“Peace is at the core of social stability”

The LTTE has demonstrated that it would not settle for anything less than a separate state, and that it would use a multi-pronged strategy of military action, violence, terrorism and political manoeuvering to win its goal, asserted former Ceylon Chamber of Commerce (CCC) Chairman Deva Rodrigo, in an interview with The Bottom Line.

He stressed that the government should not allow anti-government forces to hijack concepts such as human rights, and was of the firm belief that the implementation of the Languages Policy with Sinhala and Tamil as national languages would win the hearts and minds of the Tamil speaking people and isolate separatists and those who are responsible for violence.

As for the economy, he expressed the view that the budget deficit should be curtailed. “It would bring down inflation, stabilise prices, reduce interest rates, and also avoid a sharp depreciation of the rupee,” he pointed out.

He also stressed that free market forces should be allowed to operate, and the role of the government should be to establish regulatory bodies and appoint independent experts to run them and to keep them free from political interference. He stated that a cornerstone of social stability is an environment in which people of the country, in particular minority groups, could live in harmony without fear and discrimination.

“The private sector should be engaged in issues such as peace, educational reforms, poverty alleviation, healthcare and social responsibility because private sector interests cannot be confined to trade and investment,” he further emphasised

Q: Can you recall some of the key challenges during your tenure as CCC Chairman?

A: When the government changed in November 2005, I gave a series of telephone interviews while I was in transit in Dubai, on the way to London. All of them centred round the presidential election being won by Mahinda Rajapaksa. One particular interview asked several questions, which I felt were to elicit some form of criticism, which, I felt, was not the way for a civil society organisation such as the Chamber of Commerce, to start with a new government.

However, for all these, I was able to give a positive view. For instance, I was asked about what would happen to the peace negotiations that were on. The view I expressed was that President Mahinda Rajapaksa had quite clearly kept the options open during the election campaign, without getting tied down to positions he would take, and that since he had received a clear mandate from the south, he would be in a position to offer even more than what was offered by the UNP government of 2002-2004 and bring about a settlement.

I was then asked what the JVP would do if such a position was taken, and whether the JVP would pull out its support and defeat the government in Parliament. My response to that was that if such a scenario were to occur, I would expect the UNP, as a responsible party, to throw its weight behind the government of President Mahinda Rajapaksa and ensure that a lasting solution was found and implemented.

On the question of privatisation, I said that the declared policy not to privatise strategic enterprises would not have a major impact on the economy, although I personally would have preferred to see the government getting out of managing commercial enterprises.

When I was asked about the economy and the promises made in the manifesto, I stated that not only Mahinda Rajapaksa’s manifesto but also Ranil Wickremesinghe’s manifesto for this (2005) election, if implemented, would cause inflation and have a negative impact on the economy. I know that a government, once elected, would be advised by experts, who would apply some caution in going ahead with handouts and try to reduce the budget deficit.

The Sunday business pages of this newspaper accurately stated what I said during the interview. But the headline was, ‘Mahinda’s policies disastrous to the economy.’ By the time the newspapers were read by the public, I was in London, and from 3 a.m., I was getting phone calls from various parties, including some who held high positions in institutions where I also served as a member.

One of them did say that that the contents of the interview were fine, but the headline was damaging. Although I had no control over the headline, I know many would have read only the headline, especially on the first Sunday after the election of a new president.

As a result of this, many persons in the corridors of power of the new regime, regarded me as an adversary of the Rajapaksa government.

One of the early implications was when the CCC was not invited to join the government on its first overseas visit to India, even though the Indian High Commission and the Foreign Ministry had informally informed me that the chamber should have a business delegation ready to accompany the President.

Prior to the election, the CCC maintained a strictly independent stance, because the CCC is an apolitical body and that has been one of its virtues. I cannot elaborate, but have reason to believe that the position I had taken to stay out of meetings with either candidate during the run-up to the election, may have been seen by some as being applied only to one candidate.

