Cabraal sets record straight on the debt burden left behind by Yahapalana regime and JVP claims

By Saman Indrajith

Sri Lanka’s success story of countering the COVID-19 crisis could have been a more effective and advantageous if not for the debilitation of the economy under the yahapalana regime, Parliament was told on Wednesday.

Winding up the debate at the time of the adjournment of the House, State Minister of Money and Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal said that the performance of the previous government had weakened the economy as never before.

 “There is a shortage of reserves and that has resulted in limiting our import options. We would have been able to do much better after overcoming the COVID-19 crisis if there had been enough reserves. The previous government also increased the debt burden. Debts stood at 71 percent of total GDP at the time they came to power. They increased it to 91 percent.

 “We managed somehow. But we could have given more relief to the people. We could have made use of some opportunities on the economic front to boost the small and medium scale enterprises if there had been enough reserves.

 “During our time we recorded a 6.5 per cent growth and an increase of GDP from 24 billion US dollars to 79 billion US dollars. Inflation shot up causing suffering to the people due to the collapse of the economy under the previous government.

 “Now, we are planning to get the national economy back on the track by 2021. You can get an idea of the current situation from the Central Bank 2019 annual report before you understand the challenge before us. We have to rebuild the economy and help the public. It is a big challenge but we are not afraid because we are sure that we can turn the tide; we have the expertise to do. We’ll fast-track the development process. We are introducing some tools to attract foreign direct investments”, Cabraal said. 

 The State Minister said that he would not take the predictions of the Opposition Leader seriously as the latter had a record of making wrong predictions. “I remember that he was shouting in 2007 and 2008 that the economy would collapse any time. That did not happen.”

Responding to JVP leader Anura Kumara Dissanayake’s allegations that the economy had suffered a loss by investing in Greek bonds while he was the Governor of the Central Bank, the Minister said: “That is a topic they keep harping on while the rest of the world has moved ahead. I have explained this in my book ‘The Great Bond Scam’ in detail. There on Page 313 this matter has been dealt with in detail. Then there is a judgment by a three-judge bench of the Supreme Court presided by Chief Justice K Sripavan. It has put all these allegation to rest. The MPs who come here to talk should do their homework. I do not know whether they deliberately hide facts to mislead the public. There is one such example, it was stated in this House today that our decision to invest EPF monies was wrong because we suffered a 3,071- million-rupee loss. The Opposition however did not say that while the loss was standing at that amount for some loss making shares, we had earned a Rs 17,577 million profit. In 2011, the capital profit from EPF investment was at Rs. 2,678 million. In 2012 it increased to Rs. 3,016 million in 2013 and Rs. 3,339 million. In 2014, the profit rose to Rs. 5,544 million. I table a copy of my book because it has answers to some questions the MPs raised though they have passed their shelf life. The matter of a forensic audit has been raised. I have explained that on page 149 of this book.”

Referring to the contribution made by the JVP to the national economy, the state minister read out a list of damages and destruction attributed to the Marxist party during its second insurrection in the period of terror from 1989-90. “They destroyed 684 post offices, 13 telecommunications centers, 550 buses, 75 tea factories, 40 estate bungalows, 130 CEB transformers, 12 trains and six railway stations. The total loss by those actions has been estimated at Rs. 55 billion rupees.”

Cabraal said that while he was the Governor of the Central Bank he had heard of the same allegations being made in the House but he could not respond as an official. “Today, I am a member of this House and I can respond to these wild allegations and inform the House the truth. I thank colleague member Prof Ranjith Bandara for moving this motion for debate,” the minister said.