Editorial
Restore ‘Exchange Control Act’
Friday 25th August, 2023
Sri Lankans, who have faced numerous economic problems over the years, do not need the help of economists to understand how the current crisis came about and what should be done to sort it out; it has basically stemmed from politically-motivated tax cuts, the resultant sharp drop in state revenue, which necessitated excessive money printing, the rapid decline in foreign currency reserves, and failure on the government’s failure to adopt remedial measures at the first sign of trouble. The Covid-19 pandemic, the Ukraine war, etc., only exacerbated the crisis.
The government is in overdrive to solve the rupee crisis; it has already introduced iniquitous taxes, jacked up tariffs unconscionably and drastically curtailed state expenditure. It is also all out to sell public assets, including profitable ones, at fire-sale prices to raise funds. It has however stopped short of cracking down on numerous frauds that plague the Customs, the Excise Department, etc. Its performance is even more abysmal where the prevention of foreign exchange rackets is concerned.
Shoring up the country’s foreign exchange reserves is half the battle in breaking the back of the current economic crisis. Various views have been expressed about the genesis of the forex crisis, its development and how to resolve it. But in understanding this issue, we rely on Occam’s razor, or the principle according to which an explanation of a thing or event is made with the fewest possible assumptions, rather than complex theories. All issues pertaining to foreign exchange rackets, in our book, boil down to three things—laws sans strong teeth, lax control and political interference. When the Exchange Control Act of 1953 was deep-sixed in 2017, everybody knew the country would face a forex crisis.
Minister of Justice Dr. Wijeyadasa Rajapakshe has admitted in Parliament that the abolition of the Exchange Control Act of 1953 was a mistake that has deprived the country of a great deal of forex. He told Parliament, on Wednesday, that the introduction of the Foreign Exchange Act of 2017 had benefited unscrupulous exporters, who did not repatriate their export earnings properly. SJB MP and former Minister Champika Ranawaka pointed out that importers also carried out sordid operations such as mispricing to bypass foreign exchange laws.
Now that it has become evident that the current Foreign Exchange Act is beneficial to forex racketeers and caused a drastic decrease in the repatriation of export proceeds, the Exchange Control Act of 1953 must be restored without further delay.
Moral suasion does not help influence or change the behaviour of those who are engaged in various rackets and repatriate only a fraction of export proceeds. Importers also employ unlawful methods such as transfer pricing manipulations and using Undial and Hawala schemes for fund transfers. The country has been the loser.
All exporters and importers should not be tarred with the same brush; there are law-abiding businesspersons among them, but the need for the government to adopt stern measures to curtail the outflow of forex through illegal channels and to boost the foreign exchange inflow cannot be overstated.
Minister Rajapakshe preens himself on the passage of the Anti-Corruption Bill, which, he hopes, will help effectively tackle the twin evils of bribery and corruption. It is the fervent hope of everyone that the new laws will serve as an effective antidote to bribery and corruption. Will Dr. Rajapakshe seriously consider initiating the process of restoring the Exchange Control Act of 1953 preferably with extra provision for even tougher regulations and severer punishment for transgressions? He can rest assured that a Bill seeking to achieve that end will be passed unanimously; no one will dare oppose it for fear of incurring public opprobrium. Even the corrupt backed the Anti-corruption Bill, didn’t they?
Editorial
Bondi Beach and Arugam Bay
Tuesday 16th December, 2025
It was with shock and dismay that the world received the news about Sunday’s cowardly terror attack on a group of Israelis in Australia. Sixteen lives were lost and about 40 others injured in the Bondi Beach mass shooting, which followed an increase in anti-Jewish incidents in Australia after Israel’s invasion of Gaza, where 70,000 Palestinians have perished at the hands of the Israeli military.
Israel has doubtlessly made Hamas regret its 2023 incursion, indiscriminate killings and mass hostage-taking. But the Netanyahu government has incurred much international opprobrium by unleashing disproportionate violence and carrying out attacks on civilian targets. Worse, the Bondi Beach attack has demonstrated the growing vulnerability of Israeli citizens overseas.
Hamas has had to agree to a ceasefire, and faces the prospect of having to disarm. Israel may obliterate Gaza, but victory will still elude it. Hamas may carry out more attacks on Israel, and its sympathisers may target Israeli civilians, but Palestinians will not benefit from such acts of violence. Only peace will benefit the warring sides and civilians. The problem is best tackled at source.
