Economy is 'militarized'

28 June 2012 05:03 am - 0 - {{hitsCtrl.values.hits}}

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The United National Party (UNP) yesterday claimed that the country’s economy has been ‘militarized’, citing how the Central Bank’s actions brought the Lankan rupee market to a standstill last Tuesday.

“This is the militarization of the economic management of Sri Lanka. The Central Bank yesterday had issued notice to all banks not to sell the rupee above a certain price, there was no spot market during yesterday’s trading due to this,” UNP Parliamentarian and economist Dr. Harsha de Silva said.

“Accordingly, there was no spot market for the rupee against the US dollar during the past two days. Thus, the private banks only traded on the basis of a “spot after” process – the whole island and the world is aware of this fact now,” he added.

De Silva further noted that the government will have to resort to more far reaching measures in order to overcome the current impasse.

“The problem is, if the country doesn’t have US dollars, the authorities try to kill or bombard the person who tells us that instead figure out a way where this country could earn more dollars,” he said.

The National List parliamentarian pointed out that the reason for this acute shortage is the government’s economic policy.

Speaking on the current budget deficit de Silva said that there will most definitely be an increase in taxes on goods in the near future.

“The government projected a 6.2% deficit in the budget for this year, but now within the first quarter of 2012, the deficit has reached a staggering 2.9% and is only on the rise.

We can safely assume that the deficit will go beyond 11% by the end of the year. I’m saying this based on the data provided by the Treasury and have not made my own assumptions on this,” he said.

De Silva also commented on the government’s reluctance to decrease prices of goods that have fallen down in the global market due to this.

“Sugar, petrol and diesel have witnessed certain amounts of price decreases in the world market, but the government is not willing to give this benefit to the people due to the growing budget deficit,” he said.

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