Features
Repatriation of export earnings
by Neville Ladduwahetty
The headlines in the front page of the Daily News of December 7, 2022 states: “GOVT. WILL FORMULATE LAWS TO REPATRIATE USD 53 BILLION”. Quoting Minister Dr. Wijedasa Rajapakse, the report states: “Exporters who earn Dollars do not bring that earnings back to Sri Lanka but they deposit it in foreign banks. They bring limited amounts. We don’t have to face foreign exchange crisis if we can get this money back to Sri Lanka”.
Continuing, the headers state further: “GOVT. LOOKING AT REMOVING LOOPHOLES IN THE LAW IN THIS REGARD”. The Minister had informed Parliament that “In the last year alone, these exporters had not remitted their earnings worth USD 3 billion. The entire foreign loan component of Sri Lanka is USD 52 billion. This means, Sri Lanka could have been made debt free, if the country had received the above-mentioned forex income from the exporters”.
The material, relating to the report, is based on the findings of Global Financial Integrity (GFI), a Washington D.C.-based think tank that tracks illicit financial flows. Their report first appeared in the Sunday Times of Sri Lanka on July 10, 2022. According to GFI “The sums of the ‘value gap’ in trade between Sri Lanka and all its trading partners, in USD billions, for the year 2009 was 2.65; year 2010 was 3.464; year 2011 was 4.398; year 2012 was 4.208; year 2013 was 3.345; year 2014 was 4.622; year 2015 was 4.855; year 2016 was 4.265; year 2017 was 5.026”. Thus, the total ‘value gap’ from 2009 to 2017 was USD 36.833 billion.
Another report, titled “Call to repatriate illicit capital outflows and residual exports incomes immediately”, signed by over 15 prominent Trade Unions, Professor of Economics, Sumanasiri Liyanage, and two PhD students, was published in the Daily FT of 29 November 2022. This article states: “In a recent statement, the Central Bank of Sri Lanka (CBSL) Governor, Dr. Nandalal Weerasinghe, accused exporters of refusing to repatriate residual export incomes. The Governor affirms that only 23 % of export incomes are currently repatriated by exporters, while 65% of export incomes were repatriated, up to July 2021…. The CBSL Governor also stated that there are accusations that the import and export sector corporate elite are stashing away $35 billion of foreign exchange inflows, in offshore accounts, since 2007, up to now”. Their primary demand is “Immediately cease any move to privatize state assets and instead act in the national interest and take steps to repatriate foreign exchange flows, illicitly transferred out of the banking system…”.
DELAYED ACTION is UNACCEPTABLE
The ‘value gap’, as reported by GFI, up to 2017, was USD 36.833 billion It was on July 28, 2017, that the Foreign Exchange Control Act No. 12 was Certified. According to a report, in The Island of December 8, 2022, “amendments were necessary to restore the authority exercised by the Central Bank in respect of regulations of foreign exchange before the enactment of the Exchange Control Act No. 12 of 2017”. If the intension is to restore the powers of the Central Bank to pre-2017 levels, “as part of its response to the continuing financial crisis” (Ibid), how come the Central Bank permitted the outflow of USD 36.833 billion under the previous Exchange Control Act that was supposed to have had sufficient powers to prevent such outflows.
The only conclusion that the public could come to is that either the Central Bank failed miserably to exercise its authorized powers, or the previous Act was insufficient to prevent the USD 36.833 billion outflow. Either way, it is apparent to the public that the extent of the amendments needed should not stop at restoring to pre-2017 levels, but to go beyond, to what existed prior to the 2017 Act. This means that restoring the powers of Central Bank that had existed, prior to the 2017 Act, as intended by the Government, is totally inadequate. The Central Bank, therefore, should be the prime mover to recommend the needed amendments, in this regard, because the Central Bank, as the agent of the Government, is responsible for implementing the provisions of the Act the Government hopes to introduce.
Another unacceptable issue is that the findings of the GFI were published in the Sunday Times of July 10 2022. This means the extent of the outflow was known five (05) months ago. The Government, and in particular the Central Bank, owes an explanation to the public for the inaction relating to this issue. Over these five months, the Government, and the Central Bank, have spent an enormous amount of energy, engaging with the IMF to qualify for USD 2.9 billion, over four years. Additional energy and resources are being expended to restructure the debt. There is no indication whatsoever whether any of these efforts would be of benefit to overcoming the ongoing debt crisis. The priority of the Government, and the Central Bank, should, instead, have been to explore strategies to recover, if not the whole, at least part of the outflows, reported to be with the exporters. The fact that the Government hopes to remove the loopholes, that are exploited by the exporters, is a foolhardy exercise, because they are bound to find a way to work around them, as they have done in the past. The challenge for the Government and the Central Bank is to develop a strategy to recover as much of the outflows as possible, with which to meet debt commitments, instead of focusing on removing the loopholes as a priority.
