BS: The UNF government has been blamed for not being strong enough in negotiating with an organisation like the LTTE and practically conceding to all their demands. Will there be a corrective measure in a future government?

A: Basically, I think that in a negotiation, people have to realise what the country was like before we came into office. We had a divided country. In the northeast certain areas were controlled by the LTTE. We also had a divided society. It was divided on ethnic lines and even at a security point it was your ethnicity that mattered. So the challenge we had was to unite a divided country. Those who argue the way you say, are the people who believe that the country was united in the first place. No government was willing to admit this division even in the northeast.

When our Prime Minister was in opposition he took the figures from an earlier election and challenged the government by asking why in certain polling stations there was no polling. That’s how we demonstrated that the country was divided during the last administration. But nobody wanted to admit it. They were presenting to the south the feeling that the country was united. For those who argue in this manner it is only a political argument. In a negotiation, there should be give and take and we believe from our point of view that we have conducted negotiation in a balanced way, in an equitable way.

Even the international support we received has been based on the fact that we have been balanced. But, of course in any society there are different points of view. That is part of democracy. Yet, always, the question has to be are we trying to unite a country already divided or are we trying to divide a country that is united. What we must understand is that we are trying to unite a country that is divided. If we look at it from that perspective, it is reality of the government and I think people will then understand it.

BS: But it has been alleged that your negotiations were moving mostly in LTTE’s favour. So much so, that the final proposal you had from the LTTE for an interim administration was much more than any government could concede. Some demands could have been granted only in a confederation and not in a federal setup. Your Comments.

A: The document they presented was a negotiating document. This is the second time in history the LTTE has presented any kind of proposal and this is the first time they have presented a detailed proposal. In Thimpu, they presented only a broad concept. Therefore, this is only a negotiating document we have got from them and it has to be discussed at a negotiating table.

There is an understanding between the two sides, as agreed in Oslo. According to the Oslo declaration, any outcome has to be based on an internal self determination within a federal set up. That is the understanding reached by the LTTE and government. This is the negotiating process and you can’t expect both sides to agree at the beginning itself.

A signal to both political parties

BS: What is your response to a section of Maha Sanga entering politics? Will they erode into your vote base?

A: I do not look at it as a symbol of the fact that there is a perception in our society that both major political parties have failed. If you look at our history of 2000 years the clergy have always had the right and the responsibility to intervene when the king was ill or the king was wicked.

When the king was wicked the clergy had the responsibility of ousting him. But never have the clergy said ‘okay we want to do the king’s job’. I see that as a symbol of the fact that our society has fallen to the level where even the clergy feel that they have to do something about it. I am not somebody who is going to pass an opinion on this.

I feel it is a signal to both political parties that we need to get ourselves sorted out. We have lost the confidence of the people. The whole idea as to whether they would take out some of our votes is not the issue. The real issue is why did they think it is necessary to enter politics when historically they have never sought to do so?

BS: On the international front, your government has been accused of being too subservient to the US and its allies and of even going to the extent of voting with the US on the Iraq issue. Has this paid any dividends? On the local front too, this behaviour has provoked a fair amount of criticism.

A: On the international front I do not think that we have been subservient to anybody. We have been able to work broadly with every country in the world. This is the first time we have had an administration that is as comfortable in New Delhi as in Washington or Beijing. Our main focus as far as our operation is concerned, is with India, regarding economics co-operation India is going to be the future for Sri Lanka because like Hong Kong was to China, we believe that Sri Lanka will be the gateway to India

In addition, the United States as the world’s super power and the economic power today has been very supportive of what we have been doing here and has always been willing to consider helping us consolidate the peace process as well as for economic development. Therefore, our basic focus has been to see how we can arrive at a relationship where the benefits that India can bring to the table and the benefits that US can bring to the table can help our economy to move forward

As far as the voting in the UN is concerned, if you look at it traditionally, our governments have always voted according to their conscience in different situations. I remember J.R Jayewardene was criticised for voting with the United Kingdom on the Falkland issue. In the same manner, ideologically, we have voted on a certain pattern and that has been the history of our party. And we have been consistent in such policies as a political party.

BS: What about the allegation that UNF has been uncritically accepting World Bank prescriptions for a market driven economy and that your policy package has been pro-rich? Examples are disregarding rural economy and rural infrastructure, not promoting agriculture, low levels of taxation, tax amnesty bill and recent amendments to labour laws.

