‘We want to build the image of the whole of Sri Lanka’

Basil Rajapaksa MP

An Interview with Economic Development Minister Basil Rajapaksa

(Basil Rajapaksa, younger brother of President Mahinda Rajapaksa, is the current Cabinet Minister of Economic Development. He has been part of the political landscape of Sri Lanka since the 1970s, and is a meticulous planner, brilliant strategist and strong negotiator, having played a leading role in achieving political stability in the country following the end of the conflict)

The Report Company:

What is your assessment of what Sri Lanka has to offer as an investment and tourism destination?

Basil Rajapaksa:

We want to build the image of the whole of Sri Lanka, not just the tourism, the investments or the exports.

TRC: What have been your main strategies in ensuring and fomenting the economic development of the country?

BR: As Sri Lanka is now safe, we started to focus on food security, not only for the country as a whole, but for individual families. We developed backyard economic units in 2.5m households, to ensure the individual family is guaranteed their nutrition and an income.

Now it is time to try to export some of these products. Two years ago we were importing rice, whereas we have now recently given a donation to the World Food Program of 500 metric tons of rice.

We are in now in position to easily export vegetables, fruits, flowers and fish. We also export gems, and the Sri Lankan gem industry is environmentally friendly.

We have a lot of industry, from apparel to coconut products and ceramics.

In tourism we are the only country to offer in such a small area beaches, wildlife, heritage, waterfalls, beautiful scenery and all this culture. We have the friendliest and warmest people.

We are very interested in investment and have taken steps to simplify our tax system. Last year we abolished around 32 taxes, we have a low tax rate and we give tax free facilities for BOI investment.


To what extent would you say Sri Lanka is a destination for British investors looking for a point of access into the growing Chinese and Indian markets?


It definitely is, and that’s why this is also the time for British Airways to look at flying to Sri Lanka. Over the last two years 28 new airlines are coming to Sri Lanka. We have the Singapore budget airline, and we’re currently in discussions with Air France/KLM. From Sri Lanka there are a lot of flights to Indian cities, as well as to the Maldives and even to Karachi.

TRC: To what would you attribute the rapid post-war development of Sri Lanka?

BR: The main reason is our good educated workforce, along with our health system which is one of the best the world has. In the last two years we have had a continuous 8% growth rate. Our inflation is down, our unemployment rate is down and our GDP is increasing. The only problem we have is the balance of payments which we have to address.

With higher growth rates, countries face main two problems, the inflation, which we have very successfully controlled, and the trade balance. We foresaw this and increased our exports to cope. Unfortunately we never expected this high increase in oil prices.

The sanctions against Iran have not affected Iran as much as they have affected the rest of the world, especially Asia.


One of the major successes you’ve had is the rapid resettlement of the IDPs. As your ministry is in charge of regional and rural development, what is your overview of the north as one of the key areas in the reconciliation process?


The day the president came into power, his policy was that people should live in their own habitat. Nobody should be forced to live outside their home or place of origin.

We had a very strategic plan, starting from battlefield demining, humanitarian demining and then establishing the need for facilities like roads, schools, hospitals and irrigation.

We identified the basic things that any village should have to function so that by the time people came to see the village, their village is ready.

We airlifted demining machines and gave all our military forces and engineering units the task of demining. Our target was to resettle more than 50% of the IDPs within 180 days, but within those 180 days we resettled almost 60%. Now almost 95% are resettled.

We have cleaned the drinking water wells, provided houses with roofing and gave cash grants. We continue to provide them with food rations of rice, oil, dhal, sugar. We gave them resettlement kits which include mosquito nets, mats and medicines, as well as an agriculture tool kit.

We cleared areas in the jungle and prepared land for the paddy farmers, and provided free free seeds and fertiliser. We also made 1,000 tractors available. We gave fishermen boats and nets, and we used the airforce and army to round up all the cattle in the jungle and hand them over to their original owners.

Almost every school is reopened, every hospital is reopened and many people have come back. We have also connected the region to electricity, and we have brought in a transmission line to connect Jaffna Peninsula to the main grid. This is funded by the Asian Development Bank.

We are also building the best vocational training institute in Jaffna, which is funded by Korea. Jaffna hospital is expanding under Japanese funds and with British funds we have connected Jaffna peninsula to the major road network.

A lot of big investors are starting to come into the region. Nestlé has opened 3 milk collection centres. We are opening a new industrial estate and so far more than 52 companies have applied to have a presence there.

All of this has been done with full consultation with the people in that area.

TRC: Through your work at the ministry, in what ways are you actively promoting Sri Lanka as an investment destination?

BR: Rather than focussing on branding through the media, we first have to ensure that anyone who comes to Sri Lanka has a good experience. The toilets have to be clean and the facilities have to be available, so over these past two years we have made a huge effort in educating people and keeping the country clean.

On the export side we are making a concerted effort to brand our products. 98% of the world’s cinnamon is produced by Sri Lanka, but hardly anyone is aware of that. We want to build awareness about our products, from tea to rubber.

TRC: On a personal level, what’s your driving passion and the force that keeps you going and what would you be most proud to achieve through your role?

BR: My main achievement is what we did in uplifting the people in the rural areas through our backyard economic project. In March 2011, vegetable prices were very high, to the extent that green chilli was priced per chilli rather than per kilo. Through this project we managed to bring vegetable prices down by 50%.

We partner with the public and private sector in everything we do and that gives me great satisfaction, as does working with the people from the village. Nobody believed that we could achieve what we have achieved, and we did it our way.

That’s been the key to our success. We knew what people needed, we knew when the rain was coming, we knew when the paddy fields had to be cultivated so we timed it well. We have achieved many things. I grew up in a village, so rural communities are very close to my heart courtesy: The Report Company – The Guardian