Editorial

Security

Politics

World

Letters

Sports

Obituaries

Archives

by Charitha Ratwatte, Secretary, Ministry of Finance

When the current government came into office the economy was on the brink of collapse and an expensive war both in lives and financially was leading us nowhere.

As the Prime Minister recently explained, "When we came to office we found a fallow field.

The last year has been one where we have prepared the ground and now in the coming year we can sow the seeds of our future prosperity".

Regaining Sri Lanka is the main economic plank with which the government hopes to return the country back to prosperity.

There are four objectives to this important initiative.

1. To create 2 million new jobs over the next few years

2. To overcome the crippling debt which the Government inherited and return the country to a sound economic footing

3. To find the resources to rebuild our country whether in the war torn North and East or the poverty stricken south

4. To increase income levels through higher productivity and increased investment

These four challenges are now the cornerstone of the Governments economic plans and this week they have announced to first series of initiatives to achieve those aims. The new initiatives to be announced will bring benefits to all areas of the country and will enhance the opportunities for the people to improve their lives and those of their children.

Many of our banks are holding what are called non performing loans.

These are in effect bad debts which are burdening our banks from providing the best possible services to our people and businesses. As a result the Government is announcing the establishment of an Assets Management Company.

This company will purchase some of those loans and seek to recover the bad debts. In line with that will come another new company which will provide development funding for the private sector.

Our businessmen small and large will be able to use this to expand their activities and allow them to grow more securely. Keeping to the question of money two more initiatives come under the Regaining Sri Lanka programme. One is to abolish the Foreign Exchange Control Act and replace it with a new Exchange Management Act.

The new Act will attract foreign exchange held abroad by Sri Lanka and in the process increase our foreign exchange reserve.

Although non of us like paying taxes they are part of the way in which the Government is able to pay its bills. Because the Government has no money of its own it has to collect taxes to pay for important sectors such as health, education and social services.

The total amount of tax collected as a percentage of the wealth creation of the country dropped from 17.8% in 1995 to about 14.2% in 2002.

That has to be reversed if we are to pay for these essential services and so a new Revenue Authority will be created to centralise and improve revenue collection.

This is bad news for those few people who try to avoid paying their taxes but good news for the people who want to see better services provided by the Government. Despite being a poor country Sri Lanka has one of the largest public services in the world.

The public service is paid out of the taxes raised. So the larger the public service the more taxes we have to raise. That is bad for the people as a whole including public servants. Many people also feel that they do not get a good deal from the public service. For these reasons the government is about to embark on two initiatives.

The first is to restructure the Public Service through something called the Public Management Reform. That will be good for the people because it will lead to better public services and it is good for public servants because they will have a more streamlined system in which to work.

In a country as poor as ours we cannot afford such a large public service so we have to slim it down as well as making it more efficient. With the help of the World Bank the Government is offering a scheme to those public servants who wish to retire early or who wish to move into the private sector. This scheme will come in the form of a generous so called 'golden handshake', a one off payment for those who wish to leave and pursue other avenues of employment. This is good for those who choose to leave and good for the taxpayer as the public service is slimmed down.

So much of our economy is dependent on our private companies doing well. Many find it difficult in the present economic climate to expand. Yet they need to expand if they are to provide the extra jobs we wish to create under Regaining Sri Lanka. So the Government has decided to help those companies. In future there will be generous tax incentives for companies who come forward with clear proposals for expansion and with real job creation opportunities. The Government will also help new companies through tax incentives who can show real job creation opportunities.

In addition to those innovative schemes we also want to help the 20,000 small enterprises in Sri Lanka. In future there will be special programmes for the development of micro and small enterprises. Whilst not every one can be helped those that come up with job creation opportunities will receive favourable support.

More jobs can be created through better productivity. That I why the government intends to launch a national campaign to improve productivity of individual enterprises and to make them more competitive.

Part of this programme will include re-training of middle and floor level managers in labour management. Too many industrial disputes have ended up in court which is a drain on the national resources and bad for worker/manager relations. This training will improve relations through better management skills.

Part of the Regaining Sri Lanka programme seeks help from international donors. The Oslo Donors Conference was a success in securing aid and the June meeting in Tokyo should also bring in more support. But as yet we have not been successful in using the promised aid to its maximum.

Much of the aid promised involves construction work. Not only does that create jobs in construction but it also provides better opportunities for businesses to set up as new roads and utilities are established in our rural areas. At present we have been bad at using that aid successfully and many jobs that might have been created through these schemes have not been realised. That is why the government is laying out new plans for the use of foreign aid in the years 2003 and 2004. Again this will lead to more jobs.

Much of the prosperity of our country lies in the Western province. The Government is keen to see other parts of the country benefit from an improved economy as well. Some of the projects already identified will help.

However there are three projects the government intends to enact which will directly help farmers. Already as a result of the Peace Process up to 125,000 acres in the North and 250,000 acres in the East have been put back into productive use. That will see a bumper harvest of rice this year. Much more can be done to improve the amount of paddy produced per hectare. The Government intends to increase paddy production in the fertile areas to 6MT per hectare.