A: I think if you look at the world today there is only one economic model, that is overarching principle of globalisation and within that, the principle of a free economy. Countries that have followed this path and succeeded in various ways have sought to look at globalisation and see how best they could enter the field. Ours is not a World Bank and IMF package.

The Prime Minister has a real agenda for Sri Lanka to enter the twenty-first century and the basic principle is becoming the gateway to the Indian sub-continent. People may come to Sri Lanka as tourists, but they will not come and invest here unless they see a large market. Fundamental to it is the need for Sri Lanka to become a gateway to South Asia. The Prime Minister’s vision is for us to become what he calls ‘a value added platform’ for the region. Basically, by becoming an open economy where people can invest money with the hope of entering South Asia.

About ignoring the rural economy, I would definitely not agree with you. We created a rural economy ministry and rural economy programmes with the World Bank help. Never before has there been a rural economy ministry.

There are also initiatives on value added agriculture because the agriculture sector now has to start changing. So it is a process of transition, from what was essentially an economy that was neither here or there, to becoming an economy that will be positioned at the gateway to South Asia. We received a six-year term of office and in two years we were successful in laying a foundation. That is why, right at the beginning the Prime Minister said ‘let’s tighten our bets for two years and we will start reaping the results’. The results were visible. In the second year there was economic growth, the third year there would have been more economic growth, by the fourth and fifth years people would have started to feel it. Now we hope we can catch up for the lost time if the people give us a mandate.

BS: Isn’t it dangerous to relax the labour laws particularly in the absence of a safety net as in the west?

A: Each country has to have the kind of safety net it can afford. There is a safety net proposal in the labour law relaxation and the labour law has been delayed in its implementation because that safety net has to be prepared. When it comes to flexibility of labour laws, even countries like China and India who had more of a legacy of protecting employment, changed their philosophy with globalisation. We had made politics with it. In India you see interesting developments, if you look at some of the recent court rulings that have looked at these issues differently. Indian people realised they could develop quicker if they follow this path. So we need to look at other countries. I am not saying we have to look at the West. We need to look the East. That is the only way you see the difference. We can’t afford be behind the region if we want to become the gateway to the region.

BS: What new plans in Regaining Sri Lanka do you have to accelerate economic growth to 10 per cent when six-year projections leadingly to 7 per cent in 2006?

A: If we can have a stable environment in the country we can achieve double digit growth. A lot of people depend on international economy. The Prime Minister is pushing for infrastructure development with the four and half billion rupees that was Pledged in Tokyo for our roads and other infrastructure. With these investments we can increase our growth rate. Ten per cent is an ideal, but not an easy objective. The other thing we have to remember is that India is growing at a very good rate and if our philosophy is to become a gateway hopefully that will have a positive effect on us.

BS: Your development strategy depends on an increasing inflow of foreign investment. In this context how will you ensure transnational companies will not become too dominant in the national economy and dictate policy?

A: If you look at countries like Singapore, Dubai and regions like Hong Kong, you will see they are located in regions that are fast growing, but have been able to develop by encouraging large multinational investments, whilst maintaining some level of domestic identity.

BS: But shouldn’t we compare Sri Lanka with India, for countries like Singapore and Dubai do not have agriculture economies?

A: The difference lies in the fact that India has a billion people while Sri Lanka has only eighteen million people. The agricultural dimension is important that I do not deny. But, if you take South Korea you will see they have been able to maintain their agricultural heritage and cultural heritage because agriculture and culture go together. That is why we keep stressing the need for our cultural identity, otherwise we become basically empty vessels as a human beings So we have to have a Sri Lankan identity and have room for our industry, our agriculture, our culture while at the same time ensuring that we enter the globalised world. That is the balance we need. This means we have to remove the economic dimension from the cultural dimension. For example you look at the Japanese rice production, it is one of the most expensive in the world, but rice is produced in Japan because there is a cultural element in it. That is the same for us as well. You take South Korea for example. Some of the rice produced there is extremely expensive. It is cheaper to import rice from other countries. The country producing the cheapest rice is the United States. That does not mean you have to import all your rice form US. You have to find a balance. But at the same time you have to enter the globalised world. What has happened to us is that we have become insecure. I think that is a part of transition. Because we have suddenly become overwhelmed by globalisation, whish is a phenomenon that has backlashes. As we face globalisation we are uncertain of our identity. The spiritual values and cultural values that are relevant to our culture have to be nurtured and strengthened. This is where the government has a strong role to play in trying to protect these values within a competitive economy. That is a challenge for any government. Singapore has done it one way. Malaysia has done it another way and Thailand in yet another way. Malaysia or Thailand can call the shots. But we have to be a mix because we are small. India has a lot to offer us on the cultural mix, but at the same time we have to be the Hong Kong of the region.

