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Ravi: What I did as Finance Minister was like running a tavern without arrack

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By Saman Indrajith

UNP Assistant Leader and former minister Ravi Karunanayake, in an interview with The Island conducted on July 30, says there is no significant threat from his party’s offshoot, the SJB, which he describes as only ‘a mere irritant factor.’ Excerpts of the interview:

Q: The country is going through very turbulent times. The economy is in the doldrums. Many developing countries, including Pakistan, have opted for requesting loan waivers from their lenders such as China, considering the impact realities of COVID-19. As a former Finance Minister do you think Sri Lanka should do likewise?

A: In the current situation we see the country’s revenue dwindling. There is a yawning gap between revenues and cost of living, and this gap has led to the widening of the budget deficit, which cannot be bridged with taxes. In the process of cushioning this impact you have to reduce either the recurrent expenditure or the country’s loan commitments. One of the two has to be reduced to make the fiscal space possible for the country’s economy to move forward. I do not see that happening. The revenue is dropping and expenditure increasing and this has caused the alarming fiscal imbalance. Economic disparities seem to be becoming more complicated by the day. In this situation, seeking loan waivers is not the answer. If you ask for waivers, you’ll lose the opportunity of getting loans in the future. The impact of loan waivers would vary on bilateral and multi-lateral loans which are a few and far between but not so on international sovereign bonds. It would lead to a negative economic outlook. When I took over the Finance Ministry, we had a negative outlook. We had to convert it into a positive outlook and we went forward. Under this government, such good work is being undone and the country is moving backwards. The World Bank has moved Sri Lanka from a medium-income earning country to a low-income earning country.

Q: What is the solution?

A: We have to navigate through these turbulent times. For that we need a strong national economic agenda, which should be able to address the issue of decreasing revenue and keep the economy afloat.

Q: The government has received encomia for handling the COVID-19 threat professionally. It is popularly thought that a UNP government would have made a mess of the battle against coronavirus and economic recovery. What would you say to this?

A: If we are elected, our immediate intention should be to restore confidence in the people, in the investors, in the local and foreign markets. We need to create a situation where people would get economic activities restarted. It is a matter of how you would be able to rekindle that confidence. For that you need consistent and coherent policies. At the moment we have policies that change by the day. When we were elected to office on Jan 8, 2015 the country’s economy was not better than this. In a way it is same with the post-COVID-19 situation.

The other factor is that the country’s economy had been in the doldrums well before the COVID-19. The impact of pandemic started on March 21, but economy had started experiencing trouble well before that. The main reason for that was because the government tried to reduce VAT from 15 to 8. And with many other things, the resultant loss was about 600 billion rupees. That amount is almost one third of the government revenue for the year 2019. When you don’t have revenue, there is no economic kick start. You lose 600 billion and the economy is going to tailspin. On the other hand, none in society would feel any relief from VAT reduction because of that increases that have taken place are so much more. With the 600 billion just thrown down the drain there has been no resultant economic gain.

Q: On the political front, the split within the UNP resulted in a confusion among UNP voters. The SJB has emerged a formidable political force. What do you think the impact of the split on the UNP’s electoral performance?

A: Our fight is with the SLPP and not any other party. This government has been in power for eight months. It’s almost one fifth of its full term. During this period, the cost of living has gone up dramatically and now it is almost 40 per cent. There have been job losses though the government promised to create many more. The SJB is a by-the-way party. Our main focus is to ensure that we are engaged with the main opponent rather than by-the-way parties. Every time when there is an election such by-the-way parties are formed by breakaway groups. It is like old leaves falling from a tree. New leaves will appear and fill the gaps. The UNP is such a strong party that it will not be affected by splits.

The people who have left the party have something in common. They are people who lost badly in their electorates at the last presidential election. Their leader lost that election. The SJB is only an irritant factor.

The UNP is a reservoir of talent. Whenever there is a slip-off we have lot of new talent to remedy it. The UNP is the oldest party in the country and it is getting stronger.

