Govt. is playing with numbers – Sajith

Charging that the Government is attempting to hoodwink the people by providing unrealistic and wrongful statistics, United National Party Parliamentarian Sajith Premadasa emphasises the rulers of the country should not manipulate statistics for political gain and mass popularity.

Speaking on several issues, Premadasa points out that the Budget is not as rosy as the Budget speech depicts. He further points out that if the people of Sri Lanka decide he should be moved up, he is ready for leadership; but if the people think there are more talented people to take over, he is willing to retire. Following are excerpts from an interview:



Q: How would you describe the Budget?



A: I am actually surprised by the substance and direction of the Budget. It was my assumption that this Government is left of centre and keen on prioritising basic human economic and social needs over and above anything else. But now it seems that this Government has hugged the neo-liberal free market policies which basically focus on supply side economics. For example, giving tax breaks to the rich and the well-off. You assume that the benefits, perks and the privileges will trickle-down to the lowest strata of society.

Basically in economic terms they have moved away from the traditional Keynesian approach to a more neo-liberal, monetarist, free market, hands-off approach. I don’t think they have struck the correct balance. I think this Budget depends too much on extreme right wing theories, which are not practical and suited to modern day development scenarios. I believe in a fair and justifiable mix of both Government intervention and removing the various shackles that prohibit private enterprises.



Q: Do you believe the Government can attain its targets?



A:I believe that almost all political parties and all politicians has various aims and I would like to give them the benefit of the doubt and think that they are honest about their aims, but if those so-called honest aims are based on false assumptions and scenarios that are absolutely way off and unrealistic, then I think it’s one of the ways of hoodwinking the Sri Lankan people.

Let’s look at various proclamations and declarations of the Budget. It states that per capita income is at very high levels amounting to US$ 2375 and that the Government is aiming to achieve 400 in 2016. Now that is very laudable target, but is it achievable? They also claim that poverty has reduced from 15.2% in 2006 to 7.6% in 2009/10, let me give some statistics which will exhibit the basic falsity of their argument.

Between 2006/7 and 2009/10 are the two main benchmark time periods. 2006/7 household nominal income was 26,286 2009/10 it goes up to 35,495. A 35 per cent increase in household nominal income per month. But the real mean income of the household has actually had a 2.5 per cent reduction from 14,765 in 2006/7 to 14,023 in 2009/10. In addition the mean household expenditure per month during 2006/7 was 22, 952; in 2009/10 it was 32,446.

Household expenditure has two aspects; food and non-food. Food expenditure has gone up 8,641 to 12,980; non food has gone up from 14,311 to 19,528. Now when you look at these statistics the income deficit for the fulfilment of household expenditure has risen from 5,487 to 15,423. So how can you claim poverty has come down from 15.2 to 7.6? How can you claim that per capita income is such a huge figure? They are saying that per capita income is 2,053 in 2009 and they expect it to be 2,375 in 2010. That’s about 235,945. But the Department of Census and Statistics figures says that it is actually 107,172. That is 8,931 times 12 months. There is some error and that error amounts to 128,773.

Per capita income is a very unrealistic figure. Because what you take is GDP and divide it by the population. But you have to understand that income and redistribution is utterly skewed. In 2006/7 the top 20 per cent of the country enjoyed 53.2 per cent of the national income, whereas the bottom 20 per cent only had four per cent of national income. Income distribution is highly skewed. This per capita income and poverty reduction the Government claims is way, way off.

There is another way of looking at these issues. Now take the poverty line, the minimum a person needs to fulfil his basic requirements. This has risen from 2008; in 2008 it was Rs. 2,845 per person per month, in 2009 it was Rs. 3,038 and in 2010 it is Rs. 3,141. If the funds that you require to fulfil the basic needs of an individual have risen, how can you claim that poverty has virtually halved? It’s a joke.

Let’s take the estate sector. It consists of more than one million people. The real mean income of the estate sector has risen from Rs. 9,407 in 2006/7 and 12,408 in 2009/10. That’s a 31 per cent increase. But the household monthly expenditure has risen Rs. 13,456 to Rs. 25,661 – a 90 per cent increase. When you dissect the figures, Rs. 13,456 means Rs. 7,503 for food and non-food Rs. 5,953 in 2006/7. In 2009/10 of Rs. 25,661, the food aspect is 12,710 and the non food aspect is 12,951.

Yes, the real mean income has risen by 31 per cent but household expenditure has increased by 90 per cent. But the Government claims that poverty within the estate sector has reduced from 32 to 9.2 per cent. These are absolutely incredible statistics. From all these statistics that I have depicted, one conclusion is that if the country is to prosper, we need sound policies where basic economic fundamentals are strong. And we have to depend on realistic figures. You should not get involved in manipulated statistics for political gain and mass popularity.



Q: Are you claiming the Government has played with the numbers?



