Sri Lanka gazettes key Economic Transformation Bill

The bill, introduced by President Ranil Wickremesinghe in his role as minister of Finance, Economic Stabilisation, and National Policies, reportedly received cabinet approval earlier this month even as it aims to establish a National Policy on Economic Transformation and create several new institutions, including the Economic Commission, Investment Zones Sri Lanka, the Office for International Trade, the National Productivity Commission, and the Sri Lanka Institute of Economics and International Trade.

This new legislation will replace the Board of Investment (BOI) of Sri Lanka Law, No. 4 of 1978, with the Economic Commission of Sri Lanka. A key aspect of the bill is the restructuring of government debt. It sets specific fiscal targets: maintaining the Public Debt to GDP ratio below 95 per cent by 2032, keeping the central government’s Annual Gross Financing Needs to GDP ratio below 13 per cent by 2032, and reducing the central government’s Annual Debt Service in foreign currency to GDP ratio to below 4.5 per cent by 2027.

The policy aims to transform Sri Lanka into a highly competitive, export-oriented, digital economy, promoting diversification and deep structural changes to enhance competitiveness. It includes goals such as achieving Net Zero emissions by 2050, increasing global economic integration, maintaining stable macroeconomic balances, and ensuring sustainable debt.

The policy also focuses on modernising agriculture to boost productivity and exports and promoting inclusive economic growth and social progress.

Upon enactment, the cabinet of ministers will be responsible for implementing the National Policy on Economic Transformation, targeting 5 per cent annual GDP growth by 2027 and higher rates thereafter.

The bill also aims to reduce unemployment to below 5 per cent by 2025 and increase female labour force participation to at least 40 per cent by 2030 and 50 per cent by 2040.

The Economic Commission, established under the bill, will enhance the investment climate, facilitate sustainable foreign direct investment, stimulate international trade, and create employment opportunities.

It will oversee the establishment and management of Investment Zones, promote ease of business for investors, and identify strategic investments that significantly benefit the economy through foreign exchange inflows, exports, and job creation.

Fibre2Fashion News Desk (DR)