Pleasure to be here. Well ladies and gentlemen, I'm sure we all agree that right now, Sri Lanka is at a very important turning point. The country today stands on the cusp of a transition. We're looking to rebuild better in the wake of a pandemic as well as looking to emerge stronger from years of macroeconomic instabilities. So in light of all of the challenges of these times, ladies and gentlemen, I'm sure many of us here believe that the need of the hour is to put in place bold policy initiatives as well as pragmatic strategies that will help Sri Lanka deliver on its aspiration of economic development. Therefore, in that context, ladies and gentlemen, many of us here must be wondering how can Sri Lanka today place itself on a sustainable pathway to progress? Well, to answer that question is why we are here this evening, an opportunity to explore solutions to the same. This evening we have gathered here with renowned experts to discuss the prospects as well as the possibilities of a brighter economic future for our nation. We're privileged that joining us here this evening we have a panel of international as well as local thought leaders and they will lead us into a conversation that will focus on finding ways to stabilize, to strengthen, and perhaps even supercharge our economy. We trust that all of their insights will provide us some better understanding of how our nation can choose the roads towards inclusive as well as dynamic growth. Now at the very outset, ladies and gentlemen, before we begin, it's my pleasure to share with you that this evening's discussion has been organized by NextGen Sri Lanka in partnership with the World Bank, and we trust that this gathering will inspire a very thought provoking conversation indeed. On that note, we are now delighted to get started with our evening themed Sri Lanka Growth strategy 2022 and to now do the honors of the opening remarks, please join me in inviting on stage the World Bank country director for Maldives, Nepal, and Sri Lanka. Ladies and gentlemen, let's put our hands together as we welcome Mr. Faris Hadid Zervos. OK, thank you very much. I've been asked to do opening remarks, but, uh, I'll be kind today because I'll be part of the panel, so I'll uh reserve it for that and just uh. Say a very few short words, uh, words of welcome. Thank you all, uh, colleagues, ladies and gentlemen, uh, for being here today at this very, very important event. We're very, uh, On behalf of the World Bank, all I can say is we're very happy and honored to be, uh, partnering on this, or, or being a part of this, uh, event, uh, with NextGen. Uh, what a wonderful concept and a con a wonderful idea, this idea of the next generation of thought leaders, current generation of thought leaders who come by their very nature from a basis of diversity of opinions, diversity of ideas, diversity of views, but come together, um, around some key pillars which is, uh, the sustainable development of this country. I think there's no better elixir. Or better, uh First order condition or sine qua non of a country's healthy development than to have this bridging of ideas across different people who can sit and, uh, and debate. So for us this, uh, goes to the heart of what we do, uh, in the World Bank in, in terms of focusing on sustainable development, focusing on green, resilient and inclusive development, and the only way to do that is through, uh, the exchange of ideas and constantly. Uh, uh, debating, constantly discussing and coming to better solutions. So we're very honored to be a part of this. Uh, very interesting time, I think at the, uh, expense of sounding, uh, flagrantly obvious, uh, what an interesting time we face, not only in the world, but in the region and, and Sri Lanka. This is an opportunity. This is a time fraught with challenges, uh, difficulties, constraints, yet. Uh, also with opportunities and a chance for us to do things differently and build back better. And, uh, and convert, uh, these challenges to opportunities lest we just sit and wait them out and then they become threats. So with that, I uh want to really in advance thank all of you for coming. Thank all the respected panelists with whom I very much look forward to having a wonderful discussion and thank everybody online who's there, including my colleague and friend, our, uh, chief economist for South Asia at the World Bank, Mr. Hans Timmer, who's, who's also going to be, uh, giving us a short talk today. So, uh, thank you very much and look forward to our discussions. Thank you so much. Thank you very much, Mr. Forres for your opening remarks, setting the stage for what is sure to be a very, very interesting and insightful conversation that lies just ahead. Well, ladies and gentlemen, I'm sure we're all here eager to find out more about how we can strengthen and grow Sri Lanka's economy. As we envision a future that promises economic prosperity for all Sri Lankans, it helps to keep in mind a global perspective so that we can learn from the best in the world and to now offer us this global perspective, we are delighted to be joined by our keynote speaker on Zoom today, and he is Mr. Hans Timmer. Please allow me now to officially introduce him to you. Mr. Timmer is the World Bank's chief economist for South Asia. Before that, he was chief economist for the Europe and Central Asia region of the World Bank. Prior to these positions, Mr. Timmer was director of the World Bank's Development Prospects Group. Before joining World Bank, Mr. Timmer was head of international economic analysis at the Central Planning Bureau in the Netherlands. He has vast experience working with the European Commission, Intergovernmental Panel on Climate Change, and the Organization for Economic Cooperation and Development, as well as with the Indian Planning Commission and the Chinese Academy of Social Sciences. He holds a master's degree in Econometrics from Erasmus University in Rotterdam and was a researcher at the University of Lourdes in Poland and at the Netherlands Economic Institute. Well, ladies and gentlemen, with that introduction, I now present to you our keynote speaker this evening on screen. Let's welcome Mr. Hans Timmer. Thank you so much for that introduction and good evening to everybody in Sri Lanka and online. It is really a great pleasure to be a part of this uh program uh today. But there's only one thing that I would have rather done at the moment. There's only one place that I would have preferred to be down. Uh, and that is to join you in person. Uh, I actually already had a visa and a ticket, but, uh, because of Omicron flare-ups here in Washington DC and, and also in South Asia, we are pausing, uh, the travel at the moment, but, but I still hope very soon that I can join your beautiful country. Uh, Ferri already said why NextGen Sri Lanka is such a source of inspiration, um. First of all, it brings together young people and it presents the future of Sri Lanka that is important in itself, but, but more importantly, as Ferris said, Nextgen Sri Lanka promotes. Uh, promotes debates across the political spectrum, and, and these debates are always useful, but they are especially valuable under current circumstances and I want to illustrate that today by focusing on, on two observations that. Characterize uh the current circumstances. The first observation is that uh Sri Lanka's economy is in dire straits. And, and no easy solutions are available in in such a situation. You need all hands on deck. Nobody has perfect answers and, and a broad-based dialogue is is really needed to navigate this crisis. The second observation I want to focus on is that Sri Lanka has the opportunity, and in my view, even more than other economies in the region. To emerge much stronger out of this crisis if the right lessons are learned. And if new potential that is emerging is being unlocked. Uh, unleashing potential in the informal sector, in the new services economy, unleashing the potential of young people. is really key to, to future success and again, a, a broad dialogue is needed to get the necessary reforms right. Now before I want to dive deeper into these two observations, uh, let me tell you a bit about my experience with broad, uh, uh, public debates. Uh, as, as was said in the introduction, I, I've worked for 20 years in the World Bank, but before that I worked for 15 years in what is still called the Central Planning bureau in, in the Netherlands. Uh, that institute is, is officially part of the government, but it is completely, uh, independent. It's, uh, it doesn't take decisions, but it prepares and evaluate policies. It evaluates not only the government policies but the policy ideas of all political parties, whether in government or in oppositions and, and for example, before election times, the platforms of all political parties. Uh, are evaluated to inform the public and, and the public takes that incredibly seriously, and I recall during my time there that, uh, a, a new party, a Green Party focusing on the environment became more popular, but they didn't want to come to uh the Central Planning Bureau because they said that we are focusing on different variables and they have much more longer term strategy. But the, the public didn't buy that and they lost support. So then ultimately they came to the Central Planning Bureau and we started using new models with a longer term focus, more focus on, on the environment, and the whole policy debate was enriched by that. That institute was founded by Jan Tinbergen, uh, the first recipient of the Nobel Prize for Economics, and, and he developed that idea in the 1930s, in the middle of the Great Depression because he was convinced that, uh, that policy coordination in such an, an institute would prevent uh another big uh depression. Now, now why am I telling that story? I, I think there are two lessons. Um, first of all, it is really productive to compare policies, ideas from the whole political spectrum, not because you want to get a consensus, but when you do that, then parties, political parties at least start using the same terminology. They, they are on speaking terms and once you speak the same language, you can start learning from, uh, from each other and that's exactly what NextGen uh Sri Lanka is doing also. The second lesson is that in the middle of the crisis, Like Tinbergen in, in the 1930s, you can design institutions for a better economy, for uh, a better society, and so this is the time to, to have these kind of bold ideas, uh. So, so with these two lessons, let's, let's go back to that first two observations that I started with and let's start with the economy is in dire straits and not a nice message to start with, but to be realistic, uh, I think it's the right one and, and for that observation, let's go back to, uh, to March 2020, almost two years ago. Like many other countries, uh, Sri Lanka closed its airports, closed its schools, uh, implemented a lockdown. Uh, there was huge uncertainty. There were no vaccines yet and a major parts of the economy came to a standstill. Trade collapsed, uh, and, and if you Want to get an idea of the, of the impact, you can look at national accounts which I did and I looked at some data. I, I looked at the 2nd quarter of 2020, so the three months after March when the pandemic started. And, and what you see then is that in that 2nd quarter, uh, textile production was down 42% compared to a year before. Construction was down 30%. Transportation of goods and passengers was down 36%, so it was not just confined to manufacturing, it was very much in the service sector also and talking about the service sector, hotels and restaurants, the value added there was down 64%, an unprecedented contraction of activity in the country like we saw almost in all countries in the, in the world. The lockdown didn't last. For example, the economic damage of the delta variant was much less severe, even if the health impact was, was much more severe of the delta variant. But, but still, uh, the, the damage that was done was not easily undone. If you go to 200. 21 and you look again at the second quarter then uh transportation and goods uh of, of goods and passengers was still down 23% from the two years before, before the pandemic. Hotels and restaurants were still down 50%. Construction was down 17%. It gives you an idea of the, the, the, the size of the shock that Sri Lanka went through. Uh, interesting, uh, when, when you look at the, the sectoral developments, uh, in, in telecom, uh, value added was up 40%, uh, in, in 2021 over, uh, the period before the, uh, the pandemic. Uh, Financial services were up 25%, IT was up 33%, and so those are the sectors that were receiving immediately a boost also at the beginning of the, the pandemic and you see that. The, the, the shrinking of the economy was not broad-based, but it was also a shift in, uh, uh, in, in demands. Now, in such an environment, the, the policy response is very difficult, not just because it's an enormous shock, but because the, the, the crisis is, is very different from a normal global downturn. First of all, and, and most importantly, this was and still is a supply shock, not a demand shock. That means that pure stimulus doesn't help. It starts with closing a part of the economy and disruption in, in global supply chains, but then it continues because some firms, they, they don't survive. Demand has shifted as, as I said, and the, uh, the economy has to adjust to that. The cost of production are up, uh, under the measures of the, the pandemic, and, and as a result, you see in, in Sri Lanka, but across the world, inflationary pressures. Uh, another illustration that this crisis was different, you can see when you look at consumption when the crisis hits, uh, the, the, the contraction of consumption was even larger than the contraction in, in production, and, and that's very atypical because normally you see, uh, consumption being smoothed out over time and that shows again that it was a supply shock that hit the country. Uh, another characteristic that is very important is that there was a huge increase in inequality. There were those that lost their income because they lost their job, but others, they could work remotely like, like