by Prabath Sahabandu
Minister of Commerce and Consumer Affairs Ravi Karunanayake says the UNF government is at its tether’s end and it can no longer cohabit with the president. "We are trying to accelerate the government, and she is putting brakes from the President’s House," he says.

He blames her for what he terms her whimsical and capricious behaviour. He says the President is trying to look after the interests of only the Bandaranaike family. She, he says, does not care for the country.

He believes that food prices have come down since the UNF took over government. For example, says he, rice was selling at Rs.41.00-42.00 per kilo last December and now it has come down to Rs. 23.00.

He is sanguine about the passage of the 18th Amendment to the Constitution to clip the President’s wings further. "We have taken upon ourselves what the PA MPs want to do themselves," he says.

Minister Karunanaykake dismisses as ‘sick-minded accusations’ the allegations levelled against him by the PA over the controversial rice deal from which the President says he lined his pockets to the tune of Rs. 542 million.

What is Karunanayake’s version of the rice deal? Why is he keeping the CWE outlets open 24 hours a day? Is he trying to sell the CWE building in Fort for a song as the Opposition alleges? What has he got to say to the allegation that he is attempting piecemeal privatisation of the CWE to help his friends? Isn’t the government putting all its economic eggs in the peace basket? Above all, isn’t he responsible for the cabinet battles that have led to political uncertainty much to the detriment of the economy?

Minister Karunanayake fields these questions and more in an interview with The Island.

Excerpts:

Q: The UNF during its election campaign promised to bring prices down. But Cost of Living is still very high. And your detractors say that the battles that you are fighting with the President Kumaratunga over her handbag, vehicles etc. are only a red herring to cover up your failure. What would you say to this?

I totally disagree. When we took over government we inherited an economic mess with very high cost of living. If you are talking about food prices, when we took over government rice was Rs. 41.00 per kilo. Today it is Rs. 23.00; milk was Rs. 127.00, today its is Rs. 99.00 or less in some places; sugar was Rs. 37.00 today it is Rs. 30.00; flour was Rs. 22.00 then, today it is Rs. 18.00-19.00 even after taking subsidies away; dhal was Rs. 57.00 then, today it is Rs. 53.00. If you look at vegetables, there is a 30-40 reduction in prices.

So what is the Opposition talking about? President Kumaratunga said, "Sakkaraya Avath Bassanna Beha [even God could not reduce prices]. But Mr. Ranil Wickremasinghe and Ravi Karunanayake have done it.

This may not be good enough. I agree. Then what can we do? When we inherited SATHOSA with about 16 billion rupee deficit and when no money is being given by the Treasury, we have to live with the means that is there. I have got to do miracles. Some we have done immediately. I would say impossibilities would take a little longer.

Q: The battles that you and a few others are fighting with the President have led to a constitutional crisis of sort, which has resulted in political uncertainty much to the detriment of the economy. What would you say to this?

There is a general feeling that there is quarreling going on in the cabinet. What we are doing is to be proactive rather than act like an ostrich. We are having a problem with one person - absolutely no problem with the PA or any other political party.

We have a problem with Chandrika Kumaratunga. Her track record is what we are basically questioning. What she says is not what she does and vice versa. If you look at the problem, the reason why it has come up is her total whimsical and capricious behaviour. Some want us to trust her and work. How can one trust her and work with her when she has let down so many.

She has let down the JVP with which she agreed to abolish the Executive Presidency; she has let down Srimani Athulathmudali; she has let down Rauf Hakeem; she has let down Liam Fox; she has let down the Sri Lanka Mahajana Party; she has let down the Bahujana Nidahas Peramuna (BNP); she has let down S. B. Dissanayake. G. L. Peiris and Mahinda Wijesekera. She has let down Norway, which did facilitation.

Therefore one cannot expect us, who have been elected by the people to smile and accept what she says. We have got a very honest staff to convert Sri Lanka into a very strong economy.

She wants to protect only herself and the Bandaranaike family.

Q: You say President Kumaratunga has let people down. What if she turns around and says that you too have let down parties, for example the DUNF and the PA?

I left only the DUNF to join the UNP. I was made to leave the PA.

Q: You say you have a problem with only President Kumaratunga. It is believed that before you and a few others were absorbed into the cabinet, clashes between the President and others weren’t this intense. Can’t she also say that she has a problem only with a few including you and that she can work with the rest of the cabinet?

She has every right to say that. And I don’t dispute that. Let the people decide. I have been elected by the people and appointed a minister by the PM. I bow my head only to the people and the PM - not the President, who is trying to wag the head with the tail.

Q: The UNF is going to amend the Constitution to overcome its problem with the President. Supposing you succeed, when you face another problem with her, you will want to amend the constitution again. Where will this end?

