President will accomplish his tasks -Dr.Ranjith Siyambalapitiya | Sunday Observer

President will accomplish his tasks -Dr.Ranjith Siyambalapitiya

18 June, 2023

State Minister of Finance Dr.Ranjith Siyambalapitiya said a broad view has been created at present in society which has gone beyond the parliamentary majority. The current crisis is under control as President Ranil Wickremesinghe took up the challenge at that critical juncture. The State Minister in an interview with the Sunday Observer said even people at grassroot level regardless of their political differences accept this.

With that strength, it won’t be difficult for the President to accomplish his tasks on behalf of the people. During this brief tenure in office, the people’s confidence in the President has been strengthened.

Excerpts of the interview

Q: President Ranil Wickremesinghe has received a lot of praise for the way in which he has revived the economy. Do you think that Sri Lanka will be able to get out of the economic crisis by following this formula for the next few years?

A: I hope so- that is not because I am a stakeholder of the Government. The question I have to ask someone who thinks differently, what is the alternative? Is there any other alternative rather than the program introduced by the President to get the country out of the current crisis? This is the simple question I have to ask. Therefore, this is a difficult task and sometimes our anticipated targets may get delayed. Sometimes, we may be able to reach the targets early. We have been able to reduce inflation before we expected.

Q: Import restrictions have again been relaxed on around 286 items and all restrictions are to be ended gradually. Will this drastically affect our foreign exchange reserves and lead to a further economic crisis?

A: No. We do this in a very careful manner. I saw it had been said at one oversight committee that permission should be given to import vehicles to increase the revenue of Sri Lanka Customs. However, we won’t panic about such requests. The import restrictions of those 286 items were relaxed, consulting each and every sector including the Economic Research Division of the Central Bank and the requirements of the country. We also evaluated the amount of dollars to be spent per year by looking into the records of past five years. We have also considered whether we can bear it and this will benefit industries and the tourism industry. Having considered all those aspects, import restrictions on 286 items were relaxed. We hope this would not lead to any issue.

Q: Recently the Government signed agreements with China’s Sinopec and United States’ based RM Park for the distribution and sale of fuel in Sri Lanka. Is the Government exploring more options like this so that the country doesn’t have to spend foreign exchange on certain essential goods and services?

A: Our policy is not to bear an undue burden and create competitiveness to provide more advantages to the people without creating a shortage. For example, during the shortage of fuel last year, the operation of IOC in Sri Lanka was so advantageous to us. However, we always think of a good regulatory mechanism and get a clear tax income instead of incurring losses by providing a good service to the people.

Q: The Opposition and some economists have said that Sri Lanka might not get the second installment of the IMF loan as Sri Lanka has still not fulfilled some of the conditions put forward by the IMF. Is the Government confident of getting the next installment of the IMF loan?

A: Our next discussion is in September so we have three months to go. A progress review committee is going on at the Central Bank. Following the information given by them, the IMF recommendations go very closely with our timetable. The delay on our part is that the Central Bank Bill will have to be presented in Parliament soon. In addition to that, we have to increase our revenue by a certain amount. We have also relaxed restrictions on certain imported items. So, we are optimistic that we will be able to reach our targets.

Q: The IMF has also put forward domestic debt restructuring as one of the conditions for the bailout package. But the Opposition and some critics have pointed out that domestic debt restructuring might lead to a collapse of the local banking system and also EPF and ETF. What is your comment on this?

A: Both the Government and the Central Bank have categorically said that no room will be provided to create such a situation. When we obtained the IMF loan, our Opposition attempted to create this fear psychosis among the people. Honestly speaking, they don’t want to settle the issue in our country. Therefore, they should fabricate falsehoods to get the public’s attention. Otherwise, what will they have to say at this moment? The IMF loan was given and the people have realised that some change is taking place. The prices of goods and inflation are coming down. The tourists are also coming and the unstable situation created due to ‘Aragalaya’ has ended and democracy has been restored.

The Opposition thinks we might not get the second installment of the IMF loan. We will have to face some challenges when these IMF recommendations are implemented due to our traditional pattern of thinking and mindset. Those who genuinely love the country should admit that the consensus was reached with the IMF for our forward march and not for the IMF to govern our country. When we face these challenges, some political parties traditionally attempt to point out the negative aspects. Trade unions in some State institutions also attempt to create a fear psychosis among people to realise their narrow objectives without taking into consideration the severe economic crisis faced by the country.

Q: There have been many controversies with regard to the privatisation of State owned enterprises (SOEs) which is another condition of the IMF. There has been opposition to the sale of profitable Government ventures and a parliamentary Oversight Committee has ruled against selling assets like Sri Lanka Telecom (SLT). Will the Government stick to its plan to sell the SOEs in spite of these concerns?

A: We will have to carry out the privatisation program. We continued the program to safeguard the State entities over the past 75 years. Rs.500 billion is spent annually to safeguard nearly 400 loss-making State owned enterprises. What have those institutions saved on behalf of the people? An amount allocated close to education has to be spent to maintain these institutions.

