Opinion: We Have a Plan to Collect More Rupees. Where Is the Plan to Earn More Dollars?
Better tax collection strengthens Government finances. But lasting economic security also depends on what Sri Lanka can earn from the world.
By Eng. Lalith Kahatapitiya
Sri Lanka has announced a strategy to raise Government tax revenue to at least 17% of GDP by 2031. This is welcome. Stronger public finances, lower borrowing needs and reliable public services are essential to economic stability.
But one question deserves equal attention: will a stronger Budget also ensure that we have enough foreign exchange to meet our future obligations?
More rupees in Government revenue do not automatically mean more dollars earned by the country. When external debt repayments fall due, the Government needs foreign currency. It can purchase dollars using rupees, but those dollars must be available through external earnings, investment, reserves or further financing.
Fiscal discipline matters greatly. Yet it cannot substitute for a resilient national capacity to earn from abroad.
Why our established earnings may not be enough
Sri Lanka has made commendable progress since the crisis 2022. Debt restructuring, fiscal reforms and the IMF-supported programme have helped restore stability. Our exporters, tourism businesses, overseas workers and service providers continue to make invaluable contributions.
Nevertheless, history should make us cautious. Sri Lanka has repeatedly sought IMF support since 1965, and, before the recent surpluses, recorded annual current account deficits for decades. Repeated foreign exchange pressures culminated in the painful shortages of 2022.
The IMF’s May 2026 assessment projects average annual foreign-currency public debt service of about 3.3% of GDP during 2027–2032. Those payments must be met alongside imports of fuel, medicines, machinery and industrial inputs.
Recent improvements are encouraging. But can we confidently rely on growth in the same established sources alone to meet both our obligations and our future ambitions? A few good years do not guarantee lasting resilience.
Two tasks, not one
We must continue strengthening exports, tourism, and international services. There is much more to achieve through productivity, competitiveness and market development.
At the same time, we need a second, deliberate effort: opening entirely new ways for businesses and professionals to serve and earn from the world. This would diversify our income and make the economy less vulnerable when any one source weakens.
Other economies offer practical lessons. Singapore developed a major oil-refining industry without its own crude oil. South Korea built competitive steel and shipbuilding industries. Penang became an electronics centre, Taiwan pioneered the dedicated semiconductor foundry model, and Dubai grew through aviation, logistics and global trade.
They did not abandon their existing strengths. They created new capabilities and new sources of international earnings alongside them. Sri Lanka should pursue the same combination.
Open the door, then let enterprise work
In decades of building engineering and manufacturing businesses, I have found that entrepreneurs usually do not need Government to find customers or carry their commercial risks. They need predictable rules and the freedom to act on viable opportunities.
Sometimes an outdated restriction, an unsuitable procedure or poor coordination between public institutions prevents a promising business model from operating. Removing such obstacles can open opportunities for many enterprises, often at modest public cost.
The newly established National Business Facilitation Centre, ViYASA, under the Presidential Secretariat could play a valuable role where genuine regulatory or administrative barriers need Government action. Other opportunities should be left to businesses to pursue independently.
A new industry may take years to earn substantial foreign exchange. But the decisions that make it possible need not take years.
Targets we choose for ourselves
Sri Lanka closely follows targets agreed under its IMF programme, including fiscal and reserve measures. These serve important purposes. Yet the programme does not set a specific performance target for how many entirely new foreign-exchange earning pathways we activate, or for the additional net earnings those pathways deliver.
Why should we wait for someone outside Sri Lanka to set that ambition? The IMF has its responsibilities. We have ours.
Alongside the revenue strategy, the Treasury and Presidential Secretariat could establish a ten-year programme to develop additional, sustainable net foreign-exchange earning and saving capacity. A credible starting point would be to identify commercially viable opportunities, assign accountable officials and set dates for decisions.
Quarterly reporting could answer just three questions: How many new pathways have become operational? How many enterprises are using them? And how much genuinely additional net foreign exchange have they earned or saved, after related foreign-currency costs?
Targets should follow sound assessments, not arbitrary forecasts. But accountability should begin now. Progress is measured in operating businesses and actual results, not meetings or announcements.
What are we planting for our children?
Our grandparents and great-grandparents planted fruit trees, often knowing they might never enjoy the harvest. We still benefit from their foresight.
Today we are planning the debts our children and grandchildren will help repay. Should we not be equally determined to leave them new opportunities through which they can earn and prosper?
The IMF can support stability and reform. But the ambition, decisions and sustained action to transform our earning capacity must come from within Sri Lanka.
No one needs to impose that responsibility upon us. We owe it to our children.
Our goal must be to transform Sri Lanka from a nation that borrows its way forward to one that increasingly earns its way forward.
The writer, Eng. Lalith Kahatapitiya, is a Chartered Engineer and Founder and Chairman of the KIK Group of Companies. The views expressed are his own.