I'm doing now at the moment, but they couldn't spend their money because shops were closed. There were some that were able to socially distance, but for others that was not possible. For some kids it was easy to learn remotely, but for others it was not possible. Uh, there was a big difference in access to good healthcare, um, and, and then finally a characteristic of, uh, of the crisis was that the informal sector was hit very hard, which is also atypical. So that's, that's a crisis where navigating the responses is, is very difficult. Um, you, you, you can't just rely on stimulus, but you, you do need relief efforts trying to help, uh, uh, uh, households that have lost their income, trying to help companies survive, and it wasn't in an environment where the, the global Global monetary policy was very loose, so it was easy to uh to organize these support measures uh and, and that you saw in Sri Lanka also a huge increase in uh in in social protection and also an increase in uh in credit supply. Uh, but, but that policy, uh, was very difficult for Sri Lanka to sustain, much more difficult than, uh, than for other countries, and, and the reason is that Sri Lanka already for decades had twin deficits, and, and so as now, uh, globally monetary policy is, is tightening, uh, commodity prices are going up, then, uh, this policy results in balance of payment problem. Uh, it, it, it is important to realize that this balance of payments problems and, and the fiscal challenges, they did not originate overnight. Uh, it took many decades to, uh, to come to this, uh, this position, and they will not be solved overnight, uh, but it is important that the short-term interventions are firmly grounded in, in a long-term strategy. Uh, it, it is important to recognize, as I said, that this is not a short-lived demand crisis. Uh, adjustments are not painless, uh, and, and if I had to give some guiding principles, I, I would say focus on, on long-term sustainability, focus on equity, and, and focus on adjusting to new demands, not just, uh, on, on supporting, uh, old production. So it's time now to, to focus on that more positive and, and that second observation, uh, and, and that is that in my view more than in other countries, Sri Lanka has the opportunity to come stronger out of this crisis and, and I, I want to focus on, on, on two areas. One is the opportunities in the informal sector. And the second one is the opportunities in what we call the new service economy. So firstly, the informal sector, uh, as I said, it was hit disproportionately hard, much more than during a normal prices. Normally, uh, the informal sector functions in, in the shadows, uh, in areas, service sector that are not very sensitive to. Cycical developments, but it was not the case now because the, the crisis hit the service sector. In the informal sector, it was not possible to socially distance, uh, and, uh, the, the people working in the informal sector, they were vulnerable because they had no buffers and no social insurance. The informal sector was, was vulnerable because they were not well integrated into markets. Little or no access to credit and, and low productivity and, and, and the system of what I would call a dual economy uh has uh has kept uh Sri Lanka from growing faster for, for quite a long time. You have a system of well connected and, and well protected insiders in the formal sector. And then a large group of outsiders with limited access uh to, uh, to credit, to markets, uh, and, uh, and, and in my view, the crisis can actually change that, uh, not just because we are aware of the problem now, but because of the new developments in dig in, in digital technologies that, uh, that took really a flight during the crisis. Uh, we, we can, uh, we have an opportunity now to, uh, to, to give informal people, informal workers and firms much more access to markets and, uh, uh, and, and, and to finance. Um, uh, we, we are looking a lot at what is happening with platforms like Odesks where very small firms, uh, can provide the services in international markets and they have increased in Sri Lanka. They're, uh, Uh, their, uh, income multiple times. Uh, we are evaluating, uh, PICM, uh, the, the ride sharing service, uh, which, uh, has lots of interesting, uh, developments, uh, including for female drivers that can pick up female customers now also, and again there you see that even to two drivers, they increase their income. Uh, there are lots of new developments in FinTech providing small companies access to, uh, uh, to, uh, uh, to finance, uh, and, and so I see that there is a huge opportunity now to unleash that potential that was never, uh, unleashed till now. That is important not just to create new sources of growth, but also to keep the social contract in place and to reduce uh inequality. The, the second point is, uh, on the new service economy. Across the world, we are seeing that the role of services is dramatically changing in the economy. It, it used to be, especially for, for middle-income countries that manufacturing were, were key, uh, a key element of development because through manufacturing you could export, uh, and, uh, the, the products produced by manufacturing were used in other sectors to increase productivity. But now services have taken over, uh, have taken over that, that role. Uh, increasingly services are internationally tradable and they, they play a, a key part in, in, in pushing productivity in other sectors through the information technologies, the digital platforms, and, and all the new services that are available now. Why is that such uh an opportunity for Sri Lanka in my view? Already Sri Lanka has a comparative advantage in in services. Services as share of GDP is larger than in any country of the. Of the region, uh, it has the highest share of. Service workers in in manufacturing already. Uh, interesting in Sri Lanka is that uh the female labor force participation in services is really high. It increased now to 50% of uh of the total labor force in services. That level of female labor force participation is twice as high as in other parts of SAR. The South Asia, uh, region, um. Uh, when, when you look at, at our human capital index, uh, which, which is based on the quality of, uh, education, the quality of healthcare, uh, then, uh, Sri Lanka is in a better position than other countries, uh, in, uh, in South Asia. Uh, Sri Lanka has at the moment now the highest vaccination rates, uh, probably together with, with Maldives. Uh, so there's a huge opportunity there, but, but it will not come, uh, uh, by itself. Uh, still, uh, uh, Sri Lanka is very close to foreign competition in services. Um, But, but my point is that there is a huge comparative advantage, not just in tourism and in in trade logistics, but also in, in what we call the new services economy and it is important when you think about new growth strategies to to think about those those sectors. That that's how I look at these two points, one, a realistic one and one a very optimistic one. Uh, so, so to summarize, that there is no easy fix, for nobody for balance of payment problems, uh, but, but it's not the whole story. Uh, of, of Sri Lanka. Uh, there are big structural changes going on, and, and these structural changes in the economy that started during, uh, the pandemic, they create huge opportunities. Um, it is, uh, it is really essential to unleash the potential in, in the informal sector in my view, that really is a game changer for, uh, South Asia. Uh, but, uh, also in the services there are many opportunities. Important not to focus just on the old sectors where in the past, South Asia was successful and, and while doing that, uh, you shouldn't be afraid of increasing competition and also foreign competition in in services. Uh, one of the advantages of, of looking for new sources of growth, whether it's in the informal sector or in new services, is that you can broaden the tax base also, which is very important for, uh, for Sri Lanka. Uh, I, I started with a story of, of, um, the Central Planning Bureau in the Netherlands. Uh, when I joined after that, uh, the World Bank, uh, I found the same mentality as, as far as also said, uh, uh, in, in, in the World Bank, we are willing to, to listen to all ideas, uh, wherever they are coming from. Uh, we, we are working with and supporting, uh, the government, uh, but, uh, in that support, uh, we all can benefit from the kind of policy debates that, that you are organizing and, and personally, uh, I am convinced that the future can be really bright for, uh, for Sri Lanka. Thank you so, uh, so much for having me in this very important program. Well, ladies and gentlemen, let's put our hands together as we thank Mr. Timmer for his wonderful expertise. Thank you, Mr. Timmer for sharing with us your profound insights and I'm sure we all found great value in what he had to say. With regards to what Sri Lanka needs to do to salvage itself from dire straits, as he put it. Well, ladies and gentlemen, on that thought provoking note, it's now time for us to move into a very valuable part of this evening's program, which is of course the panel discussion. It's time now to take this evening's conversation forward, as you can see, the stage is set for us to call on our panelists as we engage them in a collective conversation on the theme for today, which is Sri Lanka Growth Strategy 2022. So as we now look forward to hearing from their esteemed viewpoints, ladies and gentlemen, it's my pleasure to invite each of the panelists to now join us on stage. First, of course, joining us on screen will be the first panelist who is Mr. Hans Timmer. So he will be joining us from Zoom and then let's now move on to our uh panelists who are right here in the audience. We'd like to start off by inviting Mr. Ferris Haddad Zervos. He is the World Bank Country Director for Maldives, Nepal, and Sri Lanka. Let's put our hands together as we welcome Mr. Ferris on stage. Joining us next will be Mr. Rajendra Thiagaraja. Mr. Rajendra is former chairman, Ceylon Chamber of Commerce and senior Visiting Fellow Pathfinder Foundation. Let's put our hands together for Mr. Rajendra Thyagaraja. Joining next will be Mr. Shammira Marceline. He is an ex-banker, he worked with HSBC and now he is the CEO of People's Leasing and Finance PLC. Let's welcome Mr. Shammira with a loud round of applause. We also have two other panelists joining in and they will be joining us online. So we have Doctor Roshan Pereira, an economist and public policy specialist. She has over 20 years of experience in formulating and implementing macroeconomic policies. So we welcome Dr. Roshan Pereira on the screen and we also. Of course have Mr. Hasata Premaratna joining us online. He is Group finance director Brandix. With all our panelists now being introduced, ladies and gentlemen, it's now time for me to introduce our moderator for this discussion. Our moderator is a policy research analyst at the Adwkata Institute. Let's put our hands together for Satya Karnaratna. And there we have it, we have the panelists ready. Our moderator is joining us as well, and we're all set for an engaging conversation on Sri Lanka growth strategy 2022. Satya, it's all yours. Thank you so much. Um, good evening to all of you. Thank you very much for being present here today. Uh, one month into a brand new year, the year 2022, I think we all have a number of questions in terms of the country's economy and its growth. Uh, given rising COVID numbers, a new variant, and the state of the economy, newspapers, television, and even our social media is crowded with rather alarming developments. These days we all have many questions in terms of the country's debt, foreign exchange crisis, import controls, rising shortages of essential items, reasons for potential power cuts, and much more. To answer all your questions, Next Generation Sri Lanka and the World Bank have invited an esteemed panel comprised of business leaders, economists, the World Bank chief economist for South Asia, and the country director. Thank you to all the panel. Who's joining in with us both virtually and in person for taking your time out of your very busy schedules, we highly appreciate it. Uh, before diving into the discussion, I'd like to remind our esteemed panelists that each panelist will be given a time duration of 4 minutes to answer each question, and I'd like to remind, uh, all our guests who's joining in with us online that you are given the opportunity to send us your questions on Slido, the password to which is. Next Generation Sri Lanka, uh, without further ado, I'd like to go into our first question for today. I'd like to direct my first question at, uh, Doctor Roshan Pereira. As a senior economist and as a former director of the Central Bank, Doctor Roshan, what is your reading on Sri Lanka's current macroeconomic conditions? Could you explain to us simply where Sri Lanka is at at the moment with the start of this new year? Doctor Roshan. Let's give Doctor Roshan a few minutes. I think you are facing some technical difficulties. If you can be patient for a few minutes, I think she can commence her remarks. OK, I think, um, Doctor Roshan will join us shortly till till we figure out, uh, the kind of technical issues that we're facing at the moment. I think I'd like to move on to Mr. Hasitha Premaratna, uh, who is also joining in with us online, um, as a leader in Sri Lanka's apparel industry, Mr. Hasitha. We all know that you are very much aware of the number of problems businesses in Sri Lanka have been facing in recent times. Moving into the year 2022, Mr. Hasitha, can you list some of your top concerns in these unprecedented times and how you think they may affect the future growth of businesses and Sri Lanka's economy as a whole? Thank you, uh, Satya for the question and, and, uh. Good evening ladies and gentlemen. Uh, so first of all, uh, I think, uh, 2022 is uh one of the most challenging, uh, Conditions for the Sri Lankan economy, but I think coming from export background, uh, from apparel industry perspective, uh, uh, we are not only challenged by the local conditions, but also some of the, uh, major developments in the global arena, particularly with the cotton