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| Sunday, 7 July 2002 |
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Operation Economic development to pull the country out of worst crisis Prime Minister Ranil Wickremesinghe announced last week that Operation Economic Development" willbe launched in the next few months to pull the country out of its worst ever economic crisis and on to a firm path to development within ten years. The Prime Minister in his nationally televised address said that the country was so indebted that it was borrowing money even to meet the running cost of government and it is this huge debt burden that has caused the rapid rise in the cost of living. "Today we need to spend Rs 327,000 million to pay instalments and interest on the loans we have taken while the total income is Rs.278, 000 millions," he said.Even the Samurdhi payments and the salaries of ministers and public servants were being met with borrowings he pointed out. The plan will be time-bound with individual targets set to be reached within a specified time frame. It requires the passing of 20 new Bills in Parliament and hoped that all members will extend their support. Legal and regulatory barriers to productivity will be removed and indebted and loss-making public corporations will be sold off. The government hopes to raise Rs 21 billion by privatisation which will be used to pay off loans to the state, the choice will be either taxing the people to save the corporations or disposing the assets. "For many years the government has been spending more than it earns, and therefore it borrow a lot of money. Debts grew at a rate of 18.5% while the economy growth was only 5%," he pointed out." "I promise you no miracles, but your government is taking every step to solve the crisis. So lend me your support," he urged. We tend to hide problems but speak just to please people, but now we have decided to be transparent, even if he had to face criticism. "It is time when the country's most serious problems, that of the North-East war, the economy and law and order have compounded each other. Last year the country's economy saw a recession for the first time and many thought the trend would continue this year. "But we have reversed the trend and expect the economy to grow by 3.7% this year. "Debt servicing is currently the highest ever, and last month's bill equalled what was spent on the entire Mahaweli project. The government has borrowed from the domestic banks and has drawn almost all the money lying with the Employees Provident Fund, he said. Loans taken for the war are also pending and even if a single bullet is not fired, these loans have to be paid for the next six years. "It is this year that we will have to suffer the most. After that the government's plan will ensure that economic growth will be accelerated and better times brought in. The government have taken urgent measures to stabilize the rupee and therefore further burdens were not brought on the people. He also said that importing cheap food stuff was not a solution as that would impact adversely on the purchasing power of the rural people and thereby add to the economy's woes. "I took on this job to make your life better. I can do it, and I will do it," he pledged. |
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