It Would Not Be Long Before The People Take To The Streets – Samarasinghe
- The current system must be changed to solve crisis-Wednesday, April 24, 2013
President of the Inter Company Employees’ Union (ICEU), Wasantha Samarasinghe says that the people are now feeling the economic crisis faced by the country. He noted that the government has failed to properly administer the economy. “The country’s economy is now defunct and the people are being burdened as a result,” he said, adding that the US proposal to cut 20 percent of its aid to Sri Lanka would have an impact on other countries’ approach to Sri Lanka as well.
Following are excerpts of the interview:
Q: What do you have to say about the current state of the country’s economy?A: I can’t explain it in one line. It is not easy to say. The country is functioning without any idea of what is going on and what is to be expected. The Cabinet and the persons handling the country’s economy do not have a proper sense. This is a capitalist crisis and Sri Lanka is facing a severe fall in its economy. The country has been pushed into a great debt trap. The production process has declined and the people’s purchasing power has also declined. The capital market is being used to cover state debt. Our country is still not based on a production economy. The economy mostly depends on the farmer’s produce and other businesses for its survival. The government has failed to properly administer the economy. People have to pay more for fuel when the global oil prices are on the decline. The Public Utilities Commission had granted permission for an electricity tariff revision when about 95 percent of the country has opposed it. The country’s economy is now defunct and the people are being burdened as a result. We believe that the crisis is due to the market economy.
Q: Do you think that the people are aware of the real state of the economy?
A: Since 1948, people have appointed governments to free the country from foreigners, but not to bring freedom to themselves. Successive governments since 1948 have handled the economy using different methods. As a result, people are now dressing differently and are using telephones, but the core issues remain unchanged. However, people have been very complacent thinking that is their fate. Nevertheless, I feel that the people are now feeling the economic crisis. The farmers have lost their seed paddy and the market to sell their produce. A kilo of paddy is sold between Rs. 22 and 24, which sometimes doesn’t cover their costs. They have to buy a loaf of bread by selling three kilos of paddy. The working masses, the self-employed and farmers are facing the pressure of the economic downfall. Their responses to the problems have shown their frustrations. The school has become a business institution and so is the health sector. When you go to a state hospital you find that most of the facilities are assigned to the private sector. It is the responsibility of social movements to rally the people and take the issue to the forefront. It is a problem with the current system and that needs to be changed. Given the current situation, it would not be long before the people take to the streets and demand for a change in the system.
A: Since 1948, people have appointed governments to free the country from foreigners, but not to bring freedom to themselves. Successive governments since 1948 have handled the economy using different methods. As a result, people are now dressing differently and are using telephones, but the core issues remain unchanged. However, people have been very complacent thinking that is their fate. Nevertheless, I feel that the people are now feeling the economic crisis. The farmers have lost their seed paddy and the market to sell their produce. A kilo of paddy is sold between Rs. 22 and 24, which sometimes doesn’t cover their costs. They have to buy a loaf of bread by selling three kilos of paddy. The working masses, the self-employed and farmers are facing the pressure of the economic downfall. Their responses to the problems have shown their frustrations. The school has become a business institution and so is the health sector. When you go to a state hospital you find that most of the facilities are assigned to the private sector. It is the responsibility of social movements to rally the people and take the issue to the forefront. It is a problem with the current system and that needs to be changed. Given the current situation, it would not be long before the people take to the streets and demand for a change in the system.
Q: What impact do you think the proposed 20 percent aid cut by the US would have on the country’s economy?
A: Various members of the government make different comments. The Cabinet says the economy is well planned and strong, the Central Bank Governor says there’s no problem and the Finance Ministry Secretary says there’s a problem but it could be resolved. Some countries give aid to Sri Lanka while some other give loans and some give monies in both these forms. However, the government’s stances with regard to the economy should be serious. The government thinks that the people are still enjoying the thrill of winning the war in 2009. But the country lost the GSP Plus concession that is valued at US$ 1.5 billion. It was value to our exporters. The government is now speaking of earning US$ 1.5 billion through tourism in the future after losing the same amount in a different sector. The government devalued the rupee following an IMF condition. Look at the impact the country is faced with by the government’s actions? When you speak of the aid cut, you must look at the impact. Such action would have an impact on other countries’ approach to Sri Lanka as well. The government has to find monies for all monies that are borrowed. All this would have an impact on the ordinary people in the country. This situation could have been avoided if the government had closely monitored its policies and repercussions. The government would have been able to foresee such an eventuality. It seems like the government is trying to live with an isolated mentality.
