The handbag is an empty pocket and we know not how to fill it. The economic time bomb is ticking fast; we don't know how to defuse it. May be the handbag was handed over empty, but it is the responsibility of the incumbent government to replenish it. The hard talk of the Prime Minister on the economy was followed by the sweet talk of the Finance Minister reducing prices.

No meaningful taxation measures to replenish the treasury have been visible. In fact the revenue out-turn could be lower than expected. Yes, the privatisation of public enterprises can bring in some money, but are the conditions ripe for the sale. In any event it merely postpones the real fiscal issues, we are spending more than our income and selling the "family silver". Not good home economics, not good public finances either.

There may be good grounds for privatisation of public enterprises but this one is no good. Assistance from the IMF and World Bank is forthcoming only on conditions. We have got some funds from an earlier arrangement that was suspended and some project loans, but any substantial funding will require so many conditions to be fulfilled. Can we fulfil these? So far the government has certainly shown the intentions but actual implementation is lacking. The implementation requires political courage, that can hardly be expected from a government uncertain of its tenure.

Peace is the other hope. So far the process has been meandering. Foreign governments are unsure. Their assistance requires more evidence of a durable peace. Even the locals are getting somewhat skeptical. Is the peace we are searching a mirage? At least the cessation of hostilities is a blessing and there are already some benefits. The real benefits are yet to come, but are our people pragmatic enough to compromise to achieve so much of economic gains before us? The LTTE is still sticking to their outworn impractical concepts of Eelam and Tamil homelands, while the southerners are preaching doom for the Sinhalese.

The LTTE must surely realise that a separate state is not a viable proposition for economic and political reasons. Within the country no democratically elected government could allow it. The repeated position of the foreign powers that matter, India and the United States, have repeatedly stated that they are against the division of the country. Is the LTTE unmindful of the sufferings their people have undergone for over two decades? Why ignore the enormous economic potential of peace for the Tamil people? Are we overburdened with history to ignore the benefits of a realistic and honourable peace?

The economic benefits of a durable peace are for all people of this country, but more especially for those who live in the North and East. As we have repeatedly said, the political system and our political culture does not allow the leaders to take the correct economic decisions. We are continuously striving to please the masses to either retain power or grab it. The Prime Minister, in particular, and many of the leading lights in the government, are aware of this. Hence the call for a national government, committee style of government and other reforms. As long as parties continue to put personal and party interests before the long term interests of the country, the economy would languish.

The economic time bomb will continue to tick as long as we are unable to take the hard decisions on the public finances of the country. We have to curtail government expenditure and find measures of taxation to increase the government's revenue. Without any significant improvements in both, the handbag will remain empty and the economic time bomb will keep ticking. The emerging economic scenario is indeed a Greek tragedy: we know what is going to happen; we watch it hopelessly.

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