‘Wonder of Asia’, a reality soon - Minister Basil Rajapaksa

As they referred to the IMF, I should remind this House as to how the UNP received aid from the IMF, World Bank and ADB at different occasions.

To begin with they agreed to a set of conditions in 1980 to obtain Rs. 60 million from the World Bank and IMF. They launched their novel privatisation scheme with Buhary Hotel, Maradana, which they claimed to have “privatised the hotel industry”. The next was the bankrupt United Motors Lanka (Pvt) Company which had only five vehicles with it. Some thought it was a step towards privatising the automobile industry. Oberoi Hotel, Ramada Hotel, Ceylon Hotels Corporation, Tyre Corporation, Steel Corporation and Ceylon Cement Corporation were subsequently privatised.

It is after privatising all these assets that the UNP obtained US$ 60 million.

Then in 1990 they got US$ 30 million after agreeing to slash the fertiliser subsidy by betraying the farmer community, the life of the country. Next the 2002 government signed the PRGF with the IMF for Rs. 556 million on the basis that the People’s Bank, Inland Revenue Department, National Insurance Corporation, Ceylon Petroleum Corporation and Railway Department would be privatised. With Trade Union resorting to legal action after the privatisation of one or two ventures, the UNP government had to give up the privatisation scheme half-way.

I would like to reiterate that it is our right to secure aid as a member country of institutions such as World Bank, Asian Development Bank, IMF and similar organisations.

For the first time we succeeded in obtaining US$ 2.6 billion from the IMF, having stated that our economic policies are based on ‘Mahinda Chinthanaya’. We impressed the IMF that we would not sell out any business venture or assets. Further we made it clear to them that no subsidy would be cut down nor the public service or education, health, highways would be touched. Our conditions were that no curtailment of salaries or slashing of subsidies would be permitted. They abolished the pension! MP Ravi Karunanayake referred to some of the provisions of the ‘Mahinda Chinthanaya’.

We hope to reduce the budget deficit to 5 percent. But in view of the current development drive we would have to go for 8 percent. Last year it was 9.9 percent. The acting Finance Minister during his budget speech said that we have to confine ourselves to 8 percent. The country’s progress depends to the extent the deficit could be reduced.

We would approach the European Union as well. We would not consent if their conditions are not acceptable to us. It is because of that America voted against us at the IMF.

Norway, Germany and France wanted to impose more conditions. We went to the European Union for GSP plus. We should assert that we would not betray our sovereignty and independence. We would negotiate aid with any institution.

I would reiterate we would not do away with the country’s independence or its sovereignty.

The Opposition said they represent the people and their opinions as well. What is public opinion? See how the public expressed their opinion. In 2005 the President received 4,887,157 votes, the percentage being 50.29 while Ranil Wickremesinghe received only 4,706,366 votes. The percentage is 48.43. There were 28,632 votes exceeding 50 percent. Then followed the Local Government election. The JVP dissociated with us and contested separately.

We won the election while the JVP could retain only Tissamaharamaya. Then came the local government elections of 2008-2009. We launched our campaign from the East. Our percentage was 52.26. In the North Central and Sabaragamuwa elections our percentage was 55.37 percent and 56.37 percent. The Central Province and Wayamba elections increased our vote base to 59.53 and to 69.43 respectively. It was 64 percent in the Western Province while the Uva Province topped with 72 percent. Next followed the Presidential election. President Mahinda Rajapaksa recorded a thumping victory with 6,015,934 votes after the completion of his four year tenure. The percentage was 58.88 with over 1,842,749 majority votes. The Opposition should know that the electorate endorsed our policies. It is time for the Opposition to listen to the public opinion. They are getting detached themselves from the people. People endorse our policies and we respect their opinions.

In the 2004 General Election which we contested together with JVP we received only 105 seats. This time, however the UPFA won 144 seats. The UNP’s electoral strength declined to 60 from 82. The TNA which lost 8 seats were reduced to 14 from 22. I need not speak of the JVP. We are bound to implement both Mahinda Chinthanaya and Mahinda Chinthana Future Vision. It is only the Mahinda Rajapaksa government which gave effect to its election manifesto; we made it the government’s vision for future!

