Oct 16, Colombo: Sri Lankan President Maithripala Sirisena has instructed the Ministry of Finance to study the status of current imports to the country and submit a report on possible imports that can be temporarily restricted in order to manage the economic challenges that Sri Lanka is currently facing due to global economic uncertainty.
President Sirisena gave these instructions when the National Economic Council (NEC) met Tuesday at the Presidential Secretariat to brainstorm solutions to the economic hardships created by the depreciating rupee and uncertainties in the global market.
The NEC deliberated extensively on measures that Sri Lanka should take in the context of challenges arising due to the appreciation of the US Dollar globally. Special attention was paid to restricting the import of non-essential goods as a temporary measure, while encouraging local substitutes.
It was discussed to revise the measures currently in place to restrict the import of non-essential goods. The President also highlighted the importance of restricting the import of non-essential polythene products that have significant environmental concerns and impact local industries negatively. He also pointed out that the country's prevailing negative balance of trade can be neutralized by prudent measures to revise the import of non-essential items when combined with a proper mechanism to collect the due levies at point of custom clearance.
The NEC also took up some concerns of local manufacturers and traders for discussion. As such, the NEC listened to some concerns raised by the importers of sugar to Sri Lanka, who pointed out that they had to incur considerable losses when sugar is sold at the current maximum retail price. However, given the fact that global sugar prices have now decreased continuously, the NEC advised Ministry of Finance and Consumer Affairs Authority to come up with a proper mechanism to address the concerns of the sugar importers.
Local manufacturers of fruit drinks, presenting their concerns to the NEC, sought relief on taxes that have been imposed based on the amount of added sugar in fruit drinks. It was agreed that local fruit growers and manufacturers need to be encouraged and prioritized. As such, it was advised for NEC to appoint a committee to identify a proper mechanism to support the industry.
It was also proposed at today's meeting to use the Eppawala Appetite phosphate deposit for manufacturing single phosphate fertilizer as a substitute to the imported triphosphate. This measure is expected to help Sri Lanka prevent the outflow of important foreign exchange in the future.
The NEC also reviewed the present screening system at Sri Lanka Customs. The NEC emphasized the need to screen all containers instead of the present system of random screening at Sri Lanka customs. The President required an urgent report on the status of the screening capacity of Sri Lanka Customs.
The Kalu Ganga basin flood control project, which aims to control the floods that affect mainly Ratnapura and Kalutara cities, was taken up for discussion at the NEC. The President pointed out that this project has been neglected for decades and emphasized the need to study the feasibility of transferring the excess waters of Kalu Ganga to North Western and the Northern provinces, to mitigate adverse effects of climate change. NEC advised to appoint a committee to carry out a feasibility of this project.
Ministers Mangala Samaraweera, Dr. Rajitha Senaratne, Dr. Sarath Amunugama, Duminda Dissanayake, Mahinda Amaraweera, Mahinda Samarasinghe, Malik Samarawickrema, and Secretary to President Mr. Udaya R Seneviratne, Chief Economist and Secretary-General of National Economic Council Professor Lalith Samarakoon, Secretary to the Ministry of Finance Dr. R.H.S. Samaratunga, Senior Deputy Governor of the Central Bank Dr. Nandalal Weerasinghe and other officers were present at the session. Local industrialists and traders had also been invited to this session of the NEC.