Q: Speculation is rife that the SJB members will join the UNP after the election. Some UNPers have said they will never allow them to return to the party’s fold. In your case, you were with Lalith Athulathmudali and Gamini Dissanayake when they left the UNP to form the DUNF and contest under the Eagle symbol. The DUNF was a splinter of the UNP like the SJB. Years later, DUNF members returned to the UNP’s fold. So, what’s wrong with the SJB members coming back to the UNP?

A: You cannot compare the two events. The bravest in the UNP at that time such as Lalith Athulathmudali and Gamini Dissanayake challenged what they saw as wrongs within the party. So, they were virtually thrown out of the party as a result of their struggle for democracy. In the present instance, some disgruntled party members have left the UNP as they could not achieve their ambitions.

I beg you not to compare the two events for it’s unfair by Lalith, Gamini and others of their calibre, who formed the DUNF.

The final outcome of an event is determined by the performance of a team. If you are a member of a cricket team, you have to be led. You cannot be led by the spectators outside the field. You can’t win the match by singing hosannas for his father or grandfather. Your success hinges on your performance.

The SJB lied to the people and they lied to the judiciary. That is why it lost the case. When it appealed to Court of Appeal and they had to pay Rs 25,000 fine as well. So, now the people can understand that their version of what happened at the Working Committee meeting of the party was not true.

With regard to the rumours of their return after the election, I must say the UNP is not a rest house where you come and go as you please.

Q: Some opposition parties have criticized the government’s handling of the COVID-19 crisis. Do you subscribe to this criticism?

A: COVID situation is something unprecedented. We would give our support to the government to face any such crisis for the sake of the people. I believe the government is doing its best, given the situation. But I cannot say the same about its handling of the economy.

Winning the COVID-19 war and winning the economic war are two different things. You cannot justify losing the economic war in post-COVID situation even if you fare well in your fight against COVID.

Q: The yahapalana government failed to prevent the Easter Sunday carnage. Don’t you think those terror attacks will have an impact on the outcome of the upcoming election as well?

A: If you say the Easter bombing had an impact on the then government’s electoral performance, then the COVID-19 pandemic will have a similar impact on this government. If people are guided by their emotions in casting their votes, then they will vote against this government. The economy is in tatters, companies are closing, cash flows are threatened and it is these major problems that will have an impact on the outcome of the upcoming election.

Q: The Easter Sunday carnage took place under a UNP government and the presidential election results show that people are concerned about national security and their safety. What would you say?

A: Well, it is unfair to say it happened on our watch because basically all security matters were in the hands of a single person, who is not in the government when this disaster occurred. It happened during the time of our government but everybody knows that the Prime Minister was not even invited to the national Security Council meetings. Everything was handled by the Presidential Secretariat. It was virtually one man show going on. We see the same now as investigations are on for eight months, but nothing new has been found out.

Q: What do you have to say about the disastrous MCC agreements with the US? Some opposition parties have already accused the government of duplicity?

A: They promised to dump the MCC agreement if they were elected. Have they thrown the MCC agreement? What a fuss they made prior to the presidential election. They said that the country would be under the dictates of America; the country would be divided and we would have to get visas to enter parts of our own country beyond Anuradhapura. We call upon the government to state its standpoint. If they reject the MCC agreement then they could tear it off and, if not, they have to admit that we did the right going ahead with it. It first started under the Mahinda Rajapaksa government; we went forward ahead because it was a grant in appreciation of good governance. What’s wrong with that?

Q: The SLPP is seeking a two-thirds majority to do away with the 19th Amendment to the Constitution. How do you propose to counter this campaign?

A: The 19th amendment was brought to do away with the 18th Amendment to the Constitution. The 18th amendment allowed the President to act according to his whims and fancies. So, the 19th Amendment had to be brought in. It was the will of the people.

