Leftists complain Ranil about to open Pandora’s Box



by Maheesha Mudugamuwa

Leftist parties yesterday expressed their strong opposition to Prime Minister Ranil Wickremesinghe’s decision to open up the country’s capital account, claiming that it would lead to a serious financial crisis.

Communist Party (CP) leader D. E. W. Gunasekera told a media briefing at the N. M Perera Centre in Colombo that PM Wickeremesinghe could not take such decisions alone and he had to discuss with other political parties, economists and experts.

Former COPE Chairman Gunasekera demanded to know whether PM Wickremesinghe had discussed it with the Cabinet before he made such a statement in Parliament.

He said it was President Maithripala Sirisena’s responsibility to look into such issues.

"What is meant by opening the capital account is to permit the free flow of capital both into a country and out of it. When the capital account is liberalized, people will be allowed to take capital out of the country with no questions asked," Gunasekera stressed.

Highlighting the Central Bank reports, he said that the total savings of the capital account in 2012 was USD 130 million and it had dropped to USD 46 million, in 2015. Therefore, it was not a right time to open the country’s capital account as it could affect the total economic system including all banks, businesses, industries and in the end all citizens.

In 2013, there had been USD 71 million in the capital account, in 2014 it had dropped to USD 58 million, Gunasekera noted.

The total value of the Sri Lankan economy was USD 80 billion and the value of the world economy was USD 80,000 billion. Therefore, each simple change in the world economy would affect Sri Lanka, especially as it was a developing nation, the CP leader said.

Referring to the economic crisis in Russia, Argentina and Malaysia, Gunasekera urged PM Wickermesinghe to take the countries as an example before opening up the capital account.

The foreign reserves of the country had also dropped by USD 3 billion within the last two years. In 2014 the foreign reserves of the country was USD 8 billion and last year it had dropped to USD 5 billion, he said.

In such a situation the opening up of the country’s capital account would prove disastrous. The world economy was not healthy as the economies in the developed regions such as the US, Japan and Europe were already experiencing difficulties, Gunasekera said.

He urged economists to come forward and raise their voice to save the economy.

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