‘Act to Ruin Economic Freedom’ makes Govt. muddy – UNP

• MP Harsha de Silva alleges Rajapaksa regime is telling 10 lies to cover up one

By Marianne David

UNP Chief Economist and MP Dr. Harsha de Silva yesterday charged that the Government was now covered in mud from head to toe with what the party described as the ‘Act to Ruin Economic Freedom’.

Addressing the media yesterday, de Silva noted that the Government had now changed its stance, despite turning a deaf ear when the UNP brought attention to the negative impact the ‘Revival of Underperforming Enterprises and Underutilised Assets Act’ would have on the country.

Emphasising that trust in Sri Lanka had broken down among international investors – including Moody’s, Fitch, the British Prime Minister and IDU, which he said were all talking about this act – de Silva revealed that the Government was now backtracking and “telling 10 lies to cover up one lie”.

Outlining the lies in detail, he said that lie number one was when the Government said it was taking over only 37 enterprises. “There is no logic in bringing this bill as the ‘Revival of Underperforming Enterprises and Underutilised Assets,’ if the intention is to only take over these 37 enterprises. Then they could have named it the ‘Bill to take over 37 enterprises,’ instead of having the attached schedules,” he asserted.

Lie number two is the bill stating that it is aimed at reviving ‘underperforming’ enterprises. “This is also not true. In the budget last year, there was no mention of underperforming enterprises. What the President spoke on was ‘non-performing’ enterprises. Not commenced or remaining closed are very different to underperforming,” he said.

The President saying they were going to take over underperforming land assets is lie number three, said de Silva, noting that many included in this bill do not fall into that category, while lie number four was saying that only unutilised land would be taken over, when all lands have been taken over. Lie number five is where the companies concerned were supposed to have been given six months’ prior notice: “Let alone six months or six hours, the people weren’t even given six minutes to express their views on this,” he said.

The Government now saying it will re-privatise the assets is lie number six, according to de Silva, who noted that President Mahinda Rajapaksa said the land would be nationalised and distributed among smallholders instead.

“Central Bank Governor Nivard Cabraal is saying they will re-privatise. Either Rajapaksa or Cabraal is not telling the truth,” he charged.

“The Competent Authority is yet to be appointed, but the Government says that investors are in line to take over. However, they also said they would give the lands to smallholders for cultivation purposes. These are entirely different things.”

Dr. de Silva said that according to Cabraal’s statement, the act will only affect lands not being utilised by the people, which he said was lie number seven, noting that in the case of Sevanagala, all lands were being utilised apart from 40 hectares which were burnt, “instigated by the thug Jagath Pushpakumara”



Lie number eight is in stating that the Government has not done anything unconstitutional or illegal, he said. “The Supreme Court has stated that the takeover is legally okay and that it breaks no agreements. However, the agreement signed between the BOI and Sevanagala states that business and capital assets or assets employed or used in the business or improvement or returns will not be liable to expropriation, acquisition or nationalisation. This is a clear violation of the agreement,” he outlined.

As for lie number nine, he said that according to the statement issued by Cabraal on Thursday, the operator may remain and only the manner in which the business is run may be changed.

“During the Committee Stage, the UNP forwarded an amendment to give time for the aggrieved parties to submit a restructuring plan on the basis that if the Government accepted it, they could go ahead with the plan or if the Government rejected it, it could go ahead with nationalisation. However, the Government laughed at us and threw the amendment in the bin. Now, after all hell has broken loose – and given the stance taken by Moody’s and Fitch in this regard – they are saying that perhaps they might want to do this after all. However, they did not accept our amendment in Parliament.”

Lie number 10 is the first paragraph of the Central Bank statement issued on Thursday, which notes that the act is limited to assets on lands belonging to the Government or a Government agency. “This is a big fat lie. The act clearly states that land can be either leasehold or freehold. It freehold, it cannot be land belonging to the State,” he emphasised.

Dr. de Silva asserted that if the Government “continues to go down this road and continues to lie, it will very quickly lose all credibility,” adding that instead of continuing to lie, it should admit that a mistake was made and either amend it or remove it, which would be a much better way to move forward.

Calling on the Government to admit its mistake without lying or hoodwinking the people and international and local investors, he said the UNP would help the Government in this regard.

“The Government can always admit that this was a wrong decision. Else in the future it will halt FDI coming in to Sri Lanka. We want to take this fight to the people and we may opt for such action. Investors are turning away due to this act. There is no question about it scaring away investors. They can always go elsewhere. This breaks down trust among the investor community, since it cannot be accepted that this will be limited to only 37 enterprises,” he added.

As for charges of political victimisation and the Government’s stance that it has taken over assets belonging to known/related parties, he said that the Government was not willing to name the parties concerned.

Commenting on the Central Bank getting involved in the matter, in the backdrop of the statement issued by the bank, de Silva said: “Cabraal now shows up after a disco party in St. Kitts and puts out a statement contradictory to what’s in the act. The Central Bank has a job to do. That is to control price stability in Sri Lanka. But it is getting involved in other things. The Central Bank did not need to have an office to bid for the Commonwealth Games inside the bank.”

The Central Bank’s duty is to look into monetary policy; fiscal policy is a matter for the Treasury, which is being run by Dr. P.B. Jayasundera, who is very experienced and qualified, he asserted.

“Cabraal has nothing to do here. We don’t need Cabraal to reinterpret this bill. It was done by Basil Rajapaksa in Parliament. Too many cooks spoil the soup! Nobody seems to know what this bill is about. Those in the Government are interpreting it in different ways. Keheliya Rambukwella, the Prime Minister, Basil Rajapaksa, Nivard Cabraal… all of them are saying different things,” de Silva added.

Commenting on where policy is headed, de Silva said that Dr. P.B. Jayasundera’s absence in talking about this bill was conspicuous.

“If he is contributing to the policy-making process, he will find it very, very difficult to convince investors to come to Sri Lanka with a sword like this hanging overhead. A policymaker has to think not once or twice but 100 times before introducing anything like this kind of legislation. It is hard to believe that people like Jayasundera and Cabraal are behind this bill,” he concluded.