STATEMENT CONTRIBUTED BY MILINDA MORAGODA MINISTER FOR ECONOMIC
REFORM, SCIENCE AND TECHNOLOGY AND DEPUTY MINISTER OF POLICY DEVELOPMENT
AND IMPLEMENTATION OF SRI LANKA AT A SEMINAR ON SRI LANKA ORGANISED
BY THE CENTRE FOR STRATEGIC AND INTERNATIONAL STUDIES IN WASHINGTON
DC READ BY AMBASSADOR DEVINDA R. SUBASINGHE -
14 FEBRUARY 2003
biggest strength was exploited by our politicians and projected
as a weakness.
Fifty years ago the per capita income of Sri Lanka was
at the same level as countries such as Taiwan and the Republic
of Korea. We emerged out of colonial rule with a developing
infrastructure and the foundations for an efficient public
service and a strong education system. We were a multi ethnic,
multi religious society poised to convert our new found
independence and self confidence into economic success and
Unfortunately today we are near the bottom of the Asian
economic league with our economy in tatters, society divided
along ethnic, class and religious lines. Our society is
demoralised and our people have lost their sense of self
confidence, our education system barely survives and post
independence Sri Lanka has left a trail of lost opportunities.
Indeed ethnic and cultural diversity which should be our
What caused our fortunes to change so tragically? The reasons
are complex but they include bungled social engineering, a lack
of social solidarity, chauvinism, political interference, and
greed. The end result was that we lost our self confidence and
a country which even Lee Kuan Yew, former Prime Minister of Singapore,
referred to as a role model never realised its potential. In fact
today Lee Kuan Yew refers to Sri Lanka as a country which can
be used as a case study to learn from the mistakes.
Today we have the opportunity to start again. We have to address
the root causes behind a twenty year war and a longer period of
ethnic mistrust and bring hope back to a country where a majority
of our people are in a poverty trap. They are also disillusioned
with their political representatives whom they believe are only
interested in their own selfish gains. There is no doubt that
every Sri Lankan believes it is our last opportunity to get things
To do this we have to build a national consensus where all communities
and political interests are properly represented within a united
Sri Lanka. This is what our Prime Minister campaigned on during
the General Election of 2001 and this is now what he is implementing.
Without the international community investing political and economic
capital in this process it is doomed to fail. We are especially
encouraged by the support of so many in the international community
including the United States, India and Japan besides Norway which
we all know is playing the critical role by facilitating the peace
process. Even Asian countries like Thailand are playing an innovative
role. Many in the international community now look to us as a
beacon of hope in an otherwise dismal international landscape.
During the latter part of last year Japan took a historic decision
when the Cabinet of that country appointed Ambassador Yasui Akashi
as a special envoy to assist Sri Lanka in the humanitarian and
the economic aspects connected with the peace process and national
reconstruction. Mr Akashi's appointment symbolises a new phase
in Japanese foreign policy in which that country took a decision
to get involved in a peace process prior to it reaching the post
conflict phase. On the 9th and 10th of June this year Japan will
be hosting an international donor conference on the reconstruction
and development of Sri Lanka. Prime Minister Koizumi will be addressing
this gathering himself.
Prime Minister Wickremesinghe's visit to the United States last
year and his meeting with President Bush laid a new foundation
for US/Sri Lanka co-operation. The signing of a trade and investment
framework agreement (TIFA) at that time has created the basis
for increased trade and investment cooperation between the two
countries. In addition, visits by teams of experts to Sri Lanka
to assess needs relating to the economy and national security
have laid out the contours for future co-operation in these spheres.
Visits by Deputy Secretary of State Richard Armitage, Assistant
Secretary of State for South Asian Affairs Christina Rocca and
Deputy Trade Representative Ambassador Jon Huntsman to Sri Lanka
in the last year helped to develop a future roadmap for this important
bi-lateral relationship. In this context a key milestone was the
participation of Deputy Secretary of State Richard Armitage at
the special donor conference in Oslo last November.
The Prime Minister and his team have also been responsible for
further broadening and deepening the bi-lateral relationship between
India and Sri Lanka. India forms the cornerstone of our foreign,
national security and economic policies. In the new globalised
world the Prime Minister sees Sri Lanka as the economic hub for
the Indian subcontinent. Symbolically the Prime Minister's first
foreign visit upon taking office was for bilateral consultations
with Prime Minister Vajpayee in Delhi. And Foreign Minister Yaswant
Sinha's first foreign visit was to Sri Lanka. I have visited India
on five occasions last year for both consultations on the peace
process and also to move the bi-lateral agenda forward to further
our Prime Minister's vision.
