“Stock market today is very much a casino with a laundry attached to turn black money into white,” opined Wickremasinghe who was the guest of honour at the popular magazine’s Top 25 awards presentation with Economic Development Minister Basil Rajapaksa as the Chief Guest.
UNP Leader lamented that big banks were supporting corporates whilst SMEs were being neglected. “SMEs are suffering due to lack of access to credit. This is a major problem,” UNP Leader told at the ceremony at which among top 25 corporates recognized included three of the biggest private banks Commercial Bank (third place), HNB ( 6th placed), Sampath Bank (12th ranked) in addition to LOLC (5th placed), and NDB (18th) and DFCC (19th).
Premier blue chip JKH reinforced its dominance as the number one corporate in the top 25 yet again.
Wickremasinghe also said that if all the banks had diverted margin trading (credit provided to stock market investors) to SMEs the economy would have benefitted.
Focusing on a more macro aspect, UNP Leader said that ballooning public debt and resultant high debt servicing was a major problem. “The Government is rolling over public debt as it borrows more and more to repay debt. This is a serious situation imposing more burden on the masses,” he warned.
Whilst admitting that it was regrettable that he was sounding a discord on a night when top corporates are being celebrated, Wickremasinghe clarified that he was and remains a believer of market economy but it was important that “market economy benefits everyone and not a select few.”
He said that today debt servicing has become the number one expenditure item in the Government’s budget whilst expenditure on goods, services, transfers and subsidies were almost half of it. He hinted that with continued borrowing, the situation will get worse. Noting that Sri Lanka has been a country dependent on free education and health but with high interest cost owing to ballooning public debt, the expenditure on health and education is being compromised.
UNP Leader also had a swipe at the IMF saying the multilateral organization didn’t know where it was heading but trying to dictate the direction to developing countries. Sri Lanka has to honour its debt hence debt servicing cannot be reduced, the same goes to salaries. So the only area that the Government is forced to cut is expenditure on transfers and subsidies, Wickramasinghe said. “IMF says cut expenditure and we have come to the bone. Can we go further,” he queried adding that this was politically disastrous.
Reiterating that he has been skeptical of IMF, UNP Leader also said that it has failed to sort by itself the voting power of members especially developing countries whilst it is dependent on Asia for finances. In his speech Wickremasinghe also likened media’s portraying of IMF and its conditions to Moses and his 10 commandments.
Suggesting that cuts on important sectors are not advisable, UNP Leader said the private sector has to think on to the future whether we cannot have a country where our children can have good education or enjoy healthcare.
With regard to being competitive as a country and increasing foreign exchange earnings via greater exports, UNP Leader said that crisis in the global economy meant less buying power in the West. “We cannot sell more to US and Europe. India is a big market but private sector must decide whether it wants to forge closer ties with India with a CEPA or not. One half of the private sector is saying no and the other half wants it,” Wickramasinghe told the Business Today forum packed with business leaders.
He also said that Myanmar will stand to benefit from international support with US alone extending $ 10 billion in aid and greater market assistance.
Despite casting doom and gloom on a night when Top 25 corporates meant to celebrate, UNP Leader however did emphasise all was not lost. “Sri Lanka as a country can come out of this mess provided we think out of the box. We have the capacity to innovate and be entrepreneurial. We may disagree on the way to do it but I for one believe we can make it with the right thinking and actions,” Wickramasinghe emphasised.