Understanding knotty economic issues
View(s):Earlier this month, a poll conducted by the Business Times (BT) and polling partner Research Consultancy Bureau (RCB) on the future of the loss-making national carrier, SriLankan Airlines (SLA), provided a lot of food for thought on how Sri Lankans think and perceive politics, the economy and social issues. The ‘food for ‘thought’ was not about the results of the poll but the manner in which diverse classes of society viewed the country’s economic, political and social structures. This particular finding was also seen and analysed in some previous polls where the intelligentsia and middle to upper-middle classes, and the semi-middle to lower classes took positions and expressed positions in opposing directions.
The BT poll was conducted (has always been) on email with respondents being corporate executives, political analysts, economists, businesspersons, politicians, strategists, etc while the RCB poll was conducted on the street with respondents coming from a wider strata of society. Both polls are published on Page 6. In this poll, to the question whether SLA should be managed by a foreign operator, 47 per cent of respondents in the RCB survey said NO while it was a 71.4 per cent YES vote in the BT poll. Asked whether the national carrier should be managed by a foreign partner in addition to having an equity stake, 61 per cent said NO (RCB) while 67 per cent said YES (BT). When asked whether the government should retain both management and ownership of the airline, 52 per cent said YES (RCB) while 78.6 per cent said NO (BT).
On a previous occasion, in a March 25, 2012 BT-RCB poll pertaining to then minister Bandula Gunawardene’s infamous claim that a family of three can live on an income of Rs. 7,500 per month, most respondents ridiculed the statement saying it was preposterous to even think that Rs 7,500 is sufficient. However there were respondents in the same street poll who, while agreeing that such an amount was insufficient, had other issues with the poll. The poll also coincidentally occurred while Sri Lanka was facing a huge challenge in the UN Human Council sessions in Geneva where a US-backed resolution against the country was being discussed. Some respondents were critical for raising the issue at a time when the country was facing a crisis overseas.
“Don’t be a traitor to the country highlighting the minister’s stupidity, specially at a time when outsiders (issues in Geneva) are giving Sri Lanka many problems: We must learn to tolerate such statements even if they are untrue. Do not damage the patriotic mindset,” some respondents said. Their position was that that irrespective of political differences and ‘stupid statements by ministers’, Sri Lankans must stand together against any indictment on the country. The point is that on many economic issues, both classes have diametrically opposing views. For examples, polls have shown that while the middle and upper classes see corruption and mismanagement an issue, the working and lower classes give more preference to cost of living, fertilizer issues, health, education, etc. That was also evident recently.
In Colombo the debate a few months ago was about the lack of proper economic management on the budget and other areas, and lack of progress on investigations against the corrupt. However in the provinces, according to many social workers, the discussion and concern was about the fertilizer subsidy and the shift to a coupon for school uniforms as against material which the rural community was opposing. These opposing views are not in the country’s interest particularly when it comes to economic issues. For example while urban society is aware that without taxes you cannot run a government, the message to the electorate from ruling party politicians (at any given time) is that the people won’t be burdened with taxes if it increases their cost of living.
Subsidies, wage hikes, fertilizer subsidies, etc cost money and that can come only from taxes.
The worsening debt situation, inability to repay foreign loans and domestic borrowings are little understood by the larger majority. Much of this discussion unfortunately takes place in the English language media. Often when reputed economists and analysts send in articles for publication, they also request whether it could be translated into Sinhala or Tamil and published in the vernacular media – realizing that this is the audience that they need to be addressing. Raising economic issues, woes and the crisis facing the country in the debt sector amongst an English-speaking audience is like preaching to an already-converted flock. What is needed most is to bring these facts and raise the discussion bar to cover others.
The BT-RCB polls clearly show this divide. Urbanites are concerned about how the government raises revenue and are not unwilling to pay taxes as long as the tax money is put to good use. Rural Sri Lanka however thinks differently. The fault lies not only in the media’s inability to take the economic debate to the provinces where a better understanding of these issues will reflect strongly at the polls but also the way economic messages are expressed by politicians. Simply assuring the electorate that everything is hunky dory and there is no need to (further) tax the people is delaying the inevitable. People need to be told that a fertilizer subsidy or a school uniform handout is funded from an increase in the price or toothpaste, dhal, soap, toothbrushes or other commodities.
Sri Lankans pay extra for their essential items through increased taxes (at some point it would happen) to fund what they get free or subsidized at the doorstep. Eventually people are paying for fertilizer or free uniforms, etc. Nothing is free. If these messages are clearly conveyed to the electorate, there won’t be such a hue and a cry over subsidies or slight increase in taxes. While politicians need to smart and convey the ‘real’ thing to the electorate on the economy and how subsidies are funded, etc, it is also important for organisations like the Sri Lanka Association of Economists (SLEA) to be more involved in creating awareness on crucial economic issues to the countryside at large. At its annual discussion with the media this week, the SLEA promised to be more open and accessible to share views and opinions and said it was unafraid to express an opinion if asked. It is hoped that such a discourse would lead to a more vibrant engagement across Sri Lanka on knotty economic issues.