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Home Business & Finance Economic Policies

Sri Lanka rupee opens weaker at 294.30/60 to US dollar, bonds up todayheadline

January 6, 2025
in Economic Policies
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ECONOMYNEXT – Hundreds of online followers of Trade Minister Wasantha Samarasinghe slammed domestic tyre producers after he revealed a request to further control imports, saying it will lead to a Rajapaksa administration style exploitation of consumers by protectionist businessmen.

Local tyre makers had asked for import controls as there were ‘more than enough’ locally made products, and after that prices would be brought down, Minister Samarasinghe said in a facebook.com post.

Local tyre producers had also claimed that, “millions of dollars” were being spent on imported tyres.

Sri Lanka has forex shortages since the setting up of a central bank with a flawed operating framework (OF) in 1951 which had led to both import and exchange controls, analysts have said.

There were almost 700 replies to the post, with almost all pointing out that it was a typical plan of vested interests to limit competition and exploit consumers.

They urged Minister Samarasinghe to listen to the plight of consumers, and not be swayed by protectionist businesses.

Unlike the pneumatic tyre makers, Sri Lanka has a large solid tyre sector, which started exports from day one and did not seek to harm citizens within the country with import protection.

Bad Request

“This is a bad request from them, Wasantha Samarasinghe,” a netizen, Gayanthra explained in moderate language. “We have already applied this flawed logic with other products a few times, and it only backfired on the entire industry.

“People shouldn’t buy tires or anything else just because it’s made in Sri Lanka or to save dollars. People should buy them because they create value and can compete in both local and international markets.

“If someone is buying Japanese tires, it’s not because they don’t want to buy local products. What they are paying extra for is reliability and quality.”

“I hope you have the simple common sense to understand the illogical, extremely damaging request they are making,” Sanajaya asid.

“Even to entertain such request is a bad signal. Kindly let the market forces play out and may the better product win.

“What you should be doing is encouraging the businesses to complete globally. Please dont be the reason for NPPs downfall. You have been given one of the most crucial and important roles in the government. Have better people around you with global exposure.”

Imports Already Taxed

“Wasantha Samarasinghe this is a terrible and short sighted suggestion that is typical of vested interests from those who are only concerned with profit,” another reader said.

“Tyres are something that can’t be experimented with, given that life safety is directly connected to them. Even the best vehicles in the world with the most sophisticated active safety systems is perilously unsafe if its tyres are bad.

“Therefore, imports should be allowed to continue. But the local industry should be incentivised, and also mandated to uplift their standards to global levels.”

There is already a 115 percent tax on foreign tyres, an importer said.

“We remember what these important gentlemen who call themselves domestic producers did in 2020. They got together and raised prices by 300 percent,” he said.

“The government will lose that tax also. Please Minister do not fall for this trick, and tell them to raise the quality.”

“The government will also lose the taxes now charged on imports”

Domestic producers collect the tax that would otherwise have gone to the state in a process called ‘tax arbitrage’ reducing the opportunity consumers to have to buy other goods and lowering living standards.

Another follower questioned who told Minister Samarasinghe that prices could be brought down by reducing competition.

පිස්සු කෙලින්න එපා වසන්ත. Competition එක නැති කරල මිළ අඩු කරන්න පුලුවන් කියල කියල දුන්නෙ කවුද”

මේ logic එක නං මට තේරෙන්නේ නැහැ. ටයර් ආනයනය කිරීම සීමා කරපුහාම දේශීය ටයර් නිෂ්පාදනවල මිල අඩු වෙන්නේ කොහොමද ? added another.

Angry Consumers

Many others were less calm, and slammed the decision in heated language pointing out that prices cannot be brought down by reducing supply.

“ටයර් තියෙන ප්‍රමාණෙත් අඩු කරල තියෙන මිලත් අඩු කරන්න උඹ මැජික් කාරයෙක්ද?

Local producers were free to cut price immediately if they wanted to another said. They pointed that nobody paid higher prices for import for fun, but did so due to the quality difference.

