The recently passed Foreign Exchange Act is certainly welcome in terms of removing some archaic rules governing the flow of foreign exchange. In terms of the vision of the UNP-led government towards liberalisation this one aspect is welcome news. However there are serious concerns on at least one aspect.
The move of imposing a 1% fee on each inward remittance impacts poorly on a vulnerable section of our people, namely the migrant workers.
Migrant workers at great personal cost in terms of family life and values and attendant matters, in 2016 remitted approximately USD 7.4 billion. There are approximately one million migrant workers.
Under the new Act all inward remittances will attract no less than 1 % as a tax. Doing the math is relatively easy. USD 7,400 million is approximately Rs 1.1 trillion and 1% of that amounts to an altogether impressive RS 11.100,000,000
Essentially taxing migrant workers will potentially be political dynamite. Not only are these citizens going abroad to work, leaving behind loved ones and our culture, but also having serious impacts on our very social fabric in terms of family values. The bulk are unskilled workers working in the domestic sector. The amounts they send back is just about enough to cope with the rising cost of living in Sri Lanka. The icing on the cake is that Sri Lanka has no provision for its citizens overseas to cast their ballot by post. Yet the monies they send back to Sri Lanka impacts on a large number of their family members. The potential for a political backlash is therefore enormous.
The other contentious aspect of the new Act is that on the face of it Sri Lanka may well establish herself as a global centre for money laundering a distinction it can do without in terms of attracting bond fide investment from overseas.
The move to have a vote of no confidence against the Minister of Local Government and Provincial Councils carries with it a certain sensibility. However the question arises if this – the delay in holding elections – is the upper most problem in parliament.
The fact that there has been no move to hold the subject minister in charge of the Central Bank accountable and responsible for the so-called Bondgate scandal, is in itself a scandal. Having sifted through the Prime Minister’s evidence at the Commission of Inquiry, one is struck by the sheer arrogance if nothing else.
The PM freely admits that they did not have a study as to the merits of changing the hybrid system of awarding bonds – in place since 1997 and therefore well away from any Cabraal influence – and instead made the change arbitrarily is a gross dereliction of good practise and democratic norms. Almost a contradiction in terms the PM also confirms that he did expect the Governor (Mahendran) to follow procedure. Yet there was a distinct departure from established procedure and from what the Monetary Law Act expects and orders if not envisages. Neither Mahendran nor Wickremesinghe as the Minister appear to have given a second thought about that aspect.
The PM’s answers appear to this newspaper as being far removed from good governance and instead appears reflective of a King of medieval times. Except of course that we are in Sri Lanka not a kingdom with an all-powerful King.
It is the same PM who having written to his Ministers on the 30th March 2015 demanding that transparency be observed and that unsolicited bids must not be accepted as a matter of principle now finds it very inconvenient to apply the same principles of transparency when it comes to the largest item regularly procured by any government: the raising of funds for development work. When it came to the Bonds he states all too easily that they had no time to do that because they were inundated with the need to service the debts on and off the books left there by the previous government.
The fact remains and it cannot be debated with any success in mind that the PM was perhaps completely out of his depth when it came to the bond saga and followed advice possibly proffered by Mahendran the invincible banker. The alternative opinion would be that the PM has become subservient to the expectations of the party to propel themselves to the front of Lankan politics and that all his decisions are tainted with the conflicts that arise out of such a position. In short that the PM was immune to the effects of this scandal and that ultimately the EPF earnings were reduced by around Rs 10-15 billion.
Thousands of telephone calls were made by a small group of people, SMS messages were exchanged, price sensitive information appeared within the knowledge of the bond boy Arjun, members of the parliamentary watchdog on public enterprise (COPE) shared calls with the bond boy, taxes due to the excise department were delayed, the former finance minister had literally a sack load of cash lying around in a safe in a company connected to his family, an apartment was rented out and the same minister did not know anything about it although he confirms that as his current address, bonuses running into the millions was paid out and the traditional respect for money seems to have flown out the nearest penthouse window.
Is Bondgate acceptable and does it not prick at your conscience simply because the money was needed to keep one party in power? If so what is the difference between that and the various electioneering bribes like the sil redi and the divi neguma cases? Or for that matter when the PM says vote for me and I will give you roads? Does that statement qualify the PM to be taken in for questioning and then released after 5 months in remand?
Why for heaven’s sake is there an abysmal lack of transparency from a government who promised nothing but equality and a balanced everything but has delivered more corruption and more debt than the Rajapaksas?
Are we living in a Kingdom with Ranil Wickremesinghe as the uncrowned King?