• SJB MP Eran Wickramaratne speaks after being overlooked for COPE Chairmanship

By Charindra Chandrasena Earlier this month, the main Parliamentary Opposition, the Samagi Jana Balawegaya (SJB), proposed its MP Eran Wickramaratne as Chairman of the Committee on Public Enterprises (COPE). In the subsequent committee election for the post, Wickramaratne lost to Sri Lanka Podujana Peramuna (SLPP) MP Prof. Ranjith Bandara.  In an interview with The Morning, Wickramaratne spoke about the plans he had drawn up for the COPE, the Government’s performance in terms of the debt restructuring process, and the issues he has with the new tax policy. Following are excerpts from the interview: You recently contested for the COPE Chairmanship but the election was won by Prof. Ranjith Bandara. What would your priorities have been, had you been elected? If I was elected COPE Chairman, my priority would have been to conduct a risk assessment of the 430 organisations that come under the purview of the COPE. It is not practical for the COPE to examine 430 organisations per year. After the risk assessment, the high-risk organisations would be summoned twice a year, once a year, or once in two years. If necessary, sub-committees would also be appointed to examine them. This would be the regular programme of the COPE. There would also be an urgent programme where matters that come up suddenly, such as the irregularities in the import of oil and coal, are taken up. I would have also moved amendments to the Standing Orders to enable the COPE, once it reaches a decision and prepares its recommendations, to refer those directly to the Attorney General’s (AG’s) Department or the Committee to Investigate Allegations of Bribery or Corruption (CIABOC), in addition to Parliament. After all, this is about the people’s tax money and how it has been utilised; therefore, people are looking for action. At present, a report is presented to Parliament by the COPE, and if something needs to be corrected, notice is given to the Secretary of the relevant Ministry. Generally, the outcome is unsatisfactory, because we haven't really seen action being taken.  Prof. Ranjith Bandara has said that he is going to bring about such changes, where the cases of special importance would be referred to the AG or CIABOC, as you just pointed out. Is that not a positive development? It is. We have discussed it, and he has agreed with the concept and said that he will move the relevant amendments to the Standing Orders. I must say this: The COPE chairmanship is not about Prof. Ranjith Bandara or Eran Wickramaratne. People always get caught up looking at individuals, and think that if the right individual is in the position, then everything will be okay. Yes, the right individual must be in place, but that alone is not enough. People are calling for a system change. Therefore, we need to look at systems. In the US, there’s a clear separation of powers between the Executive, Legislative, and Judicial arms. The President is elected and appoints his Cabinet from outside the Legislature – that is clear separation of power. We are more in the Westminster system, where Cabinet is appointed from within the Legislature, so there is a bit of a mix between the Legislature and the Executive arm of Government, which makes decisions on State-owned enterprises. This is where Parliament has a responsibility as the Legislature to ensure accountability. The standing committees are about accountability. Therefore, if standing committees are about accountability and the Government is making the decisions, then clearly, the chairperson of any of these committees should not be from the Government, but from the Opposition. That’s the check and balance, because the committee is constituted depending on the number of representatives in Parliament, so governments will always have the majority.  That is why when we were in government, we gave the chairmanship of COPE to the Opposition, as seen with Sunil Handunneththi. Because we upheld that principle, we were hoping that this Government would uphold that principle too. It did not, so there is no point talking about principles.  You're one of the members of the SJB Economic Committee. How would you rate the Government’s performance in terms of the debt restructuring process, particularly with regard to China? The Government has done some things right. For example, the main issue has been delays, delays, delays, but they finally appointed an investment bank and an international legal firm to assist them with the debt restructuring. These two are absolutely necessary and should have been appointed long ago, but they have at least done it now. Then, as you correctly said, there are different parties to the debt – there are the multilaterals, the bilaterals, and the private creditors.  Before we get to the private creditors, we have to reach an agreement with the other parties, and the key three players are China, Japan, and India. So everybody needs to come to the table together, because whatever is agreed to in terms of the restructuring must be agreed with all parties to make it acceptable to all. Then we need to negotiate with the private creditors. At this point in time, the Government seems to have initiated some discussion process, but from the information we have, there is still no agreement. With regard to China, it is absolutely critical that the Chinese agree to a common basis – that's the only way forward for Sri Lanka.  Do you think the Government could do more to convince China than it is doing currently, maybe by dangling a carrot? Yes, of course. There are lots of different strategies they could use. In 2015, when we came into office, the previous Government had agreed to sell land in the Colombo Port City outright to China. Our policy was different. Our policy was that governments can’t sell Sri Lankan land to another government. If they need some land in the country, it should be through a lease. So the whole project was put on hold, and it took a while, but we renegotiated it into a long-term lease.  Similarly, there are different propositions that you can use in negotiating. Ultimately, everybody needs to realise, including China, that it’s in the interests of everybody that Sri Lanka succeeds, because it is only by succeeding that we will be able to repay their debt.  