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Posted on August 14th, 2022

Sugath Kulatunga

Impact of Corvid 19 on the Dollar crisis

Diehard critics of the government ignore the impact of Corvid 19 on the foreign exchange earnings of the country. In 2020 worker remittances were 7.1 billion dollars and Tourism earnings in 2018 was 4.4 billion dollars. If we had this revenue even without an increase, we would have 11 billion dollars. Even with a trade deficit of 7 billion dollars we would have a surplus of 4 billion dollars which is the outstanding debt this year. If Corvid was not there, we would have got an increased export value and a higher tourist income as well. The current trade statistics show that imports could have been reduced by at least by 3 billion USD which would have given the county a USD surplus of 7 billion. (This does not take into account the increase in oil prices). Only mental retards will deny the impact of Corvid19 on the present crisis.

Borrow more to import more

I am glad to read the CBSL report that the value of imports during the first 6 months of this year has been limited to below $ 4 billion. If this trend continues the annual import value may not go beyond 10 billion USD. End of the year export would hopefully reach USD 12 billion leaving a positive trade balance of 2 billion USD. If we had limited our imports to match with export revenue, the country would not be facing the present dollar crisis. But our imports during 2017 was 20.9 billion USD, in 2018 it was 22.2 billion USD and in 2019 it was 19.9 billion USD. At the same time our borrowings on ISB as given below were USD 8400 at high rates of interest.

1 May 2017 11 May 2027 SRILAN 6.200 05/27 US85227SAT33 USY8137FAH11 6.2000 1,500.00
18 April 2018 18 April 2023 SRILAN 5.750 04/23 US85227SAV88 USY8137FAK40 5.7500 1,250.00
18 April 2018 18 April 2028 SRILAN 6.750 04/28 US85227SAW61 USY8137FAL23 6.7500 1,250.00
14 March 2019 14 March 2024 SRILAN 6.850 03/24 US85227SAY28 USY8137FAN88 6.8500 1,000.00
14 March 2019 14 March 2029 SRILAN 7.850 03/29 US85227SAZ92 USY8137FAP37 7.8500 1,400.00
28 June 2019 28 June 2024 SRILAN 6.350 06/24 US85227SBA33 USY8137FAQ10 6.3500 500.00
28 June 2019 28 March 2030 SRILAN 7.550 06/30 US85227SBB16 USY8137FAR92 7.5500 1,500.00
Total 8,400

The value of imports rose mainly due to the import of motor vehicles to recover high customs duties to earn revenue to balance the budget and to pay for the increase of unproductive employment in the public sector and to reward MPs. This was the work of the financial wizards of the Ministry of Finance and the CBSL. You know who.

All party government

The All-party government or sarvaloka pootuwa” proposed by the President is not likely to be realized as the main opposition party SJB is against it. Every political party in the Parliament looks at the proposal not in the national interest but from pure partisan interest of what is there in the proposal for them. SJB feels that they have a good political advantage in an early election and does not want to be a party to salvage the government. JVP feels that they have a good chance of getting a majority or a remote controller status if there is a general election now. Of course, the burning of houses of government politicians which they vehemently deny has not improved their political image.

The position of the minority parties is not clear. Their stand as usual will be ‘Vasi patthata and or kasi patthata hoyya.’ Ranil wants a stable government to get back to his lost glory and prove his ability. His performance will determine the conduct of many SJB members who would go back to Ranil making SJB disappear.

The tragedy is that the 22nd Amendment to the Constitution and the All-Party proposal have diverted the attention of both the Executive and the Legislature and the public away from the dollar crisis and an action plan to recover from the predicament.

This is not cricket

What made the SL Cricket Board surrender the Asian Cup to the UAE. Cricket brings in tourists. Holding international cricket tournaments in the country gives publicity to the country. SL held series of matches against Australia and Pakistan under worse law and order conditions. Holding the Asia Cup here would have given a boost to tourism which is picking up. There must be a law to prevent sports bodies acting against national interest.

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