The need of the hour is for the world to strengthen the Gaza ceasefire and make it work by ensuring that both sides refrain from violating it. That is what US President Donald Trump was expected to do. Last month, the United Nations Security Council adopted a US-sponsored resolution that enshrined Trump’s 20-point plan, including the mandate to set up a multinational force for Gaza, but not a single nation has formally committed troops to it yet, according to media reports.
Unfortunately, instead of intensifying his focus on resolving the Gaza conflict and other disputes in keeping with his pre-election pledges, President Trump appears to be busy enacting scenes from Pirates of the Caribbean, hijacking ships and sinking boats off Venezuela, while eying the Nobel Peace Prize, of all things.
Meanwhile, Sri Lanka must keep its guard up. There are Israeli tourists here. In October 2024, the US embassy, followed up by Sri Lankan police and Israel’s National security council, warned of serious terrorist threats to Israelis holidaying in the Arugam Bay area. Thankfully, what was feared did not come to pass, but no room must be left for complacency.
Sri Lanka must take the Bondi Beach attack as a warning and brace itself for any eventuality. A terror attack on its soil is something it needs like a hole in the head while struggling to manage the impact of a natural disaster and keep the economy on track.
The economic cost of the Ditwah disaster has not yet been calculated, but Commissioner General of Essential Services Prabath Chandrakeerthi has given a ballpark figure—USD 6 -7 billion or about 3 – 5 percent of GDP. This is a staggering amount. The economic crisis is far from over. The government has its work cut out to allocate funds for rebuilding programmes and is therefore seeking assistance from other nations. But whether foreign aid will be sufficient for the post-disaster reconstruction projects in all 25 districts, affected by Ditwah, remains to be seen, as we argued in a previous comment. The country is therefore heavily dependent on tourism to shore up its foreign currency reserves. One may recall that the 2019 Easter Terror attacks crippled the tourism sector, and contributed to the forex crisis by depriving the economy of billions of dollars a year.
Sri Lanka cannot take any more shocks, and everything possible must be done to neutralise threats to its national security and prevent it from suffering the same fate as the proverbial man who was gored by a bull after falling from a tree.
Editorial
“Smell of Power”
Monday 15th December, 2025
The government hurriedly launched a social media campaign on Friday to gain political mileage out of the arrest of NPP MP Asoka Ranwala involved in a road accident. Its propagandists boasted that the rule of law had been restored, and everyone was now equal before the law. But they were left red-faced when Ranwala was granted bail soon afterwards. Worse, it was revealed that the police had not made Ranwala undergo an alcohol test immediately after the accident on Thursday night and waited until Friday noon to do so.
An otherwise articulate Police Spokesman ASP F.U. Wootler cut a pathetic figure when journalists asked him why no alcohol test had been conducted on former Speaker Ranwala immediately after the accident to determine whether he was drunk. The police have trotted out some lame excuses for dragging their feet. Thanks to their subservience to the ruling party, the police always have to defend the indefensible whenever a government politician commits a transgression.
An infant, his mother and grandmother were injured in Thursday’s crash. While the police are drawing heavy fire for the despicable delay in arresting Ranwala and making him take a blood alcohol test, the victims’ family members are demanding justice. JVP/NPP politicians are making various statements and pledges in a bid to obfuscate the issue and mislead the public, but to no avail.
The unfolding Ranwala drama, as it were, reminds us of an accident involving a JVP heavyweight during the Yahapalana government in 2016. JVP MP Vijitha Herath was arrested over a road accident where his vehicle went out of control and crashed into a wayside telephone post. He was subsequently released on police bail. The Judicial Medical Officer reportedly mentioned in his report that Herath had been smelling of liquor at the time of examination. However, the Colombo Additional Magistrate acquitted Herath of the drunk-driving charge in keeping with a legal precedent, but ordered him to pay Rs. 1,500 as state costs. Herath was also ordered to pay Rs. 17,400 for the damaged telephone post. Herath vehemently denied that he had consumed alcohol. The JVP was a partner of the Yahapalana government, in all but name.
Is it that the politicians in power and their kith and kin never drive under the influence of liquor and they only drive while ‘smelling of liquor’! The police ignore that smell. They take alcohol tests, if at all, hours after causing accidents! There are allegations of blood and urine samples being swapped to help the politically-connected suspects evade drunk-driving charges.
The JVP-led NPP has demonstrated that it has no qualms about interfering with the legal process to let its members off the hook in spite of its moral grandstanding and pledges to restore the rule of law. Head of the Retired Police Collective of the JVP/NPP, former Senior DIG Ravi Seneviratne, arrested for causing a multiple vehicle collision under the influence of alcohol in Colombo in 2023, had the drunk driving charge against him dropped after his elevation to the current position. The Police Department is currently under him; a fish is said to rot from the head down.
