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Deputy Minister of Economic Affairs Dr. Harsha de Silva gestures at yesterday's press
conference - Pic by Upul Abayasekara
By Himal Kotelawala
Refuting allegations of downplay made by Former Central Bank Governor Ajith Nivard Cabraal, Deputy Minister of Policy Planning and Economic Affairs Dr. Harsha de Silva yesterday justified the rebasing of GDP data.
Last week, Dr. de Silva informed the media that growth numbers for the past four years had been revised after the base year was changed from 2002 to 2010, dramatically reducing the 2014 growth rate from 7.4% to 4.5%, while the 2013 growth rate was rebased from 7.2% to just 3.4%. The former Central Bank Governor claimed on Tuesday that this was an attempt by the Government to downplay the growth achieved during those years, adding that the 7.4% figure was published in the Central Bank Annual Report for 2014 signed off by incumbent Central Bank Governor Arjun Mahendran himself.
Responding to a question by The Daily FT in this regard, Dr. de Silva dismissed the allegations, claiming that the previous regime had attempted to hide the real figures from the public.
“Mr. Cabraal, as the former governor of the Central Bank, knows very well that the figure is produced by the Department of Census and Statistics. Whatever is sent in by that department is used by the Central Bank as the official figure. It was the group that was controlling the previous regime that was so scared to inform the country of the real situation. You can’t blame the Central Bank for publishing that figure because that was the figure it obtained from the Census and Statistics Department. The real figure on the 2010 rebased economy should’ve been 4.5%. But they didn’t do it for so many years because that was going to burst their balloon,” he said.
Addressing the media at the UNP party headquarters at Sirikotha yesterday, the Deputy Minister reiterated that true growth rates for the years 2014 and 2013 were 4.5% and 3.4% respectively, adding that the updated figures were not made by the present administration.
“We didn’t update these. This began in 2011, on President Mahinda Rajapaksa’s watch when Cabraal was Central Bank Governor. Because these figures were not good for their image and the picture they had painted of a fast-growing economy, they didn’t present the true data to the public,” he charged.
Referring to comments made by Cabraal and the Vidwath Janathapawura on ministers making statements that should ideally be the job of department heads, Dr. de Silva said his pronouncement of the rebased figures was a cabinet decision, and as the Deputy Minister of Policy Planning it was under his purview to do so.
“What I presented was a cabinet decision. Cabinet decisions can be announced by a minister or deputy minister. That is not up to some NGO,” he said.
Dr. de Silva further said the true rate of economic growth during the latter part of the previous regime was all too apparent and was deliberately hidden from the public for the purpose of image-building.
“The lie of development has been exposed. If the economy is truly developing so much, why can’t we feel its effects?” he asked.
Either there was large scale theft going on, the Deputy Minister charged, or there was a massive cover-up. The truth, he said, is that during the tenure of the Former President, the economy of a regular family developed by only 0.5%.
“This isn’t by any means an economic growth. Bridges, roads and buildings were constructed in an attempt to validate the 7.4 figure, when in reality, it was just 4.5%,” he said.
Meanwhile, responding to a question by the Daily FT on another allegation made by Former Governor Cabraal that the controversial Central Bank bond issue had resulted in a loss of Rs. 59 billion to the government, Dr. de Silva said that it was totally untrue, adding that professionals at the CBSL had calculated the true figures.