You can see what a difficult job the PM has. Even with all the hazards still he is trying to cohabit. He also says, "Let’s work along with her." But what we tell Chandrika Kumaratunga is that she can’t stand in our way. We are trying to accelerate the government and she is putting brakes from the President’s house. How can you run a government like this? Every single thing of importance that the government tries to do, she blocks - sometimes even the things her government was doing, she questions when we try to do them.

Q: Ms. Kumaratunga was elected President by the people at a national election in 1999. And at that election Mr. Ranil Wickremasinghe whom you are trying to promote against her was rejected by the people. Later he was returned to Parliament by only the people of Colombo, and he became Prime Minister. Therefore what moral or legal right does the UNF have to clip the wings of an elected President to enhance the Prime Minister’s powers? Aren’t you flying in the face of a people’s mandate in doing so?

Firstly, we don’t accept the way she was elected President. People know frauds and malpractices which that election was fraught with. The Elections Commissioner was sick at that time and a complete outsider was appointed as acting Commissioner instead of a deputy commissioner. So don’t expect us to accept that victory. On that basis you are asking a question, which is a non-starter.

Mr. Wickremasinghe was elected by the people of all walks of life. His victory was further confirmed by the people at the Local Government Elections. His gentlemanly approach was accepted by the people.

We don’t accept the election of Chandrika as President.

Q You say you have a problem with the way Ms. Kumaratunga was elected President. Then why did the UNP withdraw the election petition filed against her?

The UNP has given reasons why it was withdrawn. If you remember, Chandrika Bandaranaike herself accused some judges and said she did not have confidence in the judiciary. Then how can any one else have confidence in it? The withdrawal of the election petition does not mean that we accept her election.

Q: The PA says you are harassing the President by levelling unfounded allegations against her. For example, she says you accused her of carrying a bomb. Your comments, please?

She went around the country saying that I said so. I never did. All 31 members of the cabinet confirmed that there was never a word about a bomb.

Q: Couldn’t it be that you said so but your cabinet colleagues belonging to your party stuck together to help you out?

Do you think we have a spineless cabinet? We have honourable people. We don’t cover up mistakes. If I make one, I will admit it at once.

Q: You say the 1999 Presidential Election and all other elections under the PA for that matter, were fraught with malpractices. If so, why is there an inordinate delay in appointing the independent commissions under the 17th Amendment passed unanimously in Parliament under the PA?

We were the ones who wanted these commissions appointed soon. Their appointment was delayed by the President herself. The Prime Minister has said in Parliament very categorically that in two to three weeks they would be appointed. There are no elections round the corner. But that will be done.

Q No elections round the corner? That is you are confident of having the 18th Amendment ratified? For the government said the other day unless it was passed, it would go for a snap election.

The 18th Amendment is not basically our problem. It is the PA parliamentarians who are today saying, "You are doing what we have got to do." They thank us for having taken it upon ourselves. They say by doing it, we are helping to solve the problems of the PA.

Q: How many PA MPs are saying so?

Well, basically every one of them is saying that.

Q: That is you are confident that the PA will vote en bloc for the amendment?

My feeling is that there won’t be any necessity to muster their support. The PA is in tatters. They basically say, "Don’t ask for our votes. Here they are. You go ahead and do it!"

Q: You were one of the crusaders against alleged corruption of the PA. But today the PA as well as the President is levelling allegations of corruption against you. For example, they say you are attempting piecemeal privatisation of the CWE - by breaking it into several parts - so as to help your friends. What would you say to this allegation?

Chandrika Kumaratunga should not think the way she thinks is the way we think. We have come forwards to serve the country, not ourselves as she has done. What we want is to ensure that we have a commercialised well-run CWE. In 1994 when the UNP handed over government to the PA, the CWE was making a profit of Rs. 1.1 billion. When we got it back last December, the net debt was Rs. 8.8 billion in accumulated losses and Rs. 6.5 billion in bank overdraft. Why did it happen? Simply because of corruption and mismanagement of the PA. The Treasury does not give a single cent to us. To digress a little, you asked me about high cost of living. If not for the mess the CWE is in, we would have been able to sell goods 7-8 per cent less than today’s prices. Why should the consumers be made to pay for the sins of the PA.

So, what we have decided is this: If you sold a company like this en bloc, it would be bought for nothing. The CWE certainly has a good will and a socially responsible role to play. I will in no way recommend to the cabinet something that is not good for the country. I am sure the Prime Minister will not allow something just for the sake of privatisation if the IMF/WB says unless it is good for the country. What we thought was to break it up into seven sectors like wholesale, retail, distribution, development etc. Through this process we will be able to ensure that we have a safer company to go forward. No one person will get control of any activity. So, is that bad? We are looking at open tenders - not the way Chandrika did with the Battaramulla land and so on. She openly says she gave it to a friend. I ask her not to judge us by her standards.

Q: you say that the government stand is that no state institution will be privatised unless it is good for the country. But you are going to privatise the Sri Lanka Insurance Corporation, a giant state venture making huge profits. Why is it?

