Speedy action will turn around economy by next year - Ranil Wickremesinghe | Page 2 | Sunday Observer
Costly election is not the remedy:

Speedy action will turn around economy by next year - Ranil Wickremesinghe

8 May, 2022
Pic: Hirantha Gunathilaka
Pic: Hirantha Gunathilaka

UNP Leader Ranil Wickremesinghe in an interview with Sunday papers, last week highlighted that political issues must not be allowed to overshadow the most crucial economic recovery process of the country. “The world will face an alarming rate of local inflation triggered by the war in Ukraine soon, doubling our woes, but if we start our recovery process immediately, we might be better off by 2023,” the UNP leader said.


Q: What would have led to the present economic situation in your view?

A: I think Finance Minister Ali Sabry was exhaustive in his speech today (May 4) about how the crisis was created. He also talked about how the borrowings had increased between 2015 and 2019, but we increased our revenue up to about 13 percent then. The drop in revenue came as a result of lowered taxes after 2019. The crisis was aggravated by delaying the IMF process. The decision not to bring in chemical fertilisers, created a food crisis.

Q: Are you satisfied with the measures by the Government to overcome the current political instability?

A: I’m against the 20th Amendment. I think 21st Amendment is a good development. However, this is not a solution to the economic crisis facing the country today. People are agitating due to financial and other issues. Some have lost jobs and businesses have collapsed.

To meet the fuel shortage, at least four ships need to come simultaneously.

Even if the loans to buy fuel materialise, some of our problems will still be there. A huge demand for fuel needs to be met including for power generation. India has offered US $ 500 million, but for that amount we cannot buy even 12 shiploads of fuel. We cannot buy everything from the Indian credit lines. That money can be used for food supplies, medicines, and fertiliser. They don’t have everything we need. Some of our imports come from elsewhere.

Q: If the current economic crisis continues, what would Sri Lanka look like in 2025? What would be the worst-case scenario?

A: If this continues, the economy will crash. Then, the recovery would become much more difficult. If we start addressing the issues now, the recovery would be faster. The worst is yet to come. The hyperinflation hasn’t set in yet. If we commence the process now, we can stabilise it by 2023. Get the economy moving while restructuring economy. That’s the best scenario. But the Finance Minister thought the process might take longer. If we delay, more businesses will go bankrupt, more people will lose jobs. The situation then becomes difficult to turn around.

Q: If you were in power, how would you resolve the present wave of protests? For example, would you use force?

A: If I were in the Government, the protests would not have taken place, because I would have ensured the economy is on track. We predicted this situation in 2020.

The UNP manifesto spells out that we needed US $ 7 billion for 2021 and 2022 - US$ 3 billion per year. We have to go to the IMF and also talk to the friendly countries. In 2021, I mentioned it in Parliament twice, once during the Budget debate.

Q: There are proposals for an interim or a national government under a new Prime Minister to overcome the current political impasse. If there is an offer, will you accept the post of the Prime Minister (PM) in an interim arrangement?

A: Sri Lanka is now putting wanted ads for a PM. It might come to that level eventually. All in the Opposition says, the President and the Prime Minister must go before they think of discussing any fresh arrangement. Anura Kumara Dissanayake made it clear in his speech in Parliament today (May 4).

So until that happens or some agreement reached between the Government and the Opposition as to how it has to be handled, I can’t see the Opposition coming into any form of government. We are having three positions; the President and the PM must go, the two of them must stay or within the SLPP, there is another situation where they say that the President will stay but the PM will go.

I think that issue is getting resolved now within the SLPP. But you must sit down and discuss. They need to look at the Bar Association resolution. There is another one sent in by a collective of lawyers and members of the medical and other professions which includes Geoff Alagaratnam, Faiz Musthapha and Kalinga Indatissa.

We need to sit down and deliberate on these proposals.

Q: As a senior politician, do you think this crisis within Parliament would be resolved soon?

A: I can’t tell you when it will be resolved.  We suggested that we look at the economic issue separate from the political issue. As a long term solution to the Economic issue, we have suggested that Parliament establishes control over public finance. I have given some suggestions on setting up six oversight committees to have control over public finance.  The two issues must run on parallel tracks.

We must discuss how to resolve the current deadlock with a time bound plan. It is best to look at the concepts behind the proposals that have been made by various stakeholders.