A: Various members of the government make different comments. The Cabinet says the economy is well planned and strong, the Central Bank Governor says there’s no problem and the Finance Ministry Secretary says there’s a problem but it could be resolved. Some countries give aid to Sri Lanka while some other give loans and some give monies in both these forms. However, the government’s stances with regard to the economy should be serious. The government thinks that the people are still enjoying the thrill of winning the war in 2009. But the country lost the GSP Plus concession that is valued at US$ 1.5 billion. It was value to our exporters. The government is now speaking of earning US$ 1.5 billion through tourism in the future after losing the same amount in a different sector. The government devalued the rupee following an IMF condition. Look at the impact the country is faced with by the government’s actions? When you speak of the aid cut, you must look at the impact. Such action would have an impact on other countries’ approach to Sri Lanka as well. The government has to find monies for all monies that are borrowed. All this would have an impact on the ordinary people in the country. This situation could have been avoided if the government had closely monitored its policies and repercussions. The government would have been able to foresee such an eventuality. It seems like the government is trying to live with an isolated mentality.
Q: How will the JVP intervene in addressing this issue?
A: The JVP criticism is that the government does not have a solution. The situation now is like a flu turning out to be pneumonia. Now a surgeon is needed to address the issue. The US has slashed aid to Sri Lanka mostly because of the crisis in that country. Many countries in the world are experiencing several economic downfalls. It is evident that it is the fault of the system. Therefore, Sri Lanka is also affected. The government is trying to find a solution to the crisis by implementing policies of Regaining Sri Lanka part by part. The government is trying to get away by imposing all the burdens on the people. The electricity, fuel, transport bills are being increased. Mahinda Rajapaksa is playing the second innings of the market economy started by JR. Rajapaksa is now finding it hard to save the wicket. There’s no solution to the crisis in the current system. The government has been making wrong decisions. When the world was going into an economic crisis it started an aviation company, Mihin Lanka, which is now being maintained at a loss. However, when the crisis deepens the officials might actually flee the country.
A: The JVP criticism is that the government does not have a solution. The situation now is like a flu turning out to be pneumonia. Now a surgeon is needed to address the issue. The US has slashed aid to Sri Lanka mostly because of the crisis in that country. Many countries in the world are experiencing several economic downfalls. It is evident that it is the fault of the system. Therefore, Sri Lanka is also affected. The government is trying to find a solution to the crisis by implementing policies of Regaining Sri Lanka part by part. The government is trying to get away by imposing all the burdens on the people. The electricity, fuel, transport bills are being increased. Mahinda Rajapaksa is playing the second innings of the market economy started by JR. Rajapaksa is now finding it hard to save the wicket. There’s no solution to the crisis in the current system. The government has been making wrong decisions. When the world was going into an economic crisis it started an aviation company, Mihin Lanka, which is now being maintained at a loss. However, when the crisis deepens the officials might actually flee the country.
Q: What impact has the loss of the EU’s GSP Plus had on the economy?
A: The loss of the GSP Plus has resulted in a huge problem with some companies moving out of the country. They have shifted to other countries in the region. By December last year, some companies had closed down their operations in Sri Lanka because they were losing their markets in the EU. Market prices are decided by many conditions related to the sector. When Sri Lanka lost the GSP Plus, the price of the goods manufactured in Sri Lanka also increased. However, an industrialist cannot face such a scenario since he would lose the market. It is people who are unaware of the real impact of the loss of the GSP Plus that make foolish comments saying it would not have an impact on the economy. The current situation in the country does not help attract investors. How many foreign direct investments have reached the country last year? Were any new factories that employ over 1,000 persons opened in the country recently? The loss of the GSP Plus has resulted in the loss of investments, industries and jobs. The import and export figures show the real situation of the country. Exports and imports have declined and the authorities have failed to conduct a proper study to determine the reasons for such a situation and address it.
A: The loss of the GSP Plus has resulted in a huge problem with some companies moving out of the country. They have shifted to other countries in the region. By December last year, some companies had closed down their operations in Sri Lanka because they were losing their markets in the EU. Market prices are decided by many conditions related to the sector. When Sri Lanka lost the GSP Plus, the price of the goods manufactured in Sri Lanka also increased. However, an industrialist cannot face such a scenario since he would lose the market. It is people who are unaware of the real impact of the loss of the GSP Plus that make foolish comments saying it would not have an impact on the economy. The current situation in the country does not help attract investors. How many foreign direct investments have reached the country last year? Were any new factories that employ over 1,000 persons opened in the country recently? The loss of the GSP Plus has resulted in the loss of investments, industries and jobs. The import and export figures show the real situation of the country. Exports and imports have declined and the authorities have failed to conduct a proper study to determine the reasons for such a situation and address it.