CONCLUSION
Reports of the extent of funds from exports, retained in foreign instruments, were brought to Sri Lanka’s attention in an article in The Sunday Times of July 10, 2022, i.e., five months ago. The material in the article is based on the findings of a think-tank based in Washington D.C., named Global Financial Integrity. According to them, USD 36.833 billion are stashed away in foreign accounts by Sri Lankan exporters, over a period of nine (09) years, before the Foreign Exchange Act was revised and a new Act certified, in July 2017, wherein the powers of the Governor of the Central Bank are said to have been reduced.
The question for the Government, and the Central Bank, as the agent of the Government responsible for implementing provisions of the Foreign Exchange Control Act, is to decide the course of action that should be taken in respect of these funds. The government is planning to amend the existing legislation to “remove loopholes”. This, however, would apply to future exports. What about the USD 53 billion that is reported by Minister Dr. Rajapakse already retained by Sri Lankan exporters, outside Sri Lanka? Since recovering whole or part of it would enable Sri Lanka to meet its immediate debt commitments, it would be prudent to prioritize the recovery of funds first, over amendments to the Foreign Exchange Act of 2017, to remove loopholes, because lessons learnt to recover funds would help legislation, relating to blocking loopholes.
A matter of deep regret is that the extent of funds, stashed offshore, was developed by a Washington D.C.-based think-tank and not by any of the many Sri Lanka-based think tanks, or a division within Sri Lanka’s Central Bank, or any other Institution, despite the fact that lack of foreign exchange is a reality that Sri Lanka lives with every day. Therefore, now that Sri Lanka has been shamed because it is not in a position to even check the accuracy of the facts cited by GFI, the need of the hour is to develop a strategy to recover as much of the funds, stashed in foreign accounts, with which to settle its debts, to amend existing Foreign Exchange Acts to remove the loopholes, and to create institutional changes to make procedures, relating to imports and exports, transparent. For all of this to function, for the benefit of the country, the Government, and the Central Bank, should work with the exporters and importers to develop an effective system change, with the capability to monitor itself.
Features
The challenge of keeping value-based politics alive
The current outbreak of anti-immigrant protests in Durban, South Africa is bound to have taken many a subscriber to value-based politics or political idealism quite by surprise. After all, this is evidence that despite the historic accomplishments of nation-builders of the stature of the late President Nelson Mandela it cannot be taken for granted that identity politics, including racism in its worst forms, is no more in South Africa.
At the time of this writing details are scarce on the substantive root causes of the protests but it could very well be that economic grievances, particularly on the part of the majority community in South Africa, are contributing considerably to the disaffection. Shrinking employment and material prospects are likely to figure majorly among the factors igniting the unrest.
Fortunately, the local authorities in Durban are losing no time in calling for peaceful co-existence among the relevant communities and are pointing to the vital importance of stepping-up national integration processes. Apparently, immigrants in sizable numbers from neighbouring countries are present in Durban. However, international TV footage of the protests quoted some local authorities as saying that the majority of the immigrants in some centres that housed them were not illegal migrants and had the documents that entitle them to be in Durban.
In the Durban protests the world has fresh proof of the socially divisive consequences of the gathering globe-wide economic disaffection, touched off particularly by the continuing crisis in West Asia. Going ahead, the world would need to brace for increasing identity-based unrest of the kind it is just witnessing in South Africa.
Considering that the material lot of ordinary people everywhere could only aggravate progressively, with the US and Iran showing no signs of negotiating an end to their confrontation any time soon, it will be left to the more democratic and progressive sections of the world community to initiate positive measures collectively to bring a measure of relief to the discontented.
The swiftness with which such relief will be provided would depend crucially on the importance those sections taking up these undertakings attach to value-based politics as opposed to Realpolitik of power politics.
Going by these yardsticks, Italy could be considered to be moving in the right direction. Recently Italy came to the fore in initiating the collective named, ‘Rome Coalition for Food Security and Access to Fertilizer’, which has as one of its aims the swift provision of fertilizer to economically weak African countries.
In a recent statement Italian Minister of Foreign Affairs and International Cooperation, Antonio Tajani, said that a principal aim of the project was to ensure that the farmers of Africa gained easy access to fertilizer, considering that food security is a growing concern among some of Africa’s economically vulnerable countries.
The statement went on to mention that some 30 countries hailing from the Mediterranean region, the Middle East, the Balkans as well as the FAO had been invited to join the coalition. The venture is far-seeing in that food security is main among the reasons for social discontent which in turn could degenerate into endemic political turmoil and bloodshed. Separatist violence and geographical fragmentation of countries wouldn’t be too far behind these developments, as Africa itself has often proved.
It is hoped that more G7 countries would take the cue from Italy and do what they could to ease the hardships of economically distressed countries, particularly of the global South. In these efforts they would need to break rank with the US, which is today brutally indifferent to the consequences of its policy of making ‘America First’, come what may.