At the time the 19th Amendment was introduced there were two opinions — either to do away with the presidential system or reduce its executive powers. I believed that we should do away with the executive presidency and give more powers to parliament. The 19th Amendment was introduced to pave the way for scrapping the executive presidency. People since 1988, have voted for its abolition but none of the governments care to respect their will.

Q: Treasury bond controversy had a huge impact on the UNP. Allegations have been levelled against you as well. What kind of impact this issue will have on the upcoming election?

A: This is a miscarriage of justice. I happened to be the Finance Minister, but the Central Bank was under the Prime Minister and other commercial banks were under Kabir Hashim. It was not the Prime Minister but his deputy Minister Harsha de Silva who did all the work at the Central bank. Both of them have been kept out of this issue while people who are not relevant were dragged into it.

There were five committees on the matter. First there was the Pitipana committee. There is nothing against me. Then there was DEW Gunsekera Committee. He was in the opposition then. His report does not say I was involved. Then there was Sunil Hadunnetti-led COPE investigation. They found nothing against me or the party. Then there was a presidential commission. There is nothing mentioned in their report about me with the issue at hand. They also found that Central Bank officials are responsible for this. Have any of them been questioned? Then there is another report of which 108 pages are missing. Why are they missing? Why hasn’t it been published? These were the things in the hands of the then President. It was a political witch-hunt. It was aimed at character assassination. Then there was a forensic audit report. It shows very clearly what happened during the period of 2005 to 2015. Why is that report not brought out and why action has not been taken on its findings? They have clearly stated that losses have occurred since 2005 onwards and that Central Bank had not got relevant approval for the implementation of private placements. When this question arose, I, as the finance minister, asked the Auditor General to compare what had been happening since 2005 to 2015. All are silent. They are trying to kill the messenger and distract public attention. That is an absolute national crime. At the moment those investigations have got nowhere, found nothing at all, and why are 108 pages missing? Why is that, not a single Central Bank official has been even basically mentioned? Because these are the guys- the central bank officials, not all of them but seven or eight people. They live luxurious lives. They are earning 2.5 or 3 million salary and dictate terms to people who get by on 25,000 to 30,000 a month. It is said that the monetary policy is being pursued by the Central Bank. The government’s or the financial minister’s role is to handle the fiscal policy. But the central bank was always at loggerheads with the government. We believe that the innocent people should have low interest rates on their borrowings, so that you could bring about an economic upturn, but the Central Bank officials pursue a high interest rate where they basically think that would ward off inflation. This is the problem that exists. And this menace must come to an end. These are the people who created it. Once again, I say I was not in charge of the Central Bank; I was not in charge of the commercial banks. Then why am I being accused of something I did not do? This is simple case of character assassination. That has to be corrected. When I was the Finance Minister, what I did was like running a tavern without arrack.

I was the Finance Minister but I did not have the banks under me. Even then we were able to bring economic stability. We were able to bring in financial discipline. We established the focus on right financial directions. That was during the three years I was in charge of the finance ministry. Some of them who are engaged in character assassination have left the party. They were responsible for the footnotes of the Sunil Handunnetti COPE report. Why do they hold me accountable for this? It was they who involved in it. People within the country did not recognize us, but outside world recognized us and that was how the Bankers’ Institution in the UK, which is highly respected one, voted me the best finance minister Asia Pacific for 2017.

Q: What plans does the UNP have for the future of the younger generation of the country?

A: Not that you cannot develop this country. It’s a matter of whether you want to develop this country or not. The talent is there, the opportunity is there and we do not apply ourselves in order to get to that. My best comparison is Sri Lanka in the time we got Independence 72 years ago, we had a per capita income of $ 49 and Japan had $ 48. Japan got battered in the Second World War and without any natural resources, they are basically today enjoying a per capita of 55,000 dollars while in Sri Lanka its 4,000 dollars.

Q: The UNP is doomed in the opinion of its critics. How do you counter this view?

