12 June 2004
 
 

The new United People’s Freedom Alliance (UPFA) Government has just
completed 60 days since assuming office on 10th April 2004. I believe
that its opportune to speak to the country of the Government’s policies
and action plans for the future.

The Freedom Alliance enunciated their vision and overall policy to you,
in their election manifesto. The Government has now worked out the
detailed plan of action with a view to commencing immediately the
implementation of those policies.

 
Before I begin to enunciate some details of the Government’s action
programmes, I would like to note several important decisions that have
already been implemented in the past two months.
 
 - In order to alleviate serious problems faced by the most
poverty stricken sector of our population, fertilizer prices have been
stabilized by bringing in a subsidy.
 
 - 27,000 unemployed graduates are in the process of being
employed gainfully in the State sector.
 
 - Action has been initiated to urgently inquire into and
correct, the corrupt so-called privatization of the CWE, CTB and
alienation of large facts of State land.
 
 - A Committee has been appointed to make recommendations
regarding salary increases and correction of anomalies, of the Public
Service.
 
 - A National Council for Economic Development (NCED), is being
created in order to streamline the economic planning process of
Government, with the full participation of the people’s representatives
as well as private sector leaders, professionals and experts. This
Council will function under the authority of the President.
 
The People’s Alliance (PA) Government began in 1994 to restructure the
ad-hoc and thereby ineffective planning process that prevailed under the
previous Government. But it was felt that this process required further
strengthening, therefore the creation of the NCED.
 
 - A Strategic Enterprises Management Agency (SEMA) is also
being set up to ensure the effective management of public sector strategic
enterprises, such as the Banks, Power & Energy institutions. We are of
the view that these enterprises need not be privatized, but could be
managed by the State as profitable business enterprises through the
infusion of modern, managerial and technical expertise.
 
 -  We are also in the process of setting up a National
Procurement Agency with the objective of minimizing corruption in the
State institutions and cutting out delays which are harmful to the
country’s development process.
 
 - In the education sector the new Education Reforms Programme
which began implementation in 1998 and was halted for over two years by
the UNF Government, is being implemented with new vigour. The
introduction of the new and modern curriculum, the introduction of
Information Technology as well as English teaching, the upgrading of one
school per Divisional Secretary area with all the requisite facilities
of the country’s best schools, have all re-commenced implementation on a
priority basis.
 
Yesterday we also launched an extensive programme for “Civic
Consciousness, Ethics and Values” with the objective of bringing up
skilled, professional and also humane and democratic young Sri Lankans,
equipped with the ability to take Sri Lanka into a new era, free of the
mafias of drug and alcohol barons, corruption, violence and terror.
 
 - We have commenced a nutrition intervention programme for the
disadvantaged school children.
 
 - Extensive and intensive teacher training programmes have been
commenced.
 
 - We have also recommenced the Peace Process which had come to
a
halt for over an year and are in the process of negotiating with the
LTTE about the re-commencement of negotiations.
 
These are some of the major initiatives already put into action during
the first two months of the UPFA Government.
 
PART II
I would like to now speak to you about the important aspects of our
policy programme that is due to be implemented immediately.
 
The UPFA is a people’s party, committed to serve all the peoples of our
Nation.
 
We are fully aware that the vast mass of our people, of all communities
who are burdened with the yoke of poverty, expect this Government to
bring about radical changes in the orientation of the economic and
developmental programmes.
 
70% of our population live in the countryside, three fourths of these
people live in poverty, whilst 45% of our total population live below
the poverty line.
 
Although the per capita income increased by double in the 17 year period
from 1977 – 1994 and by a further 35% in the 05 year period from 1994 –
1999 and is around US$ 950 today, the benefits of economic growth is
concentrated in the hands of the richest 20% of the population. The
lowest 40% bracket has experienced a stagnation in their living
standards. The Western Province accounts for over 50% of GDP whilst the
other 08 Provinces together account for less than 40%.
 
