New economic development model deviates from notorious structural adjustment: CBSL Governor

The government’s intention was to ensure the people’s economic freedom with a production economy facilitated by structural changes within the framework of a market economy, Central Bank Governor, Prof. W.D. Lakshman divulged.

This strategy is quite out of way from the notorious structural adjustment programme of international financial agencies, he said, pointing out that it envisaged sustainable foreign financing measures and increased non debt foreign exchange inflows into the country.

He was making the opening remarks at a webinar on “Tomorrow’s Budget Today", organised by the Economic Students’ Association (ESA) of the University of Colombo in collaboration with the Sri Lanka Association for Political Economy (SLAPE) on Sunday (20).

The Government will be implementing an alternative economic model in order to tackle structural issues deviating from neo liberal policies after several decades. The budget 2021 was an initial articulation and presentation of this new economic development model which is to be implemented carefully and constantly, he revealed.

The alternate economic policy also intends to strengthen the rural economy by improving infrastructure facilities such as roads, bridges giving prominence to agriculture development including fisheries and dairy sectors.

Outlining the outcome of the 2021 budget, Dr. Chandranath Amarasekera, the Central Bank’s Director of Economic Research, noted that it will be strengthening the domestic production economy by promoting exports and attracting foreign direct investment, specially manufacturing oriented investment.

This is the only way forward, he said, pointing out that the financial sector reforms support the production re-opening of the business process to achieve this objective.

He said large annual foreign debt repayment needs to be curbed and borrowings should be managed properly while increasing domestic savings and investments. The country has to continue annual debt servicing of over US$ 4 billion from 2021-2025.