Budget's economic strategy timely - Dew

Budget 2006 is an instrument to implement a economic strategy needed at this crucial stage of our history, Constitutional Affairs and National Integration Minister Dew Gunasekara said yesterday.

Speaking in Parliament at the budget debate, Gunasekara said a new orientation of the foreign policy and international economic relations is also imperative.

"This need has been expressly stressed in the President's Manifesto, in the Policy statement and in the Budget," the Minister said.

He described the budget as "scientific, objective, pragmatic, comprehensive, all-embracing, pro-people, pro-poor and pro-disadvantaged".

Gunasekara said: "Bandula Gunawardena remarked that the Budget looked rosy but not implementable.

Even if implementable, he said, it would result in a colossal deficit causing a cascading effect on the economy severely affecting the well-being of the people.

This was precisely what he uttered in this House with regard to the 2005 Budget as well. What happened despite the unprecedented catastrophe of tsunami, which took place within 16 days of the approval of the Budget ?

We recovered from it faster than we expected restoring our economic fundamentals, placing them well under control.

By the end of 2005, GDP was 5.3 per cent, Budget Deficit 8.2 per cent, Inflation at 9 per cent, Revenue increased to 16.5 per cent, Rate of Investment at 27 per cent, National Savings at 21.7 per cent, Interest rate restricted to 8.25 per cent, Debt-GDP ratio at 98 per cent (105 per cent in 2004), Balance of payment was a surplus and so on.

Gunawardane's assessments were subjective and proved wrong and absolutely false.

The President stressed upon the need for a new orientation to our foreign policy.

This was in keeping with our vision and also the realities of the changing world.

I told this House during my speech at the last Budget Debate that 21st Century belonged to Asia. The next decade (2005-2015) will witness dramatic changes in the world economic order; which fact the framers of the Budget have taken into account.

It has been forecast that by 2015 the GDP of the US and Western Europe shall be reduced to 37 per cent of the world GDP whereas the GDP of Asia shall rise up to 45 per cent of the world GDP. In fact, the GDP of Asia, Africa, Latin America with Russia would be in the region of 63 per cent.

If you delete Japan (belonging to G7 Group) from this category which accounts for six per cent, it is still 57 per cent of the world GDP as against 43 per cent of the G7. You would witness this polarisation, in spite of globalisation.

The scenario of the world in the economic sphere is slowly but surely changing. Our own SAARC region which is the home to one fifth of the world is fast becoming a decisively important region in Asia. This is what the Leader of Opposition cannot see or is blind to see.

This is how the "Mahinda Chintanaya" fits in well for the changing realities of the world - You can see this only through the prism of "Mahinda Chintanaya" and not at all through Ranil's so-called People's Agenda or through "Regaining Sri Lanka."

The Leader of Opposition who is politically and ideologically committed to a policy of neo-liberalism, which is in fact "neo conservatism" is not allowing the members of the UNP to see the new realities of the world economy - The so called "neo-liberalism" has been rejected by the Latin American countries where it was first introduced. The entire Latin America is moving Left or Left-oriented in search of pro-people alternatives.

The Asian economy today, would never have come up to the present stage of development had it had blindly followed the "neo-liberalism". The lesson, which we should draw is that the current stage of development demands, "planning cum market", "growth and equity", "Economic development and human development", "private sector and public sector."

The historic November victory was a clear reaction to that trend of development! "Mahinda Chintanaya" was a product of that conceptual thinking in the Sri Lankan context, which responded to the concept of neo-liberalism as an alternative."