 
Sri Lanka’s proud achievements of human development, reflecting high
levels of literacy and life expectancy attained through long years of
State funded education, health and community service throughout the
country, is today threatened by the decline in expenditure on education
and health, especially during the last two years.
 
Our development strategy will focus on elimination of poverty whilst
liberating the vast potential for economic take off, presently locked up
in the rural sector and among the local entrepreneurs. It must be noted
that over 50% of the industries manufacturing apparel and the
construction and tourism industries are owned and managed by Small and
Medium Enterprises. Between 65% - 80% of the operators in Tea, Coconut
and Rubber industries as well as public transport and domestic trade are
small entrepreneurs. Around 90% of annual private sector investment is
undertaken by Sri Lankans.
 
This Government will prioritize development assistance to domestic
capacity builders who are undoubtedly the pillars of the national
economy.
 
We reject the UNF Government’s “Regaining Sri Lanka” strategy, which
failed to regain anything for the vast majority of our people. Sri Lanka
was regained only by a handful of cronies and that at a high cost to the
national economy. This strategy even failed to deliver on its major
stated objective, which was deficit reduction. National debt increased
during the 02 year period from 103% - 106% even after expenditure on
public investment was drastically reduced and recruitment to the Sate
sector was frozen causing an increase in unemployment.
 
The UNF Government brought rural infrastructure development almost to a
halt in the process of “Regaining Sri Lanka”. Government revenue was
also considerably reduced. This strategy seems to willfully neglect
about 70% of our population that live in the rural areas. This
would have given rise to the migration of the rural poor to the urban
areas, seeking menial jobs and living in shanties, which in turn would
undoubtedly have contributed seriously to an increase in crime and
social unrest.
 
We believe that the strength of the Nation lies within it. We also
believe that we can base our development programmes on national material
and human resources and our strategic geographic location. Our
development plan will take into consideration our specific cultural
heritage and the dynamics of our region. We will give priority to the
protection of our resources and ecological balance.
 
Agriculture
Therefore, the agricultural sector will be given top priority to attain
food security through self sufficiency in food production. Paddy, Tea
and Coconut will be given the status of National crops. Development
assistance to these sectors as well as the cultivation of spices and
medicinal plants, sugar cane, milk production, potato, onion, vegetable
and fruits will consist of new technology, storage and credit
facilities. Value addition in these products, targeting exports will be
encouraged.
 
 
 
 
Cultivation zones will be established for one or two crops for the
maximum utilization of specific soil conditions in the different regions
of the country. These zones will be equipped with storage facilities,
marketing infrastructure, distribution centers for quality seed and
planting material, which will be linked to small farmer producers
through out grower networks, dedicated banking and financial centers.
The network of agricultural training and research institutions will be
modernized and developed to effectively undertake technology transfers.
 
Ten thousand small and medium scale existing irrigation tanks will be
renovated, in a massive effort to supply water to the farmers, whilst
popularizing drought resistant technologies among the farmers. It is
expected that this important programme will not only alleviate the
harmful effects of drought on the economy, but also generate savings on
high cost power generation.
 
We are also targeting self sufficiency in sugar, and milk production in
05-07 years, through close collaboration between the private and state
sectors. The districts of Nuwara Eliya, Badulla, Hambantota, Kurunegala,
Puttalam, Polonnaruwa, Ampara, Batticaloa, Mannar and Jaffna have been
identified for this project.
 
Similar action is being taken to promote sugarcane cultivation.
 
 
 
Fisheries
In the fisheries sector we are targeting self sufficiency and then
export of fish products. For this purpose the Government will undertake
the modernization of existing fisheries harbours with better storage
facilities, the promotion of new fishing technologies, the setting up of
prawn farming zones with modern infrastructure facilities, the
development of coastal aqua-culture and inland fisheries, and the
strengthening of the marketing network. It is expected to generate
considerable employment opportunities in the breeding of fingerlings for
inland fisheries and in the fishing and marketing of fresh water fish,
as well as in the local manufacture of fishing gear and boats.
 
