Votes on the Ministry of Finance and Planning

"inflation the major problem of Sri Lanka "

C. V. Gooneratne (Minister of Industrial Development) said: Ronnie de Mel projected the image of a absolute cassandra and prophet of doom as he had been doing during the past 4 years. You speak as one who savours the thought of becoming prime minister in 20 years.

They pooh-poohed the far-sighted economic policies of the government that insulated us from the Asian economic crisis.

The United National Party was not given any aid from the World Bank due to its corruption and poor governance.

During the UNP government inflation was an astronomical 26 per cent. The growth when Ronnie de Mel left the UNP in 1987 was dismal.

They want us to correct the 17 years of murder, mayhem and corruption in 4 years. He is asking why we haven’t rectified the years of corruption that afflicted this bank.

Who were the progenitors and initiators of GST. They did not have the skill and intelligence to implement it. Then they accuse us of implementing the GST.

The 1998 budget provided a thrust for development and incentivised the economy. The 1998 budget has 28 development projects. These facts cannot be pooh-poohed even by the greatest of opportunists.

The government that wanted to become NICs in 1998 did not have a proper power generation project. Everything is not hunky-dory I must admit, within the circumstances of the East Asian crisis we have performed incredibly well. Sri Lanka’s per capita income has increased by 47 per cent. It may sound a bit jarring to my good friend. Almost all Asian countries have recorded minus economic growth. We have managed with prudent economic policies. We improved our system long before the crisis.

There is flexibility in exchange rates, and we ensured close supervision of financial institutions. There might be chinks but don’t be prophets of gloom.

Low export growth is some of the challenges we are facing. We will continue to develop with the vision and mission of our president. The ‘Asian Wall Street Journal’ in November said that the Asian crisis cost 10 million jobs. It has said Sri Lanka stands out alone, in reducing unemployment to 9 per cent.

The major problem of Sri Lanka has been inflation. It erodes the lives of the poor. Inflation was brought down from 15 to 10 per cent a sharp contrast from the 1977-1981 rate of 17 per cent. Heritage International has ranked Sri Lanka among the highest performers.

Lakshman Yapa Abeywardane (UNP-Matara district) said: Ronnie de Mel took over as Finance Minister in the UNP government in 1977, when the economy of the country was run down by seven years of SLFP rule and when the country’s economic growth was a poor two per cent.

Each of the budgets presented by Ronnie de Mel indicated the preceding years progress. But your budgets have omitted this important features of a good budget.

I agree our economy has not felt the effect of the South East Asian crisis.

But the reason for this is that there had been no soroses in Sri Lanka.

What have you to say about the textile industry in this country? Fifty major textile mills have put up shutters due to the fiscal policies of your government. One hundred and fifty thousand have lost their jobs.

Two years ago you erected the Southern Development Authority. Can you name one development programme undertaken by this authority. Now the President has appointed a new chairman. She now says she has appointed a chairman who set his feet on the earth. The chairman whom he replaced apparently walked on clouds. He too was appointed by the President herself. Not the UNP.

I will now touch on the question of banks. I will prove that your policies with regard to banks are leading them to disaster.

In 1993 we re-capitalised the two state banks to the tune of Rs. 13,547 million. When we did it under President D. B. Wijetunga we got the Bank of Ceylon to sign an agreement. Under this agreement the lending limits of the Bank was restricted to Rs. 2000 million. But according to figures for 1998 the Bank of Ceylon has exceeded this limit in breach of the agreement. By 1998 it has lent money to the time of Rs. 11,000 billion.

A certain branch of the Bank of Ceylon had paid a loan of Rs. 5 million to a government MP without any security. A government controlled trade union has been paid Rs. 60 million. Not a cent has been repaid by this trade union.

The Bank of Ceylon has imported computers to the value of Rs. 340 million. It has now been found that these computers are not in use in any part of the world.

It was wrong to accuse the UNP of ruining the Banks. It is this government which has brought these banks to the brink of collapse. Some persons in top political positions have authorised the payment of loans where bank official had declined to pay.

Lionel Gunawardana (PA-Gampaha district) said: The President has managed this ministry well with help. Our country has come in for praise from the IMF and other financial giants. There has been a marked development in infrastructure facilities especially in the Gampaha district. The BOI has facilitated development in rural areas.

Kesaralal Gunasekera (DUNLF-National List) said: There are many contradictions in Ronnie de Mel’s statements. He said the Asian Development Bank predicted a 6.2 per cent growth in Sri Lanka’s economy in 1999. He at the same time warned that the predictions of the ADB and IMF have proved wrong all the time. He said they were "notoriously wrong".

And the same Ronnie de Mel quotes the IMF report.

R. Sampanthan (TULF-Trincomalee district) The local textile industry has invested billions of rupees. Domestic textile industry had been producing 250 billion metres of fabric. The domestic textile industry was capable of meeting 90% of the local demand.

The textile manufacturing sector has always been affected by import seepages into the country. But they have never been singled out like today for such unfair treatment.

In the past they were exempted from turnover tax. They have now been reduced to a precarious position. In addition to domestic discriminatory treatment by the removal of the duty protection and the imposition of GST the Asian crisis have brought in an influx of cheaper textiles to the market.

The banks and financial institutions regard them as a non-viable sector.

The assistance package formulated by the government with the consultation of textile manufacturers should be operated soon. The crisis has reached alarming proportions and something tangible and definite should be done to save over 20,000 employees as estimated.

Debt waivers, 3 year grace period, collateral mortgages and quotas from health and education sections were some of the noteworthy features of the government’s assistance package. Don’t abandon this vital import-substitution sector to the wolves.

There is also another matter I wish to bring to your attention. The State banks in the North and East discriminate the people by demanding bank guarantees. These banks have also imposed a world bank embargo on the citizens of the North and East by sidelining them from being employed in these banks where plenty of vacancies exist.

Nanda Gunasena (PA-Galle district) said: There is a group of persons who are discouraging foreign investors coming to the country. I am not referring to the LTTE alone. But the group to which I am referring carries on this campaign of frightening foreign investors, masquerading as LTTEers. These people include some former big shots of the BOI.

A.Adaikkalanathan (DPLF-Vanni district) said: The money provided for the Vanni in next year’s budget should be utilised for development without leaving them to lapse on the pretext of the war.

(To be Continued)