A: Before talking of the party’s future, I should say we should talk of the present. We should handle it very dexterously. The UNP is very hierarchy-oriented, very seniority-oriented and competency-oriented party. In election times you hear various things from people who cannot even stand on their own feet. In the UNP, we have a leader in the party and our emphasis is on discipline. As for the party hierarchy Mr. Ranil Wickremesinghe is the senior most and next to him is John Amaratunga and I come next to him in order of seniority. I guess competency, discipline, loyalty, comradeship all would be put together and at the right time we will come as the right team.

 



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Opinion

Power tariff hikes and need to revamp CEB

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By Ordinary citizen

Ceylon Electricity Board (CEB) has again requested for an increase of 70% in electricity tariffs to settle its past losses. What are these losses and how can the CEB be run as a profit-making Institution? Recently, the Chairman of Public Utilities Commission (PUCSL) has claimed that the CEB had a net profit of Rs. 1 billion last month owing to the increase in rates a few months ago. Is it fair to burden an already economically oppressed public with a 70% increase in rates? While the CEB is making these unfair claims, the minister is silent on solving the problem which is the CEB itself. He even claimed that half the employees of CEB are redundant and what has he done to remedy this situation? CEB and Ceypetco are the biggest loss-making state-owned enterprises (SOE). In spite of losses they continue to pay bonuses and huge salary increases to its employees. They get a 25% salary increase every three years and recently CEB paid Rs. 3679 million to its employees under various ruses. In spite of that CEB employees recently demanded a 36% salary increase and the management has agreed to pay the usual 25% increase and this is at a cost of Rs. 9 billion! A meter reader in the CEB gets a salary of Rs. 120,000, about twice paid to a graduate teacher. General Manager of CEB gets a salary of Rs. 655,310 and a Grade 1 engineer gets a monthly salary of 533, 895 according to their own circulars. In addition, they get additional remuneration for site inspection, overtime, fuel allowance, telephone bill reimbursement etc.

These disproportionate salaries have arisen owing to the high handedness of the Board of Management which has taken decisions against court orders, cabinet decisions and Management services decisions. Since the whole country is dependent on the electricity supply, all Governments in the past have conveniently sidestepped confronting the CEB employees and given all what they ask for.

The Auditor General has pointed out that CEB has paid 1712 million in 2018 and 1873 million in 2019 going against cabinet decisions made in 2007 and Management services circular of 2009. In 2014, CEB Board proposed a 100% salary increase to only Engineers (circular no. 2014/GM/46/Pers dated 27 November 2014 and according to a Court decision (CA/WRIT/193/2015) this circular is illegal, null and void and any payments based on this circular is illegal. However, flexing its muscle, CEB granted a 85% of the salary as an allowance to engineers through Presidential decision on the advice of the attorney general which tantamount to contempt of court. Our politicians have been intimidated with the threat of strikes so as to cripple the entire country and they have no spine to oppose such exorbitant salaries and allowances of CEB employees. They have openly flouted the Government rule that limits all allowances to a maximum of 65%. If we consider other allowances on top of this 85% salary it comes to a whopping 138% of the basic salary! Furthermore, even the PAYE tax of its employees is paid by the CEB in clear violation of the Inland Revenue Act which specifically says that the income tax of an employee has to be paid by the individual and not the employer. These matters have been questioned by the COPE on several occasions but no corrective actions have been taken.

This reminds me of the courage Singapore’s Lee Kuan Yew had in dealing with a work to rule campaign of the Singapore airline pilots union in 1980. He summoned the pilot’s union representatives and gave them a choice. In his legendary remarks, he told them, “If you continue this I will by every means at my disposal teach you and get the people of Singapore to help me to teach you a lesson you won’t forget. And I’m prepared to start all over again or stop it,” Lee said. He further said, “They know that I’m prepared to ground the airline. They know that I can get the airline going again without them. And let there be no mistakes about it. Whoever governs Singapore must have that iron in him. Or give it up. This is not a game of cards. This is your life and mine. I spent a whole lifetime building this. And as long as I’m in charge, nobody’s going to knock it down.” And with that, the matter with the Pilots union was resolved. We do not have leaders of Lee Kuan Yew’s calibre and put the country first leaving aside politics. They meekly surrender to unfair demands of strong unions such as those of the CEB who hold the whole country to ransom with strike actions.

