The newly appointed Finance Minister Ravi Karunanayake recently revealed that steps have been taken to transfer funds, amounting to close to eight billion rupees in an account allegedly maintained by the Former Defence Secretary at the Taprobane Branch of Bank of Ceylon, to the Treasury. In an interview with Dailymirror , Minister Karunanayake spoke on this issue, as well as other corruption charges against the previous regime, the current state of the Treasury and the new regime’s financial plan for the future.
QLet’s start with your recent revelation that Rs. 8 billion was found in an account maintained by Former Defence Secretary Gotabaya Rajapaksa at the Taprobane Branch of the Bank of Ceylon. Mr. Rajapaksa has rejected the allegation saying that it was an official account set up with Cabinet approval with the funds to be spent for the construction of the Army HQ building at Pelawatta. What is your response?
Gotabaya is basically going on a trip of his own. We did not say that the money found in his account was not used to build the Army Headquarters. All we said was that no person can have money outside the Treasury but he has done it. Any other person who has done something of this nature would be behind bars because it is a flagrant violation of the ARs and FRs of the country, and if he doesn’t know that, I am sad to say that he has been running such a high office without knowing the basic law. This is not a witch-hunt; it is just a factual statement of what it is.
As a matter of fact, this was discussed at the Cabinet as well, and the Army Spokesman who gave a mischievous statement was also replaced because of such. What we said right along was that money was in the account of the Defence Secretary. You cannot have money outside the Treasury.
Q Have you received any evidence as to what this money was used for?
We are less than two weeks into office so we need a little more time to analyze what motives were behind this. But we are astonished on what we have found, and it is far from anything that is required by the people of this country. They dished out what they want to give to the people.
Q Have you found any information on the alleged assets in Seychelles belonging to former first family in Sri Lanka and their closest associates?
Well, there are lots of things. But when we are in the government and holding high office, it is irresponsible to utter something without full corroborative evidence. So I would rather answer that when I have all the information in my possession.
But what I can say is that the state of the economy is much more precarious than what we previously thought. The debt is exorbitant. Earlier it was envisaged to be about 7 trillion rupees but now we realize that it is in the range of about 7.6 trillion rupees. The interest rates on borrowings have been astronomical. We have to hit the base to see what is the real state of the economy is, and that we will reveal as soon as possible.
Q Just this week, the former Central Bank Governor Ajith Nivard Cabraal’s passport was seized. Do you think that this is justified?
Seizing the passport is the least what you can do. The Hedging alone is about worth a loss of Rs. 80 billion. That is just one aspect. He is one of the individual who have contributed to the present mess in the economy. We will be starting investigations on that. We will be able to reveal the heinous crimes that have happened with corroborative evidence in the future and you will be able to see how this economy has been robbed.
Q The former President claims that the new regime, together with the police, is harassing him and his family. Is that true?
I don’t know what exactly he has said, but I am sure such a statement would have been made for sympathy rather than for actual reasons because there is no such personal vendetta. We have not taken the law into our hands. We are letting the Police and Courts do their job.
Q Will you be conducting an audit on the Treasury?
The President and the Prime Minister have requested me to ensure that we give a full report on the status of the economy. I am trying to do that, or at least have an overview of the economy by 29th of this month. An audit will certainly be done in compliance with the fiscal responsibility.
Q So far, since you took office as the Finance Minister, have you come across any anomalies in the Treasury and the records?
Oh yes! Firstly, what was said in the budget has not been allocated. The next is, there are cost expenditures that were discussed and people have come directly and said those are much less. So we have to get things together.
Q When you were in the Opposition, you repeatedly criticized the then regime’s mega projects, such as the Hambantota Port and the Mattala Airport as being ‘useless.’ What are you doing to recover the money that has been lost on these projects?
I mentioned these were useless because they are useless! And only now we have confirmed that they are absolutely useless. We have to stop any additional funds allocated towards these projects. People who suggested these projects themselves now say that these projects are a waste of money. Have we got to say anything further? The entire previous Cabinet has allowed this to go on.
The need is to instil discipline in the Finance Ministry. The people trusted the President on honesty, good and clean governance and voted him into this high office. In turn the Prime Minister was appointed on the same beliefs and they have both appointed me to the Finance Ministry to ensure that we run the cleanest and most efficient Finance Ministry. On this basis I would love to get the support of the media to not reduce corruption, but to eliminate corruption and ensure that the information is with the people.
Q The former President was also the Finance Minster. Have you found any direct links to suggest that he has misused public funds?
Well, the former President who was the Finance Minister should take full rap on what was going on here. For eleven years there has not been a proper Finance Minister here. The expenditure has been out of control. That is what we are now analyzing. We will tell the people before too long as what has been going on.
One very direct example is the expenditure on helicopters. They had spent $ 425 million for 17 aircraft when the actual cost is in the range of about $ 200 million. Then SriLankan Airlines purchased aircraft with prices for the longer range, but the actual aircraft are of a shorter range. They cannot cover these types of things. Likewise they wanted to wipe off the losses incurred by the SriLankan airlines and Mihin Air.
Q What is the plan to salvage what has been lost in terms of misuse of funds and wastage?