prices, which is our key raw material being at one of the, uh, all-time highs, and also we have the logistics costs which is not only a parallel thing but it's. Also for import export business a big challenge where the import prices are, uh, the logistics costs are almost uh 5 to 10 times higher. Uh, so, and the COVID alone brings us a lot of challenges in day to day execution. So that leads to more cost, more, uh, spend to manage those, uh, COVID-related, uh, execution challenges. When you put all of them together, I think we are entering the year 2022 uh with uh quite a few bigger challenges, of course, uh, when you look back the last two years, uh, I would say that maybe you will never have so much of challenges in the future, but looks like challenges keep adding on and and they're, they're, they're here to stay and as businesses as uh Um, you know, bureaucrats, I think all of us will have to get together and see how we need to resolve these challenges and move forward. So for me, I think that the key aspect here is, uh, Uh, we are, we are at the moment having a, a, a serious dollar crisis in the country. Uh, so probably the export-led, uh, more foreign exchange related growth, uh, will be a priority for 2022 in Sri Lanka, uh, because, uh, not that we have deflected in the past, but export will become even more important than ever before. Uh, so it's important to see what are the encouragements that need to be given, what's Support need to be brought in there, uh, because right now I think we're going through more of uh uh consumption-led growth. We have growth rates, uh, shown at the moment, but, uh, it's a highly consumption skewed growth at the moment. uh, so we need to, uh, uh, while having consumption-led growth in play, we need to also balance that with, uh, uh, more tangible real sector growth with the, uh, export, uh, particularly, uh, with, uh, with more, more of encouragement coming in. So tourism. And other areas picking up is good, uh, but that said I think we need to invest not only for the 2022 but also looking ahead, looking beyond how much, uh, we need to do towards bringing investment into the country. So I think, uh, uh, Satya to answer your question, uh, we should look at 2022 as a year in which we uh focus on core areas and bring, uh, investments into those areas because if there is no investment there is no growth, right? If you want. Growth sustainable growth, you need to have investment and that investment has to be brought in in key sectors which can bring a difference to the economy, bring a change to the economy, right, and not just uh investing in the name of investing in the real estate or in one particular sector to dominate, but it's more to do with a few key sectors to be identified and broadened. So I think it's important to strengthen that, uh, investment, uh, ranging. Uh, mechanism of the country and also bringing the policies, uh, conducive for investors to come and invest because it'd be very challenging at this time to make the pitch to market because naturally people will look at the current economic conditions. The country and start saying let's take a wait and see approach and get back. So there has to be some drastic encouragements that have to be given to attract those investments and that's, that's something that we will have to do. I don't think we have a choice, but it's important that we do it sooner than later. Thank you very much Mr. Hatika. I'd like to go back to Doctor Roshan Pereira. If Doctor Roshan, you are still with us. Yes, sir. Right, Doctor Roshan, so I think the first question that I asked you was, uh, could you give us a bit of an explanation into Sri Lanka's macroeconomic conditions at the moment. Uh, give us a simple explanation as to where Sri Lanka is at the moment with the start of this new year. Um, thank you. Um, first, let me thank the NextGen and the World Bank for inviting me to be on this panel. Uh, and also to apologize for not being in person, but Omicron has not made that possible. Um, so I think before, uh, we talk about, I, I, I think this is an important topic to talk about the growth strategy, but I think before we talk about growth, uh, I think we need to take stock of our macroeconomic situation. Um, uh, for most of our post-independence period, we have been running twin deficits, and I think, uh, Mr. Hans Zimmer, uh, alluded to it by saying this is a problem. Our macroeconomic situation is not something that happened overnight. Um, uh, it is something that has, you know, has been, has taken place over time. Uh, we've had this deficits in both the fiscal and the external sector. And I think this fiscal dominance has been the root cause for our macroeconomic stability. Uh, and a country may think it can, you know, continue to run a continuous deficits, and in some ways it is possible as long as lenders, uh, both domestic and international, are willing to fund those deficits at, at a reasonable cost. Uh, you may continue to do that, um, and, and there are some countries we've seen where their, you know, net to GDP levels have risen to, uh, nearly 300%. Uh, but, but this is not possible for all countries. Uh, after a time, or, you know, when deficits keep increasing, it could undermine confidence of lenders. Um, and, and, and for Sri Lanka, particularly what has happened is basically with our graduation to the middle income status, uh, we lost access to these sort of low cost concessional borrowings, and we've started, we started borrowing on commercial terms. Um, and which were basically at high interest rates, or investment periods, and we also invested in projects that were not necessarily revenue generating. Uh, but even then, as long as Sri Lanka had access to financial markets, we could continue to borrow and spend. Uh, it was a bit, uh, it was a volatile growth, but still we continued to do that. But it's just, it is after Sri Lanka lost access to financial markets that really, that was in the early 2020 that the vulnerabilities in the Sri Lankan economy really uh were highlighted. Uh, it was because we were not able to roll over our debt. Um, and as a result, a lot of the consequences of what we're seeing now, uh, or rather what the effects we're seeing now is really a consequence of that. Uh, we have been using, um, foreign reserves to pay debt. Uh, it has resulted in a very drastic reduction in reserves which has affected. Basically all sectors of the economy. Asita talked about export sector, but it's also affecting imports, um, and, and many other sectors in the economy. So basically Sri Lanka has gone through these cycles of macroeconomic crises, um, and, and, and we have, you know, done various adjustments, both fiscal and external, uh, adjustments, but I think in this situation, I think it's different and we need to treat it differently. Uh, and two indicators basically debt to GDP is one of the highest in the world. It's over 100%. We really don't still know the, uh, 2021, but we know it has increased by about 2 trillion really. And more importantly, debt service payments have increased exponentially, uh, in terms of uh the interest payments to the government revenue is, is, is one of the highest in the world. So I think in this situation, I think we need to very urgently focus on the death issue. Uh, we need to get that right, uh, but it's not only the debt issue. Uh, we need to also go to the root cause and also address the twin deficit, and maybe we can talk a little bit more about that, uh, as we go along. Thank you very much, Dr. Roshan, for that comprehensive outline of where we are at in terms of the economy. I'd like to move my attention to Mr. Rajendra. Uh, Doctor Roshan also highlighted this issue of debt. GDP ratio and I think when we speak about a country's growth strategy it's important to speak of the current debt situation of the country. Uh, my simple question to you, sir, is do you think Sri Lanka's, uh, debt is sustainable, uh, at the moment? If so, how much of it do you think can be attributed to the COVID-19 pandemic and what are your top concerns for the year 2022 in this context and what opportunities for growth do you see most importantly? Thank you. So, uh, for a personal perspective, I come in sub personal. I personally do not believe that the current, uh, stress on the domestic or the country's debt is sustainable, and I think this has been debated in several fora in the last weeks and months. But just to give a snapshot for the rationale, I think, uh, looking at even despite the 500 million. Which was repaid in January from a sovereign point of view we have something between 6 to 7 billion of external debt payable this year but more importantly if we look at the next 4 years I think from 2021 to 2025. The average annual foreign debt repayment. is something in the range of around 4.5 billion. And this in comparison to the eight years from 2010 to 20018 was just about half of that around 2.2 billion so in an environment where you're seeing the key catalyst of uh national revenue, the. Uh, inward remittances from employment showing a consistent decline. December was an all-time low in 12 months. Seeing some picking up of tourism but then uh also while the exports are showing and encourage in rebound, the element of importation, imports, uh, is more so actually seeing a gradual widening of the gap which again makes us wonder as to how this burden of 6 to 7 can be actually sourced from. Uh, core sources of revenue. So this, this, uh, and this is not just a one year issue, it's a problem which I think we will have to manage for the next 5 to 6 years. So that is why it wasn't, I don't think any of us were who had this reservation had a concern about 500 million. It was about a 5 year horizon and whether the right thing was done about settling that 500 or whether the. Uh, a limited stock of foreign reserves we appear to have could be better used to rebalance the burden currently faced by ordinary citizens. That was from a debt sustainability. Uh, in terms of, uh, opportunities for Sri Lanka. Tourism, yes, it's nice to see the rebounding back. I think we have, uh, heard about 100,000 coming in. So while, while that is there's still a lot more to come, I think there is an opportunity for everybody in the tourism value chain to rise to the occasion. This should, this should not be just a price-driven business. I think this is the opportunity for Sri Lanka to really. Uh, the industry to get together and go beyond a price-based, uh, value creation and give a true experiential, uh, solution which makes people want to harm to the country. So I think there is an opportunity and not just for the big players that entire value chain has to be pulled up. Secondly, also the opportunities while the numbers are coming in. During the last two years there would have been quite a few um infrastructural establishments which would have either gone on uh. Freeze mode or actually on a limited activity so there is a need to also build up capacity um to accommodate this um growth so again there is an opportunity. Uh, secondly, on the importation side, we're seeing while exports are growing. As has just said, but there is also the component of imports continues to be a challenge. So wherever possible to look at rebalancing the imports, and if I think agriculture is a very clear opportunity where we still, I think, uh, 3 out of every 10 citizens are engaged in this area. So wherever possible, uh, if we can look at sourcing locally instead of, um, importing. Uh, nonessential stuff, I think we should look at that. The more lucrative opportunity in terms of the Sri Lanka is blessed is is talent, I think in the ICT space, and I think it is an opportunity for us at this moment in time to try and arise beyond the, uh, in terms of the spectrum of ICT value creation to go uh use the knowledge and go on to some of the more advanced value added. Uh, ICT solutions like analytics and uh AI as opposed to just doing offshoring, that's important and the fourth point I would like to look at as a lesser spoken opportunity but I think it is there for the taking being an island I think we are surrounded by the ocean. And I think it's claimed that the rights of the ocean is about 7 or 8 times of that of the land. And I think there is an opportunity, especially as we see we have gone out of the capital markets to look at uh nature driven, um, opportunities of climate financing to see whether we could attract a particular segment of, uh, blue and green friendly uh investor groups who may not necessarily look at ratings but to look at Sri Lanka's sustainable investment opportunity. And um coming there. So I think that's a, a low hanging fruit we should explore. Thank you Mr. Rajendra for highlighting the opportunities that this crisis presents to us. I'd like to move my attention to Mr. Shamiran. Um, so you assumed duties at people's leasing at a very crucial time, months before the outbreak of the pandemic, and then even the economy had to face many challenges as you, um, uh, move ahead in your organization. Uh, given this context, as a leader of a non-bank financial institution, what do you envision for the industry moving forward into the year 2022, and most importantly, what are the major challenges that you see in the industry given this context? OK, Satya, thank you. Thank you very much for inviting me over and I think uh NextGen has done a wonderful job in getting us all together. Uh, I think there were eminent speakers above me, uh, before me, you know, I mean, and where they spelled out a lot of the issues which are prevalent today. Uh, but I'm an eternal optimist, right, and I think what has happened has happened, uh, and we need to move forward. And as a country we need to come together and uh for people's leasing, uh, just to correct you, uh, I actually got into the company uh during the pandemic. And we are 2 years down the, you know, I mean, road in terms of the pandemic. Um, and you know, we have to basically adapt to the new norm. So as far as I'm concerned, uh, I mean, we have challenges, we have challenges which I feel, uh. For example, you know, I mean, uh, what is, what is prevalent today, as, uh, Mr. Tiaraja said, you know, we have the debt issue, uh, and we have