Communist Party on Thursday urged all opposition political parties and patriotic elements within the UNP-led UNF government to oppose moves to open the capital account.

The following is the full text of the statement issued by Dew Gunasekera, General Secretary of the Communist Party.

The Political Bureau of the Communist Party of Sri Lanka understands that the UNF government is contemplating to liberalise the Capital Account of the Balance of Payments.

Multilateral agencies, who have been espousing the case for Sri Lanka to liberalise its capital account, have now stepped up pressure on the UNF Government. There are also IMF trained, IMF sponsored and IMF paid economists who back them up with theoretical arguments in support of their cause. There are also bureaucrats in higher echelons of power who believe that time is ripe to liberalise the Capital Account, particularly in the context of the on-going peace process.

Taking into account the overall national interest of the country, the Communist Party expresses its vehement opposition to this move.

The experiences of Latin America as well as the South East Asian countries abundantly proved how the removal of restrictions on Capital transfers have even rocked the financial foundation of those countries, causing enormous suffering to the people. Sri Lanka’s economy is vulnerable and therefore cannot withstand sudden movements of capital. In spite of the on-going process, the security situation is still volatile and therefore does not permit sudden capital outflows.

The country’s continued trade deficit, the high rate of inflation and the depreciation of the currency are significant factors that do not permit sudden capital flows. The reported discussions with George Soros have confirmed the speculations regarding the opening of Capital Account.

We witness how in other countries speculative capital takes flight and thereafter the IMF steps in with emergency packages involving them in debt-traps.

The Communist Party of Sri Lanka calls upon all the political parties in the Opposition as well as patriotic elements within the UNF Government to exercise utmost vigilance over any possible surreptitious moves to open the Capital Account.