2026-03-03 / Debate: Foreign Exchange Act Order under Section 22 of the Foreign Exchange Act, No. 12 of 2017 2026-03-03
Hon. Ravi Karunanayake argued that Sri Lanka must prioritise long-term national economic development over short-term economic management, advocating for high-growth strategies modelled on Southeast Asian economies. He proposed deeper economic integration with India — drawing an analogy to Hong Kong's relationship with China — suggesting that capturing even 3% of the Indian market could drive Sri Lankan growth of 10–12%. He criticised the Central Bank's monetary policy stance, arguing that raising interest rates to control inflation suppresses economic activity, and called instead for policies that empower SMEs, youth entrepreneurship, and women's economic participation domestically. He also urged a focus on strengthening the capital account to attract investment inflows, which he argued would strengthen the rupee and reduce the cost of living.
What I wish to reiterate today is that Sri Lanka must stand on its own feet. Real development will come only if we take decisions today that build national capacity and compound over the next 20 years, so that—like Singapore, Malaysia, Thailand and Indonesia—we too can move forward, instead of merely managing the country while waiting for tomorrow’s income.
A timely example is India. Twenty years ago their total output was a fraction of what it is now; today it stands at about USD 4.8 trillion—after the United States, China and Japan, and within a year India will likely be third. Sri Lanka’s proximity to India is a benefit to us as well as to India. Just as Hong Kong integrated with China, if Sri Lanka integrates wisely with India, even if we capture 3 percent of their market space, our growth could approach 10 to 12 percent.
We cannot push ahead at 3 to 4 percent growth. Nor can we simply raise interest rates in the name of controlling inflation and then compress the economy. We need to propel SMEs, convert our youth into entrepreneurs, and empower our women. Our women should not be compelled to migrate to the Middle East; their labour must be harnessed here at home. As we mark International Women’s Day tomorrow, please ensure real recognition and dignity for these women. But the Central Bank has never allowed such a thrust.
Therefore, I use this moment to call for as much investment as possible into this country. The previous speaker was correct about the balance of payments—we must improve it. That requires a robust capital account, not only the current account. If we can bring in capital inflows through capital accounts, the rupee will strengthen and the cost of living will fall. When the rupee strengthens—