Home » We used to have the strongest economy in Asia, but today our economy has become a problem for the whole world – Professor Janak Kumarasinghe

We used to have the strongest economy in Asia, but today our economy has become a problem for the whole world – Professor Janak Kumarasinghe

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“In 1948, we claimed to be the strongest economy in Asia, we were one dollar behind Japan in per capita income, but today we have become an economy that is a problem not only for Asia but for the whole world.” Says Professor Janak Kumarasinghe, a member of the Economic Council of the National People’s Power.
He said this, addressing the conference “Tax to heaven! For whom is the budget?” held yesterday (17th) by the Economic Council of the National People’s Power at the Sri Lanka Foundation Institute.
For this conference, representing the Economic Council of the National People’s Power, Professor Sita Bandara of the Department of Economics of the University of Kelaniya, Professor Dayananda Ambalangodage of the University of Sri Jayawardenepura, Professor Anil Jayantha Fernando of the University of Sri Jayewardenepura, former Member of Parliament Sunil Hadunnetthi, Shanta Jayaratne – former Senior Consultant Lecturer of the Sri Lanka Institute of Administration, Professor Janak Kumarasinghe of the University of Sri Jayawardenepura and Chartered Accountant and Economic Analyst, Sunil Gamage were present. The comments made by Professor Janak Kumarasinghe are given below.
“Even if you have light food when you have a fever, you need strong food to recover. Usually, we get a lot of joy and energy when we get on this kind of stage. But today, I am sorry to say there is no such happiness or energy. Today I feel like a helpless person in my native land. It is the very reason why I got on this stage.
In 1948, we claimed to be the strongest economy in Asia; we were one dollar behind Japan’s per capita income. Today we have become an economy that is a problem not only for Asia but the whole world. If you read the budgets presented from 1948 until now, if you are someone who does not know Sri Lanka well, you will think that this is a blissful state. There were such beautiful proposals in the budget reports. So I would like to say that what we need today is not a budget booklet full of nice ideas.
This is a very crucial moment. It is also crucial for the child to be born. Today, we tell our children that this country is a developing country, which our fathers were told when they were little.
If you look at the environment in which this budget is presented, we would see, without going too far into the past, that the economic growth rate in 2019 was 2.3; the economic growth rate in 2021 was 3.7. In 2022 it is minus 7.8. But the most beautiful thing is that this budget report expects the economic growth rate next year to rise to 03 to 04 per cent. But organizations such as the World Bank and IMF believe that according to the current economic trend, the economic growth rate of next year will be minus 3.7 per cent.
The main purpose of a budget is to present an estimate of how to collect public money in countries like ours for development and poverty eradication in the next year and to develop infrastructure for production and allocate money for services. But according to the situation of our country today, we have to expect an objective beyond that from the budget document. There are two main problems in our country today. One is that production is collapsing. The other factor is the lack of dollars. Inflation is increasing through that. Several other things are happening. Our foreign reserves are depleted. Is there an answer to this in this budget? I don’t see any such attempt. If they are managed, two main things can be seen in a budget. One is fiscal policy. The other is revenue expenditure (fiscal) policy. It should be clearly stated that tax revenues are obtained and used where necessary. Such things are not in this budget. What we see is a continuation of the traditional journey. It is just a manipulation to find some money to carry on for another year. This is why they are trying to sell some government agencies using different words. In 2020 President’s expenditure is 2292 million. In 2021it was 2598 million. 2315 million in 2022. The expected expenditure in 2023 is 2610. Is there a difference? That is why we say they move along the same old path. There is no difference. This economy has not crashed but has been made to collapse. No country in the world has been built by the same people who destroyed its economy. The emperor dragged Japan into World War II. By 1948, Japan was destroyed. But it was built by a group of patriotic, educated and intelligent group of people after keeping the emperor aside. The emperor is not allowed to touch the power. Today, in our country, some still believe that those who destroyed can recover. That’s why I don’t feel happy on this stage.
We expect the central bank to prepare the necessary ground with a fixed price stable inflation which an investor can trust. Today’s interest rates are in the twenties and thirties. If you take a loan of 100 rupees from a bank, you have to pay an interest of 25 to 26 rupees. I don’t think any country has that. But some loans need a change.
The interest rate for production loans in Japan is 0.1%. But what happens if you take a loan in Sri Lanka? Therefore, central banks should make a beautiful field to play the match. Developing a country with such a vision should be done in a budget. Is there such a vision in this budget? For example, 100 million rupees is spent to develop the freshwater fishing industry. Just think how many lakes are there in our country? If you divide by the number of lakes, you will understand the extent of these proposals. No proposals exist to turn the economy around except to take taxes by squeezing people’s necks. Are they trying to chase away the one or two investors, fallen but trying to exist, in a bid to spend the next year?
“Even if you have light food when you have a fever, you need strong food to recover. When a fever develops, the patient should be given light food and then given nourishing food to recover his or her strength. There is no such thing in this budget. We are not happy; we have no chance to do anything for this country with our knowledge. But to a certain extent, it is a pleasure to share our knowledge on a platform like this.”

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