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Tuesday, 26 November 2013 01:16 - - {{hitsCtrl.values.hits}}
de Silva said the Government had failed to put measures in place to stave off a looming economic crisis in the country.
“The Opposition Leader has exposed this Budget as a scam. It has imposed tax on food. Vehicle prices have also gone up, according to the newspapers. In September 2012, average household expenditure is given at Rs. 46,307.54 as per the Fiscal Management Report. This has increased to Rs. 49,186.14 by September 2013, which is an increase of Rs. 2,863. But the salaries were not increased accordingly,” de Silva told the House.
De Silva said the UNP anticipated that the cost of living would go up by Rs. 3,000 as a result of the recently-imposed taxes.
The UNP MP said that if Sri Lanka had stick to the initial loans taken for the Hambantota Port, the repayment would have been at 1.3%. “But after 11 months Minister Rohitha Abeygunawardena said that the loan was changed. Today we pay 6.3% in return,” de Silva said.
“This is what the Leader of the Opposition said in his speech on having pawned Sri Lanka to Chinese Shylocks,” he charged.
The UNP Parliamentarian said that the Sri Lanka Railways Department had submitted US$ 650,000 per km to construct the Omanthai-Palai railway line extension but this tender was cancelled and was awarded to a foreign company for US$ 3 million. He said in addition the Matara-Beliatta railway line extension had been given to the Chinese company for US$ 10.7 million.
De Silva said the best Budget speech from the Government had been delivered by Minister D.E.W. Gunesekera. “He did the same last year also. He speaks the truth. Going beyond politics, he said that exports are coming down and exchange rates are coming down. As a result foreigners will discontinue lending to us. So the Government revenue will crash, he said. So how can a Government invest responsibly?” the UNP MP said.
The Leader of the Opposition highlighted the social market economy as a solution to come out of this mess, the UNP MP said.
De Silva said it was crucial to keep the rupee stable. “By the end of 2001, the exchange rate was Rs. 93.16 against the US$. In 2003 it was Rs. 93.76. The reduction was 1.9%. Don’t forget that UNP Government had a negative economy to deal with. By the end of 2005, the exchange rate was Rs. 102. Last Friday it was Rs. 132.75,” he said.
The UNP MP said the 30% depreciation had taken place in the past eight years, adding that Sri Lanka also has a major problem with regard to its official gross reserves. He said Sri Lanka now had US$ 7 billion in reserves.
“If the exports are more, the reserves are increased. With exports going down, the reserves are maintained by foreign employment remittances. Another way of increasing the reserves is to borrow foreign currency and show the reserves. This is not a victory for Sri Lanka. In 2003 we got US$ 2.5 b from apparel exports. After 10 years we get US$ 3.9 billion today,” he explained.
De Silva said the strategy of buying reserves carries risks particularly when a country’s capacity to accumulate resources from non-borrowed sources by raising from the earnings from the export of goods and services is on the wane.
“This may lead to an external crisis. This is the truth. Don’t run away from the truth. Taking loans is not a victory,” he charged.
