Proper plan needed-Bandula Gunawardena

Proper plan needed-Bandula Gunawardena


Bandula Gunawardena, Minister of Information and Communication Technology and Higher Education, Technology and Innovation, prefers to get down to brass tacks. Barely three weeks into the new administration, he has already laid down a rough plan for the months ahead; months which, by all accounts, will be stormy depending on how the government and cabinet handle them.

With hiking debt levels, inflationary pressures, depleting foreign reserves and foreign exchange, and of course declining growth, the challenge must and will always be to rescue the economy from recession and also encouraging people to invest, buy, and save. In a context where research and development takes up barely 0.16 % of GDP, however, this is going to be difficult; indeed, no proper initiative was taken by the previous government to combat the latter problem, one which has ailed the economy for over half a century.


Speaking to OSL-THE Investment Magazine, Gunawardena was quite emphatic on the point that a proper plan needs to be formulated. “Unfortunately with elections around the corner, this government has a very limited time frame within which it can work. The cabinet is small, in keeping with the president Mr Gotabaya Rajapaksa’s election manifesto. The plan thus needs to be for both the short and long term.”

More or less a blueprint for the future of the economy, it will no doubt delve into areas of vital importance: to name a few, investment in innovation and technology, higher education reforms, and the revitalisation of tourism. Whatever policy decisions are taken, they will fall squarely within what Gunawardena considers as the two main objectives of Rajapaksa’s manifesto: “The protection and the security of people and their property in our country, and the establishment of an environment in which our most precious resource, our people, can find a way to realise their educational and career aspirations.”

Given that a large proportion – statistics don’t tell us exactly how much – of youth voted for Rajapaksa this time, there’s no doubt that youth issues will preoccupy him and his team for quite some time; indeed, for his entire first term. “People wanted a change from the change supposedly voted into office four years ago because they were tired. In that context, they are in no mood to entertain more of the same. Our actions so far prove that we’ve understood that and more to the point, that we are only too willing to listen to them.”

As evidence, he points out that after assuming power, “the president quite clearly laid it down that there should be no waste or pilferage in government offices.” At the first cabinet meeting, moreover, “we came up with a wide ranging economic stimulus package which slashed taxes, reduced the cost of living, and gave the common man some breathing space.”

Tax cuts

By all accounts the stimulus programme is ambitious, if only overtly so. Far more expansive and expansionary that Ravi Karunanayake’s much touted “Robin Hood” interim budget of 2015, the package included the abolition of withholding tax on interest income, the capital gains tax on the stock exchange, and the Nation Building Tax on household goods, services, and products, as well as the reduction of taxes on the construction industry from 28 % to 4 % and the Telecommunications levy to 25 % and the simplification and consolidation of VAT and NBT from 15 and 2 % (a total of 17 %) to 8 %.

Moreover, the president has pledged to abolish all taxes relating to ICT, in a bid to bolster investment in that sector. Probably more carefully planned out than Karunanayake’s budget (which saw, inter alia, the imposition of a facilely anti-rich mansion tax), Rajapaksa’s pre-election bonanza has gleaned mixed reactions for the most from local and foreign analysts.

The question, obviously, is that of financing these goodies, which seem to be heavily tilted to the middle class, along with those engaged in agriculture. Gunawardena categorically denies that these were implemented purely to secure victory at the parliamentary election next year, arguing that Rajapaksa was voted into office on a mandate to ease the burden on people, and this necessitated an across the board reduction of taxes.

“In the long term we hope to reduce intervention in the market while being mindful that there needs to be some sort of management. The stimulus was needed because people didn’t invest. It’s holiday season. People need to spend and get money circulating around the economy.” In other words, these are all a foundation to far more ambitious yet rational proposals next year.

“We are trying to avoid an interventionist line as much as possible,” Gunawardena tells us, adding that the problem with the last regime was their mishandling of economic affairs which “sent debt levels spiralling out of control and forced us to go begging to the IMF. We have commitments to keep to the IMF and we will stick to them. Meanwhile, we will implement reforms that will allow us to grow out of our dependency on them.”


Though it’s probably his favourite subject, economics isn’t the only thing on Gunawardena’s priority list. He’s also in charge of ICT and higher education, two fields that are inextricably bound to each other. When queried as to what he wants the future generation of the country to think about him, Gunawardena confidently smiles and says, “Just think that father has finally come home. I’ve been in education for over 30 years, as a teacher and a minister. I’ve never radicalised students and I’ve always had their future as my priority.”

According to Gunawardena, there are currently two issues which need to be resolved, if not combated. “On the one hand, we have so many students passing through their O Levels and A Levels and securing a good enough mark to enter university who are nevertheless debarred from entering it. They can’t progress beyond school life and this tends to ferment discontent. That is a problem of intakes, and I think we can resolve that by expanding the State university sector and by making available a wide range of educational and career options to students.

On the other hand, discontent is always going to be there and students invariably resort to strike action to make their grievances felt. Often this obstructs traffic. My proposal is to appoint for each university an ombudsman, the first resort a student will have to present his grievances. I will be meeting the chancellors of State universities and we will be implementing an action plan to create an ombudsman’s office. We will do the best we can to resolve grievances at the negotiation table, rather than out on the road at Lipton Circus.”

As for research and development and ICT, “at present we will get universities and research centres, including the Arthur C. Clarke Institute, to help us increase the contribution of R and D by the time we present the budget next year. We need a fully fledged plan encompassing research and ICT, a two-pronged strategy that involves every sector and person. You will no doubt ask me how we can grow out of the mess we are in through these reforms. Well, the answer to that is obvious. Once all of us, in the public sector as well as the private sector, get into a culture of working, instead of relying on handouts, we will get the economy moving. You work, you do, you earn, and you bring money in. Simple. That is the only real solution we have. We in the new government will help facilitate the transformation that will be needed to help get us out of this rut. That is the promise we give to you.”