restrictions placed upon the industry, uh, obviously because the government and the, you know, I mean, uh, decision makers are grappling with what they need to do in terms of, uh, battling and finding solutions to the problems that are arising, uh, so there are restrictions on imports. Um, but, uh, I see this as an opportunity because as a country, if we can't come together now and structurally reform. And put things in order, I don't think we'll ever do it. So, um, for me and uh I think what people are looking for now is sustainable solutions that makes sense and uh which we can basically then pursue simply because uh I don't think we we seem to be missing out on opportunities. So whether it's digitalization, whether it is working smart. Right, all are things which we need to do, we need to basically look at how we can reduce the wastage, right? I mean there's a lot of wastage happening, so the pandemic has given a lot of opportunities for us to basically recalibrate and, uh, especially where I'm coming from, right size of the business. Thank you Mr. Sharmindra. Uh, moving on to, uh, Mr. Hans Timmer, uh, I think, so prior to the pandemic, the South Asian region, uh, was in a rather difficult situation. Um, the World Bank reported that the exports from South Asia were only 1/3 of what it ideally should be. The regional real GDP contracted by 5.4% in 2020 and is now expected to grow by 7%, and we all know that COVID-19 also left long-term scars on the region. Uh, given this context, um, how do you see the region moving forward with Sri Lanka coming into the year 2022? I'm unmuted now, uh, yeah, uh. Yeah, given the, the, the structural problems that you mentioned, uh, especially, uh, the very low exports in the region, uh, and, and given the current problems, uh, I'm, I'm very happy that this discussion is going in the direction of how to increase exports and how to use in the current situation, uh, opportunities. And I, I, I think that should be an important part of the focus of the economic strategy at the moment, uh. Look at all the possible interventions from the perspective of what does it mean for, for exports. How can you increase exports and, and sometimes when you are in dire straits, then there is also a positive side effect of uh of developments. So think about the weakness of, of the currency that is an illustration of the current problems, but that creates also opportunities for For new exports, and I don't think you need a lot of investments now in Sri Lanka to unleash some of that potential. I think there are small firms that are very creative and, uh, and when you take away bottlenecks and you make it possible for them to to access finance and markets, you can increase your exports. That is important in the short run. Uh, it is important for, uh, a long-term strategy, and it, it addresses the, uh, the problems that you have, uh, cited that, uh, have cost, uh, South Asia, in the past, uh, also there. Uh, uh, I, I, I very much agree with the last speaker. If you don't use the opportunities now, then it's very difficult to use it at another opportunities, and there are opportunities to, uh, to increase exports at the moment, I think. Thank you Mr. Timmer for highlighting the opportunities. Uh, once again, I'd like to move my attention to Mr. Fry. Um, I'd like to bring everybody's attention to the World Bank's report Shifting Gears, South Asia Economic Focus 2021, which highlighted uh with import restrictions how, uh, food prices have increased and along with it, uh, shortages. Um, how do you think the government should move forward in this context, providing some relief to the general public, Mr. Pris? You hear me. Well Apologies for that. I think my micro, my microphone is not working, um. Thank you very much for that. I think, uh, following this, uh, excellent group and, uh, and, and panel discussion it's gonna be hard for me to provide any uh additional value, but let me try to recast and, uh, some of these issues or perhaps, um, repeat some of them. I think, you know, look, uh. There's a lot of angles we can take in, in answering this question is what needs to be done, but let's, you know, let's focus on, on this meeting on Ways where we can keep our eye on the prize and that's sort of how do we take, as I said uh earlier, I think every, uh, it's clear that the current environment offers significant challenges, not only for Sri Lanka but for many other countries. Um, Sri Lanka, uh, a challenge that is, uh, addressed can become an opportunity, a challenge that is not addressed becomes a threat, and I think this is a very important issue. Um, what my colleagues have said, Hans and others, and I also very much agree with, uh, what colleagues have said is that, uh, you know, what is, what is the, um, what is the line of sight for the country in a view of the, and in view of this world that this new, uh, brave new world that we live in. Um. Sri Lanka has always cast itself and Hello. Yeah, sorry. Sri Lanka has somewhat cast itself as an open economy and as such, additional integration in the world is a sine qua non. It simply has to happen. As we all know, exports have not been commensurate with either the past of Sri Lanka. Uh, the vast potential of Sri Lanka or the peers with whom it has compared itself in the past. That is a simple. Merchandise exports, you can see have gone down from 30% of GDP um about 20 years ago, uh, to about 15% of GDP. No. I'm sorry, I think the microphone. Sorry, um, I'll keep talking, but somebody may have to give me a new microphone. It's running out of batteries. Um, and at the same time, if you look at the profile, I, uh, my respected colleague was talking about the importance, importance of looking different types of exports and things of that sort, but that continues to be somewhere where it is a huge potential, a huge distance to frontier and how Sri Lanka with its vast potential can export different types of things and things, uh, uh, higher up the value-added curve. Now, um, you know, um, one has to look in this case at not only You know, a number of issues. One is, what is the ecosystem that exists. Uh, and whether there are any sort of constraints, whether tariffs or para tariffs and things of that sort, that may actually, uh, propose a constraint to private sector, uh, and to greater exports. And I think this is really, really important. When you look at the whole confluence, it's not an issue of just one specific topic, uh, tariffs or one specific constraint, etc. But if you look at the whole sort of ecosystem of things. That an exporter faces, you can see that the actual constraints that they face. Compared to other countries, Vietnam, Thailand, Malaysia, where I used to be based, becomes something that is very real and very tangible, and one needs to look at. Um, Um So obviously for that 11 needs to specifically look at these issues. The trade regime and things of that sort. You also need to, obviously, one cannot skirt around the, the, the broader macro fiscal situation. And, uh, and this also, uh, poses constraints, whether it's in the uh supply of foreign exchange, or etc. but it's not something that is divorced. All of it fits together. My other colleague, Dr. Rosa, uh mentioned the, the twin deficits. So that has to also be captured at the end. But last but not least, the endgame, the long story, the long narrative is about competitiveness. Uh, and, uh, insofar as You, uh, aspire towards export orientation, and the name of the game is competitiveness. I think it's very important, very natural for us, all of us who are either Sri Lankans in Sri Lanka or, or, uh, uh, friends of Sri Lanka, some like us who are focused on addressing this issue as we get perhaps understandably so entrapped in this notion of where Sri Lanka was, Sri Lanka is and Sri Lanka is going to be. That's natural, that's healthy. But at the end of the day, I can tell you that investors couldn't care less. They wanna know what Sri Lanka is today versus what Malaysia is today, what Bangladesh is today, what Vietnam is today. That's what we should remind ourselves on a daily. Thank you very much. Thank you very much, Mr. Pris. Moving my attention once again to Mr. Hasita, uh, when speaking of a growth strategy, I think it's important to talk about, uh, the new normal created by the pandemic. Um, I think countries all around the world are adapting to this new normal, so I'd like to, my question to you, sir, is what policies do you expect from the government moving forward into the year 2022 to ensure consistency and predictability for businesses? I think first of all, uh, when the pandemic hit us in uh March 2020, uh, all of us went into a digital mode, virtual mode in fact today Few of us are still joining virtually, uh, and, and if not for, I think that, uh, presence, we wouldn't have been able to be a part of this, uh, session today. Uh, but obviously, I think that there are some positives that come out of this, uh, equation. Um, and, uh, uh, one of the biggest positives that come out uh with this COVID, uh, scenario is the virtual working environment and fast-tracking the digitalization journey in the world. Obviously, um, that's something that has to come as a priority in the government policy, I think, uh, uh, during the interim period there were a lot of good things that took place. Uh, I, I, I know as an exporter as well as looking at some of the import related, uh, uh, transactions, uh, there was good facilitation that came through the customs, uh, POI. By, uh, digitally approving things, so those things, uh, this we need to continue and continue in a sustainable way, uh, to the future. Uh, that's, that's one of the very important things I see because, uh, uh, if you go back to the old days and roll back, back to the paperwork and then go back to those, uh, uh, previous pre-COVID times and, and just talk, talk about hardcore. again it's a shame. So we have to learn those good of the positives of the pandemic and take them into policies and probably turn that into a more of a fast track digital journey for the country as a whole, uh, which then the industries will embrace for sure, uh, not only the large corporates but also the savings. So that's very, very important. Uh, that the semi-sector, the country be it apparel, be it any other industry for that matter, uh, are also enabled, uh, of some of these platforms, digital platforms to be used, uh, so that they can also equally benefit and engage in this, uh. Digital jet. So one of the big things I would like uh the government to fast track and enable is the digital uh journey. I know a lot of work is going on at the moment, but I, I also think uh that this needs a more serious policy level involvement, uh, a lot of uh. Bits and pieces of work is happening in different, different institutions, but the real benefit of digital comes when you bring into end connectivity and, and give, uh, ultimate outcome or a solution to, uh, uh, drive value. So that's where I believe as a country, uh, we have a lot more to do to bring things together. What is happening at the IDD card office, what is happening at the passport office, what is happening at the banking system, what is happening at central bank, BO. customs Inland Revenue, but these things do need to get connected, uh, and that will really, uh, bring a different framework and a flavor to the country. So I think that's an important aspect, uh, from a policy perspective. Secondly, uh, I think in the last budget spoke about bringing in industrial parks, uh, to the country. We know we have about 13 industrial parks in the country, uh, mostly managed by Board of Investment of Sri Lanka, but I think we need to also look at expanding those with, uh, the specific. Specific focus including the private sector involvement uh because we have as Brandix uh investment we made in India on a on setting up an industrial park in Visakhapatnam in India uh and in that journey, obviously we've had uh private sector involvement but some of the key aspects related to the, uh, investment encouragement for us to run, uh, the government enabled those by providing the infrastructure including the clearance of the land. So I know Sri Lanka has a big uh issue of land because government being the largest, uh, landowner, uh, needs a lot of work and effort there to clean up things and provide the land needed for investments or the private sector to move forward. So I believe, uh, for policy perspective this is industrial parks will naturally solve that problem. That's why I felt that industrial parks will be always useful and industrial park doesn't necessarily mean it's only a manufacturing, uh. Uh, industrial park which has various factories around that's what normally comes as industrial park, but it can be broader parks which will have tourism and other related uh end to end, uh, connectivity and value addition which need to be brought in to attract more investment and and provide easy access for investors to main infrastructure that is needed. So at the moment I believe we lack that in the country, uh, and encouraging that through uh. A strategic focus with the private sector, uh, involvement is absolutely crucial and I, I believe, uh, in that context, uh, if we do that I think we will really have that investment driven growth to come in and I, I, I, I think like, like we have, we have few identified sectors we need to also diversify some of our. Um, exports and related sectors, uh, to broad base of exports and it will be a great opportunity, uh, to bring this aspect of additional, uh, infrastructure support that is needed, and that's where I think the government need to, uh, mainly focus on. I think government should focus on providing that infrastructure that support so that uh. Private sector to take it from there and really move uh the envelope, uh, beat exports or be it the domestic uh industry uh to drive towards. I'm talking uh more on industrial parks like I said before it's not about only Eastern industrial parks it's about the service sector. It's about tourism. It can be of anything of that nature, but it's more about unlocking the lock. Uh, and allowing, uh, value creation, uh, within the economy and enabling that without too much of a hassle. So those few areas of policies, I believe, need attention. I know it has attention, but I still think that it doesn't have the attention, the strategic way to close the loop. That's what's called me. Thank you very much Mr. Hasita. I'd like to pose the same question that Mr. Shamira but slightly differently. At an interview that you had with Echelon, you stated that you want to showcase that Sri Lanka is indeed a country where private-public partnerships can prosper. To make this vision a reality, what policies do you expect from the government? OK, um, let me also just, uh, add a small twist to this whole thing, right? So we keep saying that, uh, the private sector is the engine of growth in Sri Lanka. I disagree. I disagree because I think that the public sector is the engine for growth, and I'll tell you the reasons why. If you take aviation. If you take car ports, if you take education, if you take health, if you take, uh, you know, I mean, uh, sorry, I, I listed out so many, right, it's all dominated by the state, right? So at the end of the day, I think if we now we spoke about exports with all due respect, I mean, and that's that's the way to go about, but if you take the, uh, public sector right and if we bring in some efficiencies into the public sector that's going to have a massive stimulus in the growth trajectory, and I think that's something that we can focus on and we can do, right? So coming back to your question, Saira, right, um, I agree with uh what Hasita said. I mean, PPPs, uh, we have. Successful examples, I mean, the power sector is one we have, I think, recently signed a port deal which involves a very leading large Adani group from India with John Keels and along with the SLPA, right, so. People's leasing, I'm looking at it from a unique model. We are backed by People's Bank. We are listed on the stock exchange. 