Appreciation of Rupee is no Cake Walk- Bandula G


Opining on economic condition of the country, the Minister of International Trade and Investments Promotions Dr. Bandula Gunawardena disparaged the former government’s slap-dash approach towards to the economic affairs of the country and said that Ranil led group perpetrated a daylight robbery in the Central Bank which is the root cause for the drastic depreciation of Sri Lankan rupee in comparison to the currencies of other Asian countries.  

Below are the excerpts of the confabulation the Ceylon Today had with the minister.

The country is in a state of anarchy due to the absence of any legitimate government. In this context, the Cabinet of Ministers appointed by President Maithripala Sirisena has approved the vote-on account for the year 2019. How lawful is it to utilize that finances by the new government?

There is no confusion over the legitimacy of this government as the President of the country is constitutionally vested with the sole authority to appoint a Prime Minister and the Cabinet of Ministers. The new Premier and the Cabinet of Ministers were appointed by the President by upholding constitution.

If the appointment of the new Premier and the government is illegal, then the opposition should have filed a case in the Supreme Court. The tri forces, Department of Police and the state servants have already have accepted the new government and carry out the orders of new government led by President Maithripala Sirisena and Premier is Mahinda Rajapaksa.

In this context, how can anyone allege that the government is not legitimate? This government has no such issue and can function under ordinary circumstances. It is the opposition who creates and speared the notion that this government is illegal.

As you know, the Speaker in the Parliament didn’t uphold the Parliamentary traditions and customs when conducting Parliamentary sessions. He acted as a puppet of the United National Front, not as a true and impartial Speaker.

It is also observable that Janatha Vimukthi Peramuna audaciously acting in the Parliament in accordance with the whims and fancies of the United National Party.

The opposition claims that they brought and passed a No Confidence Motion (NCM) against the new government and the Premier. Everyone knows that the opposition did not follow the proper modus operandi in bringing and passing the NCM. Hence NCM does not remain valid but this government and the cabinet approvals.  

According to the Central Bank’s latest data, Sri Lankan Rupee depreciated by 15 per cent to Rs 180 against the US dollar during the year up to now. When you were in the opposition, you were clamouring that the then government did not take any measures to prevent the depreciation of the rupee. Here is your chance to show your competence in appreciating the rupee and would you tell us of this government’s strategies to achieve it and by when?

It should be stressed that the appreciation of rupee cannot be achieved in a day. Similarly, the depreciation too does not take place overnight.

The Economic Research Unit of the Joint Opposition warned then that the USD would experience a drastic depreciation and would reach Rs. 200 by December 2018, if the government led by Ranil Wickremesinghe continued to act in a haphazard manner with regard to the economy of the country.

The rupee started depreciating when the Ranil and the Company purloined the Central Bank in 2015. When this daylight robbery took place, the foreign investors withdrew all their investments, as a result of which the country’s foreign reserves deficit widened and the rupee started deflating drastically. UNP should take full responsibility for the depreciation of rupee as well as the downfall of the country’s economy.

Hence, I would say that the further depreciation of the rupee is inevitable.

By 2019, we will be appreciating the rupee to 160 against the USD and by 2020 we want to bring it to 140.

We are planning to grant tax concessions along with other offers such as a tax holiday of 5 years for the investors to encourage investments in Sri Lanka.

We have identified that the former government has levied excessive taxes on foreign remittances and as a result, approximately 8-10 USD billion worth of foreign influx has been held by those who are employed abroad to evade the taxes.

After Premier Mahinda Rajapaksa took over the Ministry of Finance, he forthwith took actions to lift the high taxes levied on the Non Resident Foreign Currency as well as on foreign remittances.

As the Minister of International Trade and Investments Promotions, I have proposed to incorporate in the next budget some highly profitable and attractive packages that no government has ever offered them before to promote investments in the country. We enable them to invest that money in the government projects and earn profits while granting them subsidies and tax concessions.

We learnt that by intimidating, hectoring and enforcing laws, we cannot make them bring those money and it is only be offering concessions and benefits that we can achieve it.  

