Govt saddled with Rs 572b in bills - Finance Minister
Finance Minister Ravi Karunanayake in an interview with the Sunday
Observer says the government still intended to offer more benefits to
the people, in addition to the promised public sector salary increase
and other welfare measures, all of which adds to government expenditure.
It is the people who lost that extra support, he says pointing out
that the US$ one billion Chinese grant to Sri Lanka recently includes
US$ 600 million for the health and justice sectors.
Finance Minister Ravi
Excerpts of the interview.
Q: The government proposal to increase the threshold of
Treasury Bills was defeated in Parliament. What compelled the government
to take this route at a time when bank interest rates have been reduced
and people's purchasing power is low?
A: We adopted an available method and is part of the existing
market process. This government is saddled with Rs. 572 billion in bills
to pay off, as a result of the haphazard financial decisions of the
former Mahinda Rajapaksa Government.
There had been instances of overlooking or bypassing Cabinet approval
and violations of financial regulations.
The economy is in shambles in a form much worse than what we imagined
when assuming office. By December 2004, the country total limit for
borrowing was at Rs. 250 billion. It was increased significantly and
former President Mahinda Rajapaksa raised it to Rs. 850 billion. We
proposed to increase the debt ceiling on Treasury Bills, to obtain
short-term, low-interest funding to enable the Government to provide
more benefits to the people. If loan interest rates could be reduced
from 87% to 3-4 % won't that be a relief to the people?
Q: Do you believe the people have a good impression of the
government when it is defeated at a financial bill. Doesn't this show
that it is weak and cannot win the vote of the majority?
A: I don't think so. Even if 52 voted against there are still
173 agreeing. So there is a power of two thirds. This is not an Act,
only a regulation. But it is disheartening to understand that there are
Members of Parliament who are unable to understand this.
Even though the previous Government was heavily corrupt we are bound
to continue with our duty. By defeating the regulation, Opposition
Leader Nimal Siripala de Silva led the defeat of privileges people were
We can increase the salaries of public sector employees and provide
all the existing welfare measures. We have allocated sufficient funds
for it. But we were hoping to give more. It is the people who lost that
Q: What are the key financial frauds under investigation at
A: It unravels every day and we cannot say that this is the
fraud of the day or the moment. It keeps moving everyday. So what we
have highlighted is the list what we already know and investigations are
Q: Are there any frauds you consider as priority issue, yet to
A: We do have priorities. But when we have one priority today,
a bigger one comes tomorrow and overtakes the existing one. It is a
changing situation. We are managing the situation which is the most
Q: China has pledged over one billion dollars in new grant
money to Sri Lanka. To what areas will this money go?
A: It is US $ 600 million fund. It will be used in the health,
justice sectors and projects that they had done before. They have added
grants for those projects through this. It does not come with
conditions. We will not accept funds with conditions.
Q: Besides the controversial Port City project, are there any
other Chinese funded projects under government review?
A: That is the only investment by the Chinese government.
Other projects are on loans.
Q: Will the Government cancel the project. It has sent
confusing signals over this project.
A: No the government has not taken any such decision. Who
gives confusing comments? We have told them to give a legal
certification for the way forward.
Q: The Government has called for the reinstatement of GSP
plus. If and when granted, the Government must fulfill the obligations
to practice good governance and protect human rights and fundamental
rights. Can the Government ensure this?
A: Of course. That is why they are speaking with us. So the
GSP is coming. Otherwise they would not even come. They see a
difference. Has the present government granted too much democracy? Are
there white vans coming to abduct journalists? Internationally we are
now recognised as a government with good governance.
Q: You have made critical references to massive State
corruption by the previous Government? As the Finance Minister what
directives have you issued to launch investigations into these
A: I have been critical because of severe corruption. It is
despicable to see that no steps were taken against such corrupt
activities. All we have done is to launch investigations.
Directives have been given to look into any activity done
fraudulently and suspiciously, investigated properly and due action