USD 56.5 bn parked overseas: Govt. must deal with errant exporters firmly – Justice Minister




By Shamindra Ferdinando

Justice Minister Dr. Wijeyadasa Rajapakshe, PC, has said the Foreign Exchange Act No 12 of 2017, enacted during the Yahapalana administration was meant to facilitate the operations of those who exploited the system for their benefit.

The new Act had repealed the Exchange Control Act of 1953, Dr. Rajapakshe said, adding that the Yahapalana  move contributed to the deterioration of the economy. He explained how, as a member of the Yahapalana parliamentary group, he had to abide by the decision to vote for the new Foreign Exchange Act No 12 of 2017.

The Justice Minister said so at a hastily arranged media briefing at his Ministry near Technical Junction on Tuesday, when The Island sought his explanation why the Yahapalana government had repealed the time-tested Exchange Control Act of 1953 and what made him vote for the new law.

Altogether 94 MPs, including Dr. Harsha de Silva and Eran Wickremaratne – two of the strongest critics of the Rajapaksa government – voted for the new law. Eighteen MPs voted against the Bill whereas the rest skipped the vote taken on July 25, 2017.

Referring to official statistics, Dr. Rajapakshe said that export proceeds amounting to a staggering USD 56.5 bn were in offshore accounts and invested overseas. Acknowledging that those funds hadn’t been earned through illegal means, the Justice Minister said that the country suffered due to such valuable foreign exchange not being remitted. According to him, the USD 56.5 bn included approximately USD 3 bn that hadn’t been remitted last year as the country struggled amidst rapid deterioration of the national economy.

The Minister said that the actual figure could be definitely more than this.

Responding to another query raised by The Island, Dr. Rajapakshe said that the situation was so bad the government had to deal with the exporters cautiously as the country was not in a position to upset them under any circumstances. The Minister said that the Central Bank and the Finance Ministry were in the process of addressing this issue and efforts were being made to introduce a new Act.

Former External Affairs Minister Prof. G. L. Peiris on Monday (Oct 30) emphasized the urgent need to take remedial measures in this regard. The rebel SLPP MP said that this could be part of the overall government response to overcome the continuing financial crisis.

President Gotabaya Rajapaksa’s government also caused irrevocable setbacks by doing away with a range of taxes immediately after the last presidential poll on wrong advice. Declaring that the move deprived the Treasury of Rs 600-700 bn, Dr. Rajapakshe said that no one really knew the losses caused by sudden ban on agro chemicals. Perhaps the losses could be much more than the losses suffered due to the abolition of a slew of taxes.

Dr. Rajapakshe recalled punitive measures taken during the Sirimavo Bandaranaike’s administration to deal with foreign exchange frauds.

However, the deterioration of the national economy began in 2006 as the powers that be adopted corrupt and disastrous measures, Dr. Rajapakshe said, pointing out that the situation in the UPFA government compelled him to quit his ministerial portfolio.

Dr. Rajapakshe said that though some tend to question the importance of parliamentary watchdog committees, during his tenure as the Chairman of COPE the country benefited immensely as a result of action taken on COPE reports.

The former President of the Bar Association said that the Supreme Court had reversed the move to sell Lanka Marine Services (LMS) Ltd to John Keells and a controversial deal on Sri Lanka Ports Authority land. The Justice Minister mentioned several other cases, including the saving of the highly profitable Sri Lanka Insurance Corporation (SLIC) from privatization.