Visioning Sri Lanka in the year 2023
View(s):A strong middle class that would help drive growth in the rural economy, world class exports effectively competing in global markets, rising rural incomes and products, accountable pension schemes, more money in the hands of the people, cost of production of goods and services in line with world market trends, the law being equal to all, state enterprises more efficient than the private sector, foreign investment at the level of successful Asian economies, a reduced welfare state as incomes of the rural population grow substantially, public-private partnerships in health and education that avoids confrontation and benefits all classes and societies, transparent governance and finally a corruption-free state.
Is this the Sri Lanka of the future, the vision for 2023 when the country marks its 75th year after independence?
In a nutshell this is what Prime Minister Ranil Wickremesinghe envisaged when presenting the Government’s medium term “very futuristic’ policy to Parliament on Thursday. It was very comprehensive, visionary and while – in a few ways – looked like a national budget statement, such detailed analysis of the country’s future development path needs a focus away from the usual revenue, expenditure and budget deficit rhetoric in budgets.
The entire presentation also needs to be debated and discussed fully in parliament for the simple reason (apart from others) that the development path cuts across changing government, ministers and strategies. Alluding to the fact that the development path should be sans politics and personal agendas, Wickremesinghe said, “We will not leave room for politicians and officials to waste resources of the new pension fund as they did with the EPF/ETF funds. The Constitutional Council will appoint the board of trustees for the pension fund and a committee consisting of members of the civil society, unions and chambers of commerce will supervise it. Accordingly, the changes in governments, ministers, political parties and officials will not affect these measures. The funds belonging to the people will not be squandered away. The only objective followed will be to provide incentives for the people”.
Covering a range of issues focused on transforming Sri Lanka to a fully developed nation with third generation economic reforms (following on the first generation reforms by President J.R. Jayewardene in 1977 and the second set of reforms by President Ranasinghe Premadasa), Wickremesinghe made all the right noises and choices fitting for an economy that would be open to the world and where the citizens enjoy a quality of life seen in successful Asian economies particularly Singapore.
The cornerstone of the new economic agenda is generating one million job opportunities (that means 1 in 21 persons in the population will have a secured job or self-employment), enhancing income levels, development of rural economies, ensuring land ownership to rural and estate sectors, the middle class and government employees, and creating a wide and a strong middle class.
The last strategy on creating a strong, vibrant middle class has its pluses and minuses when it comes to large and small states. A strong middle class has helped the growth of Singapore or Hong Kong and provide an equitable distribution of wealth and assets. Not however a large country like India where absolute poverty still reigns across the majority of the 1.2 billion population despite a thriving 250 million-plus middle class who have money in their pockets and travel overseas more frequently. The same applies for China where middle class growth is exploding, overseas travel in increasing (Sri Lanka being a beneficiary) but poverty still persists. Like it or not, Sri Lanka needs to leap frog in development without following tradition. The country ‘missed the bus’ on at least three occasions – in the 1950s when Singapore was ‘learning’ from Sri Lanka (then Ceylon), in 1982 when the country was poised to become Asia’s financial hub a process that was ruined by the 1983 conflict, and finally in 2009 after the war ended, providing the war-tattered nation the best chance of making amends. Unfortunately while growth took place, corruption and transparency got in the way.
Wickremesinghe said: “We need to make fundamental changes to our journey forward. We must make changes that are unique to us yet in keeping with the global economic direction. We cannot get there with antiquated thinking – nor can we get there by providing plasters over issues, burdening the country with more loans. This is the last opportunity we will get to make this journey”.
He said the country once provided aid to the United Kingdom (during the second World War) while later former President of Singapore, Lee Kwan Yew envisioned Singapore becoming “like us”. Another important point that the Prime Minister made was that Singapore has no natural resources, not even water but was still able to achieve the highest echelons of success while Sri Lanka, blessed with many natural resources and human capital, went down. “Where did we go wrong?” he asked.
The proposal for an economic aid summit in 2016 with Japanese support to rebuild the war affected areas in the North and the East is vitally important to make sure these backward regions equally benefit from the fruits of development,
However making projections and issuing statements is the easy part; implementation is the key and ‘walking the talk’, paramount.
And, however much the projected development is a winner for the country, achieving these goals is no mean task given the ‘delicacy’ of managing a coalition government and current rumblings as seen happening apart from pro-Rajapaksa elements knocking on the doors of power.
The Government may succeed in whipping up foreign investment, rejuvenating the stock market, increasing savings with better interest rates returns but transforming the rural population, farmers and their uneconomic and unproductive economy is a tall order.
That’s where the vote is and that where governments are made or broken. What may be needed is an implementation strategy being developed equally from the top to bottom (with more focus on the bottom). For too long, Sri Lanka has relied on a top-down approach where strategies and policies to induce investment and spending would result in a trickle-down effect and incentivise the rural economy. However by the time the ‘trickle’ happened, governments became unpopular as corruption took over and rural voters voted against such policies even if they were good.
These are major challenges facing the Government even though its policy direction (sans ‘irritants’ like some dubious appointments) looks good and seen as benefiting all.