According to Mahinda Chinthana what is family?

What is prosperous village or province? What is afterall a prosperous country?

We want to know what it is?

We hope to resurrect the family by fostering the individual - through the family, the village and finally the entire country through the village.

Our overriding policy is to ensure the existence of an undivided country of unitary character.

For the first time after a lapse of thirty years, we hoisted the national flag throughout the length and breadth of the country asserting the unitary character of our motherland. Today one can comfortably live without entertaining fear for the safety of one’s family members - be they the husbands, wives, mothers, fathers, brothers and sisters!

We have given top priority to public security - to maintain law and order and to ensure national security.

Our sole objective is to install a disciplined, law-abiding and morally-rich society ensuring good governance. It is also a country where its citizens can live in any location of his choice without racial, religious or caste distinctions, as pledged by the President and his government.

Then only our efforts would come to fruition. Although I do not agree, there is an accepted criterion to judge a country’s economy. The first is the rate of growth. As MP Ravi Karunanayake said the global economy collapsed, with rate of growth descending to minus.8. It was minus 3.2 in developed countries, USA minus 2.5, Europe minus 3.9, UK minus 4.8 and Japan minus 5.3. Against this background Sri Lanka maintained a growth rate close upon 7 percent; it was 3.5 percent during the global economic melt-down. we have been able to increase the rate of growth from 2.6 in the 1st quarter of 2009 to 7.1 in the first quarter of 2010 in all spheres.

In the agriculture field, it is 3.6 in the first quarter of 2009 as against 9 percent in 2010; in the industrial sector it has shot up to 6.9 from 1.9; services sector 6.7 from 1 percent, so you can discern the direction the country is presently moving in.

The rate of inflation remained approximately at 25 percent in the middle of the last year. It continued to be at an average of 11.7 from 1978 to 2008.

The Acting Minister of Finance said it has dropped to 4.6 during last month. We hope to maintain it at less than 7 percent. I must reiterate that it remains at a single digit after the lapse of ten years. Is this good or bad?

I am sorry that he has misled the depth of Census and Statistics by furnishing the wrong data. The poverty estimated to be at 24.3 in 1995, 1996 has come down to 12.6 by 2006, 2007. That is final Census released in 2009. MP, Ravi Karunanayake mentioned about Hambantota. What was at 26.2 in 1995, 1996 has dropped to 10.5 today.

1.9 million Samurdhi beneficiaries were brought down to 1.6 million in 2009 because we empowered their lives. Simultaneously we increased their allowance as well. Unemployment was 8.3 percent in 2004. It dropped to 5.4 percent in 2008. We hope unemployment could be brought down to 5 percent or less than that.

We would appoint Jana Sabha Secretaries soon providing the opportunity for graduates to work in their villages. We had maintained a stable exchange rate throughout last year despite its annual increase by 8 percent in the past. The current exchange rate provides relief to the exporters. Our foreign reserves are on the increase. It has exceeded 5,500 billion rupees. We would perhaps be able to further stabilise it.

The next is the interest rate. In last September the interest rate remained between 25 percent and 30 percent to the detriment of the small-scale industrialists and the business community in the expansion of their ventures. Today it is being maintained between 14 percent and 16 percent. As we were able to reduce the interest rate due to drop in inflation, we could also increase the limit of loans to the industrialists.

Today individual income has gone up and inflation and poverty has declined; rate of economic growth has increased, foreign reserves improved, interest rates gone down, exchange rate stabilised.

The Government debt which was 105.6 percent in 2002 has come down to 80 percent while foreign investments have considerably increased.

