Sustainable Strategy
Navigating the debt crisis for long-term economic recovery
Sri Lanka, like many developing nations, finds itself grappling with the challenges of managing its debt obligations while striving for sustainable economic growth. Traditionally, countries facing financial crises have sought assistance from the International Monetary Fund (IMF) in the form of loans. However, the stringent conditions imposed by the IMF often come with significant socioeconomic costs. Sri Lanka should explore an alternative strategy, one that deviates from the strict conditions of the IMF and focuses on sustainable development, stronger bilateral relationships, regional cooperation, domestic policies, and governance reforms.
External Debt (Foreign currency)
Restructure debts and cancel private creditor debts
Honour multi-lateral and bi-lateral debt obligations, and repudiate odious debts to private creditors. Avoid global money markets for sovereign debt.
Stop illicit financial outflows, embrace UN StAR initiative
Strengthen regulatory institutions, such as the Central Bank and tax authorities, empowering them with the necessary tools and resources to detect and prevent illicit financial activities
Strengthen bilateral relationships and develop non-aligned foreign policy
Maintain neutrality in the global arena, avoiding entanglement in power rivalries between major nations and protect sovereignty and autonomy to enable independent decision-making on economic policies and reforms
Build global south-south economic cooperation
Collectively address the North-South imbalance and advocate for a fairer economic order and form regional alliances and leverage the collective bargaining power
Support multipolar world order (explore alternative global economic systems)
Explore the BRICS group (Brazil, Russia, India, China, and South Africa) and New development bank, and align with other emerging economies and contribute to the promotion of a multipolar world order
Domestic Debt (Rupee currency)
Preserve monetary and fiscal sovereignty
Reform Central Bank Act to ensure transparency, governance, accountability, and democratic decision-making in Sri Lanka's monetary system
Deny financialisation and privatisation of critical services
Resist financialisation, characterised by economic dominance through debt and exploitative lending practices and, resist privatisation and marketisation of public services and assets that risk excluding marginalised communities.
Minimise non-essential outflow of foreign exchange
Conserve depleted foreign currency reserves and funds required for essential imports such as fuel, medicines and high-tech and strengthen local industries
Democratise Central Banks Act and establish a National Development Bank
Reform Central Bank Act to ensure transparency, accountability, governance and democratic decision-making in Sri Lanka's monetary system, and create financial institution (National development Bank) to fund essential infrastructure development and critical industries.
Develop industrial strategy (value-added exports & essential product within country)
Diversify its economy, reduce dependence on a few key sectors, by focusing on industries that add value to raw materials.
Implement progressive taxation (wealth, inheritance & property taxes)
Combat inequality and unfair distribution of wealth. Maintain control over inflation by removing excess currency in circulation that is inflationary via a progressive tax regime that rewards work over wealth.
Support SME's and sound regulatory regime
Provide incentives such as tax breaks, grants, access to affordable credit, tailored financial products, training programs, and mentoring, and establish a level playing field allowing SMEs (including cooperatives) to compete with larger corporations, fostering innovation, entrepreneurial spirit, and diversity.
Break monopoly power; set price controls for critical goods
Promote fair competition, combat regulatory capture, and implement price controls (mitigate price gorging) by enhancing regulatory oversight and enforcement.
Drive for food and energy sovereignty
Safeguard against adverse effects of external economic shocks by reducing vulnerability to fluctuating global prices and supply disruptions, and enhance resilience and national security by developing domestic capabilities and diversifying energy sources
Build a strong social contract
Establish fundamental building blocks that enable citizens trust their government. Trust can be built through the provision of universal public services. Invest in the well-being of people and guarantee a minimum income for all families through a living wage and building an universal social security system.
Mitigate against climate risks
Mitigate impacts of climate change, such as rising sea levels, extreme weather events, and shifting rainfall patterns and, reduce coastal erosion, saltwater intrusion into freshwater sources, and loss of coastal habitats, prolonged droughts or intense rainfall, affecting the country's agriculture and water resources leading to loss of biodiversity and impacting vital ecosystems