State Finance Minister Eran Wickramaratne has said that those who stole public funds would continue to do so in spite of various counter mechanisms in place.
State Minister Wickramaratne was responding to a question Faraz Shauketaly posed to him on behalf of The Island on TV 1 on Oct 10, the day after UNPer presented the Appropriation Bill in parliament. Wickramaratne has estimated the budget deficit at a staggering Rs 1,807 bn.
Asked whether the government could have had an opportunity to present a better budget in case the alleged Central Bank of Sri Lanka (CBSL)-Perpetual Treasuries Limited (PTL) bond scams didn’t take place in Feb 2015 and March 2016, Wickramaratne said: “The first thing, I would like to point out is……. I would like to separate the methodology that are being used and fraud. I would say, fraud, stealing, robbing and corruption can happen under any system. That shouldn’t stop us from pursuing what is the best system, best practices anywhere in the world. I think that in many different areas, Sri Lanka can certainly move to best practices even in the Central Bank of Sri Lanka. I think we should separate that out because those who steal and rob despite whatever systems you have. On the Presidential Commission of Inquiry to the bond scam that you have just mentioned, it is an ongoing investigation. Evidence is coming.”
At the onset of the live interview, Wickramaratne asserted that having such a big budget deficit wasn’t unusual for Sri Lanka. Pointing out that issue had been there for several decades, the veteran banker said the budget deficit was measured in terms of the GDP. Having attributed the budget deficit partly to the recent devastating floods and continuing drought, Wickramaratne explained their efforts to reduce the deficit.
The UNPer alleged that the fundamental cause of instability in the national economy was due to budget deficit. Wickramaratne blamed the current crisis on the previous Rajapaksa administration on the basis of massive borrowings over the years. The State Minister said that the fundamental difference in their policy and the previous administration in respect of public investment was not to borrow further. The UNPer strongly reiterated their opposition to the government making investments. Declaring that they were on the correct part, Wickramaratne said the government expected the private sector to take the lead in investments.
The State Minister asserted that the national economy was in peril due to the previous administration’s ill-fated policies. Pointing out the difficulties encountered due to scheduled loan repayment, Wickramaratne discussed its impact on the interest rates. Wickramaratne examined ways and means of tackling the contentious issue of debt servicing against the backdrop of improving foreign reserves. Wickramaratne asserted that by end of 2017 Sri Lanka would have USD 7 bn in foreign reserves.
Wickramaratne explained the move to establish a National Debt Office (NDO) to handle fiscal policy pertaining to public debt management. The UNPer expressed confidence that the proposed mechanism could be put in place in first half of next year after having obtained parliamentary approval.
Expressing concern about the failure on the part of successive administration to review five to six decades old system still in place in which the CBSL played the role of the regulator he said in addition to that, the regulator also functioned as the agent for the government when it borrowed on behalf the government.
Wickramaratne also referred to the CBSL in charge of the country’s biggest pension fund, the EPF, being under public scrutiny in the wake of Presidential Commission of Inquiry (P-CoI) into alleged bond scams. Commending that the P-CoI inquiry had been transparent and in public domain, Wickramaratne said that it would recommend that there was a case to be investigated and probably a case to be prosecuted. “I don’t like to say more than that because I think it is a semi-judicial process at the moment.”
Wickramaratne asserted that soon it would be the judicial process.
When Shauketaly sought an explanation from Wickramaratne as to why the government had proposed former Deputy Governor of CBSL P. Samarasiri, presently under a cloud over his role in alleged bond scams as Finance Ministry consultant tasked with planning out the expeditious setting up of NDO, the State Minister said: “As far as I’m aware, I don’t think he has been appointed. It was a proposal and it has been stayed.”
Wickramaratne claimed that he wasn’t sure whether that particular proposal had anything to do with proposed setting up of NDO.
It has transpired in P-CoI that on March 28, 2016, Samarasiri had been present at a meeting, where the then Finance Minister Ravi Karunanayake instructed the Chairmen and senior officials of three major state banks––the Bank of Ceylon, the People’s Bank and the National Savings Bank––to make bids at the treasury bond auctions at lower interest (yield) rates.
Wickramaratne agreed that even a good proposal could be affected and shown in bad light due to other factors.
He repeated that those who robbed would continue to do the same under any system. The UNPer emphasized the pivotal importance of the law dealing with them.
The State Finance Minister also discussed the ongoing controversy over the Central Expressway construction.
The Minister said Sri Lanka obviously lagged behind in national procurement strategy. Emphasizing on the urgent requirement to have a mechanism in place to tackle procurement delays, Wickramaratne called for the establishment of a transparent, fast and efficient system to handle the sensitive issue.
The comments were made in the wake of a battle raging between a section of the media and Leader of the House and Higher Education and Highways Minister Lakshman Kiriella over the Central Expressway contract as well as alleged Japanese interference.
Emphasizing the importance of avoiding what he called conflicts of interests; Wickramaratne said that members of the cabinet shouldn’t be involved in business at all under any circumstances. The State Minister said even the media could be affected by issues of conflicts of interests. The State Minister compared the media having conflict of interests with that of politicians.