Harsha claims Govt., CB lack credibility
UNP MP Dr. Harsha de Silva yesterday charged that the Government and the Central Bank seriously lacked credibility, whilst the people were being taken for a ride with falsehood.
He alleged that a few months ago the Government, especially the Central Bank, was hoodwinking the masses saying the economy was robust and fiscal and monetary management were prudent.
“However, it was out of sheer desperation that the Government had to finally succumb to IMF support,” the UNP MP said, adding that assurances by Central Bank Governor Nivard Cabraal that there would be record foreign inflows had come a cropper.
“This Government has been trying to fool the people by hiding facts. At one point they say they won’t rely on IMF funding because it is expensive but will raise funds from the global market at cheaper rates, but then eventually go back to the IMF.
“When introducing some of the recent high taxes, revision in fuel and electricity prices, the Government claimed those had nothing to do with the IMF program, but the Letter of Intent lists all these measures as part of compliance to win a much-needed boost for sagging reserves,” Dr. De Silva said.
The UNP MP cited last Saturday’s hike in taxes on motor vehicles as a sheer case of desperation on the part of the Government, which was going the extreme distance to appease the IMF though the latter had expressed surprise whilst calling for a lesser degree of selective taxation.
“If Sri Lanka’s international agenda is being dictated by Geneva, then the domestic economic agenda is run out of Washington, the base of the IMF,” the UNP added. He lamented that President Mahinda Rajapaksa and his team had failed to come up with a home-grown economic policy to steer the country towards a more sustainable growth mode.
“There is serious inconsistency, incompetence and misjudgement,” he alleged, adding that volatility and uncertainty had prevented the private sector and the public from taking long-term decisions, views and investments.
The UNP MP also alleged that inflation and the exchange rate were artificially manipulated though following the resumption of the $ 2.6 billion Stand-By Arrangement (SBA) with the IMF, there would be limited room in the future to tinker with exchange and interest rate.
“If the Government was sincere and competent enough and allowed the market mechanism to operate properly, the crisis could have been resolved in a smoother way. However, it has been a guessing and volatile game apart from a costly mistake,” Dr. De Silva said.
“Unfortunately, like the post-Geneva scenario with conflicting statements from members of the Government, we also see different comments from Treasury Secretary Dr. P.B. Jayasundera, Central Bank Governor Nivard Cabraal and Senior Minister Dr. Sarath Amunugama,” the UNP MP added.
“Mahinda Rajapaksa’s Government and economic team appear to be on a voyage of discovery, changing policies and measures in quick time,” Dr. De Silva opined.
“It is pathetic that some are taking credit even for a bizarre thing like the strengthening of the rupee from Rs. 130 to the US Dollar to Rs. 128. This is like saying if originally sinking at 60 feet, it is now sinking at 30 feet. The bottom line is continued sinking,” UNP MP added.
Box
Right to Information Act a dire need
UNP MP Dr. Harsha de Silva yesterday stressed that it was high time that the Right to Information Act was introduced in the country.
“Given the serious lack of credibility and transparency, the Right to Information Act is a must. I would suggest that out of all the LLRC recommendations, this must be implemented first,” he said.
The UNP MP also said that since 2007, the Government and the IMF had not made public the outcome of and reports arising from the annual Article 4 Consultation.