Other actions of the CEB have contributed to the losses incurred by the CEB. They have continuously scuttled cheaper energy options such as solar and buy power from private power plants at exorbitant rates. The powerful Engineers union has blocked new power generating projects such as the 300 MW LNG plant Sobodhanavi. According to them it is cheaper to purchase emergency power from private power plants which is far from the truth. Also, some of these plants could have been absorbed by the CEB through the initial agreement, yet they continue to pay not only the unit cost but also their investment expenditure. CEB has procrastinated actions on at least eleven low cost renewable energy projects in the Long Term Generation Expansion Plan (LCLTGEP) for reasons best known to them and although former President Gotabhaya in his election manifesto promised to get 70% of our energy from renewable sources, the high handed CEB Engineers: union has continuously opposed the implementation of any of the renewable energy projects. Some examples are the 100 MW solar projects at Siyambalanduwa and Pooneryn and the 100 MW wind power project at Pooneryn.

It is grossly unfair to burden ordinary consumers with high electricity tariffs when a complete overhaul of the CEB is what is needed. If the engineers’ union completely blocks such low-cost projects, it is better to go for a 100% privatisation of the CEB, which appears to be the only solution. No politician either present or past have the courage to face the unfair practices at the CEB and this requires the action of the Government at the highest levels and the parliament should debate this crucial issue in parliament and come out with a long-term strategy to provide for our energy needs. Our President appears tough on hapless student leaders and what actions he proposes to take against them. However, he has been silent on this crucial issue while the treasury is pumping around Rs. 500 billion annually to sustain the corrupt CEB and this amount has not even been included in his budget speech. No wonder why we are in such a precarious position where our economy is crumbling.

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Opinion

Alan Henricus- A Stalwart Sportsman Of Yesteryear Passes Away

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Alan Henricus (10-Feb 1933 – 26 Nov 2022)

by Hugh Karunanayake

Alan Henricus the youngest of five outstanding sporting brothers who represented their school Royal College, and their country then known as Ceylon, passed away a few days ago. He would have been 90 years of age if he survived up to his birthday in February next year.

The Henricus brothers grew up in Kohuwela where their father a former Feather Weight Boxing Champion of Ceylon lived. He served as an administrator of the sport first as Hony Secretary of the Amateur Boxing Association of Ceylon and later as its President. He helped build the Baptist Church in Nugegoda and was its Treasurer for 25 years. The road leading to their property was named Henricus Mawatha in honour of this outstanding family.

Alan represented Royal in Boxing, Athletics and Rugby, and won school colours in all three sports. He was also a school prefect, highly respected and regarded by both his schoolmates and staff. The family consisting of five brothers and two sisters were all nurtured in the best sporting traditions of colonial Ceylon. Eldest brother Barney represented Ceylon in boxing at the Empire Games and won a gold medal winning the feather weight title. The next, Basil, held the national record for 100 yards sprint and I believe his record still stands. He also represented the Havelocks Sports Club and All Ceylon at Rugby. The next brother George, for many years the Master Attendant in the Colombo Port was also a champion boxer, as was Derrick the fourth in line.

Remarkable sportsmen such as Alan reached their great heights from a base of raw innate talent fostered by regular training and a disciplined approach to life. When I was a 10-year old schoolboy I used to watch with awe and admiration Alan doing his training run at 6 a.m in the morning, jogging all the way from his home in Kohuwela to the Havelock Park and back on most weekends. Alan was senior to me in school by about three years and in those days that was an age gap filled with respect and admiration for a senior student. To us younger kids the high achieving Alan was a hero.

