The government should take steps to strengthen the economy instead of blaming US President Donald Trump for the depreciation of the Sri Lankan rupee, former president Mahinda Rajapaksa said today.
He said in a statement that the role of a government was to keep abreast of worldwide developments instead of complaining that a foreign leader has strengthened his own economy and that our currency was collapsing on that account.
Mr. Rajapaksa said President Trump has strengthened the US economy through a policy of giving incentives to indigenous businesses and imposing tariffs on imports to encourage local production.
“My government also had a policy of producing whatever we could locally and reducing imports such as diary products, maize, soya, sugar, onion, potato, fruits, vegetables, poultry and certain industrial products. This government in contrast believes in limitless liberalization and free trade without a clear strategy to increase exports and reduce imports,” he said.
Mr. Rajapaksa said the government’s task is to manage crises and not to complain about them.
“If we have a government that requires foreign countries to underperform so as to enable us to maintain the value of our currency, then this country is in deep trouble,” he said and added that the present mismatch between the low price of crude oil and the high retail prices of fuel in Sri Lanka is due largely to the depreciation of the fupee and the government tax on fuel.
“The reason why the government is keeping the fuel pricing formula a closely guarded secret is because it will reveal to the public both the incompetence of the government as well as the taxes they are charging on fuel,” Mr.Rajapaksa said adding that the government has been trying to downplay the depreciation of the Sri Lankan Rupee by claiming that the Indian Rupee has depreciated even more.
“The Indian economy however is growing at nearly twice that of Sri Lanka and they are better able to weather the shocks. We are paying a heavy price for shifting from an emerging production economy under my government to a trading economy under UNP policies. What we are faced with now is slow growth below 4%, increasing inflation, increasing imports even of items that can easily be produced locally, huge repayments of short and medium term foreign commercial consumption loans taken by this government and a Rupee that is depreciating by the day,
The emerging economic crisis is the outcome of the ill-conceived economic policies of this government and the lack of a home grown economic management strategy,” Mr. Rajapaksa said.