My paternal grandfather was the Editor of The Saturday Post in Singapore. A successful journalist in three-piece suit, coat, shirt and starched collar, he and The Saturday Post were hit hard by the depression. His penury was somewhat described by the Chinese saying “Coat, shirt and starched collar, pocket no dollar.” After the collapse of his newspaper, he rearranged his career and finances, sold much of his holdings in Nallur, and sent my father and his nephew Dick Hensman to Jaffna. He went into rubber estates in Malaya where he was successful until the Japanese came. They thought him an Englishman because of his height and clothing, and tied him up to a tree in the jungles of Malaya only to survive after being released by a Tamil rubber-estate worker after three days.
The above preamble is to draw similarities to us and our government. Our rulers live with coat, shirt and starched collar. Although “pocket no dollar” our ministers live well. Most of them have become very fat after joining politics. Our government lies to us and cheats us. Many of us were promised import permits as a benefit of service. I joined Peradeniya in 1999 as Professor of Electrical Engineering. At one stage we staff were asked to accommodate 2 batches together and promised that that year would be counted as 2 years towards the permit. I had earned a motor car import permit by 2006 when I was made Vice Chancellor of Jaffna. Using my displacement by the LTTE, I was denied my permit because I had blown the whistle on the extensive corruption in finances and promotions at the university. One VC who was tainted had Rs. 500,000 taken off his provident fund but made VC of another university. The system is absolutely corrupt and this corruption is a drop in the bucket compared to the visible corruption under this government. If you are a supporter of the government, you get everything except punishment.
After three years on the Election Commission, I had earned a second motor car import permit and given this in my fifth year (after a year’s delay saying there are no funds). I ordered a car. I gave my permit to the bank. The government stopped my Letter of Credit. No money they said. I offered to buy with foreign currency I had in a fixed deposit which I was asked to invest for 5 years as a condition for my dual citizenship, and it has been free from 2015. That was not permitted although I had been promised that I could take the money out after 5 years. They say there are no foreign reserves but our government imports cars for MPs, ignoring those of us who had already earned that benefit.
To take back an earned benefit is pure thievery. Now they have money for MPs to import cars, overriding commitments already made in writing for our earned benefits. Although MPs claim they did not ask for permits, most of them, I believe, will definitely will take the permits. And these are for huge cars unlike ours, so the permits can be sold to businessmen instead of used.
Just 2 months ago the Central Bank introduced a scheme for fixed dollar deposits coming from abroad, offering up to 6.5% per annum. It could be taken out or renewed at the end of a year. It was a good deal and some people moved in money from abroad where it was earning only 4.5% as bank deposits.
My daughters who are planning to return after being stuck with us in Jaffna because of COVID. They have been told they will not be given the customary foreign currency in exchange for rupees. No money is what the Central Bank told our bank. We cannot even use our dollar fixed deposits made under the promise that they can be taken out any time. After much pleading from our bank the Central Bank agreed they may take out fixed dollar deposits but only by telegraphic transfer as there are no dollar notes anywhere to carry by hand.
The Sri Lanka rupee is now a useless currency in my opinion. Those who have free currency perhaps should buy land if they can. They should not hold on to their rupees. People with dollar deposits I thought were safe. Even they are not with restrictions on sending them out, contrary to the government’s word when we brought the money in. Now we can change it to rupees (which we do not want) or simply sit back and wait, unable to spend it abroad. So even our dollar savings are useless.
Even foreign currency dealers have no money. Two weeks ago when I inquired, the rate for a dollar was from 180 to 200 rupees from currency dealers. Dollar notes were going at Rs. 180, new 100 dollar notes at Rs. 202/Dollar and old notes at Rs. 190/Dollar. The lower rate for dollar notes is that they cannot be smuggled out so easily. I do not know the cause of the difference between new notes and old notes. Embassies at the time were accepting at their own old black-market rates like Rs. 250 for a dollar that were far costlier than money-changer rates.
Money changers operate openly – God bless them because without them we would be forced to go abroad with zero foreign currency when we travel like the 1970-77 years under Srimavo Banadaranaike. I therefor assume that they operate legally or at least under the protection of our crooked politicians.
Today (1 July) I asked around money-changers in Jaffna for my daughters to take at least money for tea while on transit. No one had dollars. One said he could arrange for dollars from a trader in Colombo. There was one passenger who had arrived with some US$2000 and was asking for Rs. 233 per dollar in $100 notes. The main money changers said they could offer a few dollars at Rs. 230 per dollar and even for that they would need time to get it together from those like a Roman Catholic priest who had arrived with a little money from abroad and a few others. Otherwise, there was no US dollar currency. For some strange reason, pounds-sterling was easier to get on the streets.
We have been had
We have a government that cheats us. Our rulers are in coat, shirt and starched collar. But the part about “Pocket no dollar” does not apply to them. In their pockets is our stolen money as they drive about in BMWs imported with our fixed deposits and effectively confiscated imported permits, our earned benefits. Those like the president have office cars, fleets of them. We cannot even buy small cars using import permits we have earned.
In the meantime, our fixed dollar deposits are not safe. If you have rupees you do not need immediately, find a way to convert it to dollars or land. If there is anything imported whose purchase you were putting off, this is the time to buy it before the rupee collapses and its cost goes up. Over the last few days the rupee went down Rs. 2 per dollar per day on the money changers’ market, making the government not publish exchange days. It means your rupee went down 1% a day making import prices go up at the rate.
Do not listen to the government’s entreaties to bring in dollars, however high the interest rate the government offers. It is likely to be locked out of your use. The only good thing is that bankers say the government will not touch those deposits because that would mean the system has collapsed. But importing cars for MP could lead to that. If you have dollars, do not bring them in. As rupees, the money will lose any value it has.