Initiatives in this direction include the proposal to convert
the existing free trade agreement between the two countries into
a comprehensive economic partnership agreement that would cover
all spheres of economic activity. And an initiative to establish
a land bridge linking the two countries as well as multi faceted
initiatives to increase cooperation in investment, information
technology, tourism, communications and surface and air transport.
In the field of national security co-operation too Sri Lanka and
India have made much progress over the last year.
In addition a decision to remove visa requirements for Indian
tourists coming into Sri Lanka has resulted in many middle class
Indians choosing Sri Lanka for their vacations. As a result tourists
from India, earlier not considered to be worthwhile, have become
one of Sri Lanka's most important market segments. The fact that
India was one of the first nations to provide development assistance
to aid our reconstruction effort is a concrete manifestation of
this new phase in the Indo Lanka relationship.
Turning now to the conflict in Sri Lanka, for some years we had
recognised that a new approach was needed. Just over a year ago
we had the opportunity to do something different and entered into
what could be long and protracted peace negotiations with the
LTTE. After twenty years of war neither side could win through
military means. This conflict could not have winners and losers.
To succeed we had to have a win win outcome. We had to find another
solution and opted for the negotiated approach. We were fortunate
to have the support and attention of the International community
for the first time. Before that ours was the forgotten war.
We entered the negotiations, as Kim Dae Jung, former President
of the Republic of Korea said when he made his historic visit
to North Korea with "a warm heart and a cool head".
When I mentioned this to a foreign colleague of mine, he said:
"add a deep breath to that as well."
Recent events in northern and eastern Sri Lanka have shown how
important the deep breath will be.
Of course the warm heart refers to a genuine desire for peace.
But that desire must also be tinged with the realism that we are
nation building once more. Our task is to unite our multiethnic,
multicultural and multi-religious country into one equal, fair
and tolerant society. One within which each community has the
freedom and flexibility to maintain their identity and realise
their aspirations free of oppression and discrimination. If we
do that then war will be a thing of the past.
The cool head relates to our need, after twenty bitter years,
to keep up our guard. We have had ceasefires in the past and they
have been broken. People have died unnecessarily because the government
didn't keep up their guard. We don't intend to make that mistake
again. We have chosen to keep our armed forces in place and to
protect their integrity. We will not drop our guard until a peaceful
solution is finally agreed.
In a sense of new found realism, neither can we expect the LTTE
to drop their guard until a lot more trust building has taken
place. So those in our country who demand that the LTTE hand over
their weapons understand very little of the dynamics of these
It was John F. Kennedy who said in his election address of 1960
that "It is an unfortunate fact that we can secure peace
only by preparing for war". As we have maintained our guard
so the last year has been about trust building. We have succeeded
in moving from mutual suspicion to mutual caution. In this context
President Ronald Reagan's famous comment to General Secretary
Gorbachev "Trust but verify" comes to mind. Much more
of that has to happen before both sides can hope to say that peace
is truly achievable. In that context the Permanent Ceasefire Agreement,
signed on the 22nd February last year was a major breakthrough.
It was through the Permanent Ceasefire Agreement that we opted
to 'take that deep breath' and with the help of the Norwegian
Government to move the peace process forward. Right from the outset
the LTTE and the Government took a pragmatic and proactive approach
to trust building. Several joint mechanisms were set up to address
areas such as immediate humanitarian support, resettlement, security
issues, as well as women's issues. There have been problems. The
Sri Lankan Monitoring Mission from the Nordic countries has been
on the frontline of monitoring the ceasefire often risking their
lives and on many occasions the agreement has been broken. Child
conscription, extortion and allegations of arms smuggling by the
LTTE have been areas for recent concern. But during the last session
of talks these matters were discussed in depth with the LTTE.
As a result the Government and the LTTE have invited UNICEF to
help in developing a roadmap to end child conscription and to
look into the area of welfare. We have also invited a former Secretary
General of Amnesty International, Mr Ian Martin to advise us on
developing a programme for the human rights aspects of the peace
process. Intense discussions are taking place on the other issues
that I have highlighted above.
As tempers are still frayed there have been other incidents on
both sides. Nevertheless we continue to talk rather than fight.
This is the important difference. Those incidents will take place
and if both sides act responsibly and maturely we would hope to
see the trust build and a decline in incidents both in number
and severity. But the reality remains that we have a long and
uphill road ahead of us.