Industries
The government will continue to provide assistance to the large scale
industrial manufacturers, including the textile and apparel sector. The
policy adopted by the former Peoples Alliance government to establish
bi-lateral relations with the EU countries will be strengthened. We will
also encourage value added manufacture of our industrial raw materials
such as minerals and even gems and discourage the export of raw
material. Agricultural producers will also be motivated to move to
export of packaged goods.
 
We will focus on the small and medium scale industrialists and
entrepreneurs to spearhead domestic industry. Skills in technology and
management will be given through increased training jointly by the State
and the private sectors. The public technology institutions will be
upgraded and credit facilities granted to obtain international
certification. Easy access to venture capital equity funds and
development finance at competitive interest rates will be arranged.
Industrial clusters in selected areas will be developed and given
further facilities. Development of small and medium enterprises in the
sectors of air & sea cargo, telecommunications, internet infrastructure
and power generation will be encouraged, as well as thrust industries
based on domestic resources.
 
Bureaucratic procedures and regulations with regard to small and medium
enterprises will be streamlined.
 
Sri Lanka needs an effective institutional mechanism to facilitate the
restructuring of financially troubled enterprises. Plans are afoot to
introduce legislation and to create an Agency to assist and coordinate
troubled industries and to render them financially viable.
 
The construction industry possesses high potential for further
development. The problems of inadequate public investment, shortage of
long term capital and undue competition from foreign companies and
system failures in procurement proceedings will be corrected in order to
assist local constructors to take off. The Construction Industry
Guarantee Fund established by the former Peoples Alliance Government
will be revived. The local manufacture of products required as inputs
for the construction industry will be actively encouraged. Research and
technology transfers for this industry will be promoted by the
Government in conjunction with the private sector.
 
 
 
 
 
Tourism
 
The tourist industry would be further developed as one of our major
thrust industries. It is planned to focus on our unique advantage of
environmental sustainability, advanced traditional and cultural
practices and our archeological assets. Small high quality upmarket
resorts will be promoted, rather than the low income generating mass
market resorts. It is planned to target an integrated development of
these “niche” resorts, together with the development of crafts villages,
herbal medicine centres, together with small producers supplying
specialised produce for the upmarket tourists. Regional land and water
based Airports, Ocean berthing facilities for sailing yachts and boat
cruises by river will be developed. The protection of the environment
and our archeological assets will be given priority.
 
 
Housing Development
 
In the housing sector, the transfer of urban shanty dwellers to
apartment housing units through the REEL programme initiated by the
former PA government will be accelerated. The Banks, provident funds
and the private sector will be given the incentive to develop low cost
housing for public servants, migrant workers, plantation workers and new
settlements in the conflict affected areas. It is proposed to target
300,000 housing units in 5 years.
 
 
Transport
 
The public transport system has reached a state of near total breakdown.
It has been neglected more than ever before during the last 02 years.
This Government has commenced to implement a programme to increase the
operational bus fleet of the CTB and to improve route diversity and
frequency of the bus services. The present practice of corruption,
harassment of commuters and bureaucratic bottlenecks will be dealt with
by the proper enforcement of law and streamlining administrative
procedures. The private bus owners will be encouraged to abide by the
requirements of the Government’s development plans.
 
A comprehensive programme of modernisation of the railways is being
drawn up and will be implemented urgently. Local enterprises will be
encouraged to manufacture a wide range of products required for the
operation of bus and railway services.
 
Cargo transport will be transferred to the railways within 03 years.
 
 
Infrastructure Development
 
The neglect of the country’s infrastructure network has serious
consequences on the national economy. Performance for the past 2 years
in these areas has been extremely poor. The road and rail network,
power generation, irrigation, education and medical facilities, research
and training have seen very little development or even maintenance
activity in the past 2 years. This Government considers it, its
responsibility to directly undertake or facilitate the proper
maintenance and the new construction of the social and economic
infrastructure of the country.
 
