Long term problem of currency crisis – Dr Godahewa
The Minister of State for Urban Development, Dr. Nalaka Godahewa, noted that the current foreign exchange insolvency was due to long-term structural problems in the country. He noted that several governments had contributed to the problem, but it was up to the current government to fix the problem.
Dr Godahewa said: “Foreign exchange reserves in 2009 were only US$1 billion, but from then until 2014 they increased by US$7 billion and reached US$8 billion. Americans”. Dr Godahewa was speaking at the 150th anniversary of the Malay Cricket Club on March 19. Dr Godahewa acknowledged that the Yahapalanaya government had complained of significant over-indebtedness and had disentangled the large swap and proxy debt instruments into international sovereign bonds.
Dr Godahewa blamed the previous government for part of the crisis. He said, “They borrowed more than the previous government (UPFA).”
He added, “When the previous government (UPFA) borrowed $5.2 billion in 6 years, the previous government (Yahapalanaya) borrowed $5.6 billion in 5 years. They cannot escape blame.
Dr Godahewa noted that the previous government, even with the sale of Hambantota Port, did not pursue the strategy of maintaining large reserve balances. Dr. Godahewa noted that this reserve balance was needed due to the trade deficit.
Dr Godahewa added that the current government was facing much tougher economic circumstances due to the sharp drop in tourism receipts alongside the drop in remittances due to people returning due to international lockdowns.
Dr Godahewa called on the public to take common sense measures to help. “We can all on our small scale help to change it or at least ensure that it does not happen again.” Dr Godahewa hailed the government for reaching out to the IMF and floating the exchange rate. He said: “By the end of this year, the situation can be reversed.” He noted that figures for tourism, remittances and income from the IT sector remained promising.
“The Malay community is one of the most peaceful and friendliest communities in the Lankan brotherhood. You have had important personalities in different fields: political arts education, sports, business and armed forces professionals added Dr. Godahewa.