President Anura Kumara Dissanayake has taken upon himself the unenviable task of mitigating the adverse political impacts of his MPs’ endless blunders and transgressions. It has become a Sisyphean ordeal for him. Now, he will have to rush to Parliament again and try to control the political damage the controversy over Ranwala’s accident has caused to the government. He has to make damage-control speeches at such a rate that while sprinting into Parliament for that purpose, he might collide with himself coming out, as in a cartoon.
Upon witnessing the blatant manipulation of the legal process and the subversion of the ideals of equality and justice under the current dispensation, one wonders why JVP/NPP does not adopt the credo of the pigs in Orwell’s Animal Farm and declare that all Sri Lankans are equal, but those who are JVP/NPP members are more equal than others.
Editorial
Disaster relief and shocking allegations
The government has announced a sweeping compensation package for the Ditwah disaster victims, and the disbursement of money for cleaning the flood-affected houses, is already underway. It is spending funds that belong to the people and not the JVP or the NPP. It must therefore not only disburse state funds responsibly but also be seen to be doing so. Transparency is the most potent antidote to all forms of financial malpractice. Worryingly, complaints abound that government politicians are interfering with relief distribution operations and even diverting funds for the benefit of their supporters.
Sri Lanka United Grama Niladhari Association (SLUGNA) President Nandana Ranasinghe told the media on Monday (08) that JVP/NPP politicians and their supporters were meddling with the ongoing disaster relief programmes at all levels and even obstructing the Grama Niladharis (GNs). He claimed that the political authority had sent letters to the District and Divisional Secretaries, directing them to appoint ruling party members to the state-run welfare centres. SLUGNA Secretary Jagath Chandralal said state officials had been directed to obtain approval from the government members of the Prajashakthi committees for carrying out relief work. On Thursday, addressing the media, Convenor of the Sri Lanka Grama Niladhari Association Sumith Kodikara made a number of similar allegations. He said the NPP politicians were arbitrarily helping their supporters obtain Rs. 25,000 each as compensation. He stressed that only the disaster victims had to be paid compensation, and never had relief programmes been politicised in that manner. These allegations are shocking enough to warrant probes.
Those who are misusing state funds allocated for disaster relief must be arrested and prosecuted under the Offences against Public Property Act. Some Opposition politicians and their family members have been jailed for obtaining fuel allowances fraudulently while in power. So, the offence of misusing funds meant for disaster victims must not go unpunished.
A ruling party politician, in his wisdom, once claimed that all 159 NPP MPs were of the same calibre as the late Foreign Minister Lakshman Kadirgamar. He caused a posthumous affront to Sri Lanka’s nonpareil statesman, whose presence adorned national politics. His egoistic, lofty claim drew derision. However, the government politicians ought to take cognisance of something Kadirgamar said in answer to a question from a BBC journalist about alleged irregularities in the handling of tsunami relief in early 2005. He said that wherever humans and money happened to be together, there was the possibility of corruption, but the then government was doing everything in its power to prevent irregularities in tsunami relief distribution. No truer words can be said about humans and their greed, especially in this country, where some corrupt politicians and officials have stooped so low as to enrich themselves by procuring fake cancer drugs.
No relief or welfare programmes have been devoid of politics in this country. It may be recalled that one of the factors that led to the country’s bankruptcy in 2022 was a politically motivated pandemic relief programme, aimed at enabling the SLPP to garner favour with the public and win the 2020 general election. The interim SLPP government gave away state funds at the rate of Rs. 5,000 per family besides distributing baskets of goods. It won the parliamentary election that followed, but the mismanagement of state funds and the loss of revenue due to ill-conceived tax and tariff reductions had a crippling impact on the economy. One can only hope that there is no truth in the allegation that the NPP government is using the ongoing relief operations to shore up its approval rating and electoral prospects in view of the Provincial Council elections expected next year. Strangely, President Anura Kumara Dissanayake, while announcing the compensation package in Parliament, declared that the families who had suffered even minimal damage to their houses, such the loss of a single roofing sheet, would receive as much as Rs. 1 million as compensation! Sri Lankan politicians are very generous with state funds.
The success of relief and rebuilding programmes hinges on several prerequisites, including transparent allocation of resources, proper coordination, efficient delivery systems, accountability and monitoring, and sustainability and follow-up. No room must be left for partisan politics and the agendas of political parties where relief and rebuilding programmes are concerned.
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