This money is the people’s money, and as the President said we are only temporary position-holders on behalf of the people. So we are indebted to the people and we are the servants of the people and not the other way around. Keeping that in mind, even a single cent that is not properly spent or is questionable, will definitely be put to probe irrespective of what the stature of the person is.
Q Let’s talk about the interim budget, which is scheduled on January 29. What can people expect from this budget?
You can expect exactly what we promised, and we will ensure that it is done in 100 days or less – not more.
Q There were reports that you are to appear in Court for the Raj Rajaratnam’s case on the very day of the mini-budget. This is causing some speculation in the minds of people. What have you got to say about this?
Yes, I am going before the Courts. This is something that has been going on for ten years, and just because I am a Minister, I will not evade the Courts; I will still go to the Courts. They know that this is a malicious prosecution and the people will get to know why we were subject to such harassment. For ten years they have not been able to prove anything so what are they going to do now? So you are right, 29th is the date of the mini budget and on that morning I have to appear in Courts. I will go to the Courts because I want to show that ministerial powers do not mean that I will hide behind them.
Q You recently met the International Monetary Fund (IMF) officials. What have you discussed with them?
We explained to them the economy we have inherited. We explained that we need a compassionate approach rather than just sticking to the book. We will not be subject to multilateral agency dictates unless it benefits our people. But we are very committed to have conditional loans so that people have the lowest interest rates when we borrow unlike the Chinese loans that have interest of 7 to 8 percent. With that in mind, whether it is the IMF or the World Bank, we are carrying one message. Please help us bring the economy back into order. Which is difficult but we want to do that without further burdening the people.
Q And, what has been their response?
I must say that they have responded favourably. They are astonished that there has been a change of government, and with the change of government the impact on the economy. What has been told to them is completely different to what is being presented now factually. I think they understand that we have inherited the economy from the previous government, which has been absolutely corrupt. So I am sure before too long they will provide the interest that we, as a nation, deserve.
Q Some analysts are critical of the financial dependence on IMF and the World Bank which has been quoted as the reason for moving toward loans from China. In that context, do you think it is a good idea to go back to the IMF for loans?
If we can get a loan with 0.5 percent interest, and all they want is to ensure that we are transparent, then what is wrong in that? On the other hand, when you go to the Chinese banks and get 8 percent interest for loans and do what you want and put 4 percent into your own pocket, that is not beneficial. I would certainly prefer to make the financial process more disciplined by going through the tortuous process of much more guided financial discipline borrowing. That is ‘conditionised’ loans. This is not our money, this is the people’s money and we are held accountable for every single cent.
Q Does that mean that China’s economic presence be reduced, if not completely scrapped?
The economic presence of China needs to be reduced to eliminate the element of corruption. We are not specifically against anybody. If China can give us loans at 0.5 percent, we would love to take it. But not the 8 percent interest loans; of which 4-5 percent went into the pockets of certain individuals and two or three family members. That is not allowed.
Q What about the Port City project?
The Port City project has been very categorically said was not done its environmental impact studies. It has not run through the proper methodology. They started without any strategic development approval. The country’s future will be put to stake in the sense into a state of national security. And owing to that fact, the entire project will be reviewed and all inimical clauses will be reconsidered.
Q There is a doubt whether the so-called ‘Yaha Palanaya’ (Good governance) would only be limited to 100 days – that is till the General Elections. What is your response?
Why do you want to be pessimistic? When we came up with the 100-day plan, the previous government said it won’t happen. But it is happening now. We have completed the tasks that were on the plan until now. Now they are still questioning the rest of the days. We will tell you that it will be done before 100 days, and it will be a journey that will exist democratically for the next 15-20 years. This is the first time we have got all the parties together.
Q There is a criticism against appointing you as the Finance Minister because of the allegations of corruption levelled against you. What is your response?
Thank you for asking that question. There were many things that were said. They said I have robbed Sathosa. For ten years, what were they able to do? They finally had to apologize. Then they said there were 3 million dollars that came from Raj Rajaratnam. For ten years this case has been carried on and nothing has been proven. So all what I have got to say is, that I am upfront and we are working toward progress. Everyone would love to shout but you have to make things happen.
Q Are you confident that the new regime’s cabinet will be free of corruption?
I could only speak for myself, but I am sure the President and the Prime Minister are very determined and my Cabinet colleagues are also of the similar opinion that we are there to eliminate corruption and not to reduce. I will ensure from the Finance Ministry that it will be done. Human frailty does exist but that is not exempt from our good governance policies. We will ensure that no one would be molly-coddled, irrespective of the title or the position they hold.
Q Finally, as the Finance Minister, what are the changes you are going to implement in the Finance Ministry and the Treasury?
I am a Cabinet Colleague of the President and the Prime Minister to ensure that this country gets what it deserves. It is not that this country cannot be developed; it is whether you want to develop it. Today, we have a very industrious working population as well as people who want to contribute to society. But unfortunately their enthusiasm has dampened due to corruption, misappropriation and the family bandyism. As a result, the futuristic prospective of the country was lost. We want to get that back. The bribery and corruption culture has ruined our economy. We want to have an export-led growth. We want to get back the investors who left the country because the process was too corrupt. Let us give people the comfort that they can develop in the country much better than they could do. We want to start the economic growth activities and have a close relationship with the international community. We don’t want to be aligned with anybody but we want to hold hands with everybody and go forward.