Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» #PM Crisis#
by Yahapalanaya Today at 3:30 am

» MARKET RISE - GUARANTEED
by Yahapalanaya Today at 3:24 am

» Financial Reports Q-3 2018
by ruwan326 Yesterday at 7:47 pm

» DIVIDEND ANNOUNCEMENTS- OCT/NOV
by ruwan326 Yesterday at 7:43 pm

» Daily Foreign Transactions
by ruwan326 Yesterday at 7:41 pm

» KEEP AN CLOSE EYE ON BFN DONT SELL BELOW 17
by kalu351 Yesterday at 7:05 pm

» Don't put your money on risk ! Buy politically less effect shares !!!!
by The Hunter Yesterday at 12:55 pm

» what is the best price for TKYO
by Pahan Yesterday at 11:11 am

» Is HNB price is attractive
by Pahan Yesterday at 10:57 am

» BFN DEAL -DONT SELL BFN AT 14 LEVEL
by kalu351 Yesterday at 10:45 am

» BFN Deal to go on in spite of the political crisis
by kalu351 Yesterday at 8:36 am

» ##FUN TOONS###
by ruwan326 Yesterday at 7:06 am

» TBs worth Rs.14.2 bn issued to SriLankan in 2012
by ruwan326 Sun Nov 18, 2018 6:42 am

» SRI LANKA @ 2020
by ruwan326 Sat Nov 17, 2018 7:24 am

» Dealing by directors
by ruwan326 Fri Nov 16, 2018 9:08 pm

» Summary of Key Announcements during the week
by ruwan326 Fri Nov 16, 2018 9:06 pm

» CSE WEEKLY
by ruwan326 Fri Nov 16, 2018 9:02 pm

» BFN Price HOLDING ON AS THE DEAL COME CLOSER
by sanjulanka Fri Nov 16, 2018 1:29 pm

» Another Finance sector deal UBC UBC UBC Deal
by kalu351 Fri Nov 16, 2018 10:56 am

» BFN BFN BFN BFN BFN DEAL ......WITH CHINESE BANK
by kalu351 Fri Nov 16, 2018 10:54 am

» MARKET CRASH - GUARANTEED
by Maharaja Fri Nov 16, 2018 9:32 am

» Q-TO-Q Financial Report-Financial Performance- Period ended 30 September 2018
by ruwan326 Thu Nov 15, 2018 9:00 pm

» CB raises key rates in surprise move to support currency
by Miss-Sangeetha Thu Nov 15, 2018 4:59 pm

» President rejects NCM brought against PM, Govt.
by ranferdi Thu Nov 15, 2018 2:36 pm

» Supreme Court issues stay order on Gazette dissolving Parliament
by THUWA Wed Nov 14, 2018 5:28 pm

» CSE THIS WEEK
by ruwan326 Wed Nov 14, 2018 8:27 am

» Veterans return to lead state banks
by ruwan326 Wed Nov 14, 2018 8:21 am

» Collect ODEL Range Rs. 23-25 .......Target Price over Rs.35
by soileconomy Tue Nov 13, 2018 8:54 pm

» අනං## මනං ##
by ruwan326 Tue Nov 13, 2018 8:52 pm

» JKH News & Reports
by ruwan326 Tue Nov 13, 2018 8:11 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » MR backs populist policies

MR backs populist policies

Go down  Message [Page 1 of 1]

1 MR backs populist policies on Thu Nov 01, 2018 9:34 am

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
MR backs populist policies

1 November 2018 



  • In predictable return to roots, promotes import substitution
  • Pledges to support farmers, improve rural economy, reduce income inequality
  • Says stable economy he left in 2014 undermined by UNP administration
  • Supports stabilising rupee but also wants strong reserves
  • Wants fuel price formula changed, simpler taxes
  • Dismisses proroguing of Parliament, says it’s typical behaviour of presidents



In a predictable policy U-turn, former President Mahinda Rajapaksa, who was appointed as Finance Minister by President Maithripala Sirisena yesterday, backed promoting populist and protectionist economic policies that would give subsidies to farmers, do away with the fuel formula and possibly reduce taxes. 

Rajapaksa, addressing the staff of the Finance Ministry after assuming duties, also supported moving away from liberalisation policies championed by Finance Minister Mangala Samaraweera under the Sirisena-Wickremesinghe Cabinet that focused on promoting exports of tradable goods, removing uncompetitive tariffs and formulating Free Trade Agreements. Fiscal consolidation measures that were spearheaded by Samaraweera to reduce Budget deficits were also criticised by Rajapaksa as having increased pressure on rural masses. 

Rajapaksa recalled what he termed as the achievements of his second term in power, highlighting the infrastructure projects, holding of multiple elections and distributing fertiliser subsidies, insisting that the currency was kept from depreciating until 2014. He also claimed that debt had reduced under his previous administration and recalled that reserves had improved to $ 8 billion before he was voted out of power in January 2015. 

In the past three years, many of these steps had been reversed, he charged, citing the rupee depreciation, higher fuel prices, and reserves being bolstered through borrowing as examples. In 2012, support from the International Monetary Fund (IMF) was sought when the Government ran into a balance of payments crisis after $ 4 billion was spent to defend the rupee, which nonetheless depreciated by 14%. Sri Lanka also went through a currency crisis in 2008. 

Delivering a statement targeted at his core voter base, Rajapaksa emphasised that he had held elections regularly and dismissed concerns over the proroguing of Parliament till 16 November, questioning why these same concerns were not raised when Provincial Council elections were postponed. 

“The people who postponed elections for years are now upset that we prorogued Parliament for eleven days. They are acting like this is something that other presidents have not done. I have also done this, (President) Premadasa also did this. This is not significant. But, on the basis of this, they are trying to show that Sri Lanka is sliding towards a dictatorship. There is no issue here.” 

Rajapaksa conceded that reducing the Budget deficit to about 5% was a positive development, but argued that this had been achieved by slashing capital expenditure that had stalled development countrywide. The smooth function of the Finance Ministry was central to putting the economy back on track, he said. 

“This Ministry has many challenges to face. We want to create an economic system that benefits everyone. In a democracy, all people must get returns. Taxes must be simplified, which means moving away from the system we have now. Taxes on the public as well as local companies must be dependent on their capacity for payment. Taxes must be levied like bees taking nectar from the flower, this is what I believe. So, there must be a system for these taxes to be paid without depriving the people of a comfortable life,” Rajapaksa said. 

Rajapaksa also called for policy consistency, slamming the much-maligned fuel price formula, which was introduced earlier this year to tackle escalating global oil prices and prevent higher losses being incurred by Ceylon Petroleum Corporation (CPC), insisting that it needs to be removed. He did, however, acknowledge that price adjustments would continue. 

“Policy consistency is a must so that people have a way to budget for their needs. Currently, on the 10th of every month, there is a change to fuel prices. This creates uncertainty. This system must be changed. If fuel prices need to change, then it can be done the way it was before. We can’t put formulas that change prices frequently. When fuel prices go up, there is no sign of them reducing. We must change these things. We must see if these policies are fair. It is true that we as a Government need taxes, but this must be done without pressuring the public. We must be sensitive to the public and provide solutions,” he added. 

Rajapaksa was adamant that Sri Lanka’s track record of never defaulting on debt repayment should be maintained, but did not specifically outline plans on how to raise money for debt repayment. 

“We must work to stabilise the rupee and protect reserves. We must find a way to attract investment. Local and international investors must take up this challenge and lead from the front.”

Rajapaksa focused most of his speech on agricultural needs, appealing to public servants to support farmers and ensure harvests are purchased at a Government-mandated price. He also called for better warehousing, transport and market links so farmers would get the best possible price for their goods. 

“We must ensure that money flows through the hands of our people. All 25 districts are farming now. We will give fertiliser at the right time. We need to help farmers. We have to promote organic farming and reduce exports. By February, harvesting will begin and we need warehouses and transport, and we must provide them with a fixed price. I am confident that public servants will come together to aid in this process and give agriculture the top position in our economy it deserves.”

Taking a typical approach to economic growth, Rajapaksa reiterated his favoured view of promoting local products – eschewing imports, even though imports allow consumers access to goods and services at competitive prices. He insisted that local producers should be encouraged with import substitution, rather than competing in the export market. “Even joss sticks are being imported,” he quipped. 
http://www.ft.lk/top-story/MR-backs-...cies/26-665915

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum