“As professionals, in a situation where you cannot forecast and make assumptions, what we should bring to the table include adaptability, agility, resilience and strategic foresight,” stated Pavithra Samarasinghe.

The Director – Finance and Compliance of A. Baur & Co. was commenting on the role of financial practitioners.

Samarasinghe began by discussing Budget 2023, highlighting the “setting up of an agency for external trade and investment, restructuring state-owned enterprises (SOEs) and developing or establishing new economic zones” as being vital proposals.

She then outlined several fiscal considerations that support the decision to divest; a divestiture is appropriate in the Sri Lankan context for several reasons including insolvency, raising capital and reducing debt. “The government has proposed to divest itself of five institutions,” she noted.

On the other hand, popular opposition is inevitable when privatising SOEs; and in this context, Samarasinghe said the government must explain “why it has to take such a drastic measure concerning non-performing or loss-making SOEs” – because it’s important to make a quick economy recovery.

According to her, SOEs ought to be reorganised into “a revenue stream from the moment they become profitable. They should be required to pay tax on revenue as well as profits.”

“Ideally, in a corporate context, we would see the actual versus budget,” the finance and compliance director said, in response to LMD’s question about what she would consider beneficial in terms of the budgeting process.

She continued: “We go deep down into the details, check expense categories, which line item we had to spend more on and the reasons for that. In this budget, we don’t see that. We must incorporate that type of visibility; and the reasons would be much clearer if we do so.”

Samarasinghe readily agreed that as a consequence of some of the measures announced in Budget 2023, the squeeze on disposable incomes will impact demand, which in turn will affect corporates.

And she explained the magnitude of the above: “The moment purchasing power comes down, there’ll be less consumption. When consumption is low, the revenue streams of corporates would be affected adversely, which will impact their profitability, liquidity and long-term sustainability.”

Commenting on the food crisis, she asserted: “According to recent economic developments published by the Central Bank of Sri Lanka…, it was categorically mentioned that the short supply of fertiliser drove the decline in growing rice and vegetables. Therefore, the reduction in crops is the main issue rather than affordability.”

Meanwhile, she applauded the proposal to reduce crop losses after harvest and enhance transportation infrastructure, saying that the government’s goal is to create conditions that would keep 30 percent of harvested crops for human use rather than letting them go to waste.

In her opinion, the most crucial proposal in the budget is the Rs. 500 million funding to combat child malnutrition.

Moving on to healthcare, Samarasinghe explained that due to the government’s decision to “drive towards establishing letters of credit, which is administratively cumbersome and costly, some suppliers did not agree with our proposals – and to offer enhanced credit and change the payment terms.”

“The healthcare sector faced many challenges initially. So until mid-September and in October, there were many issues concerning securing imports, mainly because the liquidity issue led to less confidence among suppliers,” she elaborated.

With a quote by Carol Bryant, Samarasinghe brought the conversation to a close: “There are three types of people – those who make things happen, those who watch things happen and those who wonder what happened.”

“So it’s time to display the characteristics of the first type; those who make things happen. And let us start now,” she concluded.