So is not the direction the economy is moving in correct or wrong? We have followed a policy of balancing domestic production and food security. Our basic objective is to protect the farmer, fisherman and the local manufacturer, as we want to provide relief to the consumer through increase in local production. It was the policy we maintained during the last four years to reap good results. Commodity production has increased facilitating the price structure. This was the policy we pursuit during the past four years which eventually reduced the prices. Our policies have helped to augment our vote bank. The incomes of the tenant farmers, paddy farmers, maize farmers, milk farmers and vegetable farmers have largely improved. We reiterate that we want to encourage local production with the participation of Samurdhi beneficiaries and women. The milk farmers were paid only Rs. 32 until it was increased by 10 percent on a recent directive by the President. The price paid for milk farmers for a litre of cow milk is as follows:

France Rs. 41.16, New Zealand Rs. 34.96, Germany Rs. 36.96, USA Rs. 35.93, Italy Rs. 46.55, Australia Rs. 33, Malaysia Rs. 39.62 and Cambodia Rs. 9.63.

It is our local milk farmer who should enjoy the Government subsidy - not the milk farmer in Australia or New Zealand.

We have also taken action to protect the local milk farmer. Whenever the world prices of milk powder went up, we had progressively reduced the import duties even down to Rs. 5. However, wherever the prices of milk power dropped in the world market a duty was imposed to protect the local milk farmer while passing a part of the benefits of the reduced prices to the consumer.

I should mention that we are committed to look after both the milk farmer and the consumer.

Today, the price of rice has dropped. During the previous elections, there was an artificial shortage in the rice market created by certain unscrupulous elements. Price of rice escalated and to relieve the consumer of the burden of increased prices, the Government had to import rice even with reluctance. Certain traders exploited the opportunity by importing unlimited consignments until the facility was withdrawn in February. In January itself the rice imports amounted to 80,306 tons.By sticking to the Mahinda Chinthana policy we progressively reduced the wheat flour consumption by 50 percent. As a substitute for rice, the price of which had increased, we reduced the import duty on flour by Rs. 10. The prices of wheat flour were reduced, resulting in increased flour consumption.As you are aware today, the Paddy Marketing Board has 40,000 Mt. tons of paddy in addition to what the farmers have in their possession.

With the implementation of Api Wawamu, Rata Nagamu program, re-cultivating of fallow paddy fields and rehabilitation of paddy cultivation in the liberated North and the East, the Agriculture Department expects a surplus of 449,113 metric tons of rice in December provided the level of rice consumption continues to remain unchanged.

We want to encourage breast-feeding and local milk production and also create a conducive environment, to enable the people to enjoy three rice meals a day.

You may perhaps be aware the prices of rice have considerably reduced compared to 2008 and 2009 years. The price of a Samba kilo has come down to Rs. 58 from Rs. 76.57 in 2009, the red rice to Rs. 48 from Rs. 63.64 in 2009.

The Mahinda Chinthana envisages to provide equal facilities to all. 80 percent of the people live in villages or estates. The Gama Neguma program provided all such basic amenities as electricity, potable water, roads and telephones.

As against the prevailing practice of allocating funds to Ministries and departments by the legislature, the President set apart a sum of Rs.1 million to each Grama Seva division in the 2008 budget.

There are at present 36,000 villages and 14,000 Grama Seva divisions in Sri Lanka. In all these villages and Grama Seva divisions at least a concreted road, a canal, an anicut or a culvert has been constructed. As far as the provision of electricity is concerned, in 2005 there were 3,396,047 electricity consumers, a percentage of 70. In 2010 the consumers have shot up to 4,337,364 higher percentage of 87.

A sum of 2,051 million in 2006, 2,737 million in 2007, 4,020 million in 2009 and 4,515.2 million in 2010 had been allocated for rural electrification projects apart from the funds provided for Norochcholai, Ihala Kotmale, Kerawalapitiya and Uma Oya power generation plants and transmission. Despite all these, allegations are made that we have not allocated funds for infrastructure facilities and human development. Funds have beee provided for water supply, drinkable water, electricity, housing and also for education, health, roads, ports and irrigation, as borne out by page 54 of the previous budget.

I should reiterate that new future program envisages to strengthen the village and the individual and foster the family simultaneously upgrading the village.