 
Priority will therefore be given to the early completion of the
Colombo-Katunayake, Southern and Colombo outer circular expressways and
other major roads. These have been unduly delayed by the last
Government, mainly due to corruption. Not a single new power generation
project has been initiated during the 2½ year rule of the last
Government. Power was purchased at almost double the market rate from
temporary power generators under the so-called “emergency power purchase
scheme”. High priority will be given to the early implementation of our
power generation plan, in order to move to a least-cost power generating
arrangement by the year 2008.
 
The Galle and Hambantota Ports, regional ports in the North & East,
Airport and Air cargo village development will also be given priority.
Also drinking water supply schemes, technology parks in the Provinces
and recreation leisure facilities.
 
 
 
 
Macro-Economic Policy
 
Our macro-economic policy is designed to build a modern economy, free
from corruption, with equal opportunities to every citizen, in order to
generate an environment friendly development hub of the region. A GDP
growth of 6-8% will be our target, through diverse domestic based
resources and activities scattered through out the country, supported by
modern infrastructure development. This policy is expected to generate
a balanced regional development and reduction in poverty levels. An
important aspect of this policy is the rehabilitation and reconstruction
of the North and East. The extensive use of domestic resources and the
production of value added goods will provide impetus to the growth
process.
 
In the area of budgetary and fiscal policy our immediate priority is to
reverse the adverse trends in fiscal development due to the reduction of
government revenue which has had serious effects on medium and long term
economic growth. The granting of unethical tax amnesties, exemptions,
concessions and an inefficient tax administration has caused the
government revenue to decline to 14% of the GDP from the previous figure
of 20%. To correct this situation a modern and efficient tax
administration will be put in place. Losses to the state due to the
tax amnesty law and other concessions, leakages and abuses will be
corrected soon. I must also mention the failure of the last government
to enact, enabling legislation for the budget proposals of 2003 and
2004, is also an important fact or that has lead to the reduction of
revenue. We are taking action to place the relevant legislation before
Parliament, without further delay.
 
The newly created SEMA has the task of generating profits on the
investments made by the government. Public expenditure will be strictly
controlled through financial discipline and prudent management of the
public sector. Through the increase of revenue, reduction of waste and
corruption we plan to contain the fiscal deficit below 8% of GDP in
2004, while targeting a medium term growth rate between 6-8%.
 
 
 
As for public investment, we will utilise the available foreign aid
amounting to over US$ 3.0 billion, as well as the available rupee
resources of a further US$ 1.5 billion.
 
It is planned to reduce the deficit further to 5% of GDP during the next
3 years.
 
While we engage in this development process we plan to contain the Cost
of Living. Local food production will be incentivised to increase
production through better post harvest processing, packaging and
delivery mechanisms. A regular price surveillance mechanism will be
introduced early, together with an Internal Rate of Return (IRR) index
in order to contain profit percentages.
 
 
 
 
Health Care
 
Excellence in Health Care through the development of National and
District Hospitals, mobile health clinics and low cost good quality
pharmaceuticals.
 
 - Developing the practices of indigenous medical through
upgrading of research and development work and developing and upgrading
Ayurvedic health care facilities.
 
 - Promotion of private hospitals especially for secondary and
tertiary care with the implementation of regulatory systems and
standards maintenance.
 
 
Women & Children
 
Investing in women and children is a priority in the Freedom Alliance
work plan. Special efforts will be taken to protect children from
violence, sexual and psychological abuse, child labour and corporal
punishment at school. Through the National Child Protection Authority
established in 1997 and through a variety of legislative and other
measures introduced, our priority towards children has been clearly
stated.
 
Protecting children from harm from alcohol, tobacco and other dangerous
drugs will be seriously focused on. We envision a “drug-free” schools
system and a “drug-free” society through the effective implementation of
the policies already in place.
 