Profit and loss is not the judgmental factor. If you can do much better, why worry about being ‘good.’ We want to tap its fullest potential.

Q: The PA says you are trying to sell the CWE building in Fort for a song to a friend. What’s your version of the story?

There are two buildings that we have put up. One is going into debt. We thought of selling the Negris building. We are looking at, may be, Rs. 130-150 million. The bids that have come are not good enough. The prices offered are ludicrous. We have basically decided to rent it. These are preposterous claims being made by the PA. Today every month this ministry goes before the press. And the media can ask any question. And not a single question has been asked about doubts of credibility of the ministry. When I took over this, it was a stinking den of corruption. Today there is not even an allegation of five cents being played out.

We don’t even claim our petrol bills. I am using my private vehicle. The PA is smarting as to why we are doing it.

 Q: Recently in Polonnaruwa, President Kumaratunga alleged that you had pocketed Rs. 542 million by selling a consignment of rice in a fraudulent manner. It is said you sold this consignment imported by the CWE at Rs. 17.50 per kilo while prices of rice were as high as Rs. 27.00 in the market. What would you say to this?

Again this is what the PA and Chandrika say. When our government came in rice was selling at Rs. 41.00-42.00. A seven-member committee of minister looking into cost of living decided that we import a small quantity of rice owing to lack of supplies. It was imported under cabinet supervision. Chandrika’s own cabinet appointed tender committee went into it. Out of 12 tenders, the best was approved. 40,000 tons were brought in. Within one week of its coming, prices came down from Rs. 41.00 to Rs. 27.00. The PA is smarting as we did what they had not been able to. 40,000 tons constitute only seven days’ consumption in the country.

There are three persons including a brother of a former minister in Polonnaruwa having 18 per cent of the market share. The held the stocks to politically show that we were not able to compete. They are angry today. We imported rice and held it for 3,4,5,6 months at an interest cost of Rs. 350,000 a day. The government did not allow it to be sold at a price lower than Rs. 27.00 so as not to harm the local farmers.

Q: Can you elaborate on this? What was the total value of the consignment? Where was it imported ? How much of it was sold retail and how much wholesale? How much of it is left? And what were the whole sale prices?

The total value of the consignment imported from India was Rs. 784 million. Of the 40,000 tons, 17,000 were sold retail at Rs. 27.00 and then at Rs. 23.00. 12,000 tons were sold wholesale to several persons at Rs. 21.00 if the amount purchased was 1,000 tons; at Rs. 18.50 if amount was 2,500 tons and at Rs. 17.50 if the amount was 5,000 tons. And the profit made was Rs. 40 million.

Q: Why was rice sold wholesale at lower prices?

We found that even when the price of imported rice came down to Rs. 23.00, people preferred local varieties. The interest cost was Rs. 350,000 daily. And with packaging, transport, storage, staff etc. the cost would have gone up if were to sell it retail and there would not have been much of a price difference. Chandrika says Rs. 542 million has been played out. The total value of the consignment is Rs. 784 million. So how can Rs. 542 be played out? We have also made profit contrary to the claims by the PA. We also had to sell rice to pay salaries in July.

These are only sick-minded accusations.

Q: You are keeping CWE outlets open 24 hours a day in spite of criticism from some quarters. What made you keep them open thus and have you achieved your objective?

Our objective was to provide consumers the opportunity to shop at any time. (Laughing) And more than that we wanted to tell 3,000 workers in excess that if they were not prepared to work then they had to go home. But today they have not gone home. Of our total turnover 7 per cent is between 9.00 p.m. and 6.a.m.

Q: What about overtime payments and other expenses?

We don’t pay overtime. We put them on shifts.

Q: You were very critical of corruption and financial irregularities under the PA. But the government has not only retained the Treasury chief under the PA but also placed him in charge of a vital institution. How would you reconcile you stand on PA’s corruption and this appointment?

The person is not fit to be in the system. If you look at Air Lanka, Shell, car imports for the President, French locomotives etc. the same person was responsible for them. That’s why we say that he should go. And the Prime Minister and the cabinet are very concerned.

Q: Then why on earth was he appointed?

It was on the wish of one minister. [not named]

Q: The government is banking very heavily on the peace process for economic recovery and development. Isn’t the government putting all its eggs in one basket?

Peace is a necessary component in a healthy economy. Upto December 05. 2001, there had been a feeling that there would be no cessation of hostilities. Today Mr. Ranil Wickremasinghe has been able to make a difference. With this kind of terrorist organisation, you cannot expect democracy to come the next day. We are treading a very difficult path. There has been no loss of life and loss of property since we took over.

We are not putting all eggs in one basket. We have to talk. But we don’t talk through fear. That is the hallmark. Peace talks have ended up favourably in many places in the world.

What we should keep in mind is that handling peace talks is like defusing a time bomb. You have to defuse it wire by wire.