25% of our shares are listed on the stock exchange. And why do I say that I want to make this a model PPP? Well, In my experience with HSBC and traveling the world and meeting many investors and Looking at the way HSBC did business, um, We are trying to make people's leasing. Uh, be a, be a model where governance. Uh, and, uh, you know, efficiency is. Embedded and it's a good example for prospective investors because If you take even, I mean, and very briefly, if I am to just share an example, right, if you take even China and uh one of my friends shared a very interesting clip recently. China as a country, right? Is really into, I mean, uh, free market. Pushing for investments and you know I mean there's been tremendous success. So Again, I, I come back to the example where we as a country, we have so much opportunity. We all need to come together and drive this because this is a perfect, perfect opening for everyone to set aside their differences and think about country first and we are well positioned. I think we have all the right ingredients. It's for us to believe in ourselves and actually drive this because this is a very unique situation, a very challenging situation, and I think we need to stop, you know, playing the fool. And creating issues out of this because this is, this is gonna have a huge or shall I say uh uh uh. A downfall which we'll find very difficult to come out of. So, um, model PPP, I, I referred to the Temasek model in Singapore. I think the government has got on with the, uh, with Saland Dima which is looking at real estate and trying to transform real estate properties to commercially viable, you know, I mean, uh, uh, initiatives, um, and something that we can, I think, use as an example across. The entire country, I mean we have the utility companies, as I said, we have aviation, we have ports, right? You bring in the efficiency and you see a remarkable impetuous into the growth strategy. Thank you very much Mr. Shamindra, I'd like to uh go back to Doctor Roshan once again and touch on this question of the IMF. There's this sense of reluctance in Sri Lanka to approach the IMF given the current macroeconomic conditions. This can be partly due to the fear of the hardships the condition might impose. One such fear, uh Doctor Roshan, is the increase of taxes. What are your views on this and what are the key steps do you think that Sri Lanka should embark on in order to stabilize our public finances? Thank you, Say, for that question. Um, I'd like to look at this in a slightly different way, um, and to understand. What we really need to do to come out of this issue, uh, to be able to understand that we also need to understand the root cause of why we actually got into this situation. Uh, so if you, if you look at the turning point really, uh, where the economy, you know, we, we, we started, um, This, this current, you know, downturn, uh, or the turning point of investor sentiment, uh, you can sort of pinpoint it to where we had those huge tax cuts, uh, or the huge fiscal stimulus you can call it even, uh, which were made in sort of in December 2019. So this was kind of a red flag to financial markets, to investors, uh, in terms of The, the government's fiscal issues and whether it was able to, would be able to continue paying its debts because obviously as I think many uh speakers before me have also alluded to the fact that our, our debt service payments were, were, were, ballooning. Um, so, so I think one key issue, I think that sort of urgent issue that we need to address is how do we reverse this investor sentiment? I mean, not only in terms of the fiscal, but even in terms of, uh, bringing in FDI or, uh, we're talking about PPPs, we're talking about, you know, increasing exports, but I think all of that requires a solid investor sentiment and the ability to bring in, to attract investors. So I think we need to understand what went wrong there. Um, basically, Sri Lanka's tax to GDP ratio has been declining. We had something like 20, it was nearly 20% of GDP in the 1990s. It, it fell to, uh, about 8% in 2020 after these tax cuts, and it's likely to continue to stay that way even in 2021. Uh, and there have been estimates made on the revenue for decline as a result of the tax cuts to something, it's something like 25% of revenue. We lost 25% of revenue of 500 billion, uh, in, in revenue in 2020 and probably in 2021 as well, though it hasn't yet been, uh, put out. So, so it's not a case of simply, you know, increasing taxes or raising taxes or imposing new taxes, but I think we need to, to address what really happened. So I think one of the things is basically we need to look at, you know, broad based in the tax base because if you look at what happened in those tax with those tax cuts, we basically lost the wiped out the whole, a whole lot of taxpayers. So in terms of because we increased the thresholds, uh we wiped out more than something like 70% of VAT taxpayers. In terms of income taxes, we wiped out something like 30% of the income taxes just by increasing that threshold. Uh, and the other thing is that the current threshold is basically something like 4 times our per capita GDP. It's much higher than, uh, the thresholds of many advanced economies like even Singapore and Australia. So I think these are some issues that we need to look back and see what did we do and try to reverse or, you know, bring back at least the status quo, status quo. The other one is in terms of, you know, tax administration has not been a strong point. But even the taxes that were relatively easy to collect, uh, which were, you know, the, the systems that were in place like the advanced taxes or the pay tax or the withholding taxes, we, we eliminated those. So I mean there, there were systems that were easy for taxpayers in terms of their payment and also for tax collectors. So I mean these are some things that we have done which have eroded the tax base. And thirdly, of course, I mean there are many more, but I'll just focus on these three, and the other one is, of course, tax exemption. Uh, we have a very, very, um, Um, easy in a sense we've, we've, we've given lots of tax exemptions. Uh, there's no sort of real rationale. You can't really understand the rationale for tax exemptions and, and, um, These are some things that have, we've tried to address, but we've always, you know, gone back and forth on this, and it's not necessarily the case. I mean, it's proven in the literature that tax exemptions are not necessarily the thing that attracts investment. There's so much more in terms of attracting investment. So I think these are some things that we really need to address. And, and I, I don't want to focus so much on the tax. Tax collection is very important, but I think the fundamental issue is really, uh, in terms of the governments or the fiscal space that we have. I think if you look back at COVID, and I think, uh, Mr. Hans Zimmer referred to that, uh, if a, if a economy is hit by a shock. There needs to be, the government needs to have the fiscal space to be able to, uh, to address that fiscal, to be able to give a kind of a fiscal stimulus. Which is sustainable and to be able to protect those who are very vulnerable, who are the most vulnerable in society, and I think in terms of that fiscal space, Sri Lanka was lacking. It was able to do it up to a point, but not beyond that. So I think for those reasons we really need to build that fiscal space and 11 way is really through the, through raising taxes. But I think taxes are only one side of the coin. We also need to focus on the, on the, on the expenditure side. So, so going back to your question on the IMF, I, I don't think a program designed by the IMF is going to be very different to one that is designed by eco economists in Sri Lanka. I think most economists in Sri Lanka are aware of what needs to be done. Uh, I think the role of the IMF coming in is really in terms of bringing credibility because they have the international backing, um, the, the, they have that presence and, and they have that credibility in terms of all our creditors and, and even investors, uh, and the accountability. Uh, but I, I also want to reiterate what many, uh, of the speakers have said together. I think, said in the previously. That we need to come together as a country, uh, and agree on what needs to be done. What is the reform program, um, so we need to have a, we must say the broad-based dialogue and can we come together as a country to agree on some common economic program. Um, I mean, we need, really need to, do we have the will to do that? Do we have the will to do what needs to be done? And I liked his idea of, uh, you know, what John Ting Bergen did in terms of policy coordination and, and, and what he did in terms of shaping the, uh, the consensus in the Dutch economy, and I, I hope that we can maybe learn some lessons from that and try to bring, bring about that consensus because, um, uh, uh, I, I don't think we're going to get this opportunity again, and I think we, we really need to make use. Of the current situation we're in to really bring everybody in and try to come up with some kind of common economic program. Thank you, Dr. Roshan, for highlighting the importance of coming together and consensus. I'd like to move my attention to Mr. Rajendra. We all know that Sri Lanka has been downgraded by many rating agencies, the most recent being the CCC rating by S&P. My simple question to you, sir, is what does this mean for Sri Lanka's banking system and its stability? OK, just before I, uh, respond to that, I just want to pick on a point with Roshan mentioned about the need for a common reform agenda. If I can just extrapolate that a bit further for that to work. That common understanding. Say discuss say in forums like this room, frankly is not enough. The only way this can actually work is this has also got to be presented, deliberated, debated, and agreed. Amongst the 225 lawmakers in this country. It has to be a medium term, medium to long term agreement. There's no short term fix here, so that agreement has to come from both sides of the house. That's the first point I'd like to make in terms of the rating itself. I'd like to respond to that from perhaps 4 perspectives from a bank's balance sheet. Uh, you have, uh, from a suffering stress point of view. Soering instruments which are also held by these banks on one side. Then the importance of a rating has multiple perspectives to a bank's operations in terms of the debt. They raise from the international capital markets and the ability to continue to raise and or repay secondly especially for those uh non-state private listed banks. Uh, you have today, a decent composition of ownership which is non-Sri Lankan which come from credible international funds and investors who also look at the rating as a gauge before they continue to support and then of course the third element is. Supporting trade and commerce in a country. Access to credit lines, counterparty lines becomes also an important element when it comes to. Ratings. So if I look at the first element which is the holding of sovereign instruments or bonds in these banks' balance sheets. From what I can understand from publicly available information based on the June 2021 numbers something to the tune of around $3.7 billion. In the form of sovereign bonds and SLDB Sri Lanka development bonds were held by uh local financial institutions. And I believe that there were 11 institutions, including the two state banks which held these. If you really look at the Constitution of that 3.7 billion. The 4, the larger 4 of the 11 institutions collectively held around 3 billion of these bonds and the single largest holder, as at that particular date held about a billion. But in terms of bonds as a percentage of the total assets of these institutions. The, the, the largest holder represented 6% of the total assets. And then if you look at the other three bigger players. Which made up of that 2 billion, it ranged between 6% to 11%. So from a relative point of view, I don't think it was a big component, but the, the second issue to bear in mind is if ever there is a true stress. The impact of provisioning on banks' balance sheets because what has happened in the past perhaps two years is unlike some of the foreign banks and institutions which hold some of these instruments. Those institutions tend to um mark the uh the value of these holdings based on the market price so if it goes down or goes up they revaluate but for some wise reason the local banks I believe most of them or almost all in the last 1.5 or 2 years chose to change uh uh the the evaluation methodology. And instead of using or taking the revaluation stress through the profit and loss account or the balance sheet, they have chosen to use this methodology called amortized cost where they are allowed to defer this difference over. The period of holding. Uh, and, and based on some of the Basil guidelines, your typical, uh, provision was around. 