Kumaratunga hints at "an effective compromise" with the LTTE

[TamilNet, Saturday, 12 June 2004, 15:00 GMT]
Sri Lanka’s President Chandrika Kumaratunga, in a prime-time TV address, has indicated that she is "seeking an effective compromise" to overcome the dragging differences with the LTTE that delay peace talks. The LTTE has been insisting on negotiating its interim administration proposals first, while the government wanted to have parallel talks on the final solution to the conflict. In her nation-wide telecast Saturday night Kumaratunga hinted at her readiness to "prioritise" the LTTE demand while not openly abandoning the government's position to have parallel talks on the final settlement.

President Chandrika Kumaratunga said that her government is yet to reach an agreement with the Liberation Tigers on how to proceed with the peace talks.

This is her first address to the Sri Lankan people since the formation of her minority United Peoples Freedom Alliance government in April this year.

Ms. Chandrika KumaratungeThe following is the full text of President Chandrika Kumaratunga’s speech:

The new United People’s Freedom Alliance (UPFA) Government has just completed 60 days since assuming office on 10th April 2004. I believe that it is 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 a 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.


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.

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.

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.

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.

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 centers, 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.

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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