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The Deputy Minster of Policy Planning and Economic Affairs and economist Dr. Harsha de Silva is contesting at the upcoming General Election from the Colombo district under the United National Front for Good Governance (UNFGG) led by the United National Party (UNP). In an interview with the Dailymirror, he discussed a wide range of issues, including their economic plan for the next five years, the controversial bond issue and former President Mahinda Rajapaksa’s comeback to politics.

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Q This is your first time contesting. You entered Parliament from the national list. Why did you decide to contest at the General Elections this time? 
It is because I want to know whether the people want me to be a part of the government. In the last five years, I have presented to this country an alternate solution for Sri Lanka’s economic problems. I have taken the lead role under the guidance of the Prime Minister to develop the highly competitive social market economic model. I want to know if I have the mandate of the people to implement that. 


Q What are your main priorities if you are elected? 
The priority is to shift focus towards the creation of a  knowledge-based, competitive economy. That means amendments to legislation will have to be made to attract the right kind of investors. Furthermore, incentives need to be created. And we need to amend laws and regulations that restrict investment. 

One of the main areas needing attention is skills development – equipping young people with knowledge and ability to become critical in building the economy we are hoping to create. Human resources must be inculcated with better, more advanced and in-demand skills. In this direction, the government will try to double the expenditure for education which means new opportunities in post-school learning. So, re-skilling the workforce or improving available skills will result in young, first-time job seekers entering the workforce with better and more skills. 
 

"One of the main areas needing attention is skills development – equipping young people with knowledge and ability to become critical in building the economy"

Another area is the production of more competitive goods and services.  Currently, we are in a middle-income trap. We cannot compete in terms of low wages because Bangladesh has lower wages. We cannot compete in terms of quality either because Malaysia’s products are of higher quality. Nobody is rushing to Sri Lanka to set up factories. The problem is that we don’t have the right kind of product mix. We have not diversified into the high value-added products and services. Low wages are no longer an advantage to us because we cannot play in that league. So, we have to produce goods and services that are more advanced than what we are producing now. And diversification needs to begin now; we need to move beyond apparels. There is a global demand for better quality, high-tech products such as IT enabled services. Other countries are moving up that ladder while we are losing out. 

We have not moved beyond the original thinking of Lalith Athulathmudali and the ‘77 UNP-led government where the port and the free trade zones were used to create a hub of activity. What JR did in ’78 was to plug Sri Lanka to the world and open doors for investors. He changed laws to facilitate that. What we need to do is to complete the reforms J.R. Jayawardene began. 


Q However, these reforms could not be completed at the time because some UNPers themselves opposed those reforms. You see the same division in the UNP now as well, not mentioning objections from other parties. How practical is it to take JR’s reforms forward in today’s context? 
That is exactly why we say that the next wave of reforms must happen. That’s the reason we talk about increasing competitive advantage, re-skilling the work force, setting up 11 industrial and technical economic zones, 23 agri-business zones, and 45 economic development zones. 

 

"There is a global demand for better quality, high-tech products such as IT enabled services. Other countries are moving up that ladder while we are losing out"

Q But are these plans possible to commission in five years? 
You see, we need to have a ‘structural break.’ You can grow slowly, gradually and marginally. But we are looking for a leap. This is a coalition led by the UNP for change in the next five years. This economic plan was developed by us at the Ministry of Policy Planning and Economic Affairs with the Prime Minister’s leadership. 


Q It is said that the next government will be a national unity government. What we have seen is different parties having clashing policies. This is so even in the UNFGG. How will these policy differences be resolved to achieve your goal? 
We have had discussions with the relevant partners and we have brought them to the table as well and we are in agreement about this economic plan. Yes, we also have to think about sustainability, about the environment and the impact of what we do. This is a household and family centred development plan. What we want to do is to create an asset-owning population. There is no disagreement there. 

 

"You can grow slowly, gradually and marginally. But we are looking for a leap. This is a coalition led by the UNP for change in the next five years"

Q One of criticisms against the UNP and its leader is that they are not able to relate to the grassroots level people in the country. It was one of the main strengths of Mahinda Rajapaksa. How are you hoping to capture these [grass root]votes? 
A: We need to solve common people’s problems. That is why we are giving them options. We are appealing to them not  with false promises but with logical arguments. If if you work hard and play by the rules, you should be able to get ahead in life.  

Mahinda Rajapaksa carried children but he did not give them a future. Ranil may not carry children but every child in this country would have a far brighter future with our policies. Appealing to the grassroots does not mean running around, holding their hands and bouncing their babies. 

 

"Ranil may not carry children but every child in this country would have a far brighter future with our policies"

Q What is your view on Mahinda Rajapaksa’s comeback into politics? Is it a threat to the UNP? What will happen if  he becomes the prime minister? 
He is no threat to the UNP. I am 100 per cent confident that the next PM will be Ranil Wickremesinghe. 


Q Many say that the bond issue is where the UNP went wrong.  And although the UNP claim that Central Bank Governor, Arjun Mahendran, was not guilty, the controversy has left a black mark on the UNP’s good governance and ‘clean’ image, don’t you think? 
I agree it is a black mark. With regard to allegations against Mahinda Rajapaksa, he has said that although there are court cases against him, he is innocent until proved guilty. That argument can be used in this case as well.  
COPE investigations are not complete. With a new COPE under a new Parliament, an impartial report is expected. 


Q Don’t you think that the PM and the FM should take responsibility for this matter? 
The Central Bank is an independent organization. 


Q But the UNP heavily criticized the MR regime for the actions of the former CB Governor Ajith Nivad Cabraal. By that logic, your regime should take responsibility for the controversy regarding Arjuna Mahendran… 
People can make various allegations. But there will be a full parliamentary review of this matter. 


Q But didn’t the country lose billions of rupees? 
The UPFA’s figure of Rs. 60 billion was absolutely inaccurate.  It’s nonsense. No professional economist will put his signature to that figure.

 
Q Are you trying to say there was no fraud committed? 
No, I am not. I am saying that this Rs. 60 billion calculation is wrong.  


Q So, if this calculation is erroneous, how much did the country actually lose? 
I don’t want to call it a loss but if we were to pay it would be just a few billion rupees. 


Q That is still a lot of money, isn’t it? 
It is,but that is certainly much, much smaller than the fraud that took place between the Perpetual Company and Nivad Cabraal in the stock market. 


Q But fraud is still a fraud no matter the amount, isn’t it? 
Various people have pointed fingers at various people even in this government but not me. I stand by my principles and I am a straight man. There was an allegation of insider information that someone used to make money. But that allegation must be fully investigated and if there is evidence to suggest it was so, people involved must be severely dealt with.  But I deny the allegation Arjuna Mahendran or the UNP robbed.

 
Q But aren’t some UNPers big players in the bond mafia? And isn’t the UNP being taken for a ride by this mafia? 
The bond mafia, may want to align themselves with the new government. Every time a governments changes, these  white-collar criminals want to park themselves with the new government. My position is that if people have robbed they must be dealt with. Unless that’s done, you cannot have good governance. This is a complex case and we should let Parliament look into this through COPE. 


Q The UNP, when in the Opposition, was critical of cutouts and posters during election times. But now we see cutouts and posters of some UNP candidates, you included. What is your response? 
I have not put up a single cutout without the explicit agreement of the Elections Commissioner. My cutouts have been registered in the Elections Department and I have obtained the authority from the police and the Grama Niladharis.