Ravi K's tightrope walk

Over Swiss bank account minefields, misappropriation of State property and a futuristic budget:

by Manjula Fernando

With Budget 2016 around the corner, Finance Minister Ravi Karunanayake is a busy man. But taking time off to talk to Sunday Observer, he defends the government's call to bring home the money stashed in Swiss accounts as a bid to draw the fund to the local economy and not a ploy to grant amnesty to crooks. He also assures the Appropriation Bill will make every effort to reduce the gap between the rich and the poor and cater "essentially to the poor man's pocket"

Excerpts:

Q: You have invited Sri Lankans having Swiss bank accounts to return the funds deposited in these banks, pledging no questions will be asked. What was the motive behind the pledge and can anyone bring home the funds without facing any queries?

A: We have gone on the basis that people have money in Swiss bank accounts. Up to now those have not been in the system of the government network. The government is trying to motivate Swiss account holders to direct that money to our financial system. We are asking them to bring their money home. There is no hidden agenda.

The detrimental approach of running after these people must stop. How did Singapore become the country it is now, as did UAE and Qatar? They too asked for the money to be sent home for development.

Q: Have you an estimate of the money deposited in Swiss banks by Sri Lankans?

A: We believe it is a huge amount. My query is, why did they invest in foreign bonds when they could park their money here and get paid for it.

Our call is genuine. To punish a few crooks, we need not penalise the genuine.

Q: There were allegations that key personalities of the previous government had stashed stolen State assets in overseas bank accounts?

A: Those allegations still stand. This is not an opportunity for crooks to sanctify their stolen wealth. You must not get us wrong. This is an opportunity for Sri Lankans to invest their money here. It is not a call for crooks. This invitation is open to SAARC nations too. Invest your money here.

Q: Are the investigations into alleged misappropriation of State property still on?

A: Investigations are still on. Media has been speculating for long. Soon, you will see what happens. The World Bank's STAR initiative, the Swiss Government, the Indian Government and others are collaborating to help us locate these stolen assets.

Q: Do you have new evidence to revise the amounts believed to have been pilfered and stashed elsewhere?

A: No. Investigations are still proceeding. Some are questioning as to where the stolen money is, and why we haven't been able to locate the funds. Unlike the previous government -where a big noise is made over nothing - we are moving on solid ground. The allegations are true and we will prove them.

Q: There were reports of a VVIP's son holding a US$ 500 million account with a Dubai bank. MP Namal Rajapaksa has denied its existence. Are you following this up with UAE authorities?

A: As a responsible government, this matter is being looked into. We will make a statement with the correct information soon. Many investigations are on and the details will be made known later. The Dubai case is a bona fide one and not a politically instigated inquiry.

Q: Is the opening of a Bank of Ceylon branch in the Seychelles under investigation?

A: That is for BOC to answer. I am disappointed at the pace of this particular investigation. There are only about 10 Sri Lankans in Seychelles. It is a mystery why there was no decision to open a second branch in the Maldives, Chennai or Bangladesh, where there is a greater need for Sri Lankan banks.

Q: The government has allowed the Sri Lankan Rupee to free float. You said with the expected Forex inflows the Rupee will stabilize. When is this likely to happen?

A: I don't wish to speculate. Perception is driving everybody. I can assure that a stronger Sri Lankan Rupee will be there before long.

Q: The decision to float the Rupee has contributed to inflation?

A: It is artificial inflation. Some of the officials who were responsible for past decisions are still there. Before too long it will change. We will to take full control of the situation.

Q: Will the Rupee float and inflation be taken into consideration in the 2016 Budget?

A: It will be a futuristic budget without any cosmetic work. We will be presenting the budget with the next 15-20 years in mind. Proposals will be implemented in 2-3 year cycles.

Q: You called it a revolutionary budget, can you elaborate on that?

A: All I can say is, it will serve 95-98 % people not a mere 2% of the Super Rich. People will benefit by the futuristic economy we are envisaging. People will be protected. It will be investor friendly and take off political privilege and patronage. We want to make Sri Lankan investors, in particular, strong under this futuristic budget.

Q: The mini budget that was presented a few months back was called a basket of goodies for the election by the critics. What sort of relief can the working class expect this time?

A: Those critics are part of the problem of this country. The budget will spell out government policy. In future no one will have to entertain commissions to do business. We are not aiming to just reduce corruption, we want to eradicate it. We want people to criticize us and correct our course. Will you take up to that challenge?

Q: You didn't answer my question, what can the working class expect from the budget?

A: A better life. But don't expect everything from womb to the tomb. This is not going to be a rhetorical budget. Their ''purse will feel the change''.

Q: The Ministry of Finance is in the process of ensuring ease of doing business in Sri Lanka. Already three forums have been held to identify and clear issues. Have you identified the major drawbacks?

A: The major issue is bureaucracy that is averse to change. Politicians have been entrusted with a task they have to execute on behalf of the people. We are open for discussion but when there is need to change for the better, no one will be allowed to stand in our way. People have voted for change and therefore the bureaucracy has no option but to fall in line.

Q: There is a notion that we will not be able to get out of the middle income status. What are your plans to move higher up?

A: Although the previous government gave Sri Lanka a middle income country status, the country is not completely out of the 'least developed country' ranks. We are neither here nor there. We have opted to graduate from low income to a middle income country status but 45%-50% of the people still earn US $ 2 a day. You cannot have ten people earning ten billion rupees and 50% of the population earning less than US $ 2. This is what we want to rectify.

Q: So you will propose to bridge this gap through the budget?

A: We want to narrow the huge gulf between super rich and super poor.

Q: The UNP has always upheld market oriented economic policies. Sri Lanka is a welfare state, how does the Unity Government plan to balance these two?

A: We are embracing a social economy market. The UNP has been projected as a Capitalist Party but we are more social oriented than the so called socialists. We will not play out the masses.

Q: What is the growth rate forecast for 2016?

A: I would say between 5%-7%

Q: What was the outcome of recent meetings with the leaders of IMF and the World Bank?

A: The President and the Prime Minister have brought a lot of honour to this country. What happened in the United Nations in New York and UNHRC in Geneva was clear evidence of that. Lending agencies speak with a lot of confidence now. We told them that politically we have achieved this mandate and now we have to win the economic battle. We will not do things as dictated by the IMF and the World Bank.

We will do what is good for us and their job is to help us achieve that. We said not to 'conditional' the loans. The main thing is that we have confidence in each other to work together

Q: There is public perception that development work has suddenly come to a standstill with the government change. Your comments?

A: That is a perception in the eyes of a few former corrupt government members who try to project their corrupt ventures as white ventures. It is quite the opposite, we cannot have 7% growth in the last quarter of this year if no development took place, and these are myths being created by those with vested interests.

In response, I would like to ask, where are the ships that were meant to sail to Hambantota? Where are flights to Mattala? Take Norochcholai. The country's total public debt is Rs.8.3 trillion, Norochcholai takes up Rs. 1.4 trillion of that. Almost 20 % of public debt is on one project.

Q: There are allegations that the development projects carried out by the former government have been reviewed because the members of the new government are also eyeing a share of the commissions doled out?

A: I appreciate that question. But tell me a single instance of even a cent being moved around. We will take action against the people involved. We are here to ensure people get the full benefit of the development projects. At the same time I believe it is a very unfair allegation levelled against us.