Those are the economic considerations. If there are geopolitical considerations, Sri Lanka's foreign policy needs to be absolutely clear. Our foreign policy as SJB is a fully independent Sri Lanka. We want to be friends with all and trade with all. Everyone can come and invest here, but we will not become a catspaw of any regional power or superpower. We have come out of 500 years of colonialism; we will not leave room for that to be repeated here. Therefore, we want to strengthen the relationship with China, which goes back centuries in terms of religion and culture. In terms of the economy too, it goes a long way, because China and Sri Lanka have long been trading partners, and in more recent history, under former Prime Minister Madam Sirimavo Bandaranaike the relationship was strengthened. I don’t want to elaborate on the many different ways this issue can be handled. Everybody needs to be reasonable. If Sri Lanka rises from the ashes, it will benefit not only Sri Lankans, but everybody involved.  You are advocating for a non-aligned foreign policy, but in these times, with two global superpowers pulling in opposite directions, is that a possibility? In the 1960s and the 1970s, the globe actually had two superpowers – the US and the Soviet Union. Unlike today, they were two real superpowers. Both had their aligned countries, and it was amidst that that the non-aligned movement began to take form, and countries came together. That is why I spoke about Madam Bandaranaike. She eventually became the leader of the non-aligned movement. We must understand that geopolitics is changing.  There are rising powers in Asia like India and China, and global powers like the US. With the Russian invasion of Ukraine a new global situation is arising. So we need to be absolutely clear that Sri Lanka's foreign policy will be independent. We must be conscious that we are geographically close to India, and in the decisions we take, India’s security will not be threatened. At the same time, we must make it absolutely clear that in terms of trade and investment, we are open.  You were a prominent figure in the banking sector before your political career. If our creditors demand that we restructure domestic debt for them to agree to restructure foreign debt, should Sri Lanka agree, considering the impact it would have on the banking sector? It’s a discussion that needs to be had with the domestic creditors. It depends on what is meant by domestic debt restructuring. If it is about imposing a haircut, I would say no. We have already taken a cut. Inflation in this country is more than 70%. Food inflation is more than 100%. Sri Lankan depositors’ value has been halved. We have already taken a hit. That’s why I said, it depends what we mean by debt renegotiation. Yes, domestic debt can be renegotiated, but there are ways to do it. A haircut is not necessarily the way. In that case, what is the way? Do you have a prescription?  No, I wouldn’t want to say, but there are various ways in which it could be done, but a haircut is out of the question. Naturally, foreign creditors feel only they are taking the heat, and that we should take the heat too. But we have taken the heat – we are getting roasted already. There are other things that can be done, and I would leave that to the negotiators to discuss with the creditors. The SJB has largely agreed with the economic policies of President Ranil Wickremesinghe, but has refused to take any part in the Government, apart from being heads of certain committees – is it not more prudent to support the President to implement these reforms? No, there is absolutely no way we can join the Government. We have no mandate from the people to join the Government. President Wickremesinghe obviously thinks he has a mandate and has accepted the position of President. That mandate comes from those who are in the SLPP, and the Rajapaksas.  We have taken the position that we will remain in Opposition and support the Government because we want to support the people of this country who are going through untold economic hardships. That is why, when the decision was made to go to the International Monetary Fund (IMF), we supported it. There are many, many other reforms that need to be made.  The President’s argument is that this is not the time to look at the past, but to look to the future, unite, and rebuild the country. What is your response to this? We agree with him. We are telling him to get together with the SLPP and push the necessary reforms through. They have put him there. Do people know that defence expenditure is over Rs. 350 billion, which is equal to the expenditure on health and education combined?  The public service of the country has to be reformed. There are nearly 1.5 million public servants in this country. Everybody knows it’s overstocked. Over the past 20 years, these Rajapaksas have campaigned by promising public sector jobs to tens of thousands of people. What nonsense is this? Politicians making promises of public employment? Whose money do they think they have been using? They have destroyed this country. Thus, they have to reform the public sector.  Then in terms of State-owned enterprises, total losses were Rs. 286 billion in 2021, which is more than the expenditure on health and education. In the first two quarters of 2022, which is from January to June, State-owned enterprise losses amounted to Rs. 966 billion. On health and education, we are spending less than Rs. 200 billion. There’s something wrong with this; State-owned enterprises have to be reformed.  Thus, we are telling the President to please get the support of those who made him President and push the reforms through. We are playing a positive role and we will support the reforms in Parliament. The challenge for the President is actually getting the SLPP’s support for the reforms. That’s why we don’t have to take the Executive office to do that, because people haven’t given us the mandate to do so. We are supporting the reforms and supporting the President to implement them. By refusing to join the Government are you not pushing the President further towards the SLPP by making him more reliant on them?  I should be clear on the non-economic factors. We support the economic reforms, but we don't support the President's moves against innocent protestors in this country and the people in the “aragalaya”, such as arresting trade union leaders like Joseph Stalin and actors and activists like Damitha Abeyratne. Many other innocent people who took to the streets were arrested after showing a photograph or some little thing.  