SL’s predicament: 70 % mismanagement and 30 % misfortune
While Sri Lanka is in an utter mess with the current economic crisis, it is the country’s mismanagement on one side and misfortune on the other that is the two root causes for the chaos.
Sri Lanka’s predicament lies at 70 per cent mismanagement and 30 per cent misfortune, says Murtaza Jafferjee, Chairman of Advocata Institute.
Recently the National Movement for Social Justice submitted an 8-point common minimum programme for economic recovery at the BMICH in Colombo.
Mr. Jafferjee, one of the senior economists heading the initiative reiterated, “We are here to call for economic policies that work. Sri Lanka’s predicament is 30 per cent misfortune and 70 per cent mismanagement of economic policies. What we now have is instability. Where is all the stolen money?”
Consumption levels of people have increased far more than the demand and the demand is now at highly elevated levels. “Sri Lanka had a great party and now it’s a mighty hangover,” he noted.
He also mentioned that Sri Lanka’s election is an auction on non-existing assets which politicians make their false promises on. The economy should run on a market system. The revenue to the GDP is only 8 per cent which should get to 18 per cent.
Mr. Jafferjee stressed that the country must focus on how to grow the economy. Tourism is one of the low hanging fruits. Businesses are going to fail out of no choice, he noted.
LIRNEasia, Chairperson, Rohan Samarajiva who is also a head of the initiative, stated, “Sri Lanka doesn’t have to wait till the IMF comes and tell us to reduce the expenditure while increasing the taxes.”
Using some of the data published by the Central Bank and the Finance Ministry, Mr. Samarajiva stressed that in 2021, 86 per cent of the government revenue on taxes was spent of state sector employees’ salaries which was at 53 per cent in 2019.
Tax revenue that gradually increased from 2014 to 2019 saw a dip in 2020 with the change of government whereas the state sector employees’ salaries and pensions kept increasing tremendously. Figures show that state sector employees’ salaries increased by 11 per cent in 2021 from 2015.
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