By M D P DISSANAYAKE

Sri Lanka has gone to the extreme of free market economy. As a result, there had been a net outflow of foreign exchange and rapid depreciation of Rupee.  Sri Lanka has continued Late President Jayawardene’s  Open Economy and most recently former Prime Minister has transferred Hambanthota Port  to China as an act of revenge against Rajapakse Regime.

The situation is now convoluted with several demands from India, China, Japan and Pakistan as a tit for tat strategy to buy our assets at a bargain price, when Sri Lanka Rupee is hovering around Rs 200 per USD mark.

The sale, lease, joint venture or BUILD OPERATE TRANSFER (BOT) arrangements are suitable for an economy which is stable.  When the economy is struggling to meet its ends, the crows are hovering around to catch whatever they can get at a bargain price, at a cheap USD valuation.  Professional Property Valuers index asset valuation based on these factors, knowing well that the Assets are on the buyer’s market.

Sri Lanka must introduce legislations to Nationalize Hambanthota Port and all other Assets that have been sold, transferred, pledged to foreign buyers under sale, lease, joint venture etc.   Sri Lanka cannot afford to repatriate any percentage of net profits after tax and interests to foreign buyers, by way of dividends.  Under these arrangements the royalty payments are usually  an added cost to dividends.

With the  proposed legislation to nationalize national assets, legal framework must be established to encourage foreigners  for  new direct investments capital projects  on normal commercial terms. Sri Lanka has  massive  untapped resources plus strong labour force. There are many strategies and tools that can  be used to encourage such new foreign investments, including long term Investment Allowances, Tax Free Holidays, Import Duty relaxation, liberalised repatriation of royalties and profits, whilst maintaining  the absolute ownership of the venture with the people of Sri Lanka.  The foreigners are eagerly looking for markets with infrastructure facilities, resources and relatively cheap skilled labour forces for long term investments.   Sri Lanka should eye for these avenues.

Under no circumstances  the state owned existing large or medium scale projects should be in the hands of foreigners. It makes no sense whether it is 1% or 49%, if the total ownership is not vested with Sri Lanka.   Mrs Bandaranaike took over Catholic Schools in spite of massive protests, Mr Bandaranaike took over Port, Buses from local Mudalalis even without 2/3 majority in parliament.

Gotabaya – Mahinda Regime is in the box seat to stamp their authority to ensure the full ownership of assets of Sri Lanka in the hands of Sri Lankans.