The Hon. Rauff Hakeem, Attorney-at-Law

¶ 01 Thank you, Hon. Deputy Speaker.

¶ 02 The Minister referred to the recent “Ditva” cyclone, saying the losses were several times greater than the tsunami and that the government is acting properly. In reality, though more than Rs. 700 billion has been allocated, progress remains insufficient.

¶ 03 For example, in Kandy District, around 57 schools were affected; 25 had to be relocated, yet none of those 25 have been properly addressed and they continue at the same sites. Recent heavy rains made learning difficult. The President visited Kandy and discussed this, but reports such as NBRI assessments are delayed, although it is already months since the disaster.

¶ 04 Similarly, in Ampara District, like in Polonnaruwa as mentioned by Hon. Kins Nelson, paddy farmers face severe issues. Even last season’s harvest is stacked in homes, unsold at even Rs. 80 per kilogram. The next season has begun, compounding the problem. Farmers are waiting for a fair purchase price but cannot sell. Meanwhile, global fertilizer prices may be high, but the government must ensure supply. Farmers are forced to buy urea at Rs. 18,000–20,000 per bag in the open market. Government subsidy covers about 50 percent, but beyond that, fertilizer is still hard to obtain. Solutions are needed.

¶ 05 You, Sir, also spoke earlier—and after a long time, we heard you, which is good; presiding Members should occasionally share their perspectives.

¶ 06 The main talking point today is the sharp depreciation of the rupee. Yesterday’s Daily Mirror headline—on which there was commotion—highlighted the Central Bank’s difficulty managing dollar fluctuations. Today the same paper carries an article by Dr. Kenneth De Zilwa, “Rupee depreciation’s double edge,” noting:

¶ 07 “The Central Bank faces a delicate balancing act. Defending the anchor requires reserves, but those are low and IMF targets prevent aggressive selling.”

¶ 08 IMF conditions limit interventions in the FX market. Recently, for the first time in a long while, the Central Bank purchased about USD 10–12 million from the market, but has since stopped. They also cannot print money under the new CBSL Act; the Governor has clarified the position.

¶ 09 The article further states:

¶ 10 “Allowing depreciation without intervention expands money supply and credit, fueling inflation and thus warranting a tightening cycle for shocks caused by depreciation due to external imbalances and lack of USD cashflows.”

¶ 11 That is “stagflation”: to control inflation, tighter policy hampers growth. Government must take immediate measures.

¶ 12 On fuel, in just three to four months, about USD 1.2 billion has been spent—two-thirds of last year’s entire fuel import bill—indicating the magnitude of the problem. India has introduced work-from-home measures to conserve fuel; we may also need strong measures.

¶ 13 Another concern: just a day before the surcharge on Customs duty for vehicle imports, some companies opened LCs for nearly 5,000 vehicles. How did that happen a day prior to the duty hike? This suggests serious fraud or corruption—akin to earlier sugar duty reductions that enabled windfall profits. Such matters must be investigated, even under this government.

¶ 14 I conclude. Thank you.