Opening the prelude to fresh policy making strategies to enhance Sri Lanka’s exports and investment billionaire George Soros yesterday pulled no punches in outlining the tough path the country will have to manage in an increasingly uncertain global environment but was confident of the “bright spot” presented by the nation.
Soros addressed a packed forum filled with parliamentarians, academics and leaders of industry, yesterday at the Sri Lanka Economic Forum under the theme ‘Steering Sri Lanka towards Sustainable and Inclusive Development,’ which was held under the patronage of President Maithripala Sirisena, and Prime Minister Ranil Wickremesinghe, organised by the George Soros Foundation.
The findings of a preliminary study on Sri Lanka carried out by The Harvard University’s Centre for International Development was addressed at the sessions. The study identified four key areas of risk and opportunity that are believed to be strategic in supporting a sustained and inclusive long-term economic growth for Sri Lanka. These were outlined as macroeconomic and fiscal stability, structural transformation and competitiveness, urbanisation and development and regional development and social inclusion.
“I am very pleased to be attending this conference because I am very impressed by what this Government has achieved in a very short period of time. It has moved towards a more open society and this is the cause my Foundation supports. I am pleased to be of assistance to the extent that we can be and I have people here looking at investment opportunities,” he said.
Soros, whose hedge-fund firm gained about 20% a year on average from 1969 to 2011, has a net worth of about $27.3 billion, according to the Bloomberg Billionaires Index. He began his career in New York City in the 1950s and gained a reputation for his investing prowess in 1992 by netting $1 billion with a bet that the UK would be forced to devalue the pound.
Despite recording significant growth even during the war, factors underlying Sri Lanka’s economic growth reveals several important and interrelated risks to the economy overall and to the inclusiveness of the development process; top academics who attended the event including Nobel Laureate Economist Joseph Stiglitz told the rapt audience. These views were endorsed by Soros who talked extensively of the strife in international financial markets.
“I would say it amounts to crisis; when I look at the financial markets there, I see a serious challenge, which reminds me of the crisis we had in 2008 and in my guidance to my investment people I have told them to be very, very cautious.”
Banks are reducing lending and for better or worse Sri Lanka belongs to countries that need funding, he observed, adding: “I think Sri Lanka is a bright spot because of the achievements of its National Unity Government so it has the capacity to distinguish itself and avoid the fate that is facing most of the other countries and it can attract investment. It is possible to navigate this situation but it is necessary to confront the harsh reality and think that just because you are moving in the right direction and an exception to the rest of the world, money will be pouring in here, because generally the banks are pulling money out.”
He advocated Sri Lanka would have to find “other sources of investment,” though admittedly alternative sources of funding will require significant effort.
“The hopes I feel awakened by this conference have to be reduced and you have to lower your expectations. On the other hand, instead of resting on your laurels you have to understand this is just the beginning and do more because this is only the beginning of the decline of financial markets and this is just the beginning of Sri Lanka being an exception. It is a balancing act, to reduce expectations and improve performance. This is my contribution and I’m sorry about it being a bit of a damper.”
Prime Minister Ranil Wickremesinghe was optimistic of Sri Lanka’s prospects, telling the audience that “politics is done” and the rest of his term would be focused on fixing the economy. The crowd received the announcement with applause and Wickremesinghe went onto give details of his plans to boost growth.
“This is a unique situation. We have a Cabinet, a bit large I must say, but we bring together decades of experience and we have the collective wisdom to bring together to ensure a better future for people because the mandate was for a better life,” he stressed.
The Prime Minister acknowledged Sri Lanka has to tackle internal economic vulnerabilities and fiscal uncertainties but insisted global declines cannot be used as a reason for failing to achieve growth.
“Despite vulnerabilities of the global economy we have to step up. How can we become the most competitive economy, socially inclusive and a global city for the region? I must thank Soros who had confidence in us to come here and organise this forum. Economist Joseph Stiglitz is followed by many politics on both sides of the House. All of us members of the Cabinet and Parliament have put our necks out to believe this can be done in South Asia.”
Wickremesinghe highlighted the possibly formation of a Constitutional Assembly on Saturday when Parliament is expected to begin formulation of a new Constitution. He noted it would also be the start to delivering on political and economic reforms.
“The political part is over. We are the nation that for thousands of years has lived on our wits,” he said to the approval of the audience. (ft.lk)