The Sunday Times Economic Analysis

The Sunday Times Economic Analysis By the Economist

Facing the nation: Disclosing party economic policies
Economic policies rarely determine election results. Economic conditions however are an important determinant. The frequent loss of elections by incumbent governing parties has been the recurrent inability of regimes to solve burning economic problems.

Emotional issues, particularly those relating to language, have played decisive roles in determining elections in the past. Elections have seldom been won or lost on the basis of economic policies. Nevertheless, the Marga Institute's effort to get the main political parties to a series of telecasts to discuss their policies is commendable. We hope these programmes would add clarity to party policies. Three aspects of the Marga programme require special mention. The political parties that are appearing on this programme are given the questions in advance. Therefore specific and clear answers are expected. No party has a right to say that they are not in a position to discuss details. Second, the questions are tailor-made for the particular party and meant to clarify their policies in the light of their past statements and performance.

Third, they focus on a broad spectrum of issues such as devolution of power, constitutional and administrative reforms, good governance, electoral reforms, law and order, elimination of corruption, peace, national harmony and developing a Sri Lankan identity. And most important, the economic policies of the main parties.

On the economic issues the UNF is expected to respond to the question what new plans and strategies they propose to add to the Regaining Sri Lanka programme to accelerate economic growth to 10 per cent when the six year projection only leads to 7 per cent by 2006. They are expected to explain how their development strategy that depends on an increasing inflow of foreign investment, is expected to increase inflows from US $ 82 million in 2001 to US $ 329 million in 2006. Given the dependence on foreign investment, the UNF is being asked how they will ensure that foreign enterprises and multinationals will not become too powerful and dominant in the national economy, dictate policy and act without concern for national interests?

How does the UNF propose to increase productivity in small-scale peasant agriculture and how the transport problem in the country that has reached unmanageable proportions would be solved. They are asked to respond to the critique that its strategy has uncritically accepted the World Bank prescriptions for a market driven economy and that its policy package is pro-rich, despite the claims of the poverty reduction strategy (PRS). The low level of taxation, the recent amendments to labour laws, the reduction of subsidies and the spate of privatisations are all seen as reinforcing this view. What is the UNF's response to this popular criticism?

The UNF will be asked how far they intend to take the programme of privatization? How will it affect the responsibility the public sector assumed up to now in providing free health care and education? How does the UNF propose to expand tertiary education? Would the UNF protect the right to free university education an issue that today agitates the large mass of the student population? The health care system which did very well in dealing with child and maternal health and communicable diseases does not appear to be adequately equipped and adjusted to deal with the changing needs of morbidity.

The poor and underprivileged are suffering. What are the health sector reforms envisaged? The probing questions also deal with the controversial Samurdhi programme. There is criticism that the selection of Samurdhi beneficiaries is politicized and as a result that there are a large number of undeserving beneficiaries while many deserving are left out. How does the UNF propose to ensure that the benefits of Samurdhi reach only those who deserve and that there is no political discrimination in the choice of beneficiaries? At present, it appears that of the billions allocated for the Samurdhi programme 89 percent is spent on the administration of the programme and less than 11 percent reach the beneficiaries.

How does the UNF, or indeed any government, propose to ensure that the delivery costs of the programme are contained so that a greater share of resources could be distributed amongst the targeted population? The Freedom Alliance is being asked: Regaining Sri Lanka' contains a large part of the poverty reduction strategy that the PA Government developed when it was in power. Do you intend to continue and implement the strategies you worked out for the poverty reduction strategy if you are in power?"

The UNF government set a higher growth target of 10% which seems to be necessary for the rapid eradication of poverty as well as the creation of employment. Will the Alliance aim at a similar target? Even more important, how would you achieve it? Will the Alliance's social democratic agenda go beyond giving a human face to the market economy and re-introduce import controls, state enterprises and elements of the regulated economy which hampered growth in the pre 1977 era?

These are indeed searching questions the answers to which could provide a much-needed clarification of economic policies. There are however certainubts that the answers would address the issues in a forthright manner, partly as the parties may not have thought these out these issues in detail. Answers may also be vague in order to ensure that they do not offend any section of the voters. And finally there is no assurance that the parties would be committed to the answers once they assume power.

This has happened far too often that history may repeat itself. We hope the telecasts would lead to a greater clarity on economic policies so that voters may be able to determine their preferences. It is more likely that the telecasts would confirm the weaknesses in the economic policies of parties than demonstrate that they have any substantial remedies.

Back to Columns