A: Yes. Let me show you. This is not some high-minded political play to achieve great popularity. It is time that we forget about political popularity; these were practiced during the past two to three years when we had consecutive elections in our country. I think very basically the Government is attempting to hoodwink the people by providing unrealistic and wrongful statistics.

Look at this target of achieving a US$ 4,000 per capita income figure for 2016. I have done my calculations; if we are to achieve this we have to maintain a yearly investment percentage of between 35 to 40 per cent on annual basis. Raising from US$ 2,375 to US$ 4,000 is a laudable objective. It can be a widely-acclaimed target. But it is realistic?

I am basing all these statistics on Central Bank figures, Department of Census and Statistic and Labour Force Survey Figures. In 2009 investment as a percentage of GDP was 24.5 per cent. In 2008 we saw an influx of foreign investment amounting to US$ 889 million and this reduced to 600 million in 2009. In the first six months of 2010 it was only US$ 208 million. We are going down a slippery slope of retarded foreign investment and here we are claiming that we will be US$ 4,000 by 2016, which is absolutely unrealistic!

Rather than playing around with numbers, what is needed right now is to make sure that we have an innovative strategy to attract foreign investment and that this strategy should entail attracting and inducing high value investments that would bring greater returns to the country rather than investments that are mere opportunities to take photographs and hold a series of publicity events. You basically have grand events to put up numbers whereas in actual fact at the ground level nothing actually takes place.

Unemployment is another macro economic indicator that I would like to highlight. The Government claims the unemployment rates are 5.8 per cent; the figure is actually five per cent at the second quarter of 2010. But when you examine the figures, unemployment as far as the youth is concerned is very high. Between the ages 20-24, it is 19.7 per cent; between 20-29, 15.3 per cent. The unemployment levels as far as those who are A/L level and beyond are 12 per cent; eight per cent among males and 16.7 per cent among females.

We have 40,000 graduates without jobs. The Government has catered to fulfilling the job requirement of 13,000 graduates. What’s going to happen to the rest of the 27,000 graduates? Of course the Government has allocated Rs. 16 billion for a nation skills development programme; a three year programme with Rs. 5 billion for each year to train 300,000 youth per annum. I don’t think that’s enough. And I don’t think just throwing money at problems will solve it. You have to have a very efficient and efficacious frame work to achieve the objects rather than pronouncing to the whole world that we are spending billions. Actually it’s the management and designing of the programme that is most important.

The other day I questioned the Minister of Education on computer literacy and the importance of computer education and having the minimum requirement for all the institutes of computer education. Basically, these individuals need to train to obtain International Computer Driving Licenses (ICDL). What was the Minister’s reply? The Minister of Education told me, ‘Sorry, this Ministry does not provide driving licenses.’ This is the state of this Government.

There are novel programmes as far as youth employment is concerned. Setting up of international call centres in Sri Lanka; nobody has taken the initiative to use that as a strategy. Here I have gone through several issues; per capita income, poverty issue, youth unemployment, household income and expenditure issue. Taking everything into an overall context it is not as rosy as the Budget speech depicts.



Q: What do you think about the five per cent salary increment?



A: It is not a salary increment. The funny side of this is when General Fonseka was saying on all his political platforms that he was going to give Rs. 10,000 as an increment, President Rajapaksa rubbished it and said the realistic figure was Rs. 2,500. In page 13 of the Budget speech, right at the top, prior to making any indication as to the substance in aspect of the salary increase, the President goes on to say that if you try to increase Rs. 100 per person per month, that is going to cost Rs. 1.9 billion. What I want to ask is, why didn’t he mention that on the election stage? Why now? The Treasury is the same; he was the President. Didn’t he have access to the advice of civil servants and Government officials to give him proper statistics? This is hoodwinking the people in a right royal manner.

They claim they are engaged in massive development and infrastructure projects, but those are through tide loans. The development projects with their very aspect of having everything linked and restricted, there is no local economic multiplayer effect taking place because of the development projects. From the pencil to the vehicle to the raw materials and everything else... it is brought from abroad. Even foreigners are employed in these projects. So one has to question how beneficial these mega projects are in terms of activating a local economic multiplayer. I do question the manner in which they negotiate the access to funds. We have tied ourselves up with rigorous and stringent conditions; very inflexible conditions that provide a minimal beneficial impact to the local economy.

They talk about IMF targets; I thought this was a Government keen on eradicating the International Monetary Fund and its restrictions, stipulations and conditions. That this was a Government free from the shackles of IMF regulations. It cannot point to the IMF as an excuse for its incompetence and mis-governance.



Q: The Government has recorded the lowest Budget deficit of 6.8 per cent since 1992. Isn’t that praiseworthy?



A: If I was the president, I would have recorded an even lower figure by cutting the budgets of various ministries. For an example they have maintained the defence budget at Rs. 215 billion. I am not going to question the defence budget because I think it is right that we take care of the brave soldiers and the defence establishment that brought actual freedom to our country.

