The cost of living is continuing to rise significantly alongside the depreciation of the rupee. At the same time, although the government promised to reduce VAT on medicines, it has failed to properly facilitate the importation of pharmaceuticals into Sri Lanka. Under a law introduced in 2015, when the rupee depreciates by 5 percent, the prices of imported medicines must be reviewed. However, the current government and the National Medicines Regulatory Authority have not presented any discussion or programme regarding how medicine prices should be revised during imports.
At present, the prices of essential goods and transportation charges have increased. All of these price hikes are linked to the depreciation of the rupee. There is also a major risk in not allowing discussions and price revisions for medicines when the rupee depreciates by 5 percent. In such situations, importers may stop importing medicines. If medicine imports decline, shortages will occur in government hospitals, causing severe difficulties for the public.
The government is boasting that it managed to bring the dollar rate down from Rs. 355 to Rs. 336. If the dollar weakens, that is beneficial for the country. However, maintaining the dollar depends on market confidence, and what currently exists in the market is only a temporary balance.
In May alone, Sri Lanka imported fuel worth 521 million US dollars. Funds received from the International Monetary Fund and the Asian Development Bank are only sufficient to finance around two months of fuel imports. In addition, the country’s trade deficit exceeds 200 million dollars. Therefore, temporary borrowing must stop, and long-term solutions should be found.
Economic experts have also warned that due to the ongoing war-like situation in the Gulf region, the Gulf economy could decline by around 30 percent. If that happens, the jobs of migrant workers could be at risk, which would negatively affect Sri Lanka’s foreign remittances. Therefore, long-term solutions are needed for these issues.
If long-term solutions to the country’s economic problems cannot be found, the only alternative is to attract investors and increase investments. The Samagi Jana Balawegaya also urges Sri Lankan migrant workers to send money through official banking channels instead of illegal methods. Doing so would help prevent further economic collapse. The government must seek permanent solutions instead of temporary patches for the country’s economic problems.
It currently costs the Ceylon Petroleum Corporation Rs. 561 to produce one litre of diesel, while the government imposes a tax of Rs. 163 per litre. As a result, a litre of diesel costs nearly Rs. 750. The corporation also earns around Rs. 492 per litre of diesel. In order to reduce pressure on the economy amid rising fuel and import costs, restrictions could be imposed on the importation of televisions, refrigerators, and electric fans. Otherwise, the dollar shortage cannot be addressed.
The agreement signed between Sri Lanka and the IMF will expire after March next year. Therefore, the government will need to negotiate another agreement with the IMF after that period. However, the public should not be burdened in order to generate long-term revenue. The government must immediately take steps to bring in investments to increase dollar income.
Due to the government’s reckless policies, if the rupee depreciates by just one rupee against the dollar, the debt burden increases by Rs. 40 billion. If the rupee depreciates by Rs. 10, the debt burden rises by Rs. 400 billion. When the National People’s Power government took office, the dollar stood at Rs. 292. It has now risen to Rs. 336, an increase of Rs. 44. As a result, the country’s debt burden has increased by approximately Rs. 1,600 billion.
The Samagi Jana Balawegaya would welcome the dollar rate falling to Rs. 250, but the government has no capability of achieving that. Since the National People’s Power government came to power, only around 10 million dollars have entered the Colombo Stock Exchange, and the government has failed to bring in even a single major investor.
It was the same group now in government that previously prevented the administration from functioning properly. However, during this period, the Samagi Jana Balawegaya did not organize strikes or actions that would inconvenience the government or damage the economy. Nevertheless, in the future, the party will work to mobilize the public against the government.
The government must also respect democracy and immediately hold the Provincial Council elections. Such an election would allow the public to judge whether the government has fulfilled the promises it made during its 20 months in office and whether people have truly received the prosperous country and beautiful life they were promised.
The General Secretary of the Janatha Vimukthi Peramuna is not the secretary of the country. JVP General Secretary Tilvin Silva has no authority to decide whether elections should be held. The Samagi Jana Balawegaya is ready for Provincial Council elections at any time, but the government is afraid to hold them.”
