General Secretary of the Communist Party Dr. G. Weerasinghe has said the national economy nosedived in 2022 due to three factors. The depletion of the country’s foreign exchange reserves was the main factor caused by the huge chronic trade deficit blamed on the import/export policy implemented through the free/liberal/open trade policies implemented since 1978.

The second factor that led to the economic crisis was the steep decline in state revenue caused by the wrong tax policy followed by successive governments since 1978 by slashing direct taxes, giving tax concessions, imposing tax restrictions, and granting tax amnesties, especially to multinational corporations. Despite sucy concessions, Sri Lanka had not received substantial foreign investment did not receive

The third reason was the huge trade deficit and the gradually collapsing state revenue, which required  more and more loans to be taken. Governments obtained loans from loans from lage private financial companies.  in addition to institutions such as friendly countries, the International Monetary Fund, and the World Bank. Among those who provided such loans to the Sri Lankan governments were eight Sri Lankan financial companies.

Dr. Weerasinghe said so addressing the inaugural session of the CP’s national congress that commenced on 20 February in Colombo.

Dr. Weerasinghe said that the three basic policies, namely the import/export policy that caused the loss of dollars, the tax policy that caused the loss of rupees, and the debt-building policy, especially the borrowing policy of international/national moneylenders, are all policies that arose from the so-called open economy/free trade economic strategy introduced to the country in 1978.

At the onset of his speech, the founding leaders of the CP, including Dr. S. A. Wickramasinghe, Pieter Keuneman, Rev. Udakendawala Sri Saranankara Thero, A. Vaidialingam, P. Kandiah and M. G. Mendis were remembered with great respect.

Dr. Weerasinghe said: “In Sri Lanka, we tried implementing these policies for almost 50 years – since 1978. Our infant industries, which were being built behind state protection and with assistance from the socialist countries, were destroyed. We became a market for the products of the Global North. We borrowed from the Global North’s banks to afford to buy products made by the Global North’s industries. Eventually, an economic crisis erupted in the country and it exploded.”

“When we all came together in 1935 and founded the Sama Samaja Party, and later the Communist Party, one of their main objectives was to win sovereignty – national independence. After going through various stages in the fight for national independence, we became a Republic in 1972 and completed political independence. But a question has arisen as to whether we have true political freedom today in 2026. This question has emerged so strongly in the wake of the economic crisis that erupted in 2022.

“The free market system was introduced to the world by neoliberal leaders in the late nineteen-seventies. This system was based on the views of economists who were marginal after World War II, but became more powerful following the crisis of capitalism in the nineteen-seventies. The policies of these economists were accepted by the political leaders of the United States, Britain, and Europe. These leaders then intervened in the Global South to enforce these ideas and policies.

“The main aspects of the free market system introduced to the world were: Free trade, Free movement of finance, Restriction of state intervention in the economy and expansion of the role of the private sector

“The result of these policies are that everything is determined by a handful of private international monopolies in the so-called free market. The richest 1% get richer while the poor get poorer. The rich 1% decides how the social wealth is invested, and the poor have no voice. This system was forced upon developing countries, often by military dictatorship or authoritarian governments.