Rajapaksas Ruined The Economy -Dissanayake
- Need a complete socio-economic change
JVP parliamentary group leader Anura Kumara Dissanayake says that the government is left with the options of either printing money or borrow, as pointed out by Minister Dr. Sarath Amunugama given the economic downfall faced by the country. “The President’s move has pushed the country further into the debt trap and the people have been further burdened to pay them back,” he said. Dissanayake explained that the country is in need of a complete socio economic change in order to overcome the current economic crises. “The government seems to be trying to run the country on monies earned through revenue for six months and the remaining six months on loans,” he observed.
Following are excerpts of the interview:
Q: How do you see the country’s economy?
A: The country’s economy is facing a downfall in several sectors. The production sector has fallen. The government’s initiatives, Api Wawamu Rata Nagamu and Divi Neguma that were aimed at increasing production have become a damp squib. The garment industry is affected by the loss of the GSP plus facility. Apart from the production process, a large number of large-scale development programmes have turned out to be white elephants where the country’s economy is concerned. Projects like the Southern Expressway and the Hambantota Port are not linked to the country’s economic activities. One of the reasons for the current economic crisis is the lack of a connection between the development projects and the country’s economy. Also the losses in state institutions and wastage have compounded the crisis. SriLankan Airlines recorded a loss of Rs. 19 billion in 2011 and the CPC recorded a loss above Rs. 100 billion in 2012. There’s wastage in maintaining a jumbo Cabinet, holding night races and overseas jaunts of the President and government ministers. All these have burdened the country’s economy. The debt taken by the government is also affecting the economy on another side. The government has estimated revenue of Rs. 1,304 billion for 2013, which it would not earn. However, loans to be taken for 2013 are estimated at Rs. 1,303 billion. The government seems to be trying to run the country on monies earned through revenue for six months and the remaining six months on loans. It was Dr. Sarath Amunugama who clearly explained the current situation when he said that the only options for the government were to either print money or to borrow.
Q: What do you think of the IMF’s refusal to grant funds requested by the government?
A: I saw the statement made by the Central Bank Governor that loans would not be taken from the IMF. What has happened in reality is that the government has requested for a loan from the IMF to cover its daily expenses.
The IMF never gives loans for a government to cover its daily expenses. When the IMF refused the loan, the government tried to give the impression that there was no need to obtain loans since the economy was strong. The government’s attempt to get an IMF loan to cover its daily expenses itself shows the level of bankruptcy of the current administration.
Q: The Central Bank Governor has said the country has sufficient reserves and there was no need for IMF loans. Do you agree with this statement?
A: The country’s reserves are not being spoken of in the proper manner. The loan taken from the IMF in the past has been added to the reserves. Therefore, the increase in the country’s reserves is one sided. The government received the last IMF loan since it adhered to the Fund’s condition to remove the Central Bank from intervening in maintaining the rupee value. However, all other sectors in the country were affected by this move.
Q: What options do you think the government would have to increase its reserves?
A: The government has in this instance requested for the IMF loan to cover its daily expenses and not to increase its reserves. By rejecting the IMF, the government would now take commercial loans from the open market. The government has pushed the country to a position where survival would depend only on loans. The government’s only option seems to be to push the country further into the debt trap.
Q: How do you think the government could overcome the current economic crises?
A: The government has only plaster solutions (temporary solutions). It cannot address the economic crisis. In order to overcome the current economic crisis, the government would have to move away permanently from the wrong and failed economic policies it follows. However, the current government does not have the ability to bring about such a change. The country needs a complete socio-economic change.
Q: What future do you see for the country given the current situation?
A: The Rajapaksas have ruined the country’s economy. The President recently said that he was not afraid to take loans. That is true because he does not have to pay them back. It is the people who have to shoulder the burden. It is an unfortunate statement to be made by a head of state. What a head of state should be able to say is that he could govern the country without taking any loans. The President’s move has pushed the country further into the debt trap and the people have been further burdened to pay them back. I don’t think the government would do anything else as well. It is only the people who are left to suffer while the authorities ignore their plight without trying to address them.
Q: What alternative would the JVP propose?
A: We think the country’s economic structure needs to be changed completely. The economy should be structured to increase production and to fairly distribute the country’s revenue among all people. Such a structured economy would be the only way out of the current crisis. The JVP stands for this change and are committed to bring about it.