Look at Hong Kong, they are comfortable in Chinese language they are comfortable in Chinese culture. But they can do business with the biggest multinationals in the world on an equal level. That is their victory. It does not mean that to be comfortable with the West you have to ape the West. Hong Kong Chinese can match the West one to one on anything. Similarly India can match the West one to one, but at home their culture is intact.

BS: During the tenure of your government you failed to solve the problem of national transport. Now it has reached unmanageable proportions. Why is that?

A: It is a critical problem. I think in certain areas the major political parties need to get together and formulate national policies. Education, health and transport are such areas. We should stop making politics in these areas. We should remove politics and reach some kind of common vision. In the public transport sector, there are two segments-the rail network and the omnibuses. In bus transport there has to be two systems-a state component and private component. The state component has to be viable. In the trains too we have to find a right mix. Private companies are not going to run non viable routes. Therefore the government has to play a role there. Nobody has found the perfect model. Even in the United Kingdom, they tried to privatise the rail network but it did not work.

BS: Was there no serious and genuine effort to find such a model in this vital field?

A: In some respects there were efforts made, but there were serious resource constraints. And the other problem is this whole thing has become political. In the last two years there has been a rediscovery of freedom and we have been abusing this freedom. Our people got used to the state of emergency as a way of life. Because of this, in the transport field too, the government had various challenges like lack of resources and difficulty of maintaining discipline.

BS: You personally have tried to show a policy of austerity by using an Indian made Ambassador car for instance. But the general policy of the UNF in allowing the unrestricted import luxury cars and the ostentatious behaviour of its ministers has caused anger among ordinary people. How do you look at this?

A: It is part of a capitalist economy that people tend to be ostentatious. You have these tendencies in India, Thailand and Malaysia as well. But governments must see how materialism connects with our culture. In Malaysia from the top to the bottom there is big gap, but since there was growth, people did not feel it. In Thailand it is the same. On one hand as economic growth catches up people will feel that everybody’s life is improving. Whatever the relative standards of measurements are, it is okay when there is a feeling that everyone is doing well. It is only when ‘I’ feel that ‘you’ are doing well and ‘I’ am not doing well that the resentment begins. I think that is part of a transition phase. We have to as leaders in our own way create that culture of austerity, but we can’t force it upon them because capitalism is very difficult tool to us. But we ourselves tool to us. But we ourselves should set our own standards.

BS: As a party why can’t you have a definite policy on this?

A:  The problem is, each person is different and you expect us to solve every problem at once. We had certain priorities – the peace process and to get the economy going. If the Prime Minister tried to start doing everything at once, we would not get anywhere. Being a coalition government he had to hold it together and also he had to face a President who had different views all together. The Prime Minister himself is a very austere person. Each of us should do what we can symbolically. The business community also, I think, has to pick that up one way or another.

BS: Do you hope to carry on with free health care and education as a public sector responsibility? What are the envisaged health sector reforms?

A: As with the transport sector, I think there has to be a balance. You have to provide the opportunity for those who can afford, to pay. At the same time with the savings we got out of such a system, we have to focus seriously on education and health and make investments. The biggest problem in this sector is the fact that nobody knows who is responsible. The provincial councils are responsible for education and health at one level and national government at one level. I think there is tremendous wastage because of this break in responsibility. The provincial councils were created to solve the Northeast problem. It never got resolved and instead it has created a crisis in the South. What I feel is that we have to reassess the whole thing. Start from scratch and see how we can take these resources that are saved as a result of the private health care system coming up and ensure the poor of this country get good health care and good educational system. Those are in my view, two critical sectors that require national policies. The moment one party puts its hand in, the other party comes, exploits it and creates an emotional problems.

BS: The split in the LTTE now seems to be a serious one. How would a future UNF government handle the matter? You will not be able to ignore the Karuna group in future peace talks?