The meeting situation was not very conducive to the institution I served. The regular dialogue the CCC and I had with several arms of government, came to a virtual standstill. We realised we had to rebuild trust with the government, without compromising our views and positions on what we regarded was the best for socio-economic stability and the development of the country.

This, I thought, was the challenge I faced, not only during the two years as the Chairman of the CCC, but also during the four years prior to that when I was Deputy Chairman and Vice Chairman.

Q: How did the CCC respond to these challenges under your stewardship? What new initiatives did you implement?

A: To this kind of challenge, we responded by reassessing our stand on issues and making them known to the government and other decision makers, in an objective manner. In this particular instance I realised that the new chamber leadership team that was to take over in June/July 2006, could present an opportunity to actively re-engage with the government. We also dealt with issues, not personalities.

Of late we have also seen the need to carefully analyse issues and to present them in camera to decision makers. If our views were considered sensitive, since what we needed were results, we adopted this practice in preference to making public statements to the media, which we continued to do only on non-controversial matters.

Q: When you were the Chairman, what kind of role did the CCC play when it came to peace, economic development and social responsibility?

A: At the time I was the Chairman, I had a firm view about the need for negotiations with the LTTE to find a political solution to the conflict. However, since then, the LTTE has demonstrated that it will not settle for anything less than a separate state, and that it will use a multi-pronged strategy of military action, violence, terrorism and political manoeuvering to win its goal.

I took this view after considering the LTTE’s response to what was first regarded as the Oslo Declaration, where the UNP government made a firm commitment to offer a federal structure. The LTTE later stated that it was not a declaration but a mere statement.

At the presidential elections, it used its force to prevent Tamil speaking people from voting, which, according to many, robbed Ranil Wickremesinghe, whose policies led to the Ceasefire Agreement, and was prepared to devolve power through the federal system.

On the economy, our position was, and still is, that the budget deficit should be curtailed as it would bring down inflation, stabilise prices, reduce interest rates, and also avoid a sharp depreciation of the rupee.

Another view we took on the economy, was that free market forces should be allowed to operate, and the role of the government should be to establish regulatory bodies, and appoint independent experts to run them and to keep them free from political interference.

Development of infrastructure and speeding up the projects that had been planned or started, was one of our key recommendations. We continue to take this view to date.

Social stability depends on political stability and social infrastructure. The CCC would therefore desist from doing anything to destabilise a government. Once elected, a government should be allowed to govern, and the chamber’s role should be to have an effective dialogue with the government, and play an influential role to promote private sector interest, as long as it is not in conflict with national interest.

We also believe, and continue to believe, that a cornerstone of social stability is an environment in which people of the country, in particular minority groups (ethnic, religious, economically and otherwise underprivileged, caste and other groups), could live in harmony without fear and discrimination.

Q: What suggestions do you have in terms of the private sector’s future role in national issues such as peace, educational reforms, poverty alleviation, healthcare and social responsibility?

A: The private sector should be engaged in issues such as peace, educational reforms, poverty alleviation, healthcare and social responsibility, because private sector interests cannot be confined to trade and investment.

For instance, education is at the core of promoting human understanding, respect for laws, good conduct, governance, competing in the global economy, and combating poverty as well as diseases.

Peace is at the core of social stability. Poverty alleviation is a key challenge, if we are to avoid social tension that would occur when a segment of the population lives in abject poverty, earning less that Rs. 220 a day. Inflation and the rising cost of living hurts the poorer sections of society the most, and the affluent, the least. In fact, those who own assets, benefit from price rises at the expense of those who do not own property.

Healthcare is one area in which, as a Third World country, Sri Lanka seems to have done well, largely due to the efforts and dedication of medical professionals and healthcare workers. However, the quality of healthcare services at a national level needs much improvement.

