SL inept to continue international trade if reserves fail $ 3 b mark: Cabinet Co-Spokesman

• Suggests selling whatever assets available to overcome dire forex crisis
• Cites CBK's era as major timeline where Govt. opted for privatising SOEs to cover Budget deficit
• Urges Sri Lankans to change attitudes to understand ground realities 

By Charumini de Silva

Cabinet Co-Spokesman and Minister Bandula Gunawardena yesterday said that Sri Lanka will not be able to continue trading internationally unless the foreign reserves are increased to at least $ 3 billion.

“If we don't sell whatever assets available to overcome the dire foreign exchange situation, our country will not be able to conduct business internationally anymore,” he said at the post-Cabinet meeting media briefing yesterday.

Recalling that former President Chandrika Bandaranaike Kumaratunga’s era was the major timeline that any Government privatised the State-owned enterprises to cover the outstanding Budget deficit, Cabinet Co-Spokesman urged that it was time Sri Lankans change their attitudes to understand the ground realities. 

“Unless we expand our foreign reserves to at least $ 3 billion soon, the Letter of Credit issued by the banks will no longer be accepted in the international trading arena. In the event the LCs issued by the banks are not accepted internationally, we cannot import fuel or gas no matter how bad our economic conditions may be. This is the reality of the international payment system,” he cautioned.

He also cited last week’s further downgrades issued by international rating agencies for Sri Lanka’s long-term debt and currency outlook was not at all favourable for the economy going forward.

Cabinet Co-Spokesman said the ground reality must be faced by all, be it anyone aspiring to come into power.

 Emphasising that attracting foreign direct investments is critical at this juncture, Minister Gunawardena said all Sri Lankans have a responsibility to boost FDIs carefully and diligently.

“All other economies such as India, China, Vietnam, and Malaysia are attracting sizable FDIs and we should find out why those investments are not flowing into our economy and why our entrepreneurs are investing in countries like Bangladesh, Ethiopia and Kenya and not in Sri Lanka,” he added.

Reiterating that Sri Lanka is facing the worst fiscal policy crisis in its history, he stressed the importance of achieving the set targets in the fiscal framework.

“This is the worst economic downturn that Sri Lanka has experienced in its 75-year post-independence,” he said.