Finally, the people don’t have fuel and gas. The Government policy is to get rid of the unnecessary burden of maintaining loss-making State institutions as much as it can and ensure workers’ rights through a good regulatory mechanism. It also intends to create more competitiveness and provide more benefits to the consumers. The SLT is the best example. This issue came up when 51 percent shares of the SLT were restructured. Today it has become the best example. Those days people had to wait at least a year to get a telecom connection. All those issues have been sorted out today and the SLT employees have also not faced any issue.

Actually, we had to face the issue of security before 2009 and those days we had to look at everything with suspicion. Even at that time, 56 percent shares of the SLT had been privatised. Then what was the issue faced by the SLT employees? Except SLT, how many private sector foreign telecommunication companies are operating in Sri Lanka? They are highly competing with SLT.

They also provide services to the people. Therefore, we should go beyond this way of traditional thinking. Perhaps, there may be challenges. In a democratic country, we should be ready to face challenges. In the meantime, another group somehow attempts to come to power and they create various issues to realise their goals. We all should keep in mind that the country has not yet returned to normalcy. If the current massive burden dragged on by the President is given up at least two months, once again we will be able to face similar hardships that occurred during the period of ‘Aragalaya’.

Q: You have said that you are making a report on tax evasions and ways to bring those who evade taxes under the tax net. Could you explain?

A: At present it has come to an end. This issue was extensively discussed by the Department of Inland Revenue, Sri Lanka Customs and the Exercise Department which levy taxes. We also obtained views and expertise of all stakeholders who are interested in this to expand the tax basis. Actually, this is not to impose more taxes on tax payers. The idea is to formulate a mechanism to reduce their tax burden.

We also intend to prevent the loopholes of tax evasion. The information technology will be highly utilised by the Department of Inland Revenue and Sri Lanka Customs for this purpose. The President instructed that if a report is prepared, it should have a stipulated timeframe. We hope to complete our report during this week. When the time is given by the President, we will submit the report to him and also obtain his views. We hope to turn this report into the handbook with regard to future taxes and state revenue. The information on the discussions with the IMF and World Bank will also be included into this report. We are also trying to include the details discussed at the Parliament Oversight Committees and Finance Committee to increase the state revenue into the content of the report. We hope to use this as the handbook to increase the state revenue.

Q: Is the Government looking at possible avenues of intervention for consumers to benefit from the ongoing appreciation of the Sri Lankan rupee against the dollar?

A: Actually, the Finance Ministry and Trade Ministry conduct meetings on a daily basis. As we all know, the prices of goods in the open market have not come down in the same manner in which the prices were increased. Each trader further attempts to keep the huge profit margin they got. Sometimes, there may be some justifiable reasons on the part of them as they have purchased and brought some of those stocks earlier.

Following a discussion I held with traders, they agreed to reduce the prices of school bags and shoes between Rs.300 to Rs.400 with effect from next month. Similarly, we will also discuss with those who sell electrical items and building materials.

The Trade Ministry will also get involved in this process. When the dollar went up from 202 to 360, everything changed overnight. However, when it came down from 360 to 300, the prices of certain goods still remained unchanged. This is the nature of the open market throughout the world. As a Government, we conduct continuous discussions with the relevant parties to benefit the consumers from the ongoing appreciation of rupee against the dollar.

Q: Nearly 450 State-owned enterprises have incurred losses over the past 10 years. Is there any move to restructure State-owned enterprises under the Public Enterprise Holding Company Ltd?

A: Each of such loss making State-owned enterprises will be monitored by the said company. However, we have given priority to a few identified institutions and we have pointed out that in our budget proposals as well. Some people think restructuring these institutions means selling them. Sometimes, the restructuring may be the selling of that particular institution. At present, there are three or four institutions to fulfill the same matter. Then, such institutions may be either affiliated or the management of some institutions may be given to the private sector.

Otherwise, while the Government keeps the management, their administration and operation may be given to the private sector. In addition, some of those institutions may be converted into a State company. We hope to implement the best suitable methodology which suits each such loss making state enterprises.

Q: A number of Sri Lanka Podujana Peramuna (SLPP) district leaders have boycotted a discussion called by the President on Monday (June 12). Is there a division within the Government?

A: Actually, this Government conducts itself in a very democratic manner. At that time, everyone accepted President Ranil Wickremesinghe’s leadership as necessary and that is why the Government is moving forward.

There may be divergent views among the parties which have joined hands with the President. I think since the inception of Parliament, this kind of complex parliamentary group has never been there. Each Leader who didn’t have a majority in Parliament had at least MPs close to that amount.

However, President Ranil Wickremesinghe is ruling the country under a very challenging situation. So, these are not strange incidents so we should not panic.

Q: Do you think an early Presidential or General Election should be held to overcome the current situation in the country?

A: Whatever election should be held after stabilising the economy. Everybody including international organisations say political stability is of paramount important. The election is one of the key factors which lead to creating political instability as we are highly divided based on political lines. I personally believe an election should be held after restoring political stability. I see the Presidential Election as the best election to be held first. Then the people will decide who should be elected as the President. Whoever comes to power can take up the challenge and sort out the issue by using his skills and capabilities.