Govt. compelled to carry the burden of past misdeeds - Basil

Excerpts of the speech made during budget debate in Parliament on Friday.

"Hon Speaker, first of all I am very thankful to the Government Parliamentary Group and especially to the Chief Government Whip of Parliament for giving me this opportunity of present Budget Debate on behalf of the Government. However, I would not begin my speech by replying the Member for Kegalle who spoke before me because he had unwillingly criticised the President the latter was Prime Minister and later faced Court proceedings and found guilty. I don't want to reply questions raise by him for that reason.

He would perhaps get the same reply given by the President, from the masses as well. You know that when presenting this Budget the Government of His Excellency the President faced many challenges. You are aware that before two years or so, under this Mahinda Chintanaya program the President was able to get elected with the blessings of the people, and he had to face a number of great challenge. The main challenge came from the terrorists who had usurped power in a vast area of this country. In the North and East. They were not coming under the rule of law of this country and they were not under the control and administration of the elected governments. They were running a separate administration. Although the independent institutions in this country like the Commissioner of Elections conducted a Presidential Election, General Elections and Provincial Council Elections and let the people of this country elect their representatives to run the administration of this country but the terrorists did not come under the control of these institutions. The attempts taken maintain the democratic system in these areas thoroughly failed. The independent judicial system prevailing in this country was not effective in these areas.

The main challenge faced by the Government with a unitary system of administration was the challenge of the separatists who had been controlling a vast area of the country. The terrorism was the main challenge faced by this Government. Due to this terrorism many sectors of economic activity in this country such as agriculture, industry and fisheries had been facing severe constraints. This was specially felt in the North and East coastal areas from Mannar to Batticaloa and beyond. Fisheries activities in these areas had totally collapsed. The agricultural activity in Wanni, North and East was facing challenges and vast acreage of land that could be cultivated were lot for productive activity. The other major challenges was the influences from the world economic situation. In this regard special mention should be made of the fuel prices, wheat prices and the price of milk powder which had a great impact on our economy. Fertilizer prices also escalated during this period. For example in 2005, the price of a ton of wheat flour was US$ and it had gone upto US$ 353.5 in October 2007. The price of a ton of milk powder increased from US$ 2226 to US$ 4950. The crude oil price increased from US$ 52.4 per barrel to US$ 97.0 during the past two years.

In addition to this, at the time when the President came to power he had to face the reconstruction work in vast areas that were damaged by the tsunami. Many other natural disasters took place during this period, necessitating urgent reconstruction work. Floods, earth slips etc. had damaged a number of areas by this time. More than that the debts accrued over a long period of time had to be repaid. They to day payments had also not been made and the Government had to settle such payments as well. These included payments to LOLC, amounting to Rs. 9812 million, Rs. 5818 million to the Prima Company, and millions of rupees for 10 fertilizer companies. A number of such payments had been overdue. More than that many institutions rendering essential services to the people were maintained on a loss making basis. These included Sri Lanka Railways, Postal Department, Ceylon Electricity Board and the Sri Lanka Transport Board. At the same time our infrastructure facilities had not been properly maintained for over a long period of time. These institutions were facing closure since new investments had not been made in these sectors. These sectors included highways, railways, electricity and irrigation. At the same time investments in social sectors such as, health, education, were neglected for a long time and in addition to these the general economic situation also was a big challenge. The economic system followed during the period of 1997 to 2004 was directed in a peculiar way. The main feature in this economic system was the influence of foreign forces, or the globalisation. Every economic activity was oriented towards foreign models and systems. Our food policy and the industrial policy were controlled by foreign sources and the benefits of went to foreign countries. I am very sorry about what the Member for Kegalle District said about the price of milk.

"The developed countries in the world do not shirk their nationalist feelings. China, India, Japan and Korea are typical examples. They followed their indigenous culture, livelihoods and food habits without abandoning them. China and Japan use the chopsticks, they had been using over the years. In other words they have not changed their food habits. The people use the same clothes they had been using in ancient times even today. They follow their traditions without breaking them. Although we were a rice eating nation due to alienation we got used to wheat flour as we were given wheat flour on loans through PL 480. We are still paying those debts. That is what His Excellency the President pointed out in his speech. We are not going to pawn our people for the sake of people. The CARE organisation came here and gave milk to school children. That is the day when they changed our habits. What did the Americans do to our children who had been using fresh cow milk until then. The CARE Organization came to schools and gave a glass of milk prepared from milk powder. There were complaints about formation of phlegm. That is how they changed our food habit and it was the same system that was followed from 1977 to 2004. All the people had to depend on foreign goods.

"Now we shall turn our attention to the textile industry. During those days cotton was cultivated during one season in Hambantota. As a result of that water was used for cultivation only for one season. Our cotton cultivation was destroyed when they first imposed cotton and thereafter even cotton yarn. Even clothes were imported thereafter. In this manner the textile industry collapsed. Even powerlooms and handlooms were destroyed with the import of clothes from foreign countries. Thereafter they imported textiles and produced garments in this country.

