The tough reform agenda currently carried out by the government in many sectors including the unbundling of the energy sector must be applauded, said Country Director for Sri Lanka, ADB Takafumi Kadono on day two of the Sri Lanka Economic summit organized by Ceylon Chamber of Commerce in Colombo yesterday.
He however said that more powers should be given to the Public Utilities Commission of Sri Lanka (PUCSL) and a system should be created where they could act more independently sans government funding. Sri Lanka should also look at generating more green energy and the ADB too will extend support towards this endeavor.
Meanwhile World Bank Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos said that Sri Lanka should look at more agro modernization and woo youth towards this segment. “The country must also look at producing more energy from natural resources and try to market them to neighboring countries which will lead to position Sri Lanka as an energy hub.”
Meanwhile, Chief Executive Officer, Standard Chartered Bank – Sri Lanka Bingumal Thewarathanthri said that the non performing loans (NPL) in the banking sector is now decreasing and this is a positive sentiment.
He said that the average NPL which was around 13.6% has come down to around 13.1%. “However in some sectors this has worked the other way. In the tourism sector the NPL’s have increased to around 33%.In the transport sector this is around 30% while in the food and entertainment segments too it’s around 20. For both these sectors ‘less consumption’ is the reason for this high NPL.”
He said that these sectors must keep in mind that no new moratoria would come their way to bail them out. “However , from the perspective of the banking sector, they are keen to get their credit back rather than going for acquisition of properties or other assets. This is because banks too are unable to sell properties and get their amounts back. He also explained that when the moratoria were offered many companies including the hotel sector took maximum use of it and settled their debts.”
However some others adopted a ‘wait and see policy’ expecting more concessions from the government. The third segment took the moratoria but was unable to balance their businesses and today in both these scenarios they are left with huge financial burdens.”
Thewarathanthri said that due to the C-19 pandemic followed by the economic crisis many companies have shut down and due to mismanagement of the moratoria and long outstanding debts the banks will not be able to recover the total lending they had offered in the past few years.
Secretary to the Treasury, Ministry of Finance Mahinda Siriwardana said the government too has curtailed their expenditure and by stopping recruitment and reducing expenses of Ministries. “We are also looking at reducing public sector staff and one area would be downsizing the military.”
Shirajiv Sirimane