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Mixed reviews for the first year
The business community has given mixed reviews to the government’s performance after one year in office. It seems that big business, which has always preferred the United National Party to the Sri Lanka Freedom Party, is happy with the performance of “their” regime while small businesses, which actually make up the majority of commercial