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| Sunday, 20 March 2005 |
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Features |  |
| News Business Features Editorial
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Reform of 'monsters' not privatisation assures FM
Sunday Observer Staffer Rohan Mathes interviewed Finance Minister Dr. Sarath Amunugama at his ministry office last week, following his official tour of Japan and EU countries. Excerpts of the interview: Q. There is so much controversy still, pertaining to an equitable and systematic distribution mechanism of relief aid to tsunami victims in the country. What is your response? A. It is of paramount importance that the people of this country are aware of the realities of the tsunami aid distribution. This topic has emerged as a major issue in the political platform of the country. Unfortunately, the good ground work done in this regard has not been adequately covered by the media. All this controversy is due to an ignorant and biased media which is deliberately or otherwise, suppressing the 'down to earth' situation of the relief operations, to discredit the government's efforts in rebuilding the tsunami-stricken country. The media has been briefed widely on the matter by me, other ministry officials and NGO organisations, with the facts. They must pursue these facts. Within half an hour, I can supply all the particulars of any tsunami stricken individual who has received relief funds in any district. Iam challenging the media on this. We have handled the emergency relief aid phase very efficiently to the highest international standards. Some Japanese ministers who were aware of the operations here, admitted that even in Japan they had not such an efficient mechanism for tsunami related disasters. The international media speculated that in the aftermath of the December 26 tsunami, a second tsunami was imminent in the form of a epidemic and/or famine, and the casualty figure would rise to exponential proportions. But after three months, to the admiration of world leaders, banking professionals and relief organisations among others, nothing of the sort occurred in the initial phase. This per se, bears testimony to the excellent handling of the crisis by our government. Q. Then where have you erred in the process, to draw all this criticism and chaos as reported in certain sections of the media? A. We will now be moving into the more arduous re-construction phase, such as re-building houses, schools, hospitals, highways, railways, fishing villages and even new cities, among others. We have already identified the priorities and developed the appropriate strategies for them. The government will not rush into these projects alone. We have a well-planned and systematic programme which will bear fruit gradually and in the long term. At present we are in a transitional period and unable to feel the immediate impact and benefits accrued to the country. Some NGOs such as OXFAM, UNICEF and Red Cross, certain individual countries and philanthropists have pledged to take over specific projects for houses, hospitals and schools among others privately. This has become an eyesore to some unscrupulous NGOs and Opposition political parties who were unable to even distribute galvanised sheets given free on charity to the poorest of the poor. It is these people who are carrying on these vicious media campaigns and criticising our work. We are however on the correct path. Q. You had a very successful tour of Japan and EU countries in which you met high-level delegates in the financial sphere. What benefits will accrue to the country from these meetings ? A. I have met the Finance Ministers of the G8 Donor countries, including Overseas Development Minister of England Hilary Ben. They have agreed to freeze our debt payments, including the interest for 2005. Therefore, we would be saving US$ 500 million from our regular 2005 budget. We expect to extend the same for three more years. We would be able to tide over our immediate issues by this. They have also pledged to grant other substantial relief aid to our country. Q. You are now working on your new concept where the emphasis is more on bilateral relationships instead of multilateral. What are your comments on this? A. We need to have strong bilateral links with our friendly donor countries. In the past, the UNP government negotiated widely and transacted with multilateral donor agencies such as the World Bank (WB) and the International Monetary Fund (IMF). Now we have developed a new concept of establishing and enhancing strong bonds with our donor countries such as Japan, India, China, the EU, UK, Germany and the USA, while maintaining the connections already established with the multilateral agencies. More importantly, these donor countries too are greatly interested in enhancing their relationships with us. They were eager to know about our future financial plans. The External Resources Division of the Finance Ministry quite legitimately concentrated on linkages with the local embassies of those countries. However, the political leadership too should supplement the efforts of the finance ministry officials by establishing and augmenting political and financial links with these friendly donor nations. Q. How do you