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Oil Conundrum

July 9, 2006 (LBO) - Sri Lanka's main opposition charged that weak economic management was the cause of galloping inflation in the country and not oil prices.
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"The government is hiding behind the bunker of oil price rises and driving up inflation by printing money and banks borrowings," United National Parliamentarian and former Deputy Finance Minister Bandula Gunwardene told a media conference Sunday.

He said in 2003 when the UNP government was in office the twelve month consumer inflation was 4.5 percent in June.

But in 2004 after the Sandhanaya administration backed by the JVP took over inflation in June moved up to 6.8 percent.

In 2005 it moved up to 9.4 percent and now in 2006 it was 17.7 percent.

"In 2003 the JVP took over the Lipton Circus to protest when we had brought inflation down to 4.5 percent," Gunewardene said referring to a popular area in Colombo where political protests are held.

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"Now what are they doing?"

He said countries like Singapore which had no oil had inflation under 2-percent, while Taiwan and China and also showed similar rates.

Malaysia and even India had inflation under 5-percent.



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