A sound move | Daily News

A sound move

The Government has proposed to lift the import ban on between 100-150 items that were among 1,500 items deemed as non-essential items, banned in the wake of the dollar crisis. Among the items that are to be relaxed from the ban are computers, household appliances, televisions, electrical goods, mobile phones, garments, food items etc. according to media reports. According to Cabinet Spokesman Minister Dr. Bandula Gunawardena the ban on imports will be lifted in such a way that there won’t be a large scale exodus of dollars from the country at once.

He also said that the decision regarding the relaxation of import restrictions imposed will be made based on the guidelines and instructions provided by the expert committee appointed by the Finance Ministry and the Central Bank of Sri Lanka (CBSL).

According to officials the relaxation of the ban would be made in such a manner that it would not in any way affect the exchange rate(s), foreign reserves position or inflation.

No doubt, the increase in the foreign reserves with the receipt of the International Monetary Fund’s (IMF) US$ 2.9 billion loan has prompted the Government to reconsider the import ban. The expectation of additional foreign aid on the strength of the IMF facility too would improve things further leading to further relaxation of import restrictions. There was also pressure from the European Union (EU) on the Government to lift the ban on imports. This is in addition to the repeated requests for the lifting of the import ban by certain businesses that were affected due to inputs that go into the manufacture of their products being included in the banned list.

There were also those engaged in self-employment who were badly hit by the import restrictions. This was particularly felt by those engaged in the beauty culture and bridal dressing trade with the ban on certain perfumes, colognes, make-up material and other ornaments.

Besides, the public have now got used to imported goods and would not settle for anything less. The ordinary public are forced to go without some of their favourite food items and other consumer goods they have been taking for granted all this time.

With the opening of the economy in 1977 a host of imported items flooded the country. There was a rush of apples, grapes, oranges, chocolates, confectioneries etc. which were lapped up by all and sundry - rich and poor alike. While this could be a reason for the depletion in the dollar reserves that has affected the economy, it is also a fact that people started to get accustomed to things foreign to the extent that they could not do without these items anymore, despite the merits attached to local goods from several quarters.

Not just the rich, the imported items are the first choice even in the case of the ordinary folk, particularly the post-1977 generation. The sudden ban on 1,500 items from the import list was felt by all in a very tangible form. Hence, the decision by the Government to ease the ban will be welcomed by most.

Besides, lifting import restrictions will also afford relief to businesses whose trade and production had already been affected. But like the Minister said, the Government has to be circumspect in the matter. The import ban should not be relaxed in one go. It should be phased out in a manner so that our foreign reserves would not take a fatal nosedive. If that happens we will be back to square one again.

The economy has just started to pick up and is showing positive signs of recovery from the gloomy picture that prevailed. Hence, we should tread carefully lest we turn the clock back. Ideally, the easing of the ban should begin with a list of essential items. Luxury goods including cars can wait until the economy has been brought to that stage where the harm will be much less. However, the ban on items that are required for livelihoods should be relaxed as a matter of urgency.

There have been complaints from those dependent on the music industry that included in the ban are certain musical instruments which are essential for their business. As a result certain musical groups have even suspended their open air shows and other engagements, according to media reports. There are other segments too that are similarly affected. Consideration should be given to these groups lest they lose their income avenues.

There are those involved in the export business too who have been affected since the foreign components that go into their products were caught up in the import ban. This way the country stands to lose valuable foreign exchange revenue which in turn would affect the economy. This aspect too needs redressing.

Care should also be exercised against unrestrained imports even after the economy returns to a healthy state. Constant monitoring of the situation will be required to ensure things do not go off-balance. It will be the task of the CBSL to keep watch of developments.


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