Prime Minister Ranil Wickremesinghe yesterday spelt out a detailed policy framework—which he termed “3rd Generation Economic Reforms,” following the economic reforms brought in by late Presidents JR Jaywardena in 1970s and Ranasinghe Premedasa in late 1980s— to revive the country’s economy.
The policies spelt out by Wickremesinghe aptly complemented with the German-styled social market economy the new government has been advocating for some time.
For example, Wickremesinghe said the purpose of the retrospective Super Gains Tax was served and the government would discontinue it.
He also said the government will review the businesses which were acquired by the previous regime under a draconian Expropriation Act.
Wicremsinghe’s proposal to set up a Competition Tribunal for dealing with monopolies will help to ensure a fair market place for private sector businesses to carry out their operations.
Meanwhile, Wickremesinghe’s proposal to ensure land ownership to rural and estate sectors, the middle class and government employees will help to strengthen the welfare aspects of the social economy.
Creating a competitive economy appeared to be in the core of Wickremesinghe’s policy statement as he proposed to do away with unnecessary tax holidays given to businesses, improve the country’s Doing Business ranking and create a number of new bodies to curb corruption, the archenemy of a competitive economy.
Wickremesinghe’s suggestion to set up a State Holding Corporation Limited for financially bleeding state-owned enterprises similar to that of Singapore’s Temasek will also make the market place more competitive and a less burden to the tax paying public.
The government’s decision to divest certain non-strategic investments such as holdings in hospital companies and hotels also through the stock market signal the lesser role the government wants to play in private enterprises, a key ingredient in developing a vibrant social market economy.
It is commendable the attention and focus Wickremesinghe had paid in his policy statement to overhauling the country’s pension system, identifying demographic changes in the Lankan population.