First they used the State of Emergency, then the Prevention of Terrorism Act (PTA), and then the high-security zones. We are not supportive of this Government’s efforts to crush democracy and arrest innocent people.  According to the President and the Government, those are not innocent protestors, but disruptive elements that are trying to sabotage the Government’s economic recovery efforts, or even terrorists in some cases. Do you agree? If the Government has evidence that these people have resorted to violence, it must initiate cases against them. Don’t come up with this terrorism story. Don’t try that trick here – this is absolute nonsense! What kind of rubbish is he talking about? This revolution by the protestors in this country was a peaceful revolution, which did not fire a single shot. Don’t try to try to put innocent people in a box and call them terrorists. Another argument that the President and the Government are making is that these protests and civil unrest will lead to a delay in the board approval for the IMF agreement. Is that a possibility? And if so, are people going about it the right way? Look at it this way. If there were no protests and if we didn’t get rid of the Rajapaksas, would we have gone to the IMF to start with? Come on, give the due recognition to people who actually made the change. It was not political parties that made the change; it is the people who made the change. Give due recognition to that movement. Wickremesinghe would not be President if people hadn’t made the change. It was not that political parties gave a signal and people came onto the streets; people came voluntarily in the hundreds of thousands.  I must say this, of course – after we talked about it, the high-security zones were taken away and the State of Emergency were taken away. The PTA, we are still watching. It needs to be reformed, and that was Ranil Wickremasinghe’s personal position, because when he was Prime Minister of the country, he brought in the reforms and it was the SLPP that opposed it. So if we can get them to agree, certainly, we will be supporting that initiative too.  The SJB has spoken at length about social protections amidst the reform process to ensure that the most vulnerable are not put into worse suffering. Does the Government actually have the capability to ensure a sufficient social protection net with the revenue shortage that Sri Lanka has had over the past couple of years? It is very difficult for the Government, because the revenues have plunged. Then is it not unfair to expect the Government to ensure a strong social protection scheme? It's not a case of being unfair or fair. We want the Government to succeed with the reforms, but when you are pushing through reforms, there are going to be segments of society who are going to feel the pinch more than others. There are international reports, like the UNICEF report, which said that nearly 5.2 million Sri Lankans are experiencing difficulties. Some are malnourished, some suffer from insufficient food and proteins.  Therefore, these people need to be protected amidst reforms like public sector reforms and State-owned enterprise reforms. Even if those reforms are not carried out, people are losing jobs and incomes because the economy has plunged. These people are being pushed into a desperate situation and they need to be protected.  So it’s not a case of fair and unfair; we are very clear that they need to be protected. We are telling the Government, and I’m sure the Government understands this as well. So a Social Protection Programme has to go hand in hand with the reform programme. We are telling the international community, standing with the Government, that we need their help in providing resources for social protection. We stand firmly with the Government on that, saying that we need assistance, as social protection has to be provided.  The difference between the Government and us is not regarding whether it should be done, but regarding the politicisation of these social protection programmes. For example, Samurdhi has been politicised for a long time. The beneficiaries are based on whom they voted for. As a result, it’s widely accepted that 50% or more of the people who should receive Samurdhi benefits are not receiving them.  What we are suggesting to the Government is to have a scientific basis for social protection. Lots of academics and research institutions have done a lot of work in this area. For example, look at electricity consumption. If a house consumes below 30 kilowatt hours (kWh) per month, that means they’re very poor, because it probably means they have no refrigerator. Then there will be households which consume 60 kWh or 90 kWh. If beneficiaries are selected on that basis, 80-90% of those who actually need social protection will receive it. So our difference with the Government on social protection is regarding actually who gets it, not whether or not it should be given. What are your views on the Wickremesinghe Government’s tax policy? There are two main points I would like to make. There is no question that the taxes have to be collected. When we took over the government in 2015, the tax-to-GDP ratio was 10%, and we managed to move it to 13%. Now it has come down to 8%, and it’s probably the lowest in the world in terms of revenue. The debate is about whose taxes we should be increasing. The issue here is that they are trying to do too much too soon. Do you mean that too many tax reforms are being carried out too soon? Yes, because people have to live with inflation having gone through the roof. The exemption levels need to be increased to allow people to live, and if you let them live, they will not fall into the social protection net.  Corporate taxes are a Catch-22. On the one hand, they have high financial costs because interest rates have been raised to tackle inflation. We will have to give pride of place to exports and export taxes need to be revisited, because that will help attract dollars into the country. Are you calling for the export sector to be exempted from corporate taxes? I wouldn’t say exempt, but to revisit the taxes on the export sector. Then who should bear the brunt of the taxation? Those who are making large profits should bear the brunt of the taxes. There are lots of people who haven’t paid their taxes and who should have paid. We have to go after those people and make sure they pay their taxes. Finally, what should be the economic priority for the Government at the moment, if you could single out just one priority? I would say reducing inflation is the priority, if I had to name one.