“ඉතින් ඕයි දැන් තියෙන විදියට, අඩු කරපල්ලකො දේශීය රෙද්දවල්. කව්රුත් ආසාවට වැඩි මිලට ටයර් දානවයැ.”

Dozes of others repeated the same logic.

“Foreign Tyre වැඩි ගාණට දාන්නේ ආසාවට නෙමෙයි, import ban දාන්න ඕනේ නෑ. හොඳ quality tyre එකක් locally හදනවා නම්, නිකම්ම market එක හැදෙයි. Import ban කරොත් local එක law quality වුණත් price එක නිකන්ම වැඩි වෙනවා. පිස්සු කෙලින්න එපා.”

“රවුමට තියෙන හැම එකක්ම ටයර් නෙමේ බන්, ලන්කාවේ ටයර් එකකුයි ජපන් ටයර් එකකයි විශාල වෙනසක් තියෙනවා.

“ලෝකේ හොදම වල්කනයිස් රබර් තියන රටේ ඔය කපටි දේශීය නිශ්පාදටන්ගේ ටයර් වල කොලිටි එක ගැන අමුතුවෙන් කියන්න ඕනේ ණෑනේ, ගිය ආණ්ඩුවේ උන් ටයිල් වලට කරපු දේ ටයර් වලට කරන්න එපා. ප්‍රශ්නයක් නැති නැති ප්‍රශ්න හදන්න එපා

Other facebook users said if imports were banned, Sri Lanka will go the level India was in 1990s, and they will be forced to buy Ferrantino tyres and CEAT.

“ඉන්දියාව 1990 ගනන්වත් තිබ්බ තැනට යන්න හදන්නෙ.. ෆෙරෙන්ටිනෝ කාරයා ටයර් හැදුවෙ ඒව පිටරට පටවන්න කියල.. දැන් අපිටම දෙන්න යන්නෙ..

Gota Version 02

A Dunlop tyre that was 8000-9000 went up to 25,000 rupees and a 6,500 CEAT went to 15,000 by the Gotabaya Rajapaksa import controls, another reader pointed out.

“ගෝඨා කලෙත් ඔය ටික. අන්තිමට වුනේ 8000-9000 ට තිබ්බ Dunlop ටයර් එක 25000 ක් වෙලා 6500 තිබ්බ CEAT එක 15000ක් වුන එක. කළු කඩ පෝසත් කරන වැඩ මේවා.

After seeing the post blood turned to water, another reader said.

Tile makers had raised the price of a toilet set from 20,000 to 80,000 using import controls after Gotabaya Rajapaksa ‘strengthened local producers’, he pointed out.

“අලුත් අවුරුද්දේ ලේ වතුර කරන පෝස්ට්.”

“ගෝඨාභය රාජපක්ෂ කාලයක් දේශීය ටයිල් නිශ්පාදකයන් ශක්තිමත් කලා. ප්‍රතිඵලය උනේ 20 000 කොමඩ් එක 80 000 ට ගියපු එක. දේශීය නිශ්පාදකයා ශක්තිමත් විය යුත්තේ ගෝලීය වෙලදපොලට මුහුන දීමට මිසක ඉන් හැංගීමට නොවේ.”

Another said wrong moves should be pointed out early to stop the same fate as the last administration falling on the current one for whom they voted for.

මචංලා වැරැදි දේ වැරැදියි කියමු. නැත්තම් අන්තිමට අපිමයි විදවන්නේ. මගේ profile එක බලන්න මුන්ව ගේන්න කොච්චර බලන් හිටියද කියල තේරෙයි. හැබැයි ඒ වගේමයි වැරැදියි නම් වැරැදියි. Tile වලට උන දේමයි වෙන්න යන්නේ.

Another reader refered to local tyre makers as ‘tyre farmers’ in reference to the exhorbitant prices charged for basic foods like rice, maize (which is used for chicken feed) and dairy products, with government support for price gouging coming via import taxes.