Q: You said in Parliament today that this issue needs to be resolved soon?

A: I made the suggestion in Parliament today, but it will take a long time. This is a huge problem. I think the Minister’s statement has identified many of the issues: the problems facing the banks and the relief you give in a new budget. We are only talking about the monetary side of the economy. We repay loans with more loans, but when do we bring our economy around so that we have a surplus of foreign exchange in a balance of payment to start repaying the loans.

It requires a drastic change to make the economy highly competitive and export oriented.

Q: The IMF has asked the Government to restructure external debts in preparations for a bail-out package but China has not responded to this call positively?

A: We have no prior experience with private lenders like London club to restructure our external debts. That is the reason why we have sought foreign expertise. But before reaching out to them, as a Parliament, we must deliberate on short, medium and long term plans to stabilise our economy.

The Finance Minister has met the Chinese ambassador. The Ambassador has agreed to help Sri Lanka with our IMF mission. Even though India, China and other countries agree to IMF discussions, these countries have different requirements. We will have to address them one by one. That is not easy.

Not just Sri Lanka, even other countries are facing these convulsions. It took five months for Zambia to settle similar issues. Our bilateral lending partners agreeing to sit down and discuss will not end our problem. We have to finally reach an agreement.

Q: The Samagi Jana Balawegaya (SJB) has handed over two No Confidence Motions (NCM). Does the UNP support the two NCMs if there is a vote in parliament?

A: We have already said that we will extend support to this NCM against the President, which was prepared by the TNA. It has been handed over to the SJB now. We are not against the NCM. But they must have a consensus on a plan thereafter.

Q: Some debate that the country should hold an immediate election. Others say it cannot be done due to the current situation. What is your take on that, should the Government and the President stay full term or elections must be held soon?

A: You cannot go for elections now. The economy is getting really bad. We have to stabilise the economy. The cost of the last election was Rs.10 billion. It will cost Rs.20 billion this time. A candidate will require Rs.25 million minimum for campaigning. We have 196 candidates to be elected plus 66 additional candidates who will be on the fray.

That will come to about another Rs.30-40 billion. These campaign funds for candidates come as donations from private sector. I don’t think the companies can afford to fund elections.

Q: The people are demanding all 225 Members in Parliament to be sent home. Is this a practical demand that can be fulfilled?

A: I was sent home, and I have returned.

If you send all MPs home, leaving aside 29 national list MPs, the next in line on the preferential list will enter Parliament. That is the law which applies when someone resigns.

The frustration is that people feel Parliament is not engaging in this issue. Their demand is if you are not engaging in this issue, why you don’t go home. We must acknowledge their frustration. But according to the law, sending all 225 is not practical.

Q: IMF has said Sri Lanka must first restore debt sustainability and microeconomic stability to qualify for a bailout package. What should the Government do to achieve this goal?

A: We are waiting for the Government to tell us. We must formulate a policy framework for debt servicing.

We have asked the Government to come out with its strategy. There should be a safety net for Banks and the development Budget of 2022 should be replaced with a relief budget.

The Finance Ministry should not ask other ministries to do the calculations for a relief budget. If so, the ministries will return only 5 – 10 percent of the current allocations. This task has to be taken over by the Committee on Public Finance in Parliament.

They will identify the nonessential expenditures of the Ministries and suspend those to offer relief to the people affected. This is a must.

Q: Do you think the current economic situation will develop into a geopolitical issue and if so, how should Sri Lanka manage the situation?

A: There is a 50-50 chance that this will be a geopolitical issue. The Government must know how to handle it. The Government has succeeded in annoying every country. This is a Guinness world record. I am happy that the President has given the earlier suspended LRT project back to Japan. There are many other outstanding issues.

We also must take a decision on the European Union’s GSP plus scheme. We have to sort it out with the Human Rights Council in Geneva.  A resolution against Sri Lanka has been moved by the UK and the EU. First of all we must tell our people in Geneva to shut up.

Q: What is your take on abolishing executive presidency?

A: I am for abolishing executive presidency. We will support the 21 Amendment. But first of all, we must settle this economic and political issue. We need another election – a referendum to do away with the executive presidency. These are all secondary matters. The focus should be to resolve the economic crisis.

We must discuss whether the President and the Prime Minister should stay. Currently there is a deadlock. The Opposition is in one stance and the Government is in a different stance.

