By Chandani Kirinde
All Ceylon Tamil Congress (ACTC) Jaffna District MP Gajen Ponnambalam told Parliament yesterday that people in the North and East are overburdened by loans and are caught up, not in a debt trap but a ‘death trap”, and called on the government to implement progressive policies to protect the economies of the war battered population in these districts.
“People affected by war for over 30 years were asked to compete with the rest of the country with absolutely no effort to try and create a level playing field. What was needed was to create a situation where you can have some progressive policies to declare the North East as “war affected areas” to protect the people’s economies and allow those economies to grow to some point where they can compete with the rest of the country but none of that was done,” Ponnambalam said.
He was speaking during the adjournment motion moved by the Government to discuss the 2019 Central Bank of Sri Lanka (CBSL) report.
Ponnambalam in his speech referred to the report in the Daily FT published yesterday regarding the visit of CBSL Governor Prof. W.D. Lakshman to Jaffna aimed at gaining “insight on issues encountered by the public in dealing with formal and informal financial institutions, including the micro-finance institutions and to look for participatory solutions for the issues.”
“The question of debt particularly with regards to micro-finance in the North East has become a social issue and it became one soon after the end of the war,” he said. Ponnambalam said these areas were declared as no go zones with economic embargoes very rigorously adhered to for so many decades due to the war and hence people today lag 30-years in their economic strength.
“Their financial situation was so dire that soon after the war that when the present Prime Minister Mahinda Rajapaksa was the President and Finance Minister, these micro-finance institutions sprung up like mushrooms. The government turned a complete blind eye and allowed all sorts of institutions to spring up and if those people were asked to compete with the rest of the country and the only way to do so was to take loans.”
The ACTC MP said that as a result people took loans to such an extent that scrupulous financial institutions bankrupted them which in turn has led to a rapid rise in suicide rates in these areas.
“The suicide rates in the North are high not only with small holders but even fairly middle to large scale businessmen who are unable to furnish their loans. The suicide rates in North increased after the war whereas you would expect the situation to be economically dire during the war, but it became far worse after the war,” he said.
Ponnambalam suggested that the government look into the problem of micro-finances as they have duty to do so as the war battered people were forced into that situation.
He noted that President Gotabaya Rajapaksa in his policy statement said he would create a level playing field for development regardless of ethnicities. “They should relieve all these people who have been plagued by this problem of debt, not a debt trap but a death trap. Simply relieving them will not be enough. You have to have some policy of protectionism at even this late stage so that they can protect their economy and grow to some level where they can complete with the rest of the country,” he added.