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By Ravi Ladduwahetty

Sri Lanka's 2002 budget was designed by the Government of Sri Lanka and the Government is the legal owner of it, International Monetary Fund's Senior Resident Representative in Sri Lanka Dr. Nadeem Ul Haque told the Daily News in an interview.

He said that it was in the best interests of the country. "I was certainly not the back seat driver. As for the allegation that I was the back seat driver, any body is free to imagine what they like and what they feel", he said.

Q: What are your views on the United National Front Government's maiden budget which was presented in Parliament on March 22?

A: It was very good. It is indicative of the policies that seek to control the growing budget deficits of the previous years.

It has also put in place the sweeping tax reforms which are very welcome. It has also put in place a number of policy reforms and the suggestions are indicative of the labour, financial and public sector reforms.

It has also put in place exceptional management which should usher in a new beginning. I hope that the budget will be managed well and the reforms will be implemented expeditiously.

Q: There is a school of thought that this budget was based on an IMF dictate, and that it was designed by the IMF and you for the Government of Sri Lanka and that you were the back seat driver. Your comments?

A: It was designed and owned by the Government of Sri Lanka in the best interests of the country. I was certainly not the back seat driver. As for the allegation that I was the back seat driver, any body is free to imagine what they like and what they feel.

Q: In your opinion, what should the Government of Sri Lanka do to make these laudable policies, a reality?

A: It is going to be a challenging task and we hope that the targets will be adhered to.

Q: How do you see economic development in Sri Lanka in the backdrop of the peace process?

A: The cessation of hostilities is a welcome development which has sent the right signals to foreign investors. However, Sri Lanka can be an attractive investment centre once the policy reforms have been implemented. This is a must. Much of the development has been inhibited due to the war and once the war is over there will be a window of opportunities.

Q: What kind of savings to the state coffers do you expect once the war is over?

A: Over the years and in the long term, the culmination of the war should help; leading to increased savings in defence expenditure and higher growth through protracted investments. However, we should also realise that post war rehabilitation and demobilisation should also cost large sums of money.

Q: How do you see economic development in Sri Lanka in the light of the peace process?

A: The economic development of the country should accelerate with the peace process. Investor confidence should also improve as the peace process progresses and with the implementation of the reforms, and

Q: It is said that aid has been low as 10 percent in Sri Lanka dwindling in recent years and what changes do you see which are needed in the bureaucracy for better aid utilisation?

A: There is a need to improve aid utilisation tremendously. The reforms process is moving in that direction. This can be expedited through the rapid implementation of reforms which have been long overdue. Some efforts should be made for initial reforms soon.

Q: There is also a school of thought among the business community that Sri Lanka should be developed as a service hub for trading, shipping cargo handling and as an air/sea hub. Also as a banking and financial centre. Your comments?

A: My view is that Sri Lanka should develop what it wants to develop. But the issue is to move in that direction. That can be implemented with the expeditious implementation of the reforms. Sri Lanka has already lost that opportunity that it had been offered at regional level due to the lack of the requisite reforms being implemented at the right time.

Q: There is much talk of deregulation of the state sector to energise the private sector for accelerated growth and also to draw the best returns of the economy. Your views?

A: The Government should do everything within its ambit to deregulate. The market should be developed and there must be some realisation that the market is the engine of growth. The market should be developed and not be suffocated.

Q: It is said that the deregulation of the labour sector is an essential prelude to economic growth and success. Will this affect employment?

A: This is a very important phenomenon. The Labour sector and its deregulation will have far reaching effects on the development of the market and also enhancing its mobility. The problem in Sri Lanka is that there is a section of the labour community which is opposing it as they have ulterior motives in terms of political agendas. A majority of the people are in favour of it.

Q: It is said that land cannot be procured for development and especially for industrial development without political patronage. Your comments?

A: It is important that Sri Lanka has a good land alienation policy. The Land Reforms in the 1970s was a far reaching step. This should be further fortified with a good Property Rights System and a good Land Titling System.

Q: For the private sector to be contributing to the economy and for it to be an integral part of it, there should be the right type of education. What type of education do you advocate to meet these aspirations?

A: Sri Lanka should move towards educational systems-those are geared for growth. The educational systems that are advocated are those which could match the needs of globalisation.

The extents of education which should be provided by the private sector with the Government firmly assuring the poor that they too will have adequate resources through the state for their education. Such a policy will create equality in the system.

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