දේශීය ටයර් ගොවීන්ට හොඳ කලක් 🙂

Import Duty Mafia

Netizens said further import controls will lead to the build up of a mafia or oligopoly which will then backfire on the government.

“එහෙම නැතුව මේ වගේ ගොබ්බ තීරණ වලින් වෙන්නේ පාරිභෝගිකයාට අවශ්‍ය ලෙස භාන්ඩ හිගවීමත් වෙළෙඳපොල කතිපයාධිකාරයක් ගොඩනැගී එයින් විශාල ලෙස වෙළෙඳපොල අකාර්යක්ෂමතාවක් නිර්මාණය වීමක් පමණි.

“ඇමතිතුමා දෙවැනි ගෝටාභය වීමේ මාර්ගය තොරාගතහොත් එයම මේ ආන්ඩුවට පාරවලල්ලක් වෙනවාමයි. ඔබලාට මේ වගේ අසාර්ථක ක්‍රම අනුගමනය කරනවාට වඩා දෙයක් කලහැකි බව අප තවමත් විශ්වාස කරනවා. මතක තබා ගන්න ඇමතිතුමා, දේශීය නිශ්පාදන නංවන්න කියා දේශීය පාරිභෝගිකයාට විශාල බරක් පැටවීම් නම් ඔබතුමාලගේ ප්‍රතිපත්තිය, ලගදිම ඔබතුමත්, ආන්ඩුවත් හොද පාඩමක් ඉගෙන ගන්නවා.”

තවත් මාෆියාක් හදන ගමන්, Dulip said.

Another netizen said dollar reserves cannot be built by restricting imports as Gotabay Rajapska and Sirimavo Bandaranaike governments belived but by encouraging exports.

“ඇමතිතුමා ප්‍රායෝගිකව රටේ ඩොලර් සන්චිත වැඩිකරගන්න නම් කරන්න ඕනෑ අපනයන වැඩිකිරීම මිස ගෝටා ඉස්සර මැතිනි කලා වගේ ආනයන සීමා කිරීම නොවෙයි.

“ඔය ආනයන සීමා සහ පාලන මිලේ ප්‍රායෝගික ප්‍රතිපලය හැමවිටම මිල ඉහල යෑම සහ පෝලිම් පමනයි. කිසිදා ක්වොලිටිය ඉහල යන්නේ නැහැ.”

Madushanka said attempts were being made to build monopolies through taxes: ආයෙත් ඒකාධිකාරයක් කරන්න තමා මෙ යන්නෙ/

In addition to tyres and ceramic products, milk prices were also raised through import duties, another reader, Gihan said.

ඔය තක්කඩි වැඩෙන් වෙන්නෙ මෙහේ ඉන්න එවුන් මාෆියාවක් හදා ගන්න එක. ඉස්සර කිරිපිටි වලට සීමා දාපු ගමන්, මෙහේ පැලවත්තයා ගණන් ඉස්සුවා.ටයර් ආනයනය නැවැත්තුව ගමන් CEAT Tyre ගණන් ඩබල් කලා.

Another netizen said given past experience any assurances that prices will be brought down after import controls was nonsensical and eventually price controls may be needed.

දේශිය ව්‍යාපාර ගොඩ නැගිම අවශ්‍යයි හොද ප්‍රමිතියකින් භාණ්ඩ නිෂ්පාදනය කිරීම කල යුතුයි . හැබැයි ඇමැතිතුමො සීමා කරලා දේශිය මුදලාලි ඇරපු ඇරිල්ල මතකද ටයිල් කැටේ කොමඩ් වලට .ටයර් වල මිල අඩු කිරීම ශත පහකට විස්වාස නොමැත කෙසේ වෙතත් හිගය පෙන්නලා මිල වැඩියි කරයි යසට . අන්තිමට පාලන මිලක් දාලා විහිලුවක් වෙයි 🤣🤣🤣

Sri Lankan should have freedom to make choices instead being controlled by cartels, Umayganga said.