I recall in one Public Schools Athletics meet for the Tarbat Cup, either in 1950 or 1951,Royal College was able to obtain a total of 15 points only, and were never serious contenders for the trophy. However the 15 points that Royal earned was almost single handedly collected through Alan’s efforts. He won the pole vault event, was first in the 120 metres hurdles, and was a member of the 4 X 400 metre relay team which won the event. Although the Tarbat Cup was won by another school, the assembled gathering of Royalists carried Alan shoulder high around the grounds!

From school he was selected for training as a Naval officer cadet in Dartmouth in Devonshire in England. Fellow Royalists the late Norman Gunawardena, and Humphrey Wijesinghe were among the cadets who were selected for Dartmouth together with Alan. On returning to Ceylon after his naval training at Dartmouth, he served the Royal Ceylon Navy and its successor Sri Lanka Navy for several years until retirement. On retirement from the Navy he served for a short period as an Executive in a Mercantile firm in Colombo, before migrating with his family to Australia.

The stint at Dartmouth would carry many precious memories for him, as that was where he met Maureen the love of his life. On migrating to Australia in the 1970s Alan joined the Royal Australian Navy which he served with distinction as Lieut Commander. On my migrating to Australia in 1984 I met Alan and Maureen at a Sunday luncheon hosted by the late Brendon Goonratne. It was the beginning of a beautiful friendship, and Alan and Maureen remained very close friends of ours.

Over the years we used to meet every three months at lunch at the Rosehill Bowling Club organized for old Royalist Seniors through the initiative of Chandra Senaratne. Other social engagements over the years have strengthened our friendship, and it is with deep distress that I heard of his terminal illness about two months ago. I rang him immediately and he was stoic as ever, the brave naval officer that he was. He said in no uncertain terms that he was not seeking to extend his life on this earth, and that he would wait in his home until the final call.

Alan’s departure marks another severance with the old Ceylon we knew, and its traditions and honorable ways. The Last Post will be played at his funeral at the Baptist Church, Epping on Friday December 2 at 3pm. He is survived by his dear wife Maureen, sons Andrew and Richard,, daughter in law Caroline, and grandson Ryan.

“The song is ended but the melody lingers on “

Farewell dear Alan.

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Opinion

Controversy Over Female Teachers’ Dress To School

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Our country and its people always get involved with unnecessary things which is of no interest to the majority of people. The latest debate in this never -a -dull -moment country (as always for the wrong reason) is the dress the female teachers are expected to wear to school. This is something that should be decided by the Ministry of Education in respect of the teachers of government schools.

I recollect when we were students the majority of female teachers wore saree to school. Then there were several teachers who wore frocks. These were the Burgher ladies. And there was no problem at all. I am not indicating this to show support that the teachers should be left to decide on their dress.

Now the strange thing about this controversy is that Buddhist monks have got involved in the debate and they are trying to determine the dress that teachers should wear. They do not seem to realize that the teachers must pay for the sarees. And they need to possess several sarees as they cannot wear the same saree over and over again. Given the monks get their robes free from the dayakayas, they should never get involved in matters of this nature, even though the female nurses may be happy to have one as the president of their union!

This controversy, if settled in favour of the teachers being given the option to decide on the dress and if they wear various types of dresses, the students too might get a bright idea to wear anything they want rather than the uniform that they have to wear at present.

It might be a good thing if the Ministry of Education could decide on a uniform for female teachers in Government schools. Some private hospitals, private firms and Sri Lankan Airlines have uniforms of their own and one could identify them easily. If there is such a uniform in saree and blouse for teachers in government schools, everybody outside too would be able to identify them as teachers and give the respect due to them.

However, this is not the time to worry about dress for teachers when there are children who do not get a proper education and suffer from malnutrition. It seems our rulers always get their priorities wrong, and this always affects the country and the people adversely. First, the teachers must do their job properly so that the schoolchildren do not have to attend tuition classes. We hear that sometimes only one teacher is available, and as a result the children keep away from attending school.

HM NISSANKA WARAKAULLE

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