A dialogue organized by the Civil Engineering Sub-Committee of the Sri Lanka Institute of Engineers, on Collapsed Construction Industry, Economy and Budget 2024 – An Analytical Conversation with Engineers, was held at the GAP Headquarters under the patronage of the Minister of Transport, Highways and Mass Media, Dr. Bandula Gunawardhana.
Professor Ranjith Dissanayake, Professor Sirimal Abeyratne and Professor Shirantha Heenkanda joined Resource persons for this programme and engaged in an analytical analysis of various aspects of the Economy.
Minister Dr. Bandula Gunawardhana commenting on the current Economic situation said that the Economy of Sri Lanka became negative during the reign of President Chandrika Kumaratunga in 2001 for the first time.
“There, the economy, unable to withstand external shocks, became -1.4. Based on the situation, myself and several other ministers decided to leave the Government. A new Government was born. At that time, the economy was very close to collapsing.
At that point, there were mainly two collapsing situations in the Economy. The current account deficit of the State Budget meant that the Government did not have sufficient income to meet the recurring expenses incurred for the day-to-day running of a government.
“Under every Government, not enough income was generated in the country to cover the costs of public employee salaries and pensions, subsidies including Samurdhi, and to settle interest on public debt. In this way, there was a surplus in the primary account, excluding loan interest, only for five years after independence”, he said.
Apart from that, the country’s export income was not sufficient for the import of consumer goods including essential foodstuffs, intermediate goods such as mineral oil, chemical fertilizers, and capital goods such as machinery. After 1977, there was a continuing trade deficit. Accordingly, under every government, essential materials have been imported into the country on credit. To meet these deficits, every government has had to take extraordinary loans both domestically and abroad. In some instances, when it was not possible to obtain loans from international financial institutions such as the World Bank, International Monetary Fund and the Asian Development Bank, Sri Lanka had to take steps to obtain loans through sovereign bonds in the international market. One of the main reasons for this was the need to spend a large amount of money to obtain military weapons and equipment in the war atmosphere that prevailed.
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