 
 
 
Caring for the Vulnerable
 
Safeguarding the interests of vulnerable groups such as the disabled and
those who have been psychologically and physically traumatized as a
result of the war, those who are homeless and their “street children”.
All policies and programmes developed must take into consideration these
less fortunate people in our society.
 
Rana Viru
The Ranaviru Seva Authority (RVSA), born our of the need to provide care
for those who selflessly gave their life and limb in the defense of
their motherland, provides a significant service to one such group of
people. Not only does it provide housing to the Armed services
personnel and their families, but it also implements skills development
programmes which empower those disabled and handicapped due to war and
terrorism. It also provides a most effective trauma counseling service.
Strengthening the existing programmes and developing new projects, which
target the families of those killed, those missing in action and those
disabled by the war, will be the new focus of the Ranaviru Seva
Authority.
 
 
Our Policy on Peace Negotiations
 
As a step towards ending the conflict, the UPFA is making a sustained
and serious effort to engage the LTTE in comprehensive peace
negotiations to end the war, develop the North and East and address the
grievances of the minority communities, in a way that will fulfil the
reasonable aspirations of the Sinhala, Tamil and Muslim communities.
 
 
Immediately after the formation of the new Government in April the
Norwegian facilitators were requested by me to attempt to recommence
efforts for Peace negotiations. They have been in contact with the
Government and LTTE for this purpose.
 
It is clear from these contacts that both parties are committed to
maintaining the Ceasefire and resuming negotiations of a political
nature. We have also been able to find a coincidence of interests on
several issues related to the conflict in the North and East.
 
The two parties are still working out what the next round of peace
negotiations should be about. The LTTE would like the talks to focus
only on proposals to set up an Interim Authority while the Government
has indicated the need to engage in discussions on a permanent solution
to the conflict, while prioritising the need to agree on the structures
of the Interim Authority and on the urgency to set it up. Over the past
several weeks we have been in the process of resolving issues about the
substance of the agenda for peace negotiations.
 
This delay in agreement on the agenda reflects the complexity of the
Peace negotiations, which in a democracy requires developing a consensus
among diverse political viewpoints. It also indicates that we are
taking negotiations very seriously and want to prepare for it in a
thoughtful manner. We must also recall that we are starting political
talks after a gap of more than a year. While the two parties have not
yet reached agreement about how to proceed, the Government will approach
the issue of the content of the next round of talks in a principled and
prudent manner.
 
We are seeking an effective compromise to the problem of how to deal
with the long-term importance of a lasting political settlement to the
conflict and the short-term need to urgently develop the North and East.
 
 
We have spent many years discussing what the most appropriate political
solution to the conflict in the country will be with many political
parties. The LTTE has not been a part of this discussion in the past. We
are committed to having a political dialogue with the LTTE about the
contours of a lasting solution. We know that it is only such a
political solution that can ensure a just and stable peace in the
country.
 
At the same time, as a responsible Government, we take very seriously
the urgent need to undertake effective development work in the North &
East, and are willing to explore with the LTTE interim political
measures that can address this need within the contours of the
sovereignty and the territorial integrity of the country.
 
 
Peace Structures
 
Peace Secretariat - In the past two months, my government has
restructured and revamped the peace related institutions. We have
placed the Peace Secretariat under a new professional leadership to
carry out the complex technical task of implementing the ceasefire and
supporting the process of negotiations. The ceasefire is an important
basis for the continuation of peace negotiations and we want to make
sure that we have done everything to make all parties fully adhere to
it.
 
Development - We are strongly committed to relief, rehabilitation and
reconstruction as a priority for the war-torn North and East of the
country. As a reflection of the commitment of the Government, I have
taken on the responsibility of this Ministry. We have restructured the
previous RRR structures that existed under a large number of unconnected
Ministries and governmental structures and brought them under one roof.
My officials are in the process of visiting the North and East to
explore areas where immediate relief measure can be taken, to ensure
that concerns of people affected by the war can be addressed without
delay.
 