ඕක මෝඩ වැඩක්නේ ඇමතිතුමා . මිනිස්සුන්ට අයිතියක් තියෙන්න ඕනේ quality එක අනුව තමන්ගේ ආර්ථිකය අනුව choice එකකට යන්න . දේශීය නිෂ්පාදන නගා සිටුවන්න ඕනේ තමයි . හැබැයි ඔය වගේ මෝඩ වැඩ වලින් වෙන්නේ හාල් වලට වගේ cartel හදන එක .

දැන්වත් former Soviet Union පන්නයේ මෝඩ වැඩ නවත්තලා මාකට් එකට අනවශ්‍ය මැදිහත්වීම නොකර ඉන්න . අරියසිල විකරමනායකලත් රාජපක්ෂලාට යෝජනා කලේ ඔය වගේ වැඩ තමයි . Gotabaya Rajapaksaගේ කාලේ ceramic කර්මාන්තයට වුන දේ මතකනේ .

Making people to buy local products through force using the hard earned money of consumers to fatten the pockets of a few was not correct, yet another post said.

“බාල කොලිටි බඩුවලට “දේශීය” ලේබලය ගැසූ පමණින් ඒවා සුපිරි ටොප් බඩු වෙන්නේ නැත.. බාල බඩු නිෂ්පාදනය කොට ඒවා විකිණෙන්නෙ නැති වුණාම ආණ්ඩුවට සත්තමක් දමා ආනයන නැවැත්වීම යනු මාෆියාවකි..

“හොඳින් හෝ නරකින් අපේ එව්ව ගනිං” ආකාරයේ බලහත්කාරකමකි.. කාගෙවත් පොකට් එක පුරවනු වස් අපට අවශ්‍ය ගුණාත්මක බවක් නැති භාණ්ඩ හා සේවා පරිභෝජනය කිරීමට අප බැඳී නැත.. අප අමාරුවෙන් දුක්මහන්සි වී උපයා ගන්නා මුදලින්, අපට ලබාගත හැකි ඉහළ ම ගුණාත්මක භාණ්ඩ හා සේවා මිල දී ගැනීම අපේ මානව අයිතියකි..

Broken Suspension

Hard locally made tyres damaged the suspension of cars leading to more imports of spare parts, others said.

වැරදිලා හරි මේ තීරණය ක්‍රියාත්මක කලොත් වාහන වල සස්පෙන්ශන් පාර්ට්ස් ගෙන්නන මුදලාලිලාගෙ බිස්නස් නං වැඩිවේවි …”Don’t try to be the reason for the downfall of the new Government” as someone has correctly mentioned here…You are trying so hard for that.

Extra imports of spare parts also cost dollars, Dinu said.

“ඔය ගල් ටයර් දැම්මාම ඔයිට වඩා වියදමක් යනවා වාහනේ සස්පෙන්ශන් රේපයාර් කරන්න, එවටත් යන්නේ ඩොලර් තමයි.”

Added another: දේශීය ටයර් රටේ තියෙද්දිත් මිනිස්සු පිටරට ටයර් ගන්නවා කියන්නෙම දේශීය ටයර්වල අවුලක් තියන හින්දා තමයි.
පිටරට ටයර් රටට එන්න ඕන එතකොට තමා ඒවගේ Quality එක බලලා තරඟකාරී මිලකට ඒ ළඟින්ම යන හෝ ඒ වගේම Quality එකේ ටයර් දෙන්න නිෂ්පාදකයෝ පෙළඹෙන්නේ.

එහෙම බෑ කියන්නේ දේශීය ටයර් අවුල් තමයි. පිටරට ටයර් තියෙද්දි දේශීය ඒවට තැනක් එන්නෑ කියන්නෙම බයිලා. හරිහමන් ටයර් එකක් හදාගගන්න බැරිඑකේ සිතනිවන කතා.

Several netizens urged Minister Samarasinghe to read the comments. The more irate ones said not to treat consumers like those with leprosy, and made uncomplimentary references to draft animals. (Colombo/Jan05/2025)


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