"After this alienation, privatisation was introduced. Over the years many institutions were privatised. Upto 2004 more than 93 institutions were privatised. Thereafter it was a pattern of institutions going bankrupt. All the services became bankrupt. In this regard the transport service is a good example. The Sri Lanka Transport Board, the Ceylon Railways went bankrupt. Our marketing network enabled the consumers to get goods easily and cheaply. The Government had institutions for distribution of products among the consumers after buying them at a higher price from the farmers. These services were destroyed. Firstly the Marketing Department was destroyed. Thereafter the CWE, Paddy Marketing Board, Building Materials Manufacturing Corporation, State Trading Corporation, Tractor Corporation etc. closed down. We had a very good cooperative system. The earlier speaker Hon. Kabir Hakeem stated that we are going to give some tax relief to sugar traders. Such relief is given in the hope that it will be passed on to the consumers. I do no know whether it will work satisfactory. What is intended is giving some relief to the consumers. However, it has been experienced that all such relief given to the traders had not gone to the real consumers. That is why action has been taken to allocate a large sum of money for the co-operative sector and the other marketing organizations.

Thereafter the plantation sector went bankrupt. The Plantation Corporations like 'Janawasama', Kegalle Plantation Company, Chilaw Plantation Company were 'destroyed'. They were made bankrupt to such an extent that they could not even pay the salaries of the workers let alone their provident fund monies. The plantations were neglected without even introducing fertilizers. This going to be the first time that fertilizer will be given to plantations like 'Janawasama'. Furthermore, a large number of farms like seeds farms and research farms were made to close down. In the livestock sector farms in places like Ridiyagama, Weerawila, Kirimuttiya, Palugaswewa, Kottukachchiya became loss making institutions. Some institutions did not even possess a single head of cattle by this time. More than that even some industries faced the same situation. They became loss making institutions and had to be shut down and at the end of the day they possessed only the land on which the buildings were erected. The plywood Corporation, the Leather Corporation, Steel Corporation are examples. I have already mentioned as to what had happened to the textile industry. Accordingly, factories like Pugoda, Thulhiriya, Mattegoda were made so bankrupt that they had to be closed down. The Alliance Government which came into power in 2004 with parties like, SLFP, JVP and number or others took steps to turn the tide the other way, in order to develop domestic industries instead of privatizing them. Action was taken to strengthen the state sector. Policies were adapted to strengthen the institutions that had gone bankrupt. It was a task like directing a large oil tanker if it were to be turned suddenly by which the tanker might get destroyed. When we were trying to turn that tanker unfortunately we had to face the tsunami also. We lost some of our crew who had been helping us. What His Excellency the President under Mahinda Chinthana programme to redirect our economy. In this regard three fundamental policies were adapted. The first was the development of the spiritual aspect. Physical resources alone cannot satisfy a country, a village or a family. The people are not satisfied with only physical resources.

"Hon. Deputy Speaker, we are aware of the family problems faced by the people in the Western World who have ample physical resources. Even though they have physical resources there is no satisfaction in their families. The parents are not satisfied about their children. The younger generation is not satisfied with their parents or the elders. Even though there are physical resources they are addicted to drugs and other social malpractices. Without self development all the other resources will be usless. Accordingly, the Mahinda Chinthana Programme is bent on developing disciplined society. That is how Mahinda Chinthana works. Therefore, we have achieved a great progress in this sector. In this regard 'the Mathata Thitha Programme has made a great progress. At the same time the ban on liquor consumming and cigarette smoking in public places had shown good results. The child abuse and other such activities and underworld dealings have gone down progressively. These things have gone down especially due to the emphasis made by the courts in carrying out the law of the country properly. A number of lives are lost today due to violation of Highway Code. Even properties were lost. So by implementing a proper code of law we can expect some development in the spiritual sector as well.

"As the next step, we expect to develop the infrastructure facilities in our country. We know that there were no schemes to develop infrastructure facilities in the past.

Power generation was neglected for a number of years as the authorities were unable to take proper decisions in time. With implementation of Kukulegama Project in 2003, we were able to get about 70 M. W. of power but thereafter not a single power plant had been initiated. A large amount of our power requirements were made from thermal power plants. By 2005, 60% of our electricity requirements came from a thermalpower plant. The share of hydro-electric power was only 40%. We know that thermal power plants generate electricity with fuel. Therefore, we have to spend a large amount of money on fuel. As soon as we came to power we changed this policy. We took action to construct power plants. Upper Kotmale Project which had been neglected for a number of years was re-commenced. Its power capacity is 150% mw. Thereafter the Norochchole Coal Power Plant with a capacity of 300 MW was started with aid from China.

The Kerawalapitiya Power Plant with a capacity 170 MW was also inaugurated. During the next 18 months we will have to produce about 200 MW of power. This will be covered by thermal power and also LNG".