There is a vast disparity in the services offered by government hospitals operating under the old colonial structure, as opposed to Sri Jayewardenepura Hospital, which has far more autonomy and flexibility in governing it. The growth of private sector hospitals, some with mega investments, has been a positive development.

Q: What are the strengths and weaknesses of the private sector?

A: I would say the private sector is a vast group of businesses, which accounts for 80% of the economy. However, more than half of this is the informal private sector comprising cottage industries, tea smallholders and other such producers of agricultural crops, blacksmiths, carpenters, vehicle repair garages, etc.

I would concentrate on the formal private sector, in particular those who are running business establishments in the agricultural, industrial or services sector, with some form of business registration and legal status for their business entities.

The formal private sector strengths are entrepreneurship; focus on profits and therefore value addition; growing recognition of the importance of corporate governance; compliance with laws and regulations; the need to protect the environment; and the need to adopt ethical practices.

The private sector also gives an opportunity to the hardworking and intelligent youth, to hold progressively responsible positions and earn higher rewards. Some of them have excellent management practices and are daily improving their corporate management skills.

Weaknesses cannot be generalised. There may be a few private sector companies that engage in unethical business conduct. But these are only a few, and should not in any way dilute the excellent contribution made not only to the economy, but to society by leading local blue chip companies, multinationals, and professional firms that seem to set the trend for others to follow.

Q: How would you assess the degree of good governance in the public sector, and what best practices would you recommend?

A: There is much scope for improvement of governance in the public sector. Firstly, it should be depoliticised. Officials should be given encouragement to act in the best national interest, and to advise politicians on what is best for the country. They should be protected from unwanted harassment and litigation, especially when they take decisions and act expeditiously.

There has been a spate of recent allegations levelled against honest public officials, simply because they had taken action within 24 hours after decisions were taken or approval was granted. These have been interpreted and sometimes used to fabricate allegations of corrupt practice, when in fact the officials had acted in best interests with a sense of urgency.

Q: What are your thoughts on Sri Lanka’s current status of development / prosperity / progress?

A: If you look at GDP growth, it has been a cumulative 20% in the three years to December 2006. Per capita income has grown even faster and is expected to have reached US$ 1,400 in 2007. Poverty levels have also dropped over the years. According to the last available data, from the period 1995 to 2002, poverty at national level dropped from 29% to 23% and the urban sector level had dropped to 8%.

However, income disparity has widened. We also have high inflation. The challenge is to maintain growth without figuring inflation, the unbearable cost of living and growing disparity of income.

Q: What are your views on the role of the Central Bank and the independence of the Central Bank?

A: Independence of the Central Bank is paramount. It is the Central Bank that could help the government to adopt policies that will help the economy in the long-term, and avoid short-term measures that may be politically advantageous but damaging to the country and its people. The role of the Central Bank is to maintain price stability and financial systems (banks and others) stability. One tool the Central Bank has to curb inflation is interest rates.

Q: Speaking at an LBR-LBO CEO forum recently, you pointed out that Sri Lanka should follow in the footsteps of Ireland and adopt a bipartisan approach to settle the north east conflict, curb crime, eliminate corruption, introduce labour reforms, education reforms and public sector reforms, and to enforce unpopular and perhaps initially painful fiscal discipline, to make Sri Lanka a prosperous nation. Could you explain your stance?

A: It has not changed, except in that dealing with the LTTE, appears to require building military strength as it adopts the multi-pronged strategy described above. But what is needed is to address issues such as human rights, civilian casualties, lawlessness by paramilitary groups, strengthening democratic institutions and checks and balances, which would give – especially the minorities – confidence that their lives and property will be secure, and they could live without intimidation.

Giving equal opportunity in education and employment, and the implementation of the Languages Policy with Sinhala and Tamil as national languages, would win the hearts and minds of the Tamil speaking people and isolate separatists and those who are responsible for violence. The government should not allow anti-government forces to hijack concepts such as human rights.