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Finding solution to overcoming effects of World economic crisis
Amunugama welcomes Opposition offer of help

Opposition MPs, who participated in yesterday’s adjournment debate on the ongoing world economic crisis and its effects on Sri Lanka, were very positive and pledged their support to the Government to find solutions, Minister of Public Administration and Home Affairs, and Deputy Minister of Finance and Planning Dr. Sarath Amunugama said.

This was contrary to the usual custom in Parliament where the Opposition always sought to fault the Government and its MPs and end their speeches with tirades, he said.

"This is a good and positive sign and we notice that the JVP too has graduated from useless issues to serious subjects such as economics," Minister Amunugama said in his reply to the motion moved by JVP MP Sunil Handunnetti.

Moving the motion the JVP MP said: "Sri Lanka too now experiences the ill-effects of the global recession though the Finance minister and Central Bank Governor go on saying that local economy would not suffer. Hundreds of factories have been shut down and employees thrown to the streets. Some BOI companies have announced that they will scale down their businesses and services of workers no longer required. Some other companies demand workers to work extra hours without claiming overtime payments if they want to keep their jobs. Out of 3,000 garment factories 856 have already closed down and their bosses have told employees that quotas given by foreign buyers were over. Banks no longer give loans to industries to survive in this crisis. Over one hundred garment factories have permanently put up shutters. The Tea, Rubber, Coconut and Cinnamon industries are on the verge of collapse. The Stock market has collapsed. The Gem and jewelry industry can no longer attract buyers from abroad. The Tourism industry is no longer earning profits. How long does the government expect to go on overlooking this reality?" Handunnetti asked.

UNP Kegalle District MP Kabir Hashim said "We do not have sufficient foreign reserves. The January 2008 foreign reserve was 3.1 billion US dollars and this had come down by one billion. We have foreign reserves to purchase required imports only for three weeks. Inflation is sky rocketing. Prices of essential items have multiplied overnight. The Government has no other way but to print money. This is very dangerous since history is full of examples of nations collapsing after resorting to printing money instead increasing earnings."

Minister of Trade, Marketing Development, Cooperatives and Consumer Affairs, Bandula Gunawardena said "Prices of essential commodities in the world market are coming down. Prices of petroleum products and wheat flour have come down. We have to opt for liquid milk instead milk powder. There is no other nation in the world that beats us in per capita consumption of milk powder. We spend Rs 20 billion on milk powder. Very soon our people would have to shift from powder milk to liquid milk."

The Government had taken necessary action to meet the ill-effects of global recession and the Opposition MPs should not fear any future economic problems, he said. "It has been decided to attract more foreign reserve through incentives such as giving 20 percent interest for Non Resident Foreign Currency account deposits. Expatriate Sri Lankans should be told to send their money home only through proper channels. Those who shout of an economic crisis should never forget that we continue to provide free healthcare and education despite all these crisis."

TNA Parliamentary group leader R. Samabanthan said "I am surprised of the fact that the JVP now shouts of an economic crisis. They are also responsible for the current situation in the country because it was the JVP that demanded war which incurs massive economic losses. The war drains money and causes suffering to everybody. Now those pioneers of war yell that there is an economic crisis. It was they who rejected interim administration and P-TOMS proposals which could have avoided this war and saved the country from an economic crisis."

Export Development and International Trade Minister Prof. G. L. Peiris said "The Government provides an incentive package to boost the apparel sector. It has decided to exempt the apparel sector from the 15 per cent electricity surcharges for this year. The industry will also be totally exempted from economic service charges. These opportunities will lead the apparel sector towards progress as it would reduce their production cost immensely. Almost three million people out of the 19 million population mainly in the rural areas contribute to the industry both directly and indirectly. We have also decided to grant a special incentive of five per cent on their value added garment exports for 2009, he said. "We are in a strong position on the economic stage compared to other countries. The stimulus package is not a mere hand out."

Prof Peiris said Sri Lanka has 80 per cent of market share in the world tea market. "Our tea which is well known as ‘Ceylon tea’ is exported to Latin America, Chile, Brazil, Argentina etc. while we are exploring new market potentials in Western European countries. We will not allow tea prices to fall and Rs. 45 will given to tea producers for a kilo of green tea. We have opted for product branding such as Ceylon cinnamon and Ceylon tea instead increasing the volume of exports."

The inflation which was at 29 percent last July has been brought down to 14-15 percent now and very soon this would become a single digit, he said. "There are lots of gains in the economy. One has to be fair, objective, look at the whole picture without giving into partisan politics when on economic matters. We should not colour economic affairs," he said.

UNP Colombo District MP Ravi Karunanayake said: "It is good to see government side colleagues calling upon us not to colour the economy. This was what we have been telling for the last 15 years."

Deputy Finance Minister Ranjith Siymbalapitiya said that Sri Lanka cannot stand isolate itself from the consequences of the global recession. "We too will face consequences but we are ready with counter measures to mitigate them."

Minister Amunugama continuing his reply said: "Very soon we will stop saying that we are going to be self sufficient in rice. The harvest of this coming Maha season would be a record one in the country’s history because for the first time after years the East’s harvest is also coming out this season. We had discussions with all district secretaries yesterday and they expect a bountiful harvest."

The growth rate of the Western province GDP was above 17 percent according to a recent survey conducted by a foreign economist and this was equivalent or above many developed nations, he said. "We have proposed a Rs 16 billion package to meet any consequence of the recession therefore have no fear," he said.


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