One area in which we have to do a lot more work is to build a
consensus between the politicians as well as civil society in
the South, to seek to invoke a non partisan approach and to seek
out new solutions to many long standing problems. It is important
that we seek some level of consensus between the politicians before
we take any peace proposals and solutions to the people for their
approval. The Prime Minister is working hard to reach across that
political divide and build agreement with politicians of all parties.
In the last year the road to peace presented many challenges
and difficult choices. For example soon after the signing of the
Ceasefire Agreement we had to deal with the issue of de-proscription
of the LTTE. There was much debate on this issue. Many in the
country did not believe that the LTTE had demonstrated enough
sincerity to justify such a decision. But the bold step taken
by the Government in this regard was a leap of faith which laid
the foundation for the talks to begin.
As the film maker, Robert Altman, once said "You don't change
people's ideas through rhetoric but by altering their way of looking
at things. You will only get rid of war when you get rid of the
pageantry surrounding it". Meanwhile some detractors are
concerned as to whether the final solution will divide the country
or not. Before the ceasefire if you were to go to the North and
East you would have seen a country already divided. A country
driven apart by boundaries between Government and LTTE held areas.
A further consequence of our civil war was a traumatised society
divided along ethnic lines. In the ultimate analysis Sri Lanka
was a divided society both geographically and emotionally. With
such an appreciation of the situation on the ground it becomes
clear that what this Government and our Prime Minister are trying
to do is to re-unite the country.
Nor must we forget that it was President Chandrika Bandaranaike
Kumaratunga who initiated this peace process by bringing in the
Royal Norwegian Government as facilitators to help us solve our
conflict. And with good reason for they have a track record of
helping warring parties across the world to come together and
seek a peaceful solution. As we pilot a difficult peace process
while seeking to engage in a fragile co-habitation between the
Presidency and the Parliament that is held by two different political
parties the Prime Minister has always sought to give due credit
for the role of the President and the opposition in starting the
peace process in this way. In every corner of our deeply divided
society we must look for win win solutions and a zero sum approach
can only divide us further.
Likewise the Sri Lanka Monitoring Mission which is made up of
people from Norway, Denmark, Sweden, Finland and Iceland has worked
tirelessly and often in dangerous conditions to keep the Ceasefire
Agreement on track. Those who were once suspicious of their role
now quote their reports freely. Throughout this period we have
had to endure those who were suspicious of the process. People
who were frightened that the LTTE were deceiving us or who felt
that their own vested interests were being undermined. Those detractors
have had their case strengthened from time to time by events in
the North and East. It serves the cause of peace little purpose
to allow those incidents to continue especially if it gives the
siren voices a foundation from which to build their case.
Of particular concern is the view that our armed forces take
of such events. For twenty years they have had to face and fight
the LTTE and amongst them the mistrust is greatest. Over the past
year they have shown tremendous restraint and we applaud the way
in which they have handled the most difficult of situations.But
ultimately this peace process is about them. It is about seeking
a way to end the war, to return them to a normal life where they
can be with their families and to create a prosperous and peaceful
society for them to live in.
Many of the families most affected by the war live in the North
and the East where the level of destruction as well as disruption
to normal life has been severe. Equally badly affected have been
the families of the poor living in the South of the country. For
that is where most of our soldiers, sailors, airmen and policemen
and women come from.
As they have fought a bitter war the body bags were returned
to families who were deprived of the very person who might have
helped them rebuild their futures. Sri Lanka's war has been a
poor man's war although many from the middle classes and the governing
classes too have sacrificed their lives in this bitter conflict.
Today many question if their lives are getting any better. In
one recent survey of people living in the South there were some
disturbing comments coming from ordinary people. One person said
that "We do not know about peace. We only know that the cost
of living is going up." Another commented that "We do
not even have the time to check on peace. We are struggling with
the war of living."
Whilst another said that "We do not know what is happening
in this country. The only thing we know is that we will not have
anything to eat and drink finally." It is to this aspect
of the Peace Process that I would now like to turn.
After twenty years of war our economy has been devastated. Although
the economic statistics for the third quarter of 2002 look encouraging
the economy grew 5.3% during that quarter from a negative economic
growth in the previous year. Inflation has been brought down to
9.6% from 14.5% and the budget deficit from 10.9% to 8.9%. Much
of the economic growth for this quarter came from the service
sector. This includes the fact that businesses can now operate
throughout the country when before nearly a third of the country
was not available to them.