National Advisory Council on Peace and Reconciliation - Since the UPFA
promised to conduct transparent and inclusive negotiation, I am
initiating a broad-based national forum – the National Advisory Council
on Peace and Reconciliation (NAC) – that will provide a means for the
people of the country to contribute to a political settlement and work
towards reconciliation. I will convene the NAC which will include
political, religious and social leaders in the country to ascertain
their views on how to bring peace, democracy and development to the
country. The NAC will serve as a forum for :
 a. Explaining to the country the Government’s efforts to bring Peace,
 b. Briefing the country on the progress of Peace negotiations,
c. Obtaining the views of all concerned parties and groups, and 
d.  Promoting reconciliation and understanding among the different
communities.
 
 -  We will establish a continuing dialogue with all political
leaders of the various communities and groups represented in Parliament.
This consultation will proceed parallel to talks between the Government
& LTTE with the objective of keeping the country informed of the
progress of talks with the LTTE on one hand and of conveying to the LTTE
the views of all concerned parties.
 - A negotiating team will be nominated from among senior
Cabinet Ministers, after dates for talks are agreed upon.
 -  A National Council for Peace will be the apex body that will
coordinate these four institutions. This will be chaired by President.
 
 
Finally, it is important to note that the Freedom Alliance secured
victories in 106 out of 160 electorates in the country, which amounts to
2/3 of the total number of electorates, in addition to gaining
considerable majority over its opponent. Yet the Government does not
have a clear majority in Parliament only because of the singularly
peculiar electoral system created by a previous UNP regime. It is
regrettable that a government which has people’s power and also the
skills, the ability and the strength required to manage Government
efficiently is debarred from registering a majority in Parliament due to
an unjust manipulation of the people’s vote by the existing electoral
system. The Freedom Alliance requested and received a clear mandate to
amend this electoral system. The UNP and the Alliance had agreed on new
electoral system. It is for this purpose my present Government wishes
to undertake this task through the process of a Constituent Assembly as
the UNP having agreed on the need to amend the electoral system
steadfastly opposes to give its vote in order to obtain the 2/3 majority
stipulated in the Constitution. The Government plans in addition, to
abolish Executive Presidency for which it has also received a mandate at
the past election. All Parties of the Alliance Government are in
agreement on this. From 1994-2001 the UNP stridently demanded also the
abolition of the Executive Presidency. But now since their take over of
Government in December 2001 they seems to have changed their policy for
no evident reasons. The decision of my Party and my Government to
undertake the abolition of the Executive Presidency  was based entirely
on the fact that a large majority of all Parties represented in
Parliament were in agreement with this policy. As a Party which has
strived to maintain consistency in its policy we decided to go ahead
with our commitment to implement this policy.
 
The sudden change in the UNP’s stand on this issue does not justify in
anyway a change in the Government’s policy. The habitual mud slinging
against the President which appears to be the UNP’s main political
strategy is not surprising, coming from the present leadership of that
party. But the Freedom Alliance is a Party that takes decisions based
on strictly national and political views and not on the personal agendas
of any in individual.
 
I wish to state that I find it sad and at times terrifying that the two
major democratic parties of the country that still accounts for nearly
3/4 of people’s vote are getting increasingly hemmed in and intimidated
into adopting political decisions, harmful to national interest, by
several extremist groups on either side of the ethnic divide.
 
I shall continue to dare to hope that the major political parties will
soon gain the ability to put Nation before self, in order to work
towards achieving consensus in the interest of the Nation.
 
Finally, I have confidence in the people of the country, whatever ethnic
or religious community or political group they may belong to that they
possess the millennial wisdom to recognize correct policy and the
ability of parties and leaders to carry them through effectively and
honestly and the courage and commitment to give support to such
governments and leaders to win for our Nation the future that it
deserves.
 
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