We are also planning to implement a national program to encourage exports and promote import substitutes in a bid to narrow the trade deficit and to lessen the pressure on rupee and to increase the country’s reserves.

By January 2019, Sri Lankan government is required to settle a debt installment of 1000 USD billion. How are you going to settle the payment?

In terms of Monetary Law Act, Central Bank is responsible for the management of the debt as the agent of the Government. The Public Debt Department (PDD) functioning under the purview of CBSL is responsible in handling all matters pertaining to debts including foreign debt of the Government. There is a team of specialists to handle and settle the debts. Their responsibility is to settle the installments of the debt taken on the due date.

Even if there is no government in the country and there are no ministers, the debt repayments are taking place without interruption and hindrance. Likewise, the next installment in 2019 will be paid on due date by the PDD of CBSL. Those who are not aware of this mechanism create a false phobia among the public that the debt will be accumulated and Sri Lanka will face dire economic conditions.

Sri Lanka- Singapore Free Trade Agreement (SLFTA) was roundly criticized by you when you were in the Opposition pointing out the damage and the harm it can cause to the country. We learnt that this government has no plans to nullify the agreement. Why is this contradiction in opinions when not in power and when you are in power?

It not possible to nullify an agreement made between two states. We have never stated falsely that we would be annulling the SLSFTA.

What we can do is to revisit the agreement and make necessary changes in it to thwart the detriments. We have never signed agreements with foreign countries that would be damaging to the country and its citizens. Neither will we in future. If the former government has committed that mistake of signing agreements without considering the damage that it can cause to the country and its people, what we shall do is to amend to suit the country.

However the former government contravened the constitution by not issuing the Sinhala and Tamil translations of the SLSFTA. I have instructed the Secretary of my Ministry to look in to the translations of and it is being printed and we will be able to produce the translated copies of the agreement.

Since many parties have filed lawsuits against the SLSFTA, we should await the verdict of the Supreme Court to go ahead with it.  

Nevertheless, the new government will be forming National Economic Policies and all foreign agreement will be signed in terms of that policies. This way, we can sign state and people friendly trade agreements hereafter.

Subsequent to the forming of a new government by ousting the extant Premier on 26 October, the country was plunged into disorder and many countries issued travel advisories to their citizens with regard to travelling in Sri Lanka. This has its detrimental effects on the economy since approximately 4 million of the population who were directly and indirectly benefitted by the tourism industry have been affected by the drop in the arrivals of tourists. Have you taken any rectifying measures?

This is a temporary situation. This situation will be improved by next year. If you look in retrospect, when the LTTE terrorists were playing havoc in the country, the tourism industry decline steeply. Sri Lanka was listed as a highly unsuitable and risky country for tourists. The service export based economy was affected largely by the war.

It was former President Mahinda Rajapaksa who was instrumental in promoting Sri Lanka again as one of the fascinating tourism destination in the world.

Not arriving tourists for a couple months would not affect the economy as portrayed by the opposition. We have faced crucial challenges and have successfully overcome them.

This scenario will soon disappear and people need not worry too much about it.

Many opine that what happened on 26 October has affected the economic growth rate of the country. What’s your opinion?

Not at all !An economy of a country can neither be improved nor be degraded in a month.

I think the economic growth rate is being increasing since this government came to power. We gave many concessions to the local entrepreneurs and farmers. We are also planning to revive the businesses which are on the verge of closing down. Production rate will be increased and job security will be assured.

Will the country become economically isolated in the international arena if the present entropy continues?

I do not think so! Imports and exports of goods and services are being taking place without interruption.

Nonetheless, we are grappled with the problem on how to recover the economy which was destroyed by the former government.

What are you plans as the Minister of International Trade and Investments Promotions to bring new investments in the country?

The investors should be imbued with confidence that no corruption or embezzlement would take place under the new government and a new minister. They should be infused with the faith that they can freely engage in their business in Sri Lanka without the interference of politicians for commissions or other advantages. I am a person who have never involved in any kind of misappropriation of public finances.

Since I am the Minister in charge of investment promotions, I think the investors would come forward to invest in the country.

I hope that this government can restore the economy of the country which was damaged during the previous government.


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