UNP WILL BRING PROSPERITY TO ALL SRI LANKANS –SAJITH
Excerpts from United National Party MP for Hambantota District, Sajith Premadasa’s budget speech.
Hon. Speaker, at this critical and pivotal juncture in our nation’s political and economic history, I am pleased to have this opportunity to make a constructive and progressive contribution to the annual budget that has been presented to Parliament.
When the ‘Winds of Change’ have embraced and engulfed the democratic polity of the United States, as the economic ‘minnows’ of yesterday are transforming themselves into hubs of economic prosperity of tomorrow, the plethora of innocent expectations of the people of Sri Lanka continue to be full of unrealized dreams and dashed hopes. In fact, what has actually taken place is a crude and overt attempt to hoodwink the people of our country into a false sense of belief and security that the glorious days of tomorrow will be realized by the obnoxious proposals presented in the 2008 Budget.
Mr. Speaker, let me remind this House what President Abraham Lincoln once stated: ‘You can fool some of the people all of the time; and all of the people some of the time; but you cannot fool all of the people all of the time.’ In recent times many politicians and economic analysts have extolled the virtues of high economic growth rates our country has achieved. Many have interpreted these figures as exhibiting the underlying economic strength of Sri Lankan households.
When we inspect the figures stated in the HIES 2006/2007 conducted by the DCS in a scrupulous manner it states that while the richest 20% of our society receive 53.8% of income, the poorest 20% receive a meagre 4.8% of income.The present Budget proposals fail miserably to recognize this glaring shortcoming.
If one is to assume that the economic growth rate, in itself, is an automatic cure for the economic ills of our country, let me remind this assembly that it was the UNP administration under the able leadership of Hon. Ranil Wickremesinghe during the 2002-2004 time period that propelled this country into achieving high rates of economic growth. When we look at current inflation levels and trends in the recent past, the amateurishness and the clumsiness of government policy is further evident. It was the sound policies of the RW Administration that curtailed sky rocketing inflation levels that the country inherited from the PA Administration in 2001.tradeMr. Speaker, there is an attempt in certain government circles to show that there is a direct correlation between price increases in petroleum products and inflation. Once again the figures that I possess exhibit that such a deduction is misleading and erroneous. The facts and figures exemplify the reality that it would be utterly fallacious to link oil price rises to increases in the cost of living. It is time that the present defenders of the government refrained from forwarding such bankrupt theories to justify the high levels of inflation which has a direct link to irresponsible and reckless printing of money.
I now turn to the key issue of unemployment which at present stands at approx. 5.8-6%. I cannot see any comprehensive effort on the part of the present administration to address this issue in an overarching manner. May I remind this house about the 200 Garment Factory Programme that was championed by the late President R Premadasa precisely to tackle the issue of unemployment. He recognized the issue of youth unrest and disenchantment with the traditional political framework and economic order. What is the present situation in terms of the progress that the garment trade has made to date? 270,000 in direct employment; a total of one million in indirect employment and the highest foreign exchange earner for Sri Lanka today by earning USD 3.2 billion annually.
Interest rates are one of the main tools of monetary policy. However, the Government has embarked on utilizing high interest rates as a tool in controlling inflation. While this has succeeded in reducing inflation from 29% to 20%, high interest rates have resulted in crowding out private investment. When the country was in economic doldrums in 2001, interest rates were as high as 13.7%. However, the Ranil Wickremesinghe Administration gradually brought it down to 7.24% in 2004. But, today interest rates at 25%.
Why is promoting private investment important as against public investment? If we look at recent trends in public and private investments as a proportion of GNP, public investments have made a larger contribution; 20-25% of GNP compared with public investments which has never risen above 9% stands today at around 6-7% of GNP. Let me re-iterate that high interest rates are a disincentive to investment.
Let’s now look at the issue of foreign exchange reserves. Presently its status is precarious. Recent months have seen a precipitous drop in foreign exchange reserves USD 3.4 billion August to 3.1billion in September and 2.6 billion in October. In addition, the Central Bank is selling US dollars to buy Sri Lankan rupees in order to maintain the value of the rupee. It is essential to maintain currency stability. However, this should take place at a realistic currency value.