The Government will take action to create Jana Sabhas to activate the involvement of the village people in our plans to develop the village. Divisional development is another priority for the Government for which local bodies and divisional development committees would be strengthened. Development plans would also be implemented by networking one or more villages. Divisional development committees would be given a new lease of life to undertake local projects such as construction of roads, bus stands and markets. The budget has provided funds for provincial development in which respect the experience earned from Uthuru Wasanthaya and Negenahira Navodaya would be helpful. In addition to the funds already provided a fresh allocation of Rs. 7,500 million has been made available to launch such novel projects as Rajarata Navodaya, Wayamba Pubuduwa, Pubudamu Wellassa, Kandurata Udanaya, Sabaragamu Arunalokaya and Ran Aruna. President Mahinda Rajapaksa himself was interested in developing certain provinces of the country identified as backward and made financial allocation to launch development projects.

As regards resettlement, it is very strange that some groups attempt to mislead the people in the North. I am happy to see that the TNA acts with a sense of responsibility at a time when some disgruntled elements in the South attempt to breach peace and friendship being built in the North.

A large number of people were displaced both in the North and the South. Displacement is not something new. Some people have been displaced for over 20 or 30 years. Hon. Rishard has been displaced for over 20 years!

The displacement started with the arrival of 40,000 Muslim from Muthur to Kantale. There were those displaced in Kebithigollewa and Seru Nuwara as well. Unlike the previous governments we followed a different policy in relocating early the displaced people. That is why we could resettle about 40,000 displaced Muslims from Muthur within 44 days. Then those displaced in Ichchalampattu, Sampur, Verugal, Upparu and Vakarai were resettled early. Our cardinal problem was the provision of facilities such as food, water, health etc., for the displaced people including those in the North. With the support of the people, armed forces and international organizations we could protect the displaced community in a most productive manner. Today all the international organizations accept that no other country in the world has ever succeeded in such an arduous task. Nobody ever died of an epidemic or starved to death. The government could improve the nutritional value of the displaced people upgrading it above the average standard.

Resettlement of IDPs assumed the proportions of a herculean task since every inch of the area was dotted with land mines. Each and every road, bridge, school and hospital were razed to the ground or set on fire. Tanks and anicuts were blown off.

Our first priority was demining which was performed by the SL Army and other organizations. Meanwhile, the national security & public security remained high in our minds. Most of those people were under the jackboot of the terrorists for over 30 years. They were forcibly conscripted. So our task was to identify the terrorists from among the civilians and have them rehabilitated. It was really a tremendous task, yet we did it!Provision of infrastructure facilities was really challenging. We decided that such vital requisites as roads, schools, hospitals, cooperative stores etc. should be basically provided to facilitate the community life. In addition, we took urgent steps to empower the beneficiaries by making them self-dependant, though subsidies were provided for them for six months.

Most of the people are either farmers, fishermen or those engaged in similar work. We have provided livelihood facilities for them as they are very industrious. We are optimistic that after the next Maha season they would be able to live independent lives without depending on outside support. We provided them temporary houses. After President Mahinda Rajapaksa’s recent visit to India. We have been able to put up permanent shelters for them. We are happy the TNA parliamentarians have expressed their willingness to work with us. I am specially thankful to them for the support they have extended to us.

It is pertinent to mention that a tragedy of this nature is quite different from natural disasters such as floods, volcano eruptions or tsunami. The average time-frame to resettle people displaced due to conflicts is 20 years. It is not less but more. This is our novel experience as there were no previous instances of similar nature. We could successfully resettle 80 percent of the IDPs within 180 days. I should say it is a world record itself. I should reiterate our government under President Mahinda Rajapaksa would instel democracy in the country, hold local government elections and complete all development projects and go for a final solution to the problem.

We have created a conducive atmosphere for the country to move forward fast. The territorial integrity of the country has been safeguarded while law and order is maintained equally throughout the country.

People are at liberty to live wherever they like and engage in any task they choose, without being subjected to racial, religious or caste distinctions. There is also the economic stability in the country.

Above all there is a stable government with sagacious political leadership.

Our country which is uniquely situated is endowed with quality human resources and an unrivalled literacy rate. I would like to conclude by assuring you that we would definitely make Sri Lanka, the `Wonder of Asia’ in near future.

The above is the speech made by Economic Development Minister Basil Rajapaksa during the second reading of the Budget 2010 in Parliament.

Translated by K.D.M. Kittanpahuwa