The Sunday Observer spoke to the Minister of State for Finance Ranjith Siyambalapitiya regarding the Government’s course of action, relief for the public and the future program with the International Monetary Fund (IMF).
Excerpts from the interview:
Q: Do you think the political situation in the country is stable?
A: There is a very simple answer. All these things should be seen relatively. Go back a year. How was the situation then and how is it today? The difference is clear. The Government is very stable.
Q: The Opposition says that although the Government expected to receive the second tranche of the IMF EFF, it won’t materialise?
A: The Opposition wishes that we would not get that loan tranche. But we are going according to a program. Agreements may be delayed, goals can be hard to reach but this exactly is what is being negotiated. While the majority wants to break free from a traditional framework of 75 years, we are forced to work with a traditional Opposition. They say we won’t get the second tranche from the IMF, while at the same time, the Opposition Leader claims that they will change the IMF conditions once they come into power.
Plus we are dealing with a shrinking economy. For example, collecting taxes is like swimming upstream. This is a very difficult journey. Also, this is not a calendar. This is a series of discussions for a program that goes above and beyond. Therefore, we think that we can successfully go on this journey by removing small contradictions in these agreements.
Q: However, the Opposition says that the IMF has not accepted the Government’s program?
A: The IMF has made it clear that the Government has undertaken very difficult reforms. The biggest problem for the Government in particular is dealing with a traditional Opposition who created such a dangerous scapegoat out of domestic debt reform. They tried to get the people out on the streets. We are going on this journey by dodging those hurdles.
Q: People do not like the state of security in the country. Police officers are being killed. The underworld has raised its head especially in the South. What is your comment on this situation?
A: We should definitely pay close attention to it. The most important thing that we need to clearly understand here is that this country had gone through a 30-year war. A situation like this happened with the groups who came to Sri Lanka after the war ended. There are many people who used weapons in that war. Also, weapons have been assigned to external parties. At the same time, social pressures are caused by various problems, as well as racketeers who deal in drugs. It is normal for these types of people to emerge due to conditions like this. But this situation must be curbed. For that, a strict system of deterrence should be implemented under the initiative of the Security Forces.
In this regard, the customs are working with diligence. It is now impossible to bring drugs into this country without getting nabbed by the Customs. We have doubled the number of usual checks. And public and media support is needed to curb this situation and this will help reduce these crimes.
Q: But despite ensuring the safety of the people, the Government has still not been able to appoint an Inspector General of Police (IGP)?
A: The appointment of the IGP and the duties of the Police Department are two different things. The Head of State is working to make sure that it does not cause any problems and will not hurt people’s feelings. That appointment will be made, and this won’t stop the Police Department from performing its daily duties.
Q: The pharmaceutical mafia seems to have taken over the import of medicines. What is your comment?
A: Sri Lanka spends a lot of money on importing medicines which is always given priority due to its dire need. It is given the highest priority by the Treasury both in requesting money and in calling for tenders; especially when there is a shortage. Therefore, there is more to it than other fields.
Q: But those who have been accused are still at large?
A: Our country follows Roman Dutch law which means an accused is innocent until proven guilty. If a person who is accused is innocent, we have to be careful. Due to that caution, even a real culprit can be set free. However, taking the law further than necessary can a lead to social problems. It is the responsibility of each of us to find the right kind of information.
Q: The court verdict with regard to former Environment Minister Naseer Ahamed has created a stir in the political arena. Apparently, most Ministers and even MPs are under some kind of pressure after this decision?
A: There are two sides to this. One is the party’s rights. It shows that Sri Lankan politics has become very partisan. The country was saved thanks to a person who came to Parliament alone. I do not know what would have happened today if he had not taken the initiative. But there is no talk about the court decision. We respect that Supreme Court’s decision. But overall, the problem is whether the previous parties have the same bonds now.
Q: Everybody is complaining about the high taxes. Even doctors are protesting. If there is no reduction in taxes, is there no way to get some relief?
A: We have not reached the desired goals yet. We are the country with the lowest tax revenue in the world. We are going somewhere towards a goal. It should be so. But that has to go with a shrinking economy. At the same time, bank interest rates have increased, business has been disrupted, and income has decreased. But the tax side is the most felt of these. A Government must levy taxes. Whenever possible, we work to provide relief to those sectors that are affected by taxes. Our goal is to increase the tax base. A large number of people who actually owe taxes do not pay taxes. Directing them to pay taxes as well as systematically providing relief to those who bear a higher tax burden will be worked on in the future.
Q: Will the desired goals be achieved by allowing the import of goods other than vehicles? Even toothpicks have been imported. Can we ever build up an economy under such conditions?
A: We are a country that is highly dependent on imports and such a country cannot completely stop imports. Some people think that once vegetables are allowed to be imported, cucumbers will be imported as well. We have a set of restrictive laws made up of powerful regulations. And there is an import tax regime for that. We charge a huge tax of 400 percent for some goods. We approve the import of such materials subject to such strict controls. We have to import certain goods to save the local economy. But we have to develop our exports base.
Q: A recent survey reported that many children are too poor to go to school. What can be done to improve their lot?
A: The rising cost of school supplies was a really big problem. With the economic crisis, big problems have arisen for low income earners. For that, we even went beyond our limits to provide relief.
Translated by Jonathan Frank
