The Hon. Anura Kumara Dissanayaka - President, Minister of Defence, Minister of Finance, Planning and Economic Development and Minister of Digital Economy

¶ 01 Postponed to 2027, is it? So the proposal to extend the decision to sit in the President’s Chair from December to 2027 comes from Hon. Sampath. You always bring proposals to postpone. Fine. But remember, there will be no “December President” as you imagine. Shift your political enterprise to a different frame.

¶ 02 I want to clarify the U.S. column tariff issue. On April 2 it was announced, effective April 9. The U.S. set a principle: 50% of the bilateral trade imbalance percentage becomes the duty rate. Between the U.S. and Sri Lanka, the trade gap is 88%; half of that is 44%. That is how our 44% was calculated — not due to government failure. If a country received 25%, it means the bilateral trade gap was 50%. Thus, our 44% comes from the nature of the trade gap, not a domestic issue.

¶ 03 We entered discussions from a difficult position. We are in an IMF program; differences in population, economic size, lifestyles make negotiations complex. Over 25% of our exports go to the U.S., and about 60% of apparel exports — risking jobs for roughly 350,000 workers. We formed a strong team: Treasury Secretary Harsha Suriyapperuma, Central Bank Governor Nandalal Weerasinghe, Commerce Secretary Vimalendra Raja (an expert on tariffs), and my Economic Adviser Duminda Hagulankama. Our Ambassador to the U.S., Mahinda Samarasinghe, provided vital coordination, often late at night given time differences. Our team twice visited the U.S. and also held many Zoom meetings. I personally intervened. Our aim was to resolve this with minimal harm to the economy. We have not signed any final agreement yet, but we achieved progress: a significant reduction — about 20 percentage points — from the 44% column tariff.

¶ 04 Because 44% was formula-based, achieving a cut to around 24%–25% (down by roughly 20 percentage points) is a substantive outcome of negotiations. We consulted stakeholders — industries and exporters — on potential impacts.

¶ 05 We faced three external challenges: the unexpected U.S. tariff; the IMF program schedule; and the potential loss of GSP Plus by end-2027. On the IMF: contrary to false claims, it was the third review that concluded — scheduled for last September, paused due to elections, resumed November 16 right after polls. We completed the discussions, adjusted measures (reduced PAYE, reduced dairy-related taxes), deferred the service tax and property tax slated for March, and secured the fourth tranche by June 30 after concluding the fourth review, with the fifth tranche agreed thereafter.

¶ 06 On electricity tariffs: there is clarity. CEB and CPC had heavy debt. Treasury assumed CPC liabilities to safeguard state banks. Therefore, fuel pricing must reflect cost of production and distribution, with targeted subsidies where necessary (e.g., kerosene support for fisheries). That is our policy; it is not an IMF trap. Some predicted collapse over electricity bills; it did not happen. We analyzed CEB accounts, cash flows, generation forecasts (hydro, wind, coal), and set tariffs by formula. There was a small increase now because tariffs were reduced by 23% in June last year and 20% this January — a 43% reduction. Last year’s surplus (about Rs. 41 billion from not reducing earlier months) was used to cushion January–June bills this year; no similar surplus exists for the next half. These are scientific, formula-driven decisions.

¶ 07 On GSP Plus: about 23% of our exports go to the EU. With GSP Plus covering thousands of HS codes, losing it in 2027 would be a shock while the economy is still stabilizing. We are in good discussions and have reached understandings: repeal the Prevention of Terrorism Act; amend the Online Safety Act; conduct proper investigations into disappearances and crimes. These are our government’s positions — our duty to secure human rights and democracy.

¶ 08 Relief to the people requires a stronger economy. Key indicators show stabilization:

¶ 09 - Exchange rate stability: For about a year, the dollar has been around Rs. 300, shrinking the black market and uncertainty. - Exports: Jan–Jun this year recorded the highest six-month export earnings in our history — about USD 8.48 billion vs. USD 7.8 billion last year, up over USD 600 million. We are diversifying products and markets. EU (ex-UK) exports up 11% in Jan–Jun; in June alone up 23% YoY. Africa: Jan–Jun exports up 35%; June up 58% YoY. ASEAN/East Asia up 22% for six months, 30% in June; exports to India up 26%. - Tourism: Jan–Jun earnings up about 10% YoY; we expect record arrivals from September–October onwards and a record export-earnings year overall. - Remittances: 2023 saw USD 5.98 bn; 2024 about USD 6.5 bn; this year’s first six months USD 3.78 bn — projecting a record year, with seasonal peaks later. - FDI: Jan–Jun last year USD 252 mn; this year USD 507 mn — 101% growth. BOI is targeting USD 1.0–1.5 bn this year, with leadership working pro bono. - Port City: four projects approved — USD 588 mn, 438 mn, 112 mn, and 175 mn (total USD 1,313 mn) — moving from desert to development. - Reserves: targeting over USD 7 bn by December.

¶ 10 Vehicle imports: after five years, LCs opened amount to USD 1,267 mn to date; we expect USD 1.5–1.8 bn by December. Rumors that we will reimpose bans are false and designed to trigger panic LCs and FX pressure. We will not reimpose restrictions nor raise taxes arbitrarily on vehicles; the open market will continue. Economic growth needs movement, not barriers.