2% of the value of the bonds. I know I said December last year it went up to about 6%, but the question is when instruments for trading at 35-40% discount was 6% adequate? Uh, time will tell, but that is something which one has to bear in mind then when we move into this issue regarding. Uh, the use of credit lines unfortunately with the downgrading of ratings. The available trade finance lines each bank would have to support businesses whether it's importers or exporters or whatever it is also tends to shrink so you have a reduced pool of credit lines now trying to support. A growing need of requirements from the country as a whole. That itself is a challenge and then more recently I think what we heard in the last few weeks was a decision was taken by the government. To invite and encourage the non-state private sector banks. To also, uh, part finance some of the petroleum bills. And these are not small ticket items, these are large items. So when that tends to happen. Then that naturally squeezes out these banks' ability to support the genuine requirements of trade requirements of their normal customers to facilitate businesses whether it is uh Shamira uh Hasita you know those challenges coming in so I think we we are correctly probably. These banks are going through multiple set of challenges, uh, which certainly has to be understood and appreciated so it's not an easy time. Thank you very much, sir. Given time constraints, I'd like to pose my next question to both Mr. Hans and Mr. Paris. Um, I think Sri Lanka faces a number of serious problems. Uh, we are one of the fastest aging societies in Asia. Um, climate change risks added to that, uh, weak public finances, high debt, and growth has been stagnant for many years. Um, I know it is a rather difficult question, but where do you think Sri Lanka even should think to begin to manage these multiple risks according to your point of view? That means that Paris wants me to start, yeah. Um, let, let, let me. Let let me use this opportunity. Uh, in, in responding to that difficult question, um, let, let me use this opportunity to react to something very important that was said, and that was about the relationship between the government and the private sector. Uh, there was a really important point made that you do need a strong and efficient government, and there are still opportunities to make the government more efficient. But it is also important to realize that you need the right balance between government and private sector. And before the pandemic, I gave a talk at the university in Colombo. And I asked all the students what they wanted to do after graduation. And with only one exception, they all wanted to work for the government, and the reason was that salaries were high in the government and the uh the jobs are very stable. And that's not the right balance. There's obviously nothing wrong for having great talent in the government. But you have to wonder. How you can make it more attractive to have a career in the private sector. Because we have to realize that if you're looking for new sources of growth, they will come from what is now still a very small initiative in the private sector, especially in the services sector. That's where the real opportunities are and, and to understand where the opportunities for Sri Lanka are, uh, it is important to talk to those people and to understand what they see at the moment as, uh, as their bottleneck. And, and why are not more talented people, young people, uh, exploring these new opportunities because there are lots of opportunities in, in Sri Lanka uh compared to, uh, to other countries, uh, so I, I, I think that's where the opportunities are. That's uh what you need to increase your exports. It will not come from big investments in existing sectors. It will come from those new sectors and ultimately it, it is also needed to create a solid tax base which you need for a strong government, uh, also. So my response would be look at those early initiatives, look at new sectors, and ask yourself how you can help those initiatives, but especially try to take away the bottlenecks that these people face. Over to you, Ferris, to, to, to answer the really difficult part of this question. Thank you. Um, thank you very much, Hans. I think you've answered it, uh, very well. So, um, very little to add to that, but I just want to reiterate what you said, and I think, uh. You know, it's a very, it's a tough question. I don't know if we have enough hours, 18 hours to sit and talk about uh what the narrative is, but uh we need to ask ourselves a question and it's not. Silly question. Um, what is the narrative? What is the storyline for Sri Lanka? If we were to ask each other from what you see, what you hear, and everything, do we have a clear narrative we can put in a half a page what the development storyline for Sri Lanka is? I think, uh, I don't, you know, uh, I can, uh, venture a guess. I'd be happy to participate and support one. But one thing we definitely uh need to know, uh, need to have in that is this idea of new drivers of growth. And clearly, uh, everything requires a middle way and a balance. The role of, I mean, one of the key things that the World Bank keeps talking about is the importance of PPPs. Uh, not only in the key infrastructure sectors, but also in health, uh, education and tourism and things of that sort. So there is a key role to play. But let's look at history and let's look at the future. Um, I don't recall this, uh, figure, so forgive me, I don't remember the number of days, but I remember a very striking figure that was, uh, uh, um, came in one of our analysis, uh, a few years ago, and Hans, you can remind me on this, uh, digital report, digital divide, and digital development in the nature of work and in the sense that whatever we're doing now, 7 years. You know, in terms of innovation, in terms of conducting business, in terms of new products, um, 7 years down the road is going to be completely redundant similarly and again forgive me, I'm not giving you an accurate number of years, um, 7 years down the road, whatever's gonna happen there and whatever will be produced, we don't even conceive of today. So my bottom line question, do you want to put that in the hands of young, passionate, smart, uh, young ladies and men in Sri Lanka, private sector, these young entrepreneurs, or do you want to get, put it in the hands of people like me and the public sector. I'm sorry to say that. This is not, this is not the time when we were in school. This is a completely different time. When my kid, uh, my kid is in high school, when he finishes college, he'll probably be in a field that we haven't even conceived of today. And that's the world we live in. Sri Lanka is a beautiful island. It's a small island. Your whole history from Seredeep until now, you are uh strategically positioned, not physically, but also intellectually and trade-wise with the rest of the world. So the future lies outside the shores of uh Sri Lanka. And for that, it's about competitiveness, it's about finding sources of growth. It's about Exploiting the opportunities of what you have here through greater global value chains, greater additionality in a number of areas. In the absence of that, you will, uh, we will, I would say because I consider myself, uh, one of you, we will bound, uh, be bound to the shores of the country to some extent. I'm not saying there's still tremendous growth and I don't want to appear to be pessimistic. We are optimistic. But the optimism requires an identifying new avenues and creating pathways for people to flourish. Otherwise, we're gonna be chasing uh textile productivity here, etc. I think that's gonna be uh very important. So global value chains, identifying areas of high value added, but allowing people to do that, who have the ideas and keeping in mind that we have already reached a point where the nature of industry, the nature of innovation, The nature of the delta has gone way beyond our capacity to model and to do so we need to create the ecosystem to let others who have more energy, who have less white hair than us, uh, move forward with this. So I think that's the key to it. Thank you. Thank you very much, Mr. Paris. I'd like to move my attention to Mr. Hasita. Um, Mr. Hasita, how do you think Sri Lanka should look at international markets, benefit from international trade, and most importantly, remain competitive in the global markets? Uh, I think it's up there when you look at the, uh Overall international markets that we are setting, uh, we have a little bit extra focused, uh, on to the Western world, so we have to look at diversifying the market, especially for the growth ranges in the world, be it China, be it India, um, and, and some of some some of the. And, uh, the market growing markets as well, uh, so that we have a fairly decent, uh, or a better diversified export, uh, uh market that comes in in the meantime, uh, not only just, uh, go with the current product base or the basket that we sell. But also we will have to look at how we need to bring in more um diversification into the product as well as value addition, value added value addition to the product which will certainly help us uh to drive things forward in a more, uh, I would say a value creating manner to the country and bring more dollars, uh, and bring more higher, higher value to the, uh, whole economy across. Uh, the other challenge I think that we are facing today is, uh, as a country we, uh. Have only probably very limited amount of uh uh uh meaningful free trade agreements, let me put it that way because at the end of the day, uh, the trade agreements are important uh uh we have uh GSP plus benefit to Europe, uh, which certainly helps, uh, apparel and some of the other industries for exporting to, uh, uh, the European, uh, sector, but apart from that we don't have to have really meaningful, uh, uh, uh, benefits there. I'll take example to Bangladesh. Now Bangladesh, for example, has a duty free. Access to Europe, to Canada, to Australia, uh, Japan, and in certain products to China, uh, so that really makes them highly competitive, uh, at the end of the day in industry like apparel if I take, it's just maybe, uh, 10, 12% duty duty means it's a massive part of your margin, profit margin, so you can't, uh, compete sometimes unless you have that benefit, uh, uh, being taken. So it's important that, uh, uh, we move, uh, into, uh, some of those meaningful uh. Free trade agreements. I know the government has been talking to, uh, China, India, uh, Japan on various free trade agreements to be completed, but we haven't really made any meaningful progress in the recent past. So we will have to, uh, take that and, and ensure that the export segment has, uh, benefit or at least not a benefit with at least, uh, help people to remain competitive against the competitive nations that we are dealing with the Vietnam. Uh, uh, Bangladesh or in African continent, there are a lot of, uh, uh, duty related benefits that come in. Apart from that, I think that the big thing is about the productivity because as a country, uh, we have to push the productivity up as I said before, uh, the digital space needs to come in so digitalization becomes absolutely crucial. Uh, on top of that, the automations need to come in basically to say that with less number of people, how do we put more, uh, product out, output out, and, uh, get, uh, more. More more income to the country. So this is something that has not been, uh, done in a strategic manner. I know larger corporates, uh, who have the investment capability are uh working on this uh as as a as a primary objective these days, but it doesn't uh really uh serve the entire economic purpose unless uh we have a mechanism to encourage, uh, and educate and maybe even, uh, support investment, uh, requirements, etc. uh, for the SME sector now we have. Have this uh R&D allowance that is there for tax side where you can deduct 200% of your R&D expenses for income tax purposes. Uh, so, but going beyond that, I think it's important, uh, that there is a strategic focus from, from the, uh, respective bodies to support on the automation and digitalization side because that's where the productivity game will come for the future. And the other point I wanted to highlight is, uh, on the value addition. There again, uh, in different industries have different levels of value additions, uh, but certainly it's important that you look at extending your value addition in Sri Lanka, uh, to an extent which probably will, uh, move, uh, bring in more dollars, at least maybe 50, 60% of, uh, uh, value addition to come in and for that, uh, extending a certain amount of the, uh, uh, segments are very important. Now if we take a parallel industry, uh, we may, we bring still about close to 40. 