Sri Lanka offers better quality of life than Venezuela, says former Venezuelan economist
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Ricardo Hausmann
Sri Lanka is ‘one more’ country that was dramatically poorer than Venezuela 20 years ago but now offers a better quality of life than what Venezuela can offer, according to Ricardo Hausmann, Director of the US-based Centre for International Development, adding: “We must change this!” Hausmann, also Professor of the Practice of Economic Development at the John F. Kennedy School of Government at Harvard University and a former Venezuelan Minister of Planning, offered this view in reflections on his Sri Lankan visit written in his Facebook page.
He was one of the keynote speakers and moderators at the Sri Lanka Economic Forum in Colombo last week. In a separate FB post, he said: “I will be leading an effort by the Centre for International Development at Harvard University to advise the recently elected government of Sri Lanka in their economic development strategy. It will be an honour to work with Prime Minister Ranil Wickremesinghe and his team. I thank George Soros and the Open Society Foundation for funding this effort”.
Soros footprint
Much of the funding of the forum and its post-research work is said to be funded by billionaire George Soros whose footprint was everywhere at the event. Apart from Soros, the other heavyweight at the event, Nobel Laureate Joseph Stiglitz is also linked to the Hungarian-American investor and philanthropist: He is head of a Soros-funded NGO called the Initiative for Policy Dialogue. In a lengthy FB post, Prof. Hausmann said besides Soros, the meeting had a great set of world class economists and policymakers including Stiglitz, Montek Ahluwalia (India), Alan Hirsh (South Africa), Erion Veliaj (Albania), Robert Conrad, Christopher Woodroof, Filipe Campante, Frank Neffke, Ljubica Nedelkoska, Daniel Stock and Tim O’Brien.
“In addition, I had three very good and substantive meetings with the Prime Minister Ranil Wickremesinghe. I was also privileged to have not just the PM, much of the cabinet, our international guests, some 600 local participants, present during my talk on the economic challenges of Sri Lanka but also President Maithripala Sirisena.”
Five challenges
“I mentioned five challenges that Sri Lanka must face if it is going to sustain a process of accelerated and inclusive growth. First, I pointed out that the country was giving signs that its growth rate was limited by the growth of its export (and remittance) income. Second, and related to the previous point, the country faced the challenge of structural transformation, with too much employment in low productivity agriculture, very large gaps in productivity between agriculture and the rest of the economy and a relatively static composition of its exports, composed mainly of tea, rubber and garments.
Third, the country faced the challenge of efficient urbanisation with something between 20 and 40 per cent of the population living in urban areas (depending on definitions) instead of 60+ expected of countries at Sri Lanka’s income level. Fourth, and related to the previous points, the country faced the challenge of regional and social inclusion, as the structural transformation and urbanisation process is bound to have some lagging regions and sectors (tea, rubber, simple garments), while others such as BPO, Knowledge PO, IT, tourism and more advanced manufactures would expand, in different regions, hiring different social groups. Finally, to accompany and even lead this process, the state would be hampered by a tax revenue of barely 12 per cent of GDP.”
Impressive factories
He said he visited three plants: two in garments and one in tyres. “The two garment plants were quite different but incredibly impressive. Both owned by MAS holdings are the most advanced I have ever seen and supply Nike, Victoria Secrets and others. The tyre company is the world leader in solid tyre,” he added.“For a country that started so much poorer than Venezuela poor when I was born and that had a 28 year civil war that ended in 2009, the country has made incredible progress.
I flew to Sri Lanka on January 5th while the Venezuelan National Assembly was being sworn in. The following day, (President Nicolás) Maduro announced a new cabinet. I was struck by the dramatic difference in the quality of the debate between Sri Lanka and Venezuela. While the debate in Sri Lanka featured real challenges with tough choices, the statements of the new ministers in Venezuela exhibited plain lies (such as the “economic war”) and absurd theories. A country can be destroyed by people acting on lies and wrong ideas.
A President willing to
forego powers
Today (Friday January 8), the Sri Lankan Parliament was convened as a constitutional assembly in order to pass a constitutional reform that would reduce the powers of the President in order to prevent a new Chavista-like abuse of power as that which is attributed to previous President (Mahinda) Rajapaksa. What a sight: a President that is willing to forgo powers to make sure that future presidents do not abuse it. That is one thing that the Venezuelan National Assembly could do: re-establish the division of powers by re-appointing the Supreme Court, the Attorney General, The Comptroller General, the Electoral Council, free all political prisoners, re-establish freedom of the press and hold ministers accountable for gross violations of the law.”