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There is widespread disappointment with the unity government’s economic performance. Perhaps the most disillusioned are those who supported the regime change in 2015. The great expectations from the regime change, in as far as the economy is concerned, have virtually disappeared. A strong political will to resolve these constraints and reawaken the economy is the need of the hour.

Weaknesses
Political indecision, lack of a consensus on economic policies, consequent uncertainty about the government’s economic policies and an inability to effectively implement policies remain severe obstacles to economic development. These weaknesses stem from the character of the government’s composition and the unwillingness to put the nation above the interests of the constituent parties. The end result of this is an economic crisis that is not easy to resolve.

Achievements
Notwithstanding the disappointing economic performance, there have been important gains by the regime change. The establishment of law and order and the elimination of sudden disappearances of persons opposed to the government, the establishment of law and order and the rule of law, freedom of expression and press freedom are among the government’s achievements. These are immeasurable gains. There have also been economic gains as well.

The regaining of the GSP plus status in the European Union (EU), better relations with the international community that would facilitate trade and bringing down the fiscal deficit last year to 5.4 percent are among the government’s noteworthy achievements. Yet the country’s economic potential remains to be realised owing to political indecision and inability to implement reforms that would enhance economic efficiency.

Coalition politics
The foremost obstacle to economic development in the last two and a half years has been a political configuration that lacks a consensus on economic policy. The coalition government’s lack of a consensus on economic policies has made it ineffective in the formulation of a consistent coherent and pragmatic economic policy and its effective implementation. What one wing of the coalition wishes to implement the other objects.

In fact the government is constituted by more than two constituent parties as there are differences within a party as well. Without a consensus on economic policies, the government has failed to take the advantage of the opportunities that the country has. Investors are confused about the government’s investment policies, fiscal policies and economic reforms.

Consensus
Coalition governments are notorious for their inability to pursue a coherent policy, except when such a coalition is formed when there is an overriding national crisis such as a war or a threat to national security. However there are situations when it is pragmatic for coalition parties to come to a common policy agenda. The country is in an economic crisis that warrants such a pragmatic approach. Is there this recognition?

Economic policy
It is essential for the government to agree on a common economic programme for the next half of its elected period or face a severe crisis that may result in its downfall. A realisation of this danger should be the motivating factor a consensus on economic policies. It is better to agree on a limited policy agenda and implement it vigorously than continue with uncertain economic policies.

The last nearly two and a half years have seen vacillations in policies, withdrawal or not implementing announced policies and weak governance. In the remaining two years of this government it is essential to come to a common agreed economic programme. Policy consistency and certainty in the implementation of policies is vital to gain confidence that is vital to attract investment.

Agreed programme
There is an urgent need to develop an investment friendly economic climate that attracts both domestic and foreign investors for export manufacturing industries. Without such investment the economic crisis will persist.

Larger amounts of foreign investment in export manufactures to international supply chains are vital to boost exports. The government must reverse the declining trend of foreign investment by an investment friendly policy framework. Foremost among the prerequisites to attract FDI is certainty in economic policies. A consensus on economic policies and certainty in their implementation are prerequisites to inspire confidence among foreign investors. The political environment and policy uncertainty are underlying reasons for the lack of investor confidence.

Implementation
Implementation has been an endemic weakness in Sri Lanka for quite some time so much so that a World Bank representative in the country once exhorted that implementation was the first priority, the second priority and the third as well. It is widely recognised that bureaucratic inefficiency is at its worst. The recognition of this weakness has made the government bring a number of retired administrators to assist implementation. It has not worked.

Obstructionist opposition
The obstructionist actions by the opposition using various interest groups and trade unions have also been a serious setback to the economy. Trade unions have mounted huge demonstrations and strikes on issues that they do not concern them or they may not even understand. In other instances, they have struck work and paralysed the functioning of the economy as they see the proposed policies a threat to their interests. The irresponsible actions of the opposition have been a reason for the inability of the government to go ahead with some of its economic programmes.

The political environment of opposition to nearly every policy of the government, the protests and road demonstrations causing huge traffic problems and the opposition to Chinese investments are serious impediments to attracting foreign investment. One can hardly expect foreign investors to invest in such a chaotic country when far more hospitable locations are available.

Conclusion
There are opportunities for higher economic growth that are not being exploited owing to an agreed pragmatic economic programme. An agreed economic policy agenda and effective implementation are imperative for a revival of the economy. The constituent elements of the government must put the economy above party political gain.