Going by current developments, the Trump administration seems to be blithely oblivious to the wider, deleterious effects of its policy course in West Asia. Besides rendering Iran militarily and otherwise impotent nothing else seems to matter to Washington, as regards West Asia. This is policy short-sightedness of an extreme kind. After all, right now West Asia could be said to be sitting on the proverbial powder keg.
On the other hand, Iran is not giving the world the impression that it is doing anything constructive to get out of the policy straitjacket that it wove for itself decades ago. Rather than enter into a policy of ‘live and let live’ in relation to Israel in particular and initiate a process of reconciliation with the latter, it has chosen to operate within policy parameters that continue to damn Israel. This has put Israel always on the ‘defensive’ so to speak and prevented the opening up of space for meaningful dialogue.
That said, Israel is obliged to explore the possibilities of entering into a negotiatory process with the Arab-Islamic world that could lead to a de-escalation of tensions and bloodshed. It cannot continue to look at its neighbours through lenses that distort them as archetypal enemies who should be ‘wiped off completely from the face of the earth.’
In other words, the need is urgent for Realpolitik to give way to value-based politicks. Italy is beginning to prove that the latter approach could be pursued with some success. May be the EU and the UK could throw their weight behind these initiatives as well and establish that international politics could be refashioned on the basis of humane, civilized norms. The UN would need to be fully supportive of these moves and prove an organizational nucleus of the operations that follow.
In fact the time is ripe for people of conscience to collectively stand up on the side of peace and say ‘No’ to war and violence. Organizations such as the ICRC, the WHO and Medicines Sans Frontiers have already taken up this call. Referring to the widespread destruction of health facilities and their dehumanizing results these organizations have said, among other things, that ‘This is not a failure of the law. It is a failure of political will.’
True, ‘failure of political will’ among those powers that matter accounts for the runaway, uncontrollable nature of war and destruction in contemporary times, but more fundamentally it is a failure of the human conscience. It could very well be that the phenomenal levels to which violence and war have been unleashed today have had the effect of deadening consciences. This is a matter for urgent study and wide discussion.
Features
Vesak celebrations … with Cuteefly
I would describe Indunil Kaushalya Dissanayaka as innovative and creative, and she operates under the name of Cuteefly.
Indunil always comes up with something novel to celebrate special occasions, and she does it with candles … and that’s her profession.
She was in the spotlight when she created a happening scene, with candles, for Christmas, Sinhala and Tamil New Year, and Valentine’s Day.
As lanterns light up Sri Lanka for Vesak, the Colombo-based candle maker is quietly turning wax and wick into little pieces of the festival.

Candles reflecting Vesak themes
Her candles reflect Vesak themes – light, peace, remembrance, giving, etc., to enable you to fill your Vesak celebration with devotion and beauty.
Among her Vesak creations is a lotus-shaped soy candle, scented with sandalwood, lavender, etc., meant to burn during this Vesak Poya Day.

Indunil Kaushalya Dissanayaka: Customers
praise her for her creativity
These handcrafted Vesak candles are perfect for offering at the temple, she says.
What makes her creations so novel is that they come in different shapes, scents, themes, and all are handmade.
What’s more, her customers have heaped praise on her for her creativity.
According to Indunil, her creations are perfect as a thoughtful gift … to bring beauty, unity, and light into every moment.
Says Indunil: “Our beautifully handcrafted Unity candles are designed with premium detail and love, making them perfect for celebrations, gifts, and meaningful occasions.”
Cuteefly, says Indunil, is available online.
Readers could contact Indunil on 0778506066 for more details.
He Facebook Page is: Cuteefly.

Handmade with love
Features
Dark Spots …
Yes, dark spots do crop up on the skin, especially with sun exposure and, of course, as the skin ages.
However, these tips should be of immense benefit to those who are faced with dark spots.
* Lemon and Honey Glow Mask:
You will need 01 teaspoon lemon juice and 01 teaspoon honey.
Mix the lemon juice and honey well and then apply this mixture, only on the dark spots.
Leave for 10–15 minutes and then rinse with cool water.
Benefits:
Lemon helps brighten pigmentation.
Honey moisturises and heals skin.
Gives a natural glow.
* Aloe Vera Gel Treatment:
All you need is fresh aloe vera gel.
Apply the gel apply on dark spots, before going to bed.
Leave overnight and wash in the morning.
Benefits:
Reduces acne marks and pigmentation.
Soothes irritated skin.
Helps skin repair naturally.
* Turmeric and Yoghurt Paste:
You will need 01 teaspoon yoghurt and a pinch of turmeric
Mix the yoghurt and turmeric into a smooth paste and apply on affected areas.
Leave for 15 minutes and then wash gently with lukewarm water.
Benefits:
Turmeric brightens skin naturally.
Yoghurt removes dead skin cells.
Helps fade dark spots gradually.
Use these packs 02-03 times a week as results are generally seen over time.
You can also try this out: Mix a ripe papaya into a smooth paste and apply to the face, or directly on to the dark spots. Leave for 15-20 minutes and then wash with lukewarm water.
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