The Leftist parties in the country explained that the relaxing of the rules for taking money abroad by way of opening capital accounts in the country would result in the drain of the limited foreign exchange earned by the country’s efforts.
General Secretary of the Lanka Sama Samaja Party, former Minister Prof. Tissa Vitharana said that foreign direct investments would not come freely as the investment climate in the country was extremely poor and there was no suitable or enabling environment for investors to invest and get a return with a certain degree of certainty.
As there is an economic downturn in the world and money is tight as a result, people are not likely to invest in long-term ventures involving industrial development, he noted, adding that people would instead invest in the stock exchange and the property market for a quick return.
The violation of exchange controls and income tax regulations would be made legal because of this, he pointed out.
“The Left opposed an earlier decision to relax to 10%. Foreign exchange earned should be within our banking system and only on selected and necessary instances be allowed to be taken abroad. This must be regulated,” he said.
“The Government may have agreed to the complete opening of the economy as part of the International Monetary Fund’s strategy and condition for the 1.5 billion US Dollars loan given. If this is implemented, anyone can send money abroad at anytime without any question. Exporters can earn and collect monies abroad. This may lead to a Panama Papers type situation involving offshore banking. Last year, 2 billion USD left our shores, mainly from the stock exchange. The present situation is fairly certain to result in failure and the collapse of the economy,” he opined. (RLJ)