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| Sunday, 11 September 2005 |
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Business |  |
| News Business Features Editorial
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Attempt to distort SLFP, JVP MoU : UNP trying to mislead business community by Gamini Warushamana
The United National Party (UNP) is trying to mislead the people and the business community by distorting the details of the Memorandum of Understanding (MoU) between the SLFP and the JVP, said Prime Minister Mahinda Rajapakse in an exclusive interview with the Sunday Observer. He said some business papers published banner headlines that the Mahinda-JVP deal will end the open economic policies and totally distorted the MoU reached between the JVP and the SLFP. But I am not surprised about this because similar things have happened in the past. When we proposed a human face to the open economy in 1994, a similar campaign was carried out by the UNP. Similarly when we formed the United People's Freedom Alliance (UPFA) with the JVP as a partner they said that the open economy was over and the country was going back to state run closed economic policies. But we did not reverse the economic policies. I must say that today the whole world is following open economic policies, even in China and Vietnam. But there can be different versions of implementation of these policies. Today the commonly accepted concept is to apply this policy to match the development strategies and ground realities of each country". Anyway, we did not have anything new to discuss with the JVP regarding the economic policies, because today the PA government is implementing the policies agreed to by both parties. Our policy statement Rata Perata and the 2005 budget proposals were approved and highly appreciated by the business community as well as the donor agencies. We accommodated the proposals of the business community especially the business chambers and professional organisations when we drafted our policies and budget proposals. The Premier said that both parties were well aware of the need for economic integration and the impact of policy changes. Reversing exchange rate policies in Brazil caused a financial crisis and the economy collapsed. In Sri Lanka we have continuously followed open liberal economic policies since 1977, but there were different versions. The UNP government followed the extreme neo-liberal policies and we a middle path. Similar things happened in India too. Ranil Wickremesinghe's UNF government in 2001 tried to implement the extreme right policies which many developing countries are reluctant to adopt and in India the BJP followed the same policies. But last year people in India and Sri Lanka rejected those policies and Ranil Wickremesinghe had to go home with his "Re-gaining Sri Lanka" policies even before completing three years of his tenure. Expressing his views on the role of the private sector in the economy the PM said that he had told the Business Today Top Ten awards ceremony a few days ago that they had a clear vision. Economic growth should be a joint effort of the government and the private sector. In this effort the government facilitates and as all successive governments have said the private sector is the engine of growth. We feel that the SME sector and the rural industries have a big role to play in developing the economy and we encourage them. The SME Bank, Dahas Diriya credit scheme and the one-thousand industrial villages program were launched focusing on this sector and our entrepreneurs are happy about this. But Ranil Wickremesinghe considered only bluechip companies and granted a tax amnesty to them. Those are the differences between the two governments. We proposed to reconstruct ten-thousand tanks when the UNP proposed to reclaim paddy fields. Our objective is to increase national production on all fronts. We will give special encouragement to local entrepreneurs and expect them to voluntarily participate in economic development and tsunami re-construction, the PM said. "We believe that the market mechanism is the best way to allocate resources. However, at this stage all markets are not perfect. We have to safeguard the interest of marginalised groups of people. Therefore the government has a bigger role to play in some sectors. We have to keep several key sectors including utilities under government control, but not as they are today. We all know that these institutions are inefficient and corrupt and would not facilitate the corporate sector. We have to restructure them but not privatise them. The education sector is also the same and we all accept that reforms are crucial". The JVP has already proved their flexibility in a coalition government when they held four ministries in the UPFA government. They did not go to implement Soviet model collective farms. Instead they
tried to turn loss making ventures profitable, he said. |
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