In addition tourism appears to have grown by around 86% and the
telecoms sector by 16.5%! Unfortunately this growth is not evenly
distributed throughout the country. In addition the stabilisation
measures instituted by the Government with IMF support resulted
in all global commodity prices being passed straight to the local
The cost of living has begun to rocket and the people are increasingly
frustrated. Furthermore the transitional dislocations associated
with privatisation, deregulation and reforms have begun to bite.
The poor of our country who expected a quick peace dividend are
becoming increasingly impatient and frustrated. The Government
is committed to our ambitious reform programme. We believe that
long term gains require short term sacrifices. However it is imperative
that we show the poor of Sri Lanka some level of hope in order
to inspire them to stay the course. The prospect of a war in the
Middle East which would entail increased petroleum prices destabilisation
in the tea market and a possible impact on foreign remittances
from Sri Lankans working in the Middle East is a serious threat
to our fledgling recovery.
In the North and the East the whole zone is littered with hundreds
of thousands of landmines which have made farming a dangerous
occupation. In the past for security reasons the fisherman were
prevented from fishing. Many of the towns and villages were razed
to the ground or at best badly damaged. The concerns of the people
in the North and the East are now turning to the economic struggle
In the South many families have lost loved ones. The infrastructure
is in poor condition and many of our families live on just a few
rupees a week. Many of our children are malnourished and crime
is on the increase as drugs and alcohol become the main source
of comfort for a despairing youth.
Adding to this problem are the many hundreds and thousands of
internally displaced people wishing to return to their homes in
the North and the East. Whilst we have had some success in returning
these families, many more have yet to be returned to their homes.
It is against such a backdrop that the peace process has to find
a way forward. If we are to succeed much relies on finding the
elusive peace dividend that I mentioned earlier on which people
can rebuild their lives.
Nevertheless in just a few short months we have shown that there
can be economic development. Without that economic development
peace will be harder to achieve. The people feel as though we
already have peace and it is our job to continually remind them
that as yet we still have a cease fire only. And so it is that
they continue to ask why it is that after a year of peace they
are not reaping the benefits. The people are impatient and we
have to manage expectations.
The international community has played a critical role in keeping
the peace process on track. Despite the inevitable distractions
elsewhere in the world we need that engaged approach to keep both
the Government and the LTTE clearly focused on moving forward.
We have to pursue de-mining in the war affected areas with real
vigour. We must rebuild our schools and our hospitals. We have
to return people to their homes and create real jobs for them
to be able to feed their families. In the South we have to alleviate
poverty and bring industry and businesses to the villages. And
we have to do it now.
We do not shirk away from tackling these problems. But it is
made more difficult because we do not have the expertise or the
capacity to do these things alone. Many agencies have agreed to
help us when peace returns to our land but that could be some
But what we need is that support now for without it we cannot
bring the much needed peace dividend to the people. That is why
the Donors Conference in Oslo last November was so important to
us and it is why the Donors Conference in Tokyo in June will be
so critical to the Peace Process.
For our part we continue to work hard towards creating the right
environment for peace. Our economic reforms are moving forward
and we are opening up Sri Lanka to the rest of the world. The
Prime Minister has instigated a reform package called 'Regaining
Sri Lanka' which seeks to create two million new jobs, to control
public debt, to reconstruct all of our country and to raise productivity.
We will continue to pursue these polices vigorously and to bring
hope to our people. In the coming months prior to the Tokyo conference
we hope to provide a poverty reduction and growth facility (PRGF)
with the IMF. This we hope will provide the framework for further
donor assistance from the international community.
Meanwhile the international community must focus on three key
areas of support:
As the focus of the world turns to other areas of conflict and
uncertainty it should not be assumed that peace is guaranteed
in Sri Lanka. Without continued world scrutiny and political support
our peace process could easily slip backwards into war once more.
Then we need help to revive our economy. We need the experts
and know how to help us. Also, the financial support to give us
quick gains on the ground that will relieve the unease of the
people. As we rebuild our infrastructure, our economy will grow
more rapidly and we are determined to wean ourselves from that
support that much more quickly.
And we need the continued support to attract world class businesses
that will help our economy to grow and play its role in this globalised
world. Improved market access for our products and services, especially
to the US market where 41% of our exports ( valued at $ 1.9 Billion)
are destined, will help us achieve the 8-10% growth that is required
to take our country forward. In return we can provide a willing
and eager workforce ready to take on the investor challenges thrown
The task ahead of us is still daunting but the signs of hope
are there. We can show the world that conflict can be resolved
and people can live in peace in a multiethnic democracy where,
free markets and private entrepreneurship flourish. Such noble
aims can be achieved through resolve, partnership, hard work and
understanding by us and the world community to regain Sri Lanka.