respond to allegations that the government has taken a U turn in its privatisation policy. A. No, we are not for privatisation at all. But definitely, we opt for restructuring and reform, with the consumer in mind. The private sector, especially the CEB, CPC and the SLTB, which I refer to in Chinese leader Mao Se Tung's phraseology as 'Monsters', needs to be tackled and set on the correct path as they are gobbling-up public funds. They are neither helping the consumer nor the national economy. They are only depriving the consumer of a quality service and value for money. We have the onus of bringing down the cost of living. By reforming the CEB, I could bring down the cost of a unit of electricity by Rs.2.50. These institutions are enemies of the common man and not the capitalists. They themselves admit that large savings to consumers are possible by pursuing reforms. Q. But there could be agitation by the employees of these institutions against reform? A. No, I dont think so. Only those encouraging corruption and incompetence will object to it. We are not depriving the employees of their jobs, promotions or any of their legitimate claims. Becoming more efficient is in their own interest. The progress of the IOC in development and investment is clearly visible. The share issue of IOC was the most popular in this country as people are willing to buy shares to improve the petroleum distribution system. Q. As for the 'Interest Rates', you adopt a policy where the stress is on growth instead of rates for the ordinary savers. What is your motive behind it? A. In Sri Lanka, we have to create an environment where people invest money in growth. This does not take into consideration only the very rich people and the big companies. It also accounts for the small and medium-scale entrepreneurs as well, who have to be dragged into the investment process. For this, we want to maintain the interest rates low and stable to fuel that type of investment which will develop the country and themselves. Q. What about the currency rates? A. There the people were worried about the rupee weakening against the US dollar. So now we hope to keep Rs.100 to the US dollar, as a benchmark. Q. What is the present position of the 'third player', the Indian Company Bharath, in the CPC scenario? A. The President has discussed with the trade unions and explained to them that there would not be a privatisation of the CPC at any cost and we are even willing to amend the legislation in their corporations for this. Actually, the trade unions and workers are not bothered about this privatisation issue. They are only using it as a 'smoke screen' to retain their privileges and some benefits wrested from the management and cover up some corruption. When they see competition and certain elements are being re-organised, they are obviously opposing it. The majority of the sensible employees in them are not opposing it as there is no logical reason for non-reformation. The IOC success story speaks for itself. The corporation owned petrol stations are nothing more than public toilets, with bad management, antiquated pumping equipment and storage facilities. They have not invested a cent on refurbishing their stations. We cannot proceed like this. We must have a modern economy. Q. What do you think about the NGO relief funds flooding the country and how will you account for same? A. Personally I am happy the NGOs have taken part in the re-construction process. However, it does not entail that they could function as they please. They would be subject to the laws of the land. I, as Finance Minister will have to ensure that all funds coming into the country are accounted for. So we must have an authentic record of it. We have set up a section to register the NGOs here. Q. Tourism has suffered very badly by the tsunami disaster. How do you intend to revamp the industry? A. I don't propose to offer loans to the tourism sector. They must go to the banking system, obtain loans at concessionary rates and develop their shattered industries. Actually, the big players are not affected at all, or their damage is minimal. It is only the second and third class hotels which have been built on wrong locations sans proper planning have suffered. I dont think the government should interfere with them. That they must comply with the laws of the land and obtain money from the normal banking system. Q. How are the present budget allocations? A. As far as the budget is concerned, it remains intact. The re-construction programme will be financed outside the budget. All ministries have been given adequate funds to carry out their normal duties. So our strategy is, for the ministries to continue to deliver the goods based on the allocations already made in the budget. We will not make any cuts on the concessions and allocations made in the budget. The money has been found for them. Q. The Pramuka Bank matter has reached a deadlock situation where the Provincial Road Development Authority and the Public Trustees' Department are not co-operating with the Depositors' Association to revamp the bank. What do you, as Finance Minister propose to do in this regard? A. Now the matter is before court. Let's wait for the decision and then see what we could do. |
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