OPA Suggests Solutions to FX Crisis
By Ishara Gamage
The Organisation of Professional Associations of Sri Lanka (OPA), has called on the government to immediately set up a special task force to resolve the current foreign exchange crisis in Sri Lanka.
“It is our considered opinion that the government authorities should formulate a Task force to develop the proposals forwarded as well as other valuable options that may be available received from multiple sources to address the issues of concern” they said. “We are fully committed to serve in any such committee for the betterment of the people of Sri Lanka”, the OPA said.
According to the OPA, Sri Lanka is going through a difficult period due mainly to economic issues and also based on the prediction that the national debt will assume serious proportions of over 100% this year and based on the critical evaluation that a solution is the development and sustenance of foreign exchange to improve the Balance of payment status, with the overriding requirements of diluting the outflow with import substitution, and increase of exports to bolster the inflow. They have also put forward a solution to the foreign exchange crisis on a medium and long -term basis.
The proposals they handed over to the Governor of the Central Bank Ajith Nivard Cabiral recently are as follows: Short-term solutions are as follows-Credit lines extending to long years to be established with countries from which major levelsFT of imports are prevalent. Development of the Apparel export sector with government assistance utilizing the positives of the ‘new normal’ environment.
Propose that a separate Ministry to develop the apparel industry in Sri Lanka be formulated. The development of the Apparel industry in Bangladesh could be utilized as a benchmark. Re-negotiate prevailing Free Trade Agreements with neighboring countries to enhance exports with quota allocations based on increased shipping costs due to Covid-19 pandemic issues.
Seek enhanced employment quotas from countries such as Korea, Japan, Middle East and Israel etc., to improve foreign remittances. Negotiate an employment quota from China as a friendly gesture. Initiate appropriate measures to recover employee dues through relevant country authorities where Sri Lankan employees have been subjected to a “wage theft” based on Covid 19 pandemic. Specific measures to be introduced by the government, to recover such wages of the wage earners, withheld by the respective foreign employers.
Special concessions to be granted to foreign country based wage earners with no commissions being charged for changing and transmission of foreign currency and home based delivery of funds to recipients. The duty free allowance at port of entry upon serving in a foreign country is to be enhanced to ensure that the foreign currency earned in other countries is brought into the country.
Provide short-term incentive for exporters holding US $ funds at Banking institutions to release the same providing them with an incentive scheme to overcome the current impasse on US $ limitations.
Creation of an Authority to develop the spice industry and develop FTA based export of spices upon suspension of imports of spices similar to what was done with regard to saffron. Develop the Colombo Port which stands as No. 25 (Country wise No. 15) in international container shipping rankings to the next level with regard to Transshipments, ship registration process simplification and marketing of bunkering facilities.
Any foreign investor investing in an apartment for a minimum sum of US Dollars 100,000 which has to be equal or more than 50% of the total cost of the apartment to be granted a resident visa for two years. For the balance 50% of the cost a Sri Lankan Banking institution to enter into a tripartite agreement with the developer and the investor whilst releasing the balance to the developer and granting possession to the investor.
Special concessions such as interest free advances and credit guarantees by the government to be offered to SME exporters mainly in the Apparel sector thus seeking enhancement to existing export markets. Such exporters to be absolved of CRIB issues for export related funding.
An ‘Export industry based Ombudsman’s office’ to be created to assist exporters to overcome issues relating to funding and other matters of concern and the inflow of foreign currency relating to sale of Gems and Jewelry has to improve and as a promotional exercise introduce a scheme similar to ‘Convertible Rupee Accounts- CRA’ prevalent in the seventies for a portion of funds received by the exporters.
Medium-term solutions are as follows-Economic Development through the Export of High Technology Products from Sri Lanka. Provide a new dimension in development of Tourism based on ‘Medical Tourism’ and ‘Pilgrim Tourism’. Both, ‘Western and Ayurvedic’ medical facilities to be offered in this regard.
Development of foreign degree offering Universities in Sri Lanka to provide resident facilities to entice students from countries such as Maldives, Pakistan, Bhutan and Taking into consideration the number of reputed enterprises which had wound up mainly due to insufficient funding assistance during period of adversity an Act to be enacted to resurrect sick industries based on a similar process as in India.