State Minister for Urban Development Dr Nalaka Godahewa noted that the current foreign exchange insolvency was due to long term structural problems in the country. He noted that multiple governments’ contributed to the problem but that it lay with the current government to sort out the issue.
Dr Godahewa said, “In 2009 foreign currency reserves were only US$ 1 billion but since then till 2014 this grew by US$ 7 billion and reached US$ 8 billion.” Dr Godahewa was speaking at the 150th Anniversary of the Malay Cricket Club on 19 March. Dr Godahewa acknowledged that the Yahapalanaya government complained of a large debt overhang and unravelled the large swap and proxy debt instruments into International Sovereign Bonds.
Dr Godahewa blamed the previous government for part of the crisis. He said, “They borrowed more than the previous (UPFA) government.”
He added, “When the previous (UPFA) government borrowed US$ 5.2 billion in 6 years, the previous government (Yahapalanaya) borrowed US$ 5.6 billion in 5 years. They can’t escape blame.”
Dr Godahewa noted that the previous government even with the sale of the Hambantota Port did not continue the strategy of maintaining large reserve balances. Dr Godahewa noted that this reserve balance was required due to the trade deficit.
Dr Godahewa added that the current government faced much harder economic circumstances due to the sharp drop in tourism receipts alongside the fall in remittances due to people returning due to lockdowns internationally.
Dr Godahewa called on the public to take common sense measures to help. “We can all in our little way contribute to changing it or at least make sure it doesn’t happen again.” Dr Godahewa hailed the government for reaching out to the IMF and floating the exchange rate. He said, “By the end of this year the situation can reverse.” He noted that figures for tourism, remittance, and IT sector earnings remained promising.
“The Malay community is one of the most peaceful, friendliest communities in the Lankan brotherhood. You have had important personalities in different fields: politics arts education, sports, business, and professionals in the armed forces,” Dr Godahewa added.