There is no food crisis to come out from- Minister Cabraal tells BBC

(COLOMBO, LANKAPUVATH) – The State Minister of Money and Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal in an interview with BBC said that there was no food crisis in Sri Lanka to come out from.

“Like other countries of the world Sri Lanka too faces challenges. They can be overcome through prudent policies. The country’s economic growth rate this year will be 4.5 percent”,the state minister Cabraal said.

Responding to a question, why the government denied there is a food shortage while a food emergency has been declared to address the same issue. The minister Cabraal responded that, “country has sufficient stocks of all food items and there is no shortage whatsoever. However, some unscrupulous traders had mischievously hoarded stocks of several food items in order to create an artificial shortage and profit by such exercise. Naturally therefore, government had to take the necessary steps to deal with the situation.”

He further said that, the government does not foresee a food shortage in future.

When BBC asked on how much inventory is available in Sri Lanka on rice, fuel, sugar, kerosene oil, LPG, wheat flour and other essential items, he said, “the government can give a categorical and firm assurance that all essential items would be readily available at all times. Food security and Law & Order are two of the top most priorities of the government, and hence the government considers the availability of all essentials as a vital part of its functions.”

Below is an excerpt of the interview :

Question: The government’s overnight implementation of going 100% organic is being seen as a threat to the country’s food security. What was the rationale behind the implementation during the pandemic and overnight?

Answer: The government’s decision of growing 100% organic food has been discussed for more than 10 years, in the face of the massive increase in kidney-related and other diseases in the country. The need to change over to organic food cultivation had also been referred to, in the manifesto of President Gotabaya Rajapaksa. In implementing this strategy, the government is well aware that there would be challenges, and already, many challenges have been addressed while special teams are working to deal with those that are emerging. The outcomes so far have been reasonably satisfactory with many stakeholders in the different processes adjusting well. Therefore, the government is confident that this vital transition to organic cultivation would take place quite smoothly. As with any major change, there are pockets of resistance and various groups continue to lobby against this decision. Such resistance has sometimes been picked up by various local and international agencies and used to convey a more-than-actual resistance.

Question: What steps did the government take to ensure there is adequate supply of compost or other organic fertilizer after chemical fertilizers were banned in April?

Answer: The government has already carefully assessed the requirement of compost and other fertilizer and the necessary steps have been taken to provide such fertilizer in consultation with the relevant stakeholders.

Question: Many economic experts have pointed out that the country is running short of foreign exchange and a lot of it is going towards debt settlement. What would be the government’s response to this?

Answer: Sri Lanka has successfully managed its reserves and forex cash flows so as to be able to settle its maturing forex debts as well as ensure the adequate supply of all essential imported goods and services. However, due to the non-availability of tourism receipts consequent to the Covid pandemic, a corresponding adjustment in the forex outflows including the stopping of imports of vehicles, had to be done. That would be a temporary measure which would necessarily be restored upon the resumption of tourism. The government has also pursued new ways and means of promoting non-debt inflows which is now gaining traction, and that too would hold the country in good stead.

Question: Many economists say only solution for government to come out from the present crisis is to go to the IMF. Will Sri Lanka go for IMF? If not, could you explain why?

Answer: Some economists think the IMF is the panacea for all economic ills, while others can only see a crisis, but no solutions. From the time the new government came into office in late 2019, these economists seem to be fixated on an IMF solution only. They fail to understand that the IMF can’t bring 2.5 million tourists who would deliver inflows of USD 4.5 million or increase worker’s remittances or increase gem exports, etc. Nevertheless, the government has assessed the challenge and has already developed a realistic plan which deals with the pandemic-hit economic problems, including debt, reserves and investment. Those plans are now being implemented and the government is confident that with the effective implementation of those plans, the current weaknesses would be addressed. In these circumstances, there is no need for Sri Lanka to go to the IMF and thereby cause unnecessary pain to its lenders and investors.

Question: How long does the government think it will take to come out of this situation of food and economic crisis?

Answer: It is reiterated that there is no food crisis, and accordingly there is no crisis to come out from. Further, this year, Sri Lanka will record an economic growth of over 4.5%. Inflation is in mid-single digits. Every single debt instalment has been paid on time. Of the Covid-vulnerable population, 99% have been vaccinated with the first dose while 65% have received the second. Exports and remittances are rising. The banking system is vibrant and stable. New Laws for the Securities and Exchange Commission and Colombo Port City have been passed recently, which will encourage future investment. Interest rates are at reasonable levels. The LKR has faced challenges, but is now stabilizing. Therefore, whilst it is true that Sri Lanka is facing economic challenges just like all other countries, the situation is being managed satisfactorily. In that background, it is sometimes strange that some international news agencies tend to exaggerate the situation in emerging nations and try to portray those countries as being in crisis or stressed out or in a debt trap, or in financial difficulty. Sadly, such agencies fail to acknowledge the vast improvements that are taking place in countries such as Sri Lanka, even in the midst of this global pandemic. (news.lk)

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