A: Frankly I don’t think that consumers would get any relief in the short run and neither in the medium. The situation can only get worse than better.

A: These answers were not given a year ago; they have been given from the time they assumed office for the past four years. From the time they came through the Chandrika Kumaratunga and Mahinda Rajapakse administrations, they have given various headlines with deadlines without any actual occurrence. The 100% increase is on certain items. Others have gone up by as much as 300%. On that score, I don’t think that the government that has been unable from 1994 to constrain the increases or come up with ideas to overcome the situation in the short and medium term could give solace to the people.

A: Now that they have mishandled the situation, they can only turn to ordering the next batch. Rice is not something that can be grown overnight and it cannot be brought down before the New Year. The problem of this government is that they think everything can be sorted by shouting and be controlled through regulations. That has been the major failure of this government.

The government knows the annual consumption and the annual production and from that they could see if there is an increase or a deficit. Knowing clearly that there is a deficit they do nothing. On the other hand they also discourage the consumption of bread, which can be a substitute, by increasing prices and there is a yawning gap between production and demand and it is obvious that you have to be ready for it. These fundamentals have been ignored and they think that prices can still be maintained.

My feeling is that it is not done by default, it is done by design. I guess there are people in the middle taking undue advantage of the situation. Otherwise there is a buffer stock in the country. Why is it not utilised? All this shows that this situation was not created overnight but by design to create chaos.

This government also said that they have to protect the local producers. They ridiculed the UNP claiming we ignored the farmers and did not give the fertiliser subsidy. They came and gave subsidies worth Rs. 22 billion to the farmers. Where has it all gone?

The highest recorded paddy production was in 2003 during the UNP period — 3.1 million mt. Now, with the Rs. 22 billion given on subsidies for fertiliser, there has not been an increase. The production in 2007 has been somewhere between 3.2-3.3 million mt, so where has the Rs. 22 billion subsidy gone where production is concerned?

Consumer Affairs Minister Bandula Gunawardena leaves for Mayanmar in search of rice to import to the country just a few days before the April New Year. This would not help reduce the prices as it would take time for the country to receive the shipment. Therefore the people cannot expect a decline in rice prices this New Year.

A: India, which was recording a 4-5% level of inflation, recorded a peak of 7% and that is what they call inflation. Indonesia is roughly 8.5% and it is not a country that has very good financial discipline. The Maldives has recorded an inflation level of 1.5%, Singapore 2% and Malaysia 3.1%. How is it that Sri Lanka has 28%? Sri Lanka’s 28% comes after certain commodities have been taken out of the market basket.

It is simply due to the absolute mismanagement of the economy. The Central Bank is there to stabilise prices, but they are doing politics. The Finance Secretary has been running the Ministry for the last 14 years, less two years — has there been any benefit? I’m mentioning this because otherwise, it is a heinous crime on us. They should be held responsible for misguiding and taking the government on the wrong path.

I sometimes don’t blame the politicians because they are guided by bureaucrats who massage the egos of the politicians. They are the ones that need to be taken to task. Money is printed due to the deficit in government revenue and expenditure, and it is that impact that is being felt now.

The unnecessary subsidies created and the extra expenditure on ministers maintained by the government are a direct reflection on the cost of living. The other fact is the unwanted expenditure like that of Mihin Air. They are contributory factors. These are the things that create inflation.

This is an induced inflation by the government through bad policies. Otherwise how can other countries in the region maintain low inflation while Sri Lanka records double-digit inflation? It is because of the breakdown of the economic order in the country.

A: There is a general picture shown by the Central Bank that printing money is basically not inflation. We concur with this view to some extent. If certain notes circulating in the country are damaged and money is printed in lieu of it that is no issue. If you have assets to back the liabilities, then that is not an issue.

But if the government revenue is short and the government temporarily starts borrowing from the Central Bank and prints money in order to overcome the expenditure, that is what drives inflation. When there is a deficit between government revenue and expenditure and the bank prints money to meet it, that is inflation.

I see a huge distortion campaign carried out by the Central Bank to ensure their bad management is protected and projected in a different way. Last year they printed Rs. 44 billion. The bank has approved that. Now it varies between 35-40 billion at a given moment simply to bridge the deficit.

A: They can either print money or put the burden on the people. They do both and blame everything on the war. What relationship does the expenditure on the war have on rice production? The war does not have a relationship with any other domestic issue. Therefore it clearly shows that it is an economic breakdown.

When you have high levels of inflation going on for months, it has a galloping effect. That is what we are faced with. If you see, the same Central Bank Governor in 2006 said that the budget would cure the inflation problem. But it only got worse.

In 2007, he said that he would ensure that inflation would be brought down to a single digit, it became worse. Now he is saying it will continue to be double digits. I only hope it won’t go to triple digits.

A: In 2005 during the election, we said that if the JVP, JHU and the SLFP alliance came into power, this is what everyone would have to face. We said that peace would go to pieces, cost of living through the roof, Sri Lanka would be isolated from the world and that there will be economic disorder. Haven’t all those come true now? Yes, the people have voluntarily got this problem on to their heads.

