Garvin Karunaratne

It is important to note that for the first time since 1977 Sri Lanka is taking action to ensure that our foreign exchange is not taken away by foreign countries. I refer to the recent action taken by our Central Bank to ensure that profits are not repatriated.

I enclose a paragraph from my Paper:  Playing Poodle to the IMF is not the way ahead”, appearing in the Lanka Web of  12/1/2020:

Third World countries have enticed McDonalds,  Pizza Hut and such Multinationals to come in. They bring in a small sum of foreign exchange initially to establish their business. They get into local trading in the local currency but take away the profits in foreign currency forever without paying any taxes. It amounts to a net loss of our foreign reserves.

Foreign companies getting into trading in local Rupees – like Uber etc. also amounts to a net loss of our foreign exchange as though they calculate profits in Rupees they take away their profits in foreign currency. One of the latest inroads is hotel bookings by foreign companies over the internet. Hotel bookings done insist on payment in Rupees to the hotelier, but the internet companies get fifteen percent of the payment paid to them in foreign currency. Again this goes from our reserves. It is sad that our Central Bank fails to even understand how our foreign reserves are being robbed by these foreign investors.

Needs it to be said that since 1977 our foreign exchange has been taken away to the Developed Countries by various methods.

If only our Central Bank orders that the intake of foreign exchange by Authorized Foreign Exchange Dealers should be credited to the Central Bank coffers we will amass a large amount of foreign exchange. Today the intake of foreign exchange at these Dealers does not come into our coffers. It is resold by the dealers. This foreign exchange only serves to make a profit to the Dealer. In actuality, it is a foreign currency that has come into our country and the country is entitled to it.  It is also necessary for all banks to accept foreign exchange offered by anyone without holding investigations- checking passports to check arrival dates, etc.

Our leaders should know that FDI (foreign direct investment) is a shrewd googly deployed by the IMF to take away foreign exchange from our reserves.

Our economists need to do some hard thinking about what happens to the foreign exchange that comes into the country.

Garvin Karunaratne