7% of our fabric from overseas, uh, which is our largest raw material really in the sewing industry, uh, we have uh many of the, uh, different accessories like the buttons, hangers, thread, mostly made in Sri Lanka, but we do have an imported component as well. So we can still do more, uh, to expand in those areas and then we increase the value addition within because that's where the easy, uh, uh, dollars also can come into the country. So overall I think from a, uh, from a markets. Perspective in a nutshell, we need to look at diversification from a product perspective, go up in the value chain, um, with the international trade, um, have more FTAs, uh, to get into diversifying markets and, and enough competition and as uh industry as corporates, I think we need to have better productivity to fight the global, uh, war, uh, that we have to go through a daily basis in this price competitive environment. Thank you very much Mr. Hasita. I'd like to move my attention to Mr. Shamira. I'd like to touch upon this topic of the new normal once again, sir. Um, I'd like my question to you is, what lessons did the pandemic bring to you in terms of digitalization, uh, new ways of working, and how do you wish to transform your business operations, um, in this new year? OK, so I'll, I'll allude to, uh, my company People's Leasing. Today I think as a semi-government institution I'm extremely proud to say that 80% of our entire team can work from home, so we've digitally enabled them. We've invested a lot on our IT infrastructure like what Hair said in order to basically bring about technology, you know, to the client, so we. Even our credit, our credit today is evaluated on an app. Our team can be. Out there they don't have to come into office. We've invested in. A decentralized checking process, which means that we can get business done out there rather than it being at the head office and so on and so forth. Likewise, in terms of our entire infrastructure, we have looked at buildings. We have right sized the branches, and we will continue to right size some of the other branches in order to cut down the wastage and plow that back into the business. So those are the examples which we have done for the company, and this is what I alluded to in terms of the public sector. I'm basically trying to showcase or we are trying to showcase people's leasing as a company where we've cut down the waste today. We all work on EMOs. We don't sign anything. We don't have wet signatures, so we basically we sign off on electronic signatures, little examples like this where our entire paper usage in the company has come down from 80,000 A4 sheets to 12,000. So these are the initiatives we are taking. Our branches, we are investing in renewable energy. We're investing in solar power in terms of our branches. And doing our bit so that this can be a showcase for the others to follow. So if the public sector takes a cue from this and Invest and these are not game changers. This is not leading to job losses. This is just bringing about efficiency in the way we do our business, right? And I think as a whole, and I again go back to my point that if we get together and the public sector gets together, we become efficient and agile, um, we'll contribute a lot towards the trajectory in terms of the company's progress. Thank you very much Mr. Shammindra. Moving on to Mr. Rajendra, so how do you think Sri Lanka can create the policy environment to attract foreign direct investment? There are 2, in my opinion, there are 2 types of uh investments. You have those who will make use of uh challenging times like today and want to come in short term to profit. And those who will look at things more on a medium term to come in because they like the attributes of a country and frankly the type of quality of investments I think Sri Lanka needs to attract is a latter, you know, sustainable in nature and frankly for somebody to look at. Investing from a sustainable point of view, they will certainly look at not just That's Uh, free status or tax benefits they will look at a whole host of attributes which, uh, create an enabling environment for them to do business. In a trouble free manner and that is something I mean there are established benchmarks. I think Sri Lanka is no stranger to it. It is a question of being consistent in applying those and measuring and reporting if I can just uh I mean we we keep on speaking about. Exports when we keep on speaking about uh comparative nations as uh was mentioned. But if I can cite, I think about 4 or 5 years ago. There was a an extensive study done with the support of the Kennedy School of Government. I think Harsha is here probably is aware of that with uh led by Professor Ricardo Hausman. That, that I think they did 2 rounds and a lot of what we are talking today was. Done with objective evidence and presented. As there's really no need to go and reinvent the wheel, it's a question of taking something like that then taking the positive attributes of that and following. Similarly, we speak about the need for a comprehensive national export policy. Again, about 3 or 4 years ago, there was a comprehensive policy developed with the multi-stakeholder support, the EDB, the chambers. And there is a public document, but as far as I am aware, for the past 2 years we have not seen any. Accountability of public uh reporting as to how or whether in any extent that policy has been followed then one asks herself, are we reinventing the wheel. Thank you very much sir. I'd like to put my attention to Doctor Roshan. um, Doctor Roshan at the Advokatta Institute who led the research effort for the report a framework for Economic Recovery. Uh, my simple question to you is, Doctor, could you explain to us the urgency of implementing these reforms? Um, thank you, Satya. I think, uh, I'll, I'll start from, I think where some of the, uh, previous speakers spoke about, uh, basically the need to have stimulate economic growth and improve competitiveness really. Um, and I think that is really, um, the macro stabilization is, is, is key, and I think that is very urgent. But I think in parallel, we also need to have some reforms to have to stimulate economic growth and improve our competitiveness. Uh, and I think, uh, Hait also mentioned a lot about productivity-driven growth, but I'll, I'll look at it more from a macro point of view and how we can actually have this more sort of productivity-driven growth rather than the kind of growth that we've had, uh, in the past few years. Uh, so firstly, I think one thing we need is to have more flexibility, uh, in both our interest rates and the exchange rate, uh, because we need to allow market force. Sources really to guide the allocation of resources, uh, this allocation of scarce resources, and I think that's something that is impeding growth. Uh, we've got an exchange rate which is, has an anti-export bias at the moment. Uh, and I think a lot of all the speakers here spoke about the importance of exports, uh, and I think that is one area that we really need to address if we are going to attract, um, Export led growth or if you're trying to stimulate exports, uh, but we also need some structural reforms. So in parallel, we need some structural reforms. Uh, I think, um, you can't talk of exports without talking about FDI and having some foreign direct investment coming in. Um, I think, uh, one of the key, um, Areas really that we spoke about in, in the report that you referred to is basically how do we improve the, the doing business index or how, how doing business, not, not the index really, but just how do we improve the doing business environment. Um, and I think, uh, that, that applies not just for the, you know, the, Enormous economy, but I think there's a huge informal economy, and I think, uh, Mr. Hans Zimmer referred to that and I think that's really the key driver, uh, or will be the key driver in terms of converting that informal economy into a formal, into the formal sector. Uh, and to do that, I think you really need to improve the ease of doing business. And the ability for that informal sector to come into the formal sector, uh, both in terms of driving growth, but also as I said, in terms of also improving our tax revenue collection and then that, that's a huge uh area that, that hasn't been a lot of attention, uh, paid, um, uh, in terms, in the policy uh arena. Uh, the second one, of course, I think also was mentioned in terms of, uh, unlocking land supply. I think someone mentioned that the, the government is one of the largest uh owners of land. And I think, uh, and I think Mr. Araj also mentioned the study that was done by the Harvard CID and one of the binding constraints they found was really the, the inability to access land. And even if you speak to investors, I think this is one area that really comes up. So unlocking this land, the potential of the land in the country, I think is one area. That really needs to be looked at. Uh, the other one is, of course, labor markets, having more flexible labor markets. Um, if you look at countries that are really, uh, particularly in the pandemic that have been able to sort of shrink and then grow are those that have had more flexible labor markets, uh, and also, uh, getting the females into the labor force. I think that is a huge. Area of untapped potential. Um, uh, someone mentioned that there's a huge, uh, female labor force in the IT sector, and I, and that's great, but I still, there are labor laws that prevent, uh, women from actually being able to participate, uh, particularly in these areas because of restrictions in, in the labor laws. Um, so as the labor laws plus of, of course, the uh, Enabling environment you need to have, you know, the infrastructure to enable them to be able to participate in the labor force. So I think that's another area that really needs to be developed and of course human capital. We know that the services sector, we know that the IT sector is going to be the game changer. It's going to be the new, the new services that are going to be really the driving force, but Then is our labor force, uh, is our human capital, do they have the right skills? Are we skilling them to be able to, to be able to take up those jobs? I think I'm going back again to what Mr. Han said when he visited a university. The problem is that our that our universities, our education system may not be really Addressing that issue or, or, or developing uh the, the labor force to be able to take up those positions. But I think you can't really only put the blame or you can't really expect only the private the government to do that. I think the private sector really needs to come forward because finally, the private sector are the people who are going to really benefit from this labor force. So I think there needs to be more concerted effort. In training this labor to be able to uh to, to, uh, take up these jobs and finally of course this infrastructure gap. I know we have that we're talking about a lot about infrastructure, but are we talking about the right infrastructure? So, uh uh the digital infrastructure, I mean, the, even now I think my internet sort of went on and came on again. Um, so, so we really need to be investing in the right infrastructure and so. So, uh, I, I think that's, that's the last point that I'd like to make that, uh, uh, it's, it's not, you know, the, the, the, it's a digital highway really, and that is going to be the future. So, uh, I think these are just a few things that, that, that are going to be necessary if we are going to move on to the next, uh, growth onto another, uh, growth path or a higher growth trajectory. Thank you very much, Doctor Roshan for highlighting where our untapped potential lies in the economy. I'd like to uh pose my next question both at Mr. Hans and Mr. Faris. Uh, the World Bank have highlighted that to uphold Sri Lanka's human capital achievements and long-term growth prospects, it's important to support students recovering from learning losses with a focus on reducing equity gaps. Uh, how do you think this can be achieved given Sri Lanka's current macroeconomic conditions, Mr. Hans or Mr. Faris? Yeah, a couple of observations to kick it off and then, then fires can give uh the real answer. Um, uh, first of all, uh, I, I think at the moment, uh, it is, uh, very important to focus on how to recover from the lost, uh, education of the last two years for a big group of kids in, in Sri Lanka. Uh, as I said in my presentation, uh, there was a big divide. Between those kids that had the opportunity to learn remotely and those kids that did not have the devices to do so, uh, and it is very important to recognize that and to address that issue and to make sure that this is not a long-lasting uh experience for, for those children. Uh, a second observation is, uh, is that when we look at the, the new sectors, the new services, the new, uh, opportunities, then, uh, you indeed do need, uh, uh, skilled labor. Uh, the services are more skilled intensive than the old, uh, manufacturing. Uh, that is true, but not necessarily. The skills are all built up during the formal, uh, education. Uh, and I very much agree with what Ron, uh, said that there is an opportunity for the private sector for on the job, uh, learning, uh, that is a lot more flexible and, uh, a lot more targeted. And if you need changes in education laws or or labor laws that make it possible to recognize that kind of on the job education, that is very important. That is what you see in many other countries that IT companies, they are not waiting for people to come out of schools with the right skills, but they want the opportunity to educate them in their, uh, in their firms. So, so 22 points to kick it off. We have to realize that education came out from a very difficult situation over the last 2 years with remote learning. You have to correct that. And secondly, you really have to think about more opportunities for on the job training and then I'm convinced that the human capital is there in Sri Lanka also comparatively compared to other countries in South Asia. Ferries over to you. Thank you, Hans. Thank you. No, I'll just, uh, uh, launch from where you, where you started, which was, uh, uh, which was a very positive message about Sri Lankan human capital and indeed, um, I don't think you need to tell any of you around the table that Sri Lanka over the years leading up to COVID has actually had quite, quite astounding progress in terms of access to health, education, and social protection. That that's uh been a very positive story. Now, clearly the impacts of COVID have been tremendous, not only here and and across the world but uh also here in addition to the learning losses of one Hansa said, the, the irreplaceable loss of life, you also had this aging population which you've had for a while and that burden of non-communicable diseases which was not really what that was defrayed and delayed. We weren't able to address this. So it's a, it's a, it's a multitude of problems that we have that. And again, we talk about, you know, and sometimes we sit and bicker, well, the GDP grow by 3 point blah, blah, blah, or 2. blah, blah, blah. Uh, and to me, that's really beside the point. The reality is this one year that we've seen this year, last year of impacted education. Kids not being able to go to college, what is that gonna mean for the GDP and productivity a few years down the road? There's been a delay now that we're gonna feel the butterfly effect of moving forward. So that's something we really need to focus on. Um, one needs to give credit where credit is due. I, I do think and feel strongly and say this, um, quite forcefully that I believe the government's response in addressing the immediate health. Uh, uh, a crisis, including with vaccinations and with everything has been quite, quite good. Certainly if you look across the region, their, the, the performance have been, uh, quite good. And I think that, uh, is, is a very important thing. Now, moving forward, what do we need to do to keep our eye on the prize in the sector? One is to reverse the damage that has been done. Uh, because of COVID, and secondly, keep our eye on the prize. Look, we're in a situation of a tight fiscal constraints. Um, there's, uh, insufficient resources out there, so we need to find out and be very clear on what are the cost-effective solutions to address this. Not all solutions in health and education, nutrition, what are the cost-effective things, and there are things that can happen. Uh, Hans talked about some of them, which is really important. Others is the issue of the teachers uh their professional development. These are areas we need to prioritize right now. Uh, focus on productivity, which is critical, and that's Dr. Roshan and Hans have said that as well, and others, revitalization of the private sector. Uh, particularly, and also samurdi. Samurdi is very important. So we talk about health, education, etc. but what about the vulnerability, those who have been vulnerable, those who are not able to do that. Better targeting, focusing on, on addressing the targeting aspects of some more, making sure that nobody's left behind and also addressing the public pension scheme service. I think there have been some good uh uh uh reforms in terms of retirement, etc. uh, in the recent budget, and we have, you know, let's, let's focus on the positive, but public service pension scheme and the fact that That's one of the aspects also of people wanting um public sector jobs. The pension scheme is very generous. Private sector uh pension is a critical issue that needs to be addressed. And that is also one very critical issue when we talk about, well, private sector, private sector, yeah, that's right. But what is the ecosystem that a young lady or young man is going to face when faced with a crossroads between public and private sector, and we need to think about that. It's all about the narrative. It's all about the storyline. It's not one thing. It's the whole story. We have to look at it from a horizon. Thank you very much. Thank you very much, Mr. Haas and Mr. Faris. I think given time constraints we've come to the concluding minutes of our panel. We have a few questions coming in from the audience. Doctor Ocean, there is one question for you. Uh, the question is whether there is a possibility for Sri Lanka to move into a hyperinflation status. Yeah. Um, so, so I think, uh, here, uh, the, the issue is basically twofold. So when we have either, we have both demand, do we have demand-driven inflation or, or supply-driven inflation? I think in Sri Lanka, we have both. At the moment, uh, inflation is double digits. We haven't seen double-digit level inflation since, uh, I think 2009, uh, during the height of the war. Um, so one, thing is, uh, we've had a very high, uh, uh, uh, financing of the deficit through, through deficit financing through the, the, the central bank, uh, central bank's deficit financing, which is basically money printing. Um, I know many countries have done that. I mean, we've had quantitative easing, but I think all countries are now realizing that that has had an impact on inflation. Uh, so, uh, so I think that is something that needs to be addressed. Central bank has already taken, uh, is taking action, but I think there is more that needs to be done. Uh, we, to, to rein in inflation. The second side, of course, is the supply chain disrupt disruptions that we're seeing across, uh, in many countries, um, which is, which is also affecting inflation, not only, uh, in Sri Lanka but across the, Uh, the world, uh, I think, uh, we need to be cognizant of that, uh, and we need to take proper measures to be able to address that. So one of the things, of course, is I think energy prices, uh, are rising. Uh, if you look at our own energy, uh, uh, costs, we have not really, uh, pricing, we have not adjusted pricing. So some of these things may need to be done for other, for basically fiscal reasons, for monetary stabilize, macro stab. Sterilization reasons and those are going to have an impact on prices. Uh, the other one is, of course, the, the food supply, uh, and we're seeing some of the effects of, of the food, uh, you know, the, the effects of the fertilizer subsidy, uh, fertilizer, uh, restrictions on food supply. So I think these three factors or some of these factors really need to be taken into consideration when we're looking at inflation. Uh, I, I, I think we are not at the stage of hyperinflation, but I think the policymakers really need to, uh, be mindful of, of, of where inflation is headed. Um, I think, but we still need to make the right adjustments, particularly in terms of price adjustments. But I, but, but, but we also need to be mindful of the, you know, the bottom, uh, bottom of the pyramid or those who are at the very vulnerable, um, parts of society and ensure that, uh, the support is given to those people. So even if you are, uh, uh, you are addressing the price. Changes in terms of administrative price changes for fuel, for, uh, energy, etc. We need to make sure that that bottom of the pyramid is, is taken care of. So I, I don't think we're quite at the stage of hyperinflation, but I think we, the policymaker really needs to, uh, keep their eye on the ball and ensure that the inflation is managed because inflation, um, increases the immune. Inflation has a huge bearing on the kind of decision making both from the producer point of view and the consumer point of view which finally feeds into growth. So I think that that really needs to be kept in mind. Thank you very much, Dr. Roshan. I think we can entertain one last question from the audience, Mr. Shamindra. This one is for you. Uh, the question is whether vehicle import restrictions have impacted the leasing industry, if at all. Oh yes, yes. It has impacted, it has impacted. Um, and, uh, But it's, it's the way it is, and we need to manage through that process. We need to understand the big picture. Um, and I think there are bigger priorities that need to be resolved. Uh, as a business, we will do what is best and it also gives an opportunity for us to look at other, you know, areas which we have not done or gone into, so. secondhand or rather a used car market that has seen a considerable increase in prices. There are about bubbles. Um, so, I mean, this is all part and parcel of what's happening around us, and um, As a company we see a market share which we lost 3 to 4 years back which we can regain, so we will work towards that and we will work towards diversification of our business in order to stay competitive. Thank you very much, sir. Uh, with that, I think we've come to the conclusion of our panel discussion for today. Uh, a warm thank you to Doctor Roshan Pereira, Mr. Hasipa, Mr. Rajendra, Mr. Shamira, Mr. Hantima, and Mr. Faris. Uh, we highly appreciate you taking time out of your busy schedules to be here today with us, and thank you to all of you being present and joining in with us both in person and online. We wish to see you once again with a similar discussion. Thank you very much. Have a good night. Let's put our hands together for our panelists, ladies and gentlemen. Well, I do hope you agree that, uh, our panelists today have really helped to educate us and enrich us with their very interesting perspectives. But before we wrap up, we have one final item on the agenda. We do have, uh, the co-convenor of uh NextGen Sri Lanka who would like to come up on stage and deliver the formal vote of thanks as well as appreciate our panelists on stage as well. So with that, ladies and gentlemen, let's put our hands together for Melinda Rajapaksa. Good evening ladies and gentlemen. Usually at the end of next year NSL events, some of you have attended our previous events, to keep both parties, all the parties happy, Rashika and I both deliver vote of thanks. Rashika in English because for some reason Kalambo thinks SJB should be speaking in English and then meaninghall. Uh, since the priority today at the moment is dinner, only I will be delivering the vote of thanks. So, uh, distinguished guest representing, especially representing SJB today, apologize to me for my English, but, however, I have a written, prepared speech, not because of SJB, but my office boss, Director General of the Government Information Department, is in the audience. So, next day I said, was found to debate. We have talked about this many times. We have debated at many places from Vihara Mahadevi to Shangri-La, from 52 days of government, that's when we found Ciri is here, one of our founding members. Most of our founding members are here today. From 52 days of government to date we have debated. We have fought for our political ideologies, for our policies, for our parties. Different parties we are representing to protect what we stand by. Next NHL brings politically different ideas and politically different people to one room, but most importantly, we usually don't have fancy rooms and dinners like this, so we must thank World Bank Group for helping Next GenerL to bring such an amazing panel together today to such a nice place. Faris. Country director for the World Bank Group here in Sri Lanka. Thank you very much. And uh please give a And uh Chio, Chio is not here, country manager of the World Bank, but she's watching us online. Thank you very much, Chio. And thank you very much, Mr. Hans Timmer, World Bank chief economist for South Asia. When we planned this event actually a few weeks ago when we met and when we planned uh this uh event a few weeks ago, Hans was supposed to be here physically. Uh, but before Hans Omicron came, so, but thank you very much, uh, Hans. And then Mr. Rajendra Thiagaraja, a senior banker and uh former chairman Ceylon Chamber of Commerce, thank you very much sir for being here. And then my friend Shavindra. Uh, CEO people leasing. Actually, I called Shamindra to invite for this event, uh, a few weeks ago, 2 weeks ago, and I said, Shamindra. Bro, you have to defend the government. That's what you have to do in the panel. And Shamira didn't answer my calls for a week. Uh, thank you very much for being here. I'm kidding, actually, I talk to Shamira more than I talk to my wife. Uh, Shamindra, thank you very much for being here today. And uh Doctor Roshan Pereira, thank you very much, uh, madam. Most mispronounced name in 2022 probably. It's not Roshan, as many of you ask, it's Miss Roshan. Thank you very much, madam. And then my dear friend Hasita, Haar, thank you very much. Same story. Uh, you were supposed to be here, uh, physically a few weeks ago when we invited you. But uh thank you very much for being here. Uh, while the entire home front is positive, uh, so you are excused now. As you told me after 9 o'clock, you have to wash dishes, wash kids, so you are excused. Thank you very much for being here, Azita. Uh, then our kind moderator Satya, thank you very much for, uh, making this a wonderful conversation. You have been with uh Next Generation and supporting NextGenation for for some time. Then, uh, former Deputy Minister Harshha Silwa, uh, thank you very much, sir. It's an honor to have you here. Uh, you have been to many next NSL events. Uh, it's encouraging. Thank you very much for being here. And then two young Parliamentarians from my opposition, uh, Honorable Mayantha and Honorable Arshana, thank you very much for being here. It's an encouraging. Uh, then, uh, Trishma, thank you very much, uh, have been a very big support to NNSSL. And finally, you all, uh, very dear friends who represent different political ideologies, you all are here in this room today. Most of you have different political ideologies, different political beliefs. It's a houseful event today that shows the credibility NextGenSL has built over the years and the political enthusiasm in Colombo. So that's very encouraging for young politicians like us. Thank you very much, uh, Suppo and the team. Uh, our Facebook Live was very well received across a number of platforms, uh, a number of comments, a number of suggestions, a number of different debates under the Facebook Live. So thank you very much everyone for watching online and joining us. So, again, have a good day. So, dinner is served outside. Uh, we have around 140-50 participants today. But we ordered dinner for 100, so all the best. Well, thank you very much Melinda. We do have special tokens of appreciation coming to our panelists who are here with us physically, of course, the panelists who are joining us online. We'll find a way to virtually or physically send it to you, but for now, to thank our panelists on stage, of course, we have special tokens coming up right away. On that note, ladies and gentlemen, as we thank our panelists as well as our wonderful moderator. We thank you all for being here with us at this discussion on the Sri Lanka Growth strategy 2022 organized for you by NextGen Sri Lanka in partnership, of course, with the World Bank, and as Melinda said, it's now time ladies and gentlemen for dinner and fellowship. So please do join us and we do hope you have an enjoyable rest of the evening. Thank you and have a good night.

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