[Video] Sri Lanka Finance Minister, Ravi Karunanayake addresses London Investors Forum

https://vimeo.com/144151235 The Invest Sri Lanka Forum is timely and it is my intention to spell out the Government policies here. As you know Sri Lanka is today a new Sri Lanka. It was very much a topic that's being spoken about. On 8th January 2015 Sri Lanka had a change and that change was the new President was elected in my country and on the same day, new Prime Minister Ranil Wickremesinghe was appointed by President Maithripala Sirisena.

On 17 August we had a reconfirmation of the will of the people by having the United National Party elected as the governing party; then our Prime Minister and the President put forward a very strong Government by having a national coalition and today we have a two-thirds strong Government. The political will of the people has been spoken and that is the reason why I said Sri Lanka is on the move.The British in 1815, when they came to Sri Lanka, they conquered Sri Lanka and obviously took over the 'Pearl of the Indian Ocean'. Our democracy was threatened in the last couple of years and I am sure I don't need to reemphasise on that; it was known more as the 'Tear in the Indian Ocean,' but today with democracy at its best, vibrant, and the people's voice spoken, I'm sure all of us together can build a new Sri Lanka. So this is the intention of our Government, to place Sri Lanka back on the world map. My intention here today is with you all to take it to new heights.

The Government of Sri Lanka on election had three specific things to be done, that is to replace Sri Lanka in the foreign front, human rights and Sri Lanka's international perception, the domestic policy and the fiscal policy. Let me take one at a time. As for human rights and international perception, I'm sure that last month this was addressed through the human rights issues in Geneva. Our President, Prime Minister and our Foreign Minister have addressed the main criteria matters that were there and endorsement came out of that, with a joint declaration with the British Government and America leading it.The international perception with that has changed dramatically.

Then the domestic order has to be relooked at. The election on 8 January 2015, we certainly did certain corrective actions. We had to ensure good governance coming to our country. With that the independent commissions came to life. The independent commissions which basically have been put in place during the last month have been a reassurance. Media freedom has been ensured and the Right to Information will be a reality soon. These are necessary ingredients if we are here to ensure that Sri Lanka is marketed properly. We had to ensure the redistribution of wealth in the country. Distribution has been even right throughout the country. Consumption has taken place and we are seeing consumption going towards capital development and that is helpful for tomorrow's earnings.

Then we have to take the fiscal policy, the revenue if I may take first, we had to do some corrective actions. I as the Finance Minister on behalf of the President and the Prime Minister we sat down and had our priorities in place. We have a revenue to GDP drastically dropping from 17% of GDP in year 2004 to roughly 10.8% of GDP today. We need to increase this. We have look into areas on how this could be done, sustainably.We had a huge recurring expenditure taking place; as a result the fiscal deficit was going well beyond acceptable norms and it has been corrected today.

You would see in the Interim Budget, we had to reduce the budget deficit which was roughly projected at 5.8% to 5.6% and today we are looking at further corrective actions that will take place. Then the revenues to be increased, costs to be controlled, subsidies to be targeted, fiscal deficit being in a manageable position so for now as I said it is at 6.8% of the GDP. We need to ensure that a fiscal deficit of not more than 3.5 to 3.8 is achieved by the year 2017 and we will ensure that these targets are met.

What have we inherited? I would rather like to say the inheritance of economy, because I don't want to dwell in the dead past and what has gone wrong. On 20November we will present the first Budget of our Government. The Prime Minster will make an address to Parliament on 5November to spell out the main criteria, how to we are going to do that. Now here are some of the factors I need to take you all through, we have an 8.9 trillion public debt and we have a Government revenue of true GDP of 10.8%. This is not tolerable. We need to put it into a more professional approach; it has to be done without affecting very many people. We have to keep the energy and the enthusiasm of the investors but we also need to take some corrective action.

Sri Lanka's economy is expanding. The 12.5 trillion GDP is what we have at the moment. Our Stock Exchange is worth $ 22 billion with 294 companies listed. It is our intention to make sure that we have the budget deficit around3.5 to 3.8% of GDP by the year 2017 and 2018.
We like to see the capitalisation of the Stock Exchange rising to at least $ 50 billion by end of 2016. We will ensure that we will put in certain actions and plans and help you to ensure that growth takes place not only with the present companies but a higher number of new companies listing. We like to achieve a GDP of approximately about $ 135 to 150 billion by year 2020 which means achieving around 7 to 7.5% growth. We will ensure that we will take on meaningful proposals as there is no point being in an illusionary world. We will walk along with you all to ensure that we achieve every single target that we are set ourselves.

Being a professional Government, it our intention that we work towards every single specific item that we have mentioned. What have we done? In the last 35 days we have basically visited three countries, the Prime Minister and I, we went to japan and the enthusiasm that is coming out from japan is spellbinding. We were in Switzerland yesterday and here today, so it is our intention that we take the country to where it matters, we want to have a friendly policy with every single country; thereare many who question us on what our policy is with India with China. Now it is our intentionto be friends with all and be enemies with none, that's our intention.

We need to in Sri Lanka de-bureaucratise ourselves, we need to modernise ourselves, and we need to ensure the archaic law setup there is modernised and you will see that taking place on 20November 2015 via Budget 2016 where certain things will basically put the entire country into a storm. I like to see the Stock Exchange having cross listings in the London Stock Exchange, in the Singapore Stock Exchange and we need to get that done. We need to have our neighbouringcountries coming and investing in the Colombo Stock Market in dollar terms. I have been speaking with these Colombo Stock Exchange and Securities Exchange Commission on the legal impediments. Those will be corrected and we will ensure that all meaningful assistance will be given to ensure that is done as soon as possible.

Other irritants will be corrected as well. The Exchange Control regulations will be something of the past and the Department will be replaced with the Foreign Exchange Management Agency which will help to modernise and put Sri Lankawhere it should be to ensure that theGDP which is roughly about 58% in the service industrybe maximised. We also need to bolster the industry sector which is about28% of GDPand commercialise agriculture and expand itfrom the current 10-12%.

The Bank of japan has intimated its interest in coming to Sri Lanka. Three other very big banks from the Middle East and one from Asia would be coming by the end of the year as well. We will be ensuring the financial sectoris opened up as well. The President and the Prime Minister have been discussing with me and we are trying to see how we can ensure that Sri Lanka becomes a mini financial centre like Singapore or Dubai and serve South Asia. We will name it the Colombo Investor Financial Centre and ensure that we are able to start that with immediate effect. The reason iswe believe we have lost far too much time in the past.
Sri Lanka successfully concluded the Euro Bond issue of $ 1.5 billion which was four times oversubscribed and that is clear direction as to where we can take Sri Lanka.

I would like to see the private sector contribute in a big way to the economy and the country's future bytaking advantage of the platform we have created and make Sri Lanka's economy very strong. We will also look forward to higher foreign direct investments and a greater role by foreign companies.Sri Lanka will be a very investor and business friendly country.With the Indo-Lanka Free Trade Agreement,UK investors must take the advantage of thisplatform and the Government will create the enabling environment.

See more at: http://www.ft.lk/article/491957/Ravi-K-outlines-in-London-new-Govt--s-vision-and-plans-to-strengthen-Sri-Lankan-economy#sthash.EJtoDuFf.dpuf