Q: The government has resorted to taking commercial loans. How do you see this development?
A: The country’s production process is dependent on the private sector. Therefore, the manufacturers and investors work closely with the country’s banking sector. It is the banks that lend to the private sector to carry out their businesses. The private sector use the monies borrowed from banks for the production process. However, the government has now taken Rs. 410 billion at a 17 percent interest rate from the banks. These monies borrowed by the government are not used for any production purpose. They are mostly used to pay state sector salaries. Banks then don’t have money to lend to the private sector. The government and institutions like the CPC and CEB have taken loans from the banks and even cashed in on fixed deposits. For example, Lanka Mineral Sands Limited had a Rs. 1,250 million fixed deposit that gave the company Rs. 75 million as annual interest and it was used to pay the staff salaries. This fixed deposit was taken and the company is now heading towards a financial crisis.
A: The country’s production process is dependent on the private sector. Therefore, the manufacturers and investors work closely with the country’s banking sector. It is the banks that lend to the private sector to carry out their businesses. The private sector use the monies borrowed from banks for the production process. However, the government has now taken Rs. 410 billion at a 17 percent interest rate from the banks. These monies borrowed by the government are not used for any production purpose. They are mostly used to pay state sector salaries. Banks then don’t have money to lend to the private sector. The government and institutions like the CPC and CEB have taken loans from the banks and even cashed in on fixed deposits. For example, Lanka Mineral Sands Limited had a Rs. 1,250 million fixed deposit that gave the company Rs. 75 million as annual interest and it was used to pay the staff salaries. This fixed deposit was taken and the company is now heading towards a financial crisis.
Q: How do you think the country can overcome the current economic crisis?
A: Mahinda Rajapaksa and the family cannot overcome the crisis. The crisis would be pushed further. If you are really keen in finding the answers to the crisis, you can. But the government is not in the mentality of finding the answers. You cannot fool everyone all the time. Inflation is increasing and the country is on a debt trap and the people are feeling it. The monthly expenditure of a family of four is estimated at Rs. 47,800, but a public sector worker’s minimum salary is Rs. 20,088 and a private sector worker is Rs. 8,625. Families are finding it hard to survive even with two members being employed. Using loans to build roads is not sufficient. Monies should be used for the production process. The government has estimated its revenue to be at Rs. 1,274 billion and the loan and interest payments at Rs. 1,196 billion. Only Rs. 80 billion will be remaining. The government has to spend Rs. 396 billion for annual public sector salaries and Rs. 150 billion for health. Every person in the country is in debt to the tune of Rs. 65,000 as a result of the loans taken by the government. The per capita loan is over Rs. 400,000 now. One must see where the country is heading? In order to salvage the country from the current crisis, the country’s production process must be strengthened, the people must be involved in the development process and the people should enjoy the benefits of development. But the economy at present is functioning according to the needs of one family. The current system must be changed and the JVP has a properly planned programme that would help increase the production process and get the people involved in it.
A: Mahinda Rajapaksa and the family cannot overcome the crisis. The crisis would be pushed further. If you are really keen in finding the answers to the crisis, you can. But the government is not in the mentality of finding the answers. You cannot fool everyone all the time. Inflation is increasing and the country is on a debt trap and the people are feeling it. The monthly expenditure of a family of four is estimated at Rs. 47,800, but a public sector worker’s minimum salary is Rs. 20,088 and a private sector worker is Rs. 8,625. Families are finding it hard to survive even with two members being employed. Using loans to build roads is not sufficient. Monies should be used for the production process. The government has estimated its revenue to be at Rs. 1,274 billion and the loan and interest payments at Rs. 1,196 billion. Only Rs. 80 billion will be remaining. The government has to spend Rs. 396 billion for annual public sector salaries and Rs. 150 billion for health. Every person in the country is in debt to the tune of Rs. 65,000 as a result of the loans taken by the government. The per capita loan is over Rs. 400,000 now. One must see where the country is heading? In order to salvage the country from the current crisis, the country’s production process must be strengthened, the people must be involved in the development process and the people should enjoy the benefits of development. But the economy at present is functioning according to the needs of one family. The current system must be changed and the JVP has a properly planned programme that would help increase the production process and get the people involved in it.