Unfortunately, there is a majority in the minority that did not vote for the government and they too have to pay for the sins committed by some people. As an opposition, all we can do is to address these issues and create awareness among the people that the government was given four years to get their house in order and they have no clue as to what governing is and human suffering is and what international isolation is. They need to understand that this is a government run by a few for the benefit of some at the expense of all.

So all we could do is to get the people mobilised and tell them that this is suffering created by choice and not by chance. We will get the people with us and say enough is enough. You can fool some people some time and all the people some time, but not all the people all the time.

A: No absolutely not. There is a distortion in both. If you look at the private sector, it has got a negative return. The public sector has had a rupee increase but the purchasing power has reduced. I asked a question in parliament on Samurdhi beneficiaries. Comparing the Rs. 1000 in 2004 with its value in 2007. The answer that was given was that it is Rs. 560.

You could see that from 2004 to date, in three years it has reduced so much. Where is the public sector? Has a public sector worker received a salary increment in line with it? No. So it is a distortion. Finally, it is the purchasing power of the people. The government sector hasn’t, so you can imagine the suffering of the private sector, which is absolutely huge.

The government uses the per capita income for everything. The per capita being high is true. You could basically take the total income and 10 people can get 10 million dollars per person and the others can get $2 per person, but when you average it, they will say a person gets $1600. What $1600 dollars means is that you are receiving roughly Rs. 15,000 per month. Does a police constable get that?

So where is this per capita distribution. This is like a drunkard using a lamp post to stand; the government is using statistics that are self-created in order to stand on its feet.

Inflation is 28%, interest rates are 22%, government borrowings are at a giddy level where Rs. 44 billion was printed. Total government revenue is about Rs. 741 billion and government debt and amortisation is Rs. 855 billion, so the revenue is not even enough to cover one aspect — the debt repayment of the country.

So where is the money to spend on the people? You have to tax. With the Fiscal Responsibility Act being disregarded all we can say is that this is like a Rs. 2.50 balloon being blown to the size of a Rs. 10 balloon.

From 1948 till 2003 when the UNF government was in power governments have borrowed Rs. 1863 billion in total. From 2004 to date, the country’s debt has gone up to Rs. 3489 billion, which is twice the debt recorded between 1948 and 2003. This alone shows the magnitude of the economic mismanagement and its impact.

A: Knowing Prof. G.L. Peiris, I’m sure it is not he who has told it and people would have got him to say that. I believe him to be a person of honour and dignity and I don’t think he would openly write like this knowing what the circumstances would be.

He and I, under the instructions of former Prime Minister Ranil Wickremesinghe are the ones who got the labour GSP. We know how difficult it was, what good governance is and how human rights need to be protected. Human rights had to be protected and as a result we made a case with the CFA and said that we needed the facility as a country that needed to develop.

When we received it for a period of three years, it was not given on a platter and it is something we have to earn. I was pretty surprised to hear that Prof. Peiris has said that the UNP was working in connivance with the LTTE. If the LTTE was so in love with the UNP then why did they prevent the Tamils in the north and east from voting at the 2005 election that caused Ranil Wickremesinghe to loose?

Is this a sellable story anymore? A person of his calibre should ensure that these things are not given in a wrong manner. So I still feel that it is not Prof. Peiris who has said this. I’m telling that because I respect him. He and I worked together to get this facility and owing to Wickremesinghe’s move to bring in the CFA we got the benefit.

The industry comes and tell us one thing and the government another. Why can’t they stand their ground? We call upon the people to ask — on the one hand they ask for salary increments, but first protect the labour GSP, which is the government’s duty. They are called upon to accept international covenants; the protocols have been signed by us. Who brought this in? It was Prof. Peiris.

In 1995 President Kumaratunga congratulated him and Lakshman Kadirgamar for bringing in the international protocols and signing the covenants that have been administered. Now the same minister is saying we do not need to do this because it is already in the constitution. Did he not realise it when he brought it?

This needs to be exposed. The JVP, JHU and the SLFP stand naked, as it is their blatant violations that have led to this. We have not politicised the issue, if we did so we would be holding placards at Lipton Circus.

The vile accusation is only to ensure that their internal battles are pushed on the UNP. Not only garments, but many other industries also benefit from the GSP Plus. So far only Sri Lanka and Mongolia have the facility. But other countries too are fighting for it, so we have to show that we deserve it.

A: I hope, pray and sincerely think that the entire country is looking at the eastern people to see that they get what they deserve. The people have been hoodwinked, robbed and the country has been taken astray. The eastern people are the fabric of Sri Lankan society. It is made up of Sinhalese, Tamils, Muslims, Burghers and Malays. The three districts in the province show that. I hope that the rest of the country would look at the easterners as saving the country when they give a resounding victory to the UNP and the SLMC. We are contesting under one common symbol — the elephant and this is a move forward. I hope and pray that this will help save Sri Lanka.