That will increase paddy production and give better earnings for the farmer on the land already being used. It will also lead to a reduction in the cost of rice to the consumer.

It is one thing to produce bumper crops but then we want to see more of those crops reaching the markets. Over the next three years better storage and farm to market systems will be introduced. One scheme is already under way to improve the supply chain and the first of these will open shortly in Meegoda. This will provide a new centre where farmers produce can be brought, sold and refrigerated to protect it from perishing before it gets to market. Another centre is planned in the south around Embalapitiya.

The third element of our reforms for farmers comes through the establishment of a Drip Irrigation project. Farmers will be trained in this technique and be encouraged to use it more widely.

Remaining in the villages we have two more reforms we wish to carry out. One is the establishment of Gramodaya Mandalayas which will re-introduce local democracy to our villages. The other is the establishment of Village Level Development Projects funded by the Samurdhi programme.

Many of the projects mentioned so far are about tackling immediate problems. However we need to think about the future. The Youth Corps Act has already been passed and will introduce training for our youth and give them real prospects for jobs.

In addition to that we want to look more closely at the future education of our young. We have a dedicated corps of teachers in our education system but even they need re-training from time to time. The government feels that the time for this re-training is long overdue. That is why we shall be introducing a new retraining scheme for all teachers and education managers in our education service.

In addition to these initiatives there will be a further Youth Training Scheme to prepare 'A' level qualified young people for employment in both the public and private sectors. A national campaign to learn English will give those who wish to learn English to enhance their job prospects and a Human Resources Development Fund as announced in the 2003 budget will also be established to fund students for Technical and Vocational education.

One of the tragedies of recent years has been the high number of unemployed graduates. The Government feels that they are a wasted valuable resource who could help greatly to improve the economic prospects of Sri Lanka. It is for that reason that we will be setting up a joint Employment Preparation Scheme with the private sector to see more graduates in worthwhile employment.

Education is important for the future development of the country. The Government wants parents and past pupils to get more involved in the education system.. That is why we are creating a pilot scheme to create School Development Boards where those most interested in the development of the children will have a say in the running of the schools. Good news for the pupils, good news for the parents and good news for the teachers.

Other areas in which work is planned are restructuring of technical education a new Sports Act and Sports Development plan and provision of equipment for Youth Centres.

There is much more to do and many more projects to complete before we shall see the future of Sri Lanka blossoming in the way we would wish. In particular the Government understands the restlessness of the people. They want action and they want it yesterday. However the planning and implementation of projects that will provide lasting benefits and establish our country on a new path takes time.

There are nevertheless some further reforms we would wish to enact which will create more stable basis for the future.

Over the past years most observers will acknowledge that too much of the political system has become politicised and overly partisan.

The Government believes the time has come to strengthen democracy and the institutions of democracy. That is why we intend to come forward with new proposals for the strengthening of Parliament, especially in scrutinising the work of the Government. Any government which is acting in the best interests of the people will have nothing to fear from greater scrutiny and this Government not only welcomes such close scrutiny but hopes that it will lead to better governance in Sri Lanka.

But that is not sufficient in itself. We intend to place before Parliament a new Election Manifesto Law, it will be short in length but long in encouraging greater responsibility by political parties. For too many years political parties have published election manifestos at election time that are obviously unworkable. Many of them were hollow promises of giveaways to the people.

In future political parties will be expected to cost out their proposals so that the people can see if they are really possible or just more hollow promises. This reform is being demanded by the people and we intend to fulfil this request. The UNP has no difficulty with such a law and nor do we believe any other responsible political party will either.

The Media are important democratic institutions. The Government recognises that their job is to inform and challenge. The current laws do not help them media and in future we want to create a system whereby the Media and the Public are better protected. This new law will repeal the existing laws and introduce a new Media Complaints Council. Although developing it is taking a little longer than we would have liked it is the intention of this Government also to introduce the first Freedom of Information Act for any Asian country. Much has been talked of Women's rights and yet little has happened.

That is about to change. In future a new Women's Rights Law will set out clear rights for women. Similarly the consumer has rights as well. Especially when dealing with the Public Service.

That is why we intend to place before Parliament a new Citizens Charter Law. In future the public service will have a set of standards towards the public which they will be expected to uphold. If they fall short of such standards than this law will allow the people complain and expect action.

There are two final areas that are an important element of Regaining Sri Lanka. The first is the establishment of a Land Ownership Law. This is long overdue and will re-establish the rights of land owners and clarify ownership particularly for the farming community where such rights are often confused.

The second damages the economy much more than we might realise. We have become a society ridden with crime. Small crimes such as bad and inconsiderate driving as well as major crimes such as murder and rape.

The time has come for a less tolerant approach to be adopted. The Police have the powers and in future they will be expected to act. They will be supported fully by the Government and political interference with the work of the Police will no longer be tolerated.

The people want safer streets to walk. Capital punishment will be re-instated and the criminal will be targeted - there will no longer be any safe havens.

The proposals outlined above are far reaching and will take time to implement but they will have a resounding effect upon the economy and the welfare of our people.

In the days and weeks ahead much more detail will be provided on each of these initiatives as they are rolled out.

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager