Sri Lanka opposition says better governance will preserve trade concessions

(From left) Dharmasri Kumaratunga, Director - Payments and Settlements, Central Bank; Nanda Fernando, Managing Director, Sampath Bank; and Tharaka Ranwala, Head of Operations and Group Chief Marketing Officer, Sampath Bank

Jan 13, 2010 (LBO) – Sri Lanka’s opposition presidential candidate promised better governance which will lead to a continuation of trade concessions from the European Union and tough new anti corruption laws.

Analysts say a currency depreciation would help improve the competitiveness of exporters and also help increase nominal state revenues to help finance a 10,000 rupee a month promised pay hike to Sri Lanka state sector.

The ruling coalition has said that the pay hike would cost 132 billion rupees a year and has instead promised a 2,500 rupee hike, which would be a less of a burden on private citizens.

From 2004 Sri Lanka’s already bloated state sector has expanded by around 30 percent to 1.1 million workers. People outside the state, have for years contributed in taxes, inflation and currency depreciation to keep afloat a bloated state.

State enterprises also make large losses and are topped up by taxes collected from the people.

Fonseka said businesses were suffering high levels of taxes up to 64 percent and it would be brought down.

Opposition spokesmen have said cutting corruption will help finance a state sector salary hike.

Fonseka is promising a new anti-corrupti