Q: What is your personal stance - should the President remain or step down?

A: All in the Opposition are of the same view, that both should step down. But the Government says both should stay. How do you resolve it? Nevertheless, there is some consensus on resolving the economic issue, that is why we have asked to address it first. The Government and the President is responsible for this crisis for he introduced ad-hoc tax cuts, stopped the use of chemical fertiliser, and delayed discussions with the IMF.

Q: The newspapers reported that you postponed the NCM until after the Finance Minister returned from IMF discussions in Washington. And the SLPP did horse trading during that time to get the support of independent SLPP members. Did you scuttle the NCM as reported?

A: If you had moved the No Confidence Motion, then, the IMF would have stopped discussion with the Finance Minister. Therefore, I suggested it. Anyway that week Parliament was not sitting and we could not have taken up the NCM. The motion was not even ready by that time. We agreed on the decision to delay it till the Finance Minister returned.

The Government cannot claim now that we disrupted the IMF discussions.

Q: Sri Lanka’s inflation has taken wings. Observers say we might surpass Lebanon and Venezuela, countries with the highest inflation very soon. Some action has been taken by the Central Bank to control it, any proposals from you to reverse the trend?

A: This is just the beginning. This could be a hybrid version of their vistas of prosperity. This Government is doing things that no other government could do.

Lebanon took four years to reach this inflation rate. We took only six months. We are waiting for the Government to spell out its plan.

Q: What are your proposals for fast economic recovery?

A: There should be a program to have a sustainable debt level. Protect banks, give relief to the people, make up with the foreign countries and get a consortium to help us. Prepare for the next rise in inflation. This is the local inflation. We will be hit by the inflation triggered by the Ukraine war. America too is having record high inflation. The UK is affected too.

Our hyperinflation causes it to rise fast. Then, there will be a shortage of food due to the war. People will not be able to afford even two meals due to high prices. We have to provide for that. This is why we need to restructure our economy.

It is on those principles that I wanted Parliament to take it over. We need to have a 20-year policy framework for climate change, education and economy.

Q: Don’t you think stopping development work completely will be harmful in the long run?

A: We have enough concrete in our economy. We must now fill the stomachs. If you don’t have a relief budget, people will get on to the street. There will not be any development after that.

Q: What are the changes anticipated with the appointment of a new Prime Minister replacing Mahinda Rajapaksa?

A: I don’t know. That will depend on the coalition he brings in.

Q: What changes do we anticipate under an interim government?

A: There is no interim government to begin with. And I don’t know because this Constitution doesn’t have provisions for an interim government. If this Government goes out, another Government comes in. You can have a caretaker government when Parliament is dissolved. What the protestors are saying is to change the composition of the Government from this system of having  a majority party only to get as  many parties as possible involved in the governance and to resolve the economic issues.

If the Government wants to get the Opposition involved, then it must compromise with them. You can’t have the cake and eat it at the same time.

Q: In the midst of this grave crisis also, we see the MPs behaving in the House like kindergarten children. Can anything be done to change this culture of misbehaviour?

A: I have brought it to the notice of the Speaker. I regret it.  A lot of members do not take part in it. This type of behaviour has given Parliament a bad name.

We have to change this culture. That would take some time, but we should to bring some standard for behaviour inside the House and outside Parliament

The parliamentary privileges have nothing to do with it. The House must make new rules to have an orderly debate.

Q: What is your take on the Galle Face protest?

A: It is a symbol of public frustration. The middle class and the workers have joined the Galle Face protestors.

These are peaceful form of protests. The Government should listen to their voice and resolve it.

If not, they would resort to violence. They are frustrated by disruption to their lives due to shortage of food, fuel and lack of essential services. The Rambukkana incident (where a protestor was killed by police shooting) should have been avoided.

Q: There is a debate on assets stolen from public coffers during previous regimes. There are allegations against your Government as well. Can such wealth be brought back to the country from overseas?

A: During our time, we appointed an anti-corruption secretariat which received about 1,000 complaints. The bona fide complaints were sent to the bribery commission and the police.

Those assets can be recovered, but we will have to go through jurisdictions of many countries. That will be costly. It will take about six to ten years to trace them and complete the process.

Q: Do you have information of such stolen assets or money ?

A: We don’t have information, but people have made various claims. We need to dig up evidence.