I have no issue with the Budget allocation for defence. From that, Rs. 202 billion is for recurrent expenditure; that is for salaries. A year and a half after the military victory, we cannot make all those brave soldiers redundant. But I think when you compare the education, higher education and health budgets with defence, it’s disgraceful. Education is 14.4 per cent of the defence budget; health 28.8 of the defence budget, higher education is 9.7 per cent of the defence budget.

The Government is talking of a knowledge-based economy. How can they achieve that when they are devaluing, downgrading and de-prioritising education, health and higher education? The entire school system in the country is dilapidated. It’s falling apart at the seams. The fundamentals of education policy are misguided and misdirected and we have poor leadership in the education sector, in terms of Bandula Gunawardena who doesn’t understand what an international computer driving license is. How can you pioneer the education drive in Sri Lanka if you are not even aware of these very basic academic qualifications?



Q: What’s happening inside the United National Party?



A: We hope to have the convention. And I hope and pray that the convention will take place devoid of any obstacles that some people are talking of. I think it will provide our party with a wonderful opportunity to move on and move forward with a modern vibrant formula for the rejuvenation and reinvigoration of Sri Lanka.



Q: How confident are you that you will be able to make the changes you desire?



A: If the process is not manipulated by various interested parties with a singular purpose of self preservation, if we move on a path of empowerment and think of the masses rather than two or three who want to hang on to their positions in the most desperate of manners and if we prioritise the masses and UNP membership, certainly the glory days of UNP will come soon rather than later.

But if we continue to maintain the status quo and continue to prioritise the preservation of a one or two at the expense of vast masses and party membership, then I suppose we can be a party of permanent opposition. While the masses languish in the doldrums, the two or three upper echelons can have a pretty posh life at the expense of the party membership.



Q: How would the party reformists react if the party convention is not held as scheduled?



A: Well the convention is scheduled for 12 December. I don’t want to strike a pessimistic note; I am very optimistic that sanity will prevail. The whims and fancies and the thinking of the grass root level both in urban and rural Sri Lanka will be felt by the decision makers in our party. I hope and pray that that the new constitution will get approved.



Q: What do you say that you want to be the Leader of the UNP?



A: I have never said that I want to be the leader. I said if the people of Sri Lanka wish that I become the leader, I am ready for it.



Q: What difference will your leadership make in the party and the country?



A: Let me be very frank; I believe that I possess the requisite qualities and relevant talents that are necessary to guide this country towards economic, social prosperity and a country where you have vibrant democracy. But even though I may have certain targets and objects in my political life, where I end up will be determined by the people of Sri Lanka. So if the people of Sri Lanka decide that Sajith Premadasa should be moved up, I am ready to move up. But if the people of Sri Lanka decide there are more talented people to take over the reins and it would be better if Sajith Premedasa retires in to wilderness, I am ready to do that also.

It’s not that I have this thirst, lust or greed to grab power. No way. I have country leadership as an objective, but whether I go on that path towards that particular task is up to the Sri Lankan people. It will be the overwhelming wish of the people that will win the day – whether it’s national leadership or party back home for retirement.

I have a larger goal of making sure that our country goes through the highest prosperity levels in history. That’s my target. I want to make sure that the fruits of economic growth are redistributed in a just and fair manner to all in Sri Lankan society; that the various privileges, perks and benefits of growth do not get concentrated in the hands of a few. I would like to implant a system whereby fruits of progress will be redistributed to all in society. I believe that I have the capabilities, the energy and the necessary indispensable leadership skills to attain those tasks.



Q: Don’t you think you delayed in presenting yourself as a national leader?



A: Until you come up to a presidential level, you are elected from a particular district. However, much popularity I have nationally, I will never forget my roots and how I came to Parliament. I came to Parliament to represent Hambantota District; 24 hours a day and 365 days a year and seven days of the week I will be representing the grievances, wants and needs of my electorate.

The country as a whole can decide which politician having grand schemes to become the leader of the country has best served his electorate and done the most efficient job in terms of servicing those who voted for him or her. The country as a whole will see what kind of a job Sajith Premadasa has done for Hambantota. This microcosm is an example to the entire country. They can ask the question, if Sajith Premadasa becomes the leader of the country, what wonders would he do for the whole country?



Q: If Ranil Wickremesinghe step down today, will you take over the UNP leadership?



A: I don’t want to make presumptions about the future hierarchy of the United National Party, because there is a leader in place right now. We hope to bring in a new constitution. That’s a revolutionary exercise. Let’s go through the motions as far as that is concerned. After that the rest of the mechanics will follow. And as I have always said, as a politician I will leave my all options open. I will decide what’s best for the country, what’s best for the party and how best I could serve both my party and my country.