Sri Lanka's president on Thursday appointed eight task forces to explore investment prospects after reaching a preliminary deal with the International Monetary Fund (IMF) for a $2.9 billion bailout fund.
They will facilitate the government in starting new businesses, obtaining construction permits, registering business property, obtaining loans, protecting investors, cross-border trades, and paying taxes.
IMF AgreementThe IMF said that its deal with Sri Lanka is contingent on approval by IMF management and the executive board, as well as on financing assurances from Sri Lanka's creditors, including China, Japan, and India.
The accord is also subject to Sri Lankan authorities' implementation of prior agreed measures to stabilize its economy and the government's efforts to reach a collaborative agreement with private creditors.
The program aims to raise Sri Lanka's fiscal revenue, implement new pricing for fuel and electricity, increase social spending, promote fiscal consolidation, rebuild foreign reserves, and strengthen financial sector safety nets.
"Starting from one of the lowest revenue levels in the world, the program will implement major tax reforms. These reforms include making personal income tax more progressive and broadening the tax base for corporate income tax and [value-added tax]," it said.
President Calls For Export-Oriented EconomyWickremesinghe described the preliminary agreement as "an important step" towards resolving Sri Lanka's bankruptcy crisis and debt moratorium, and improving the standard of living of its 22 million population.
"The beginning will be difficult, but we know as we go on that we can make more progresses," he said. "I appeal to the country, let us reorient ourselves to an export-oriented economy which will also make it easier for us to sustain our social services."
Sri Lanka's main exports include apparel, textiles, tea, spices, and rubber-based products.
Sri Lanka already had the second-highest child malnutrition rate in South Asia before the economic crisis. The country’s food inflation stood at 90.9 percent in July, with widespread food and fuel shortages, as well as daily power cuts.