The GSP Plus issue is an impending economic and national disaster of enormous proportions. This facility bestowed upon us by the EU, provides Sri Lanka with preferential tariff and free access to the world’s largest market amounting to USD 16 trillion. The exceptional rise in Sri Lanka exports to the EU from USD 1.3 billion to 2.8 billion after the implementation of the GSP Plus scheme is a clear indication of the immense value of the scheme to our country. With the expiration of these concessions in a few months, I believe the government has completely mishandled negotiations with haphazard decision making. At the inception itself, there was high intensity ministerial conflict and bureaucratic wrangling. Ultimately the policy prescription prescribed by the government amounted to a bail out package with a one off payment amounting to USD 150 million in return for the government obtaining redeemable preference shares in each company to the value of the investment.
Mr. Speaker, the brain drain issue continues to be consistently ignored by this government. The possession of a highly skilled, capable, talented, educated work force is an indispensable pre-requisite to the functioning of a successful economy. As Sir Winston Churchill observed 43 years ago: ‘The Empires of the future will be the empires of the mind.’ Statistical evidence with regard to brain drain paints a sorry picture as far as Sri Lanka is concerned. According to SLBFE figures in 2003, 1541 professional workers left the country and this figure rose to 2678 in 2005. Between 2003 and 2005, a total of 45,590 skilled workers left the country. What policy prescription has the Government designed to address this fundamental issue of national importance?
Mr. Speaker, there is universal acceptance within the Global Community that providing support to sustain high nutritional standards, especially amongst the most vulnerable sectors of our society–infants, mothers and children takes precedence. Here again statistics indicate the persistence of acute and chronic malnutrition among these vulnerable sectors in Sri Lanka. As far as children are concerned, the figures relevant to stunting, wasting and underweight are alarming. Why has the Government failed to formulate and implement a comprehensive integrated National Nutrition Policy?
Mr. Speaker, poverty alleviation is a national priority that I consider to be sacrosanct and inviolable. The Samurdhi Programme that has been apparently designed to achieve this objective is a dismal failure. Extreme politicization, waste and corruption have made this programme a national liability. Therefore, there is a clear need for a more strong and vibrant poverty alleviation strategy that provides more resources to the hands of the poor.
Mr. Speaker, now I would like to focus my attention on Sri Lanka’s ICT policy. When one examines the record of the Government in this field, there is a visible disparity in rhetoric and reality. When our neighbour and friend India have made significant strides in the ICT arena, Sri Lanka continues to vacillate and hesitate to leap forward. When states such as Karnataka with nearly 2000 IT firms contributed USD 12.5 billion in 2006-2007 to the Indian IT exports, the Mahawillachchiya Project is the only programme that the government can talk about in terms of ICT advancement in rural Sri Lanka.
Mr. Speaker, let me present some statistics to prove my point: 17.9% of urban households own computers, but only 6.9% rural households , and 1.1% estate households. Considering these facts, I believe it would have been more fruitful to have a national programme of upgrading ICT infrastructure facilities throughout Sri Lanka and the setting up of ICT institutes of international repute at district levels rather than squandering billions on wasteful and inefficient pet projects.
In conclusion, Mr. Speaker, it is obvious to any layperson that the current PA Administration has totally ignored the external economic and political environment prevalent globally in formulating economic policy. As a responsible and accountable administration it should have taken account of the impending global meltdown which has been aptly called a “Once in a Century Economic Tsunami” by Allan Greenspan, the former chairman of the US Federal Reserve.
It is my humble premise that Sri Lanka’s economy is in dire straits due to the ineptness, maladministration and inability of the government to look beyond political gimmickry and embark on a path breaking voyage to correct fundamental structural imbalances pervading the economic strata. If one dares to question whether the situation is redeemable, the frank answer is: “of course it is possible.” However, it would take a paradigmatic shift in the design, structure and substance of public policy to achieve this monumental task. As Martin Luther King once stated, ‘The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.’
Mr. Speaker, this is the time that Sri Lanka needs innovative, pioneering, imaginative, and groundbreaking leadership to guide this country out of this economic and social quagmire. And the UNP astutely led by Ranil Wickremesinghe is willing to bring about prosperity and economic advancement to all Sri Lankans.
To use JFK’s words: ‘We stand today on the edge of a new frontier, a frontier of unknown opportunities and perils a frontier of unfulfilled hopes and threats.’ Let all of us combine our efforts to try to do our utmost to save our Motherland from despotism, nepotism, corruption, tyranny, economic and social cataclysm. I thank you.”
courtesy:dailymirror.lk
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