The International Monetary Fund (IMF) is ready for political talks with the new administration with a view to reaching a staff level agreement (SLA) on the EFF arrangement, the principal head of mission for the IMF told Sunday Observer. Sri Lanka Peter Breuer and Head of Mission for Sri Lanka Nozaki Masahiro. Business last week.

Declare a decade for export promotion with more emphasis on promoting exports of goods and services where public and private sectors, political leaders and all stakeholder institutions should focus broadly to boost exports by identifying products and helping entrepreneurs to penetrate foreign markets. Giving export revenue targets to potential entities is key to getting the economy back on track, he said.

Attracting foreign students to local universities, obtaining research funds are essential, said Dr Dunusinghe, while stressing the need for a well-established safety net covering the short-term consumption needs of the needy and developing means medium term livelihood.

He said that the identification of such groups, the development of programs, the mobilization of local and foreign financial resources and the implementation of such a program with the participation of officials and experts are crucial.

Identifying key public sector reforms, in addition to public enterprises that will be part of the IMF program to improve efficiency and professionalism, should be a priority. It is important to consider whether the public sector services comply with the requirements of the people/investors. In particular, it is important that, at least for new recruits, abolish permanent positions in the public sector and grant a fixed mandate initially for a period of three years which could be extended, he said.

Establish an independent entity, similar to NITI (National Institution for Transformation of India) which is led by experts and political leaders to draft national policies on identified sectors and provide independent policy observations and recommendations/ projects of national interest. This entity could prevent politicians from carrying out projects/policies/agreements without proper analysis of the impact on the economy.

He said the focus should be on developing special economic zones in Hambantota and the port city to boost businesses. It would take 7-8 years to get loans for development projects. Therefore, the private sector (both foreign and local) is expected to play a key role in bridging the gap between savings and investment during this period.

Introduce strategies to improve household savings. Currently, domestic savings represent 15% of GDP. The investment need is about 30 percent of GDP. In East Asian countries, the savings rate is around 40%. It is therefore essential to encourage savings through appropriate policy measures.

Creating a level playing field for the market to function fairly is vital for which new laws or upgrading of existing regulations and their implementation are essential, said Dr Dunusighe, adding that communicating real economic problems and their seriousness to people by the authorities is paramount.

Tax concessions and special privileges given to public officials, security forces and politicians should be removed immediately to ensure equal treatment for all citizens, he said, adding that steps should be taken to promote healthy relations with all countries and in particular with the donor community.

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