Hon. Nimal Palihena

¶ 01 When we look at Sri Lanka’s economy, certain things are clear. There is a shortfall in investment inflows to our country, weaknesses in tax revenue, issues with foreign remittances, and, from another angle, the impacts arising from the newly concluded IMF agreement. All these relate to the regulations, rules and subordinate legislation we are discussing today, tied to several Acts. Although Opposition Members expressed views, all these laws were approved during 2005–2018. We must ask whether any of the expected outcomes materialized for the country. For example, even when we tried to attract investment, only USD 1.18 billion came in 2022, while India attracted USD 64 billion. The message is that, through the Orders we pass here, we have not demonstrated sufficient strength as a Government or a country.

¶ 02 As a Government of the National People’s Power, representing citizens bound to meet the aspirations of millions, I wish to state that we will correct these conditions within our administration and deliver the anticipated success to our people, building a prosperous country with dignified lives. We will strengthen the future of the country, raise living standards, reinforce the state machinery and public service performance, and suitably reform the institutional framework to fit our national needs, so we can build the developed country we aspire to.

¶ 03 There are several avenues of state revenue: first, taxes; second, income from state enterprises; third, we must respectfully note remittances from our citizens working abroad; and finally, loans and grants. The Orders we discuss today are linked to these conditions. Within the Imports and Exports (Control) Act, the Foreign Exchange Act, the Payments and Settlement Systems Act, the Ports and Airports Development Levy Act, the Colombo Port City Economic Commission Act and others, we have opportunities and discretion to build proper frameworks. We must take decisions to guide orderly and lawful implementation.

¶ 04 On foreign exchange, we recall that our exchange rate was managed under a managed float up to 2022. Despite efforts to bring remittances through formal channels, many did not use the official system because of lower rupee conversion, and instead resorted to undiyal and hawala-type methods to meet their needs. Consequently, the banking system did not receive the required foreign exchange formally. We passed laws, but we did not research who was tasked to regulate or register these flows, nor conduct proper investigations. We must ensure laws do not remain on paper and that fair interventions are made hereafter.

¶ 05 If we facilitate formal inflows—whether through our banks or under other regulated business mechanisms—there is scope to resolve the foreign exchange challenge and rebuild reserves.

¶ 06 Madam Deputy Chairperson of Committees, under undiyal systems we saw people transacting abroad, depriving our reserves. If that persists, it will continue to harm our external reserves.

¶ 07 Turning to the economy: in 2019 our GDP was USD 89 billion. Thereafter it fell to about USD 80 billion and even recorded negative growth. If these Orders had delivered fairness and attracted the investments we need, we would already see positive signs as we restart growth. With supportive regulations approved today, we can pull growth up and strengthen the country.

¶ 08 On casinos, though we have not endorsed the concept, it is an international commercial activity. Despite enacting the Betting and Gaming (Regulation) Act, domestically we only recorded USD 2,000 million in one-off registrations and then did not follow through with taxation or supervision thereafter. When activities with international linkages operate here, we must act responsibly to secure revenue. Our common needs, the upkeep of public assets and development depend on state income. Passing laws alone is insufficient; we must also create real value. Therefore, we should amend these laws properly and rectify deficiencies through review and necessary intervention. We will act responsibly as a Government.

¶ 09 Projects like the Colombo Port City and the Hambantota Port raise questions about our natural advantages and choices—Hambantota involved land excavation while Port City reclaimed the sea. Were these carefully planned and were borrowed funds properly deployed? Regardless of how we pass Orders, we also need mechanisms and skilled human resources to realize objectives. We must connect with the world through development and build Sri Lanka as a country on that path.

¶ 10 Finally, we are preparing steadfast measures to free our people from current challenges and to build a respected, strong nation. We will seek FDI and, where needed, loans for more viable projects, to create a fair life for our citizens. We will act as a responsible Government. Thank you.