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When you were elected to office in August 1994 you promised to resolve the ethnic conflict. You negotiated with the Tigers and after they broke the cease-fire in April 1995 began what you called a war for peace - a military effort to corner the LTTE and a political effort to address the problems of the Tamil people. There is a widespread feeling today that the war has come to a stalemate once again following the setback at Mullaitivu when one of the largest camps was overrun by the Tigers and the halt to military operations at Kilinochchi?
When one is at war one does not win all the battles even though one may win the war at the end. Especially when one is at war against a terrorist-guerrilla Organisation like the LTTE one cannot expect the results you have in a traditional war. Even in a traditional war not all battles are won even if one wins the war in the end.
As far as the military part of the campaign is concerned we have had very good successes. For the first time since the war began we have been able to bring under the control of the Government the most important and the largest part of the Northern Province, including Jaffna city. So about 60-70 per cent of the population of the Northern Province is also in government-controlled areas. We achieved this victory only seven months after military operations commenced. The major setback is Mullaitivu and we have advanced a certain amount towards Kilinochchi.
You intend looking at extra constitutional means or extra parliamentary means to resolve the political aspects of the (ethnic) conflict?
No. It would not be extra-parliamentary means. It would be democratic means.
Isn't the stability of your Government enhanced by the executive presidency, one of the features that is considered undemocratic?
Yes, but if some of the other undemocratic provisions of the Constitution were not there, then we would not need the executive presidency. For example with the number of votes we got we would have had an overwhelming majority in Parliament if we had the normal method of voting. Then we would not have needed an executive presidency to stabilize the situation.
About the parliamentary select committee process for constitutional reform, do you think there is still a possibility that the UNP might come round?
That is the imminent problem.
What do you see as the conditions necessary for such a neutral mediation?
First and foremost, we must be convinced that the LTTE would want to go to the end of a discussion and not use the negotiations process to strengthen themselves and hit back again, as they have done over and over again.
If tomorrow the LTTE leader, Prabhakaran, were to state publicly that he would like to contact the Government or engage in some talks with the Government through a neutral third party that is acceptable to both sides, how would your Government react?
If the LTTE say they are willing...
Well, we have to consider that. As a matter of principle, as I told you, we would be happy to do that. But it depends on who it is. There are a lot of people who have been offering for sometime, lots of people - peace NGOs, which cannot live without getting involved in peace processes, various individuals, and some countries also. We will have to look at the ability of such people and then decide.
There is strong criticism of the Government with regard to the economy. For example, in the month of June alone, prices rose by almost 4 per cent. There is a considerable increase in the cost of living and a rise in inflation. Would you consider the economy to be the Government's greatest failure?
The talk that the economy is not moving and that it has failed, I completely reject that. There are certain accepted norms by which one judges the state of the economy. One is the budget deficit, another is inflation... the other is of course unemployment. And I have here with me figures. The budget deficit averaged 13 per cent for the period of 17 years (of UNP rule).
When I took over in 1994, the budget deficit was at 10 per cent. With a 70 per cent increase in war expenditure, we were able to keep it down to 8.4 per cent last year, which is lower than for the entire 17-year period of the UNP. For the first six months of 1996, it is at 7.8 per cent. This year it is going to be more than last year, but we believe that next year again we can keep it down to less than 7.5 per cent.
Inflation (during the 17 years of UNP rule) was at (an average of) 13 per cent. During some years it was over 20 per cent. For the first year of our rule, with very strict budgeting and cutting down of expenditures, we were able to keep it down to 6-7 per cent. It was about five months after the war commenced that it started rising. During the second year (of the PA Government) it was at an average of about 12-13 per cent. That is with the war at its most intense, except for the period when the IPKF (Indian Peace Keeping Force) was here. Then as far as investment is concerned, we have had for the first time Fortune 500 companies coming into Sri Lanka. During the entire 17-year period of the UNP, not a single Fortune 500 company came.
The criticism that "things are not moving fast enough" is often being made. The strong criticism leveled against this Government is that it has the fundamentals right, that its broad strategy is correct and that it wants to do the right thing, but that it is unable to get the government machinery moving in the right direction. Many explanations have been given for this problem, such as lack of experience. Do you see this as a problem and what steps have you taken to remedy it?
It is moving, but it is not moving fast enough. The main reason for this is a malaise in the public sector that occurred before our Government came in. It is a malaise that has come right down the line. I have personally seen this happening, especially after '77. The public service was traumatized by state terror. Individuals were transferred 10 to 15 times within one year - political revenge. Very senior government servants were thrown out of jobs within one week of the UNP coming into power and others were not given promotions at all.
This was a malaise that set in because of the terror on the one hand and corruption on the other. And corruption seeped down: all the way right from the top, all the way to the bottom. Officers I know personally who were very honest and full of integrity ended up being very dishonest because it was the order of the day. And things moved depending on the amount of money handed out by various people. So we inherited a very sick public service.
When I became Chief Minister (of the Western Province), I remember saying, I dread the day that we have to take over the (central) government, because of the state of the public sector. So now we are taking very serious steps to correct this situation. I have a committee which is doing emergency work recommending what sort of public sector reforms we should pursue. We will have the report by the end of the year and start implementing it very soon.
What do you think has been the biggest failure of this Government. If you were to look back, what would you have done differently?
I wouldn't call it a failure, but our biggest inability has been to get the public sector reformed and moving. In every other way the goals that we set ourselves, - I think we have achieved them you - cannot finish achieving them in two years, but we are on the right track.
We wanted to achieve four major goals.
The first was getting rid of the terror regime and re-establishing democracy.
The second was the resolution of the war. I think that in two years, we have done a great deal. We have had many, many successes, both on the peace front and the war front. While we are on the right track, certain developments, I would have preferred them to have happened differently.
The third goal is anti-corruption. You can say that at the top level - and that is far more insidious and therefore difficult to attack - all important decisions have not been taken due to the monetary consideration that anybody got. They have been taken only in the best interest of the country. We may have made honest mistakes in taking decisions, but certainly corruption did not play a role. At the second and third levels corruption is still there, but much less, because we do not encourage it at the top.
The fourth is the economic front. That is certainly on the right track, as I mentioned earlier, but I would have liked it to have taken off faster. We have achieved many things (in the economy), with all the limitations imposed by the war. But we have failed, at the moment, to do anything serious with the public service. And this is where I believe we have to take serious action. Internationally also we have regained our respectability, but we have a long way to go.
So I feel honestly, and I would not hesitate to say so if I felt otherwise, that we have placed the country on the right track to achieve all our major objectives.