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‘High state expenditure on IDPs prevents immediate CoL relief’
– Minister Gunawardhana

‘When holding wedding receptions, a private citizen is saddled with feeding only 300 guests. However, today it is the responsibility of the government to provide three square meals daily to 300,000 Internally Displaced Persons (IDPs) in the North and the daily meals bill for these persons is a high Rs. 250 million. Feeding these IDPs over the next six months is likely to cost the government Rs. 45,000 million and these unanticipated expenditures make the provision of immediate CoL relief to the public, unthinkable’, Trade, Marketing Development, Co-operatives and Consumer Services Minister Bandula Gunawardhana said.

‘Perhaps, by 2010, when the produce of the liberated regions begin to flow more smoothly into the rest of Sri Lanka, the people would have a measure relief from their daily living costs’, the Minister explained when asked in an interview whether the public could look forward to a reduction in their material burdens, now that the state’s war expenditure could be expected to plummet. ‘In fact, the responsibilities of the government are now greater than ever’, the Minister said. ‘It is only now that the problems have begun’, he stressed. The state has the additional task now of providing the needs of the one third of the land area of the country and two thirds of its coast line, which were earlier under the ‘diktat of Prabhakaran’, he said.

Ruling out a scaling-down in defence expenditure in the foreseeable future, Gunawardhana said that national security needs to be comprehensively built and sustained for the benefit of future generations. Nothing could be left to chance. Besides, Sri Lanka has vast resources to protect. It is perhaps the latter which prompted ‘meddling’ by some external powers in Sri Lanka’s affairs in the closing stages of the war. ’Singapore, which is only the size of Colombo, allocates 4.7% of its GDP for national security. In contrast, Sri Lanka allocates 3%’, it was pointed out by way of accounting for the country’s defence expenditure.

Besides, although the war is over, a ‘gun culture’ is rampant in Sri Lanka and no community is free of this blight. The ‘unofficial’ arms circulating in the country are very high and national security provisions would need to be in place to tackle such menaces.

Excerpts of interview:

Q; What are your reactions to the criticism in some quarters that the CoL is spiked by a jumbo Cabinet and not by any other considerations?

A: Such strictures are entirely politically-motivated. There is a tendency among some to politicize economic issues; as a result perspectives are distorted. Government expenditure on the Cabinet of ministers is not at all considerable when compared to other expenditure heads. The biggest bill that the government is saddled with is public sector salaries. This bill has grown by 194% in the years since 2003. And today we have 12 lakhs of public servants as opposed to 225 MPs and a 47-menber Cabinet. Likewise, the corresponding increases in public pensions, defence, local and foreign loans, and capital expenditure, for example, are, 187%, 431%, 100% and 345%, respectively.

Wide Cabinet portfolio distribution is necessitated by coalition politics and every coalition government, since independence, has faced the need to bring about numerous portfolios. The UNP-led government of 2002-2004, for instance, created the position of Minister of Land Deeds, although an Agriculture Minister had already been appointed. But next time around, at the parliamentary poll, when we come in with a two third majority, such wide portfolio distribution would not be necessary.

Q: But is there ready assurance of such a victory?

A: I am most certain of a two-thirds triumph and the continuance of the Mahinda Rajapaksa presidency for the next 20 years. Today, for the ordinary people, the President is no less than a king for his great success of bringing the whole country under the state. They see and feel that he is the man for them because no previous Lankan President has been so close to them; no previous President has kissed the soil of this land, for example.

Q: There have been rumours about a ‘Dambulla mafia’ which has been controlling the prices of commodities. What has been done about this problem?

A: It is only today that we held a meeting with the Dambulla trade association office bearers. They clarified issues to the media. It was explained that there is no mafia in operation. What happens is that the prices of vegetables tend to rise, out of season, when production is low. They made it clear that some sections have been misinforming the public.

However, some vegetable prices are on the decrease and more and more vegetables are coming into the market. Jaffna produce is also coming in. We have made arrangements to bring all the produce directly from Dambulla and Jaffna to the Narehenpita collecting centre from this week, without the intervention of middlemen. The same will happen in the case of fish from the North. In a month or two, once the necessary transport arrangements are made, fish prices too would drop.

There is a great need at the moment for objective economic analyses. Very often, these issues are viewed through a political lense and many are misled. Many local commentators lack a sound grounding in economic theory. It is essential that they have such a background. For instance, no government could do anything about rising prices. This is because prices are regulated by the forces of supply and demand and other relevant economic forces. If there is a scarcity of a particular commodity, its price will rise and the government cannot intervene to reverse this trend which is based on objective conditions. However, the government addresses its mind to the rate of inflation and its endeavour now is to bring inflation down to single digit levels.

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