¶ 11 Domestic investment via BOI is up about 18% YoY; job creation follows investment. Revenue performance is strong: against a Budget target of Rs. 4.5 trillion, IRD met 101% of YTD targets by July; Customs reached 115% of quarterly targets; Excise exceeded targets (Rs. 143 bn vs. 136 bn). For the first seven months, all three major revenue streams surpassed targets. We will not repeat past populist cash handouts that drove collapse.

¶ 12 On sugar industry issues: production costs are high, plants outdated, labor heavy; either Treasury absorbs losses or import duties stabilize prices. We maintain VAT and import duties where appropriate while giving targeted support. We provided Rs. 1 billion to sugar companies; some taxes and dues remain unpaid — that culture must change.

¶ 13 We have Rs. 1 trillion in Treasury liquidity (built from about Rs. 650 bn previously), enabling us to stabilize bill/bond markets and prevent artificial rate spikes.

¶ 14 Monetary policy: single-digit interest for over a year. We are engaging banks to expand credit to MSMEs and agriculture, not just a few large borrowers; state banks are on board and private banks are being engaged.

¶ 15 This economy is being steered to a strong, stable position. Collapse will not occur unless there is political instability. We have seen governments fall in the House, in the streets, or at elections. This one will not fall by intrigue. If it falls at an election, we accept that.

¶ 16 As for talk of a “December President,” you have now clarified it is “whenever in December,” not necessarily this December. Do not be trapped by agendas that aim to create uncertainty because the law is reaching those who long believed it would never touch them. We are ensuring the rule of law applies to all, irrespective of wealth, family, or networks. We have empowered the CID and the Commission to Investigate Allegations of Bribery or Corruption. Courts have ordered arrests (e.g., a former Navy Commander) — those orders must be respected. Creating fear to stall investigations will not work. We will protect honest officers doing their duty — in or out of government.

¶ 17 Recent attempted protests fizzled. Claims of mass uprisings are manufactured. Those proclaiming imminent collapse cannot present a single coherent pathway for such a fall.

¶ 18 We inherited stalled projects: Mirigama–Kadawatha Expressway; Katunayake Airport expansion; Kandy Digana water project — all halted due to bankruptcy. Restarting requires renegotiation, damages, and fresh financing. The Exim Bank of China has now agreed to a Yuan-denominated concessional loan; Cabinet approval is forthcoming to restart the expressway segment. JICA’s original loan for the airport now covers only about 30% due to cost escalations; we are expediting supplementary financing.

¶ 19 Energy sector: We are committed to 70% renewables by 2030. Siyambalanduwa is breaking ground in September; Sampur agreements are ready; a wind plant in Mannar and other identified sites will proceed. CPC storage is being expanded with six new tanks at Kolonnawa and rehabilitation of Trincomalee tanks; current national stocks cover only about three weeks — this must increase. We are tendering to convert expensive diesel/naphtha generation (Kelanitissa, Kerawalapitiya) to LNG; 12 years of delays due to political tug-of-war (Korea vs. Japan proposals, then the attempted unsolicited deal) have cost consumers. Now tenders are underway with award imminent.

¶ 20 Stabilization benefits must flow to people — better jobs, improved living standards. We focused the past year on macro stabilization to avoid a second, worse crisis. We will now push sectoral development: primary healthcare reform (family physician model — one doctor per 10,000 population, starting 100 practices this year), education, public transport, agriculture, IT, and roads.

¶ 21 On MPs’ pensions: proposals to reduce from Rs. 1 million to Rs. 250,000 (insurance) and to cut pensions were introduced by your own members; yet some hold press conferences opposing them. We will proceed with rationalization.

¶ 22 On allegations and files: bring them; our doors are open. We have referred port container-release practices (used 13 times historically during congestion) to the CID regardless of who is involved. We are cleaning up bank NPLs tied to politically connected borrowers with massive exposures. We have installed capable, independent leadership in state banks and Port City — many serving pro bono.

¶ 23 Law and order: Organized crime has infiltrated state systems. We are dismantling networks — illegal arms (5.56 rifles from camps), contract killings, prison contraband, forged passports and RMV fraud. Many overseas-linked criminals have been brought back. Give us time; we are acting methodically through intelligence and the CID.

¶ 24 Air Lanka (SriLankan Airlines): We will not sell it in distress. Operations posted Rs. 29 billion operating profit by March 31; legacy liabilities from past aircraft and finance deals remain, including the infamous Airbus “Do it” SMS episode that cost USD 117 million. We are negotiating with unions on arrears like cabin crew meal allowances from 2019; we support a fair, phased solution.

¶ 25 State enterprises: SLPA operating profits up ~60%; SLT turnaround; we will rationalize and invest (e.g., converting MILCO’s Badalgama white elephant into a modern integrated facility to actually process capacity, rather than letting imported equipment decay).

¶ 26 The Budget will be prepared after consulting all sectors to resolve bottlenecks, support domestic production, and revive national pride. We are building a clean, rules-based state and a prosperous economy. No one in our leadership is in politics for private gain. For the first time, domestic and international actors accept that Sri Lanka’s top political authority is not stealing. That confidence matters for investment, diplomacy, and our global standing.

¶ 27 This country was branded dark in human rights reports and corruption cases (from Airbus to diplomatic property scandals). We must cleanse it and give our children a credible future. That requires three pillars: supremacy of law; economic prosperity; and social stability. We will deliver these with patience, planning, and firmness. Do your politics as you wish, but do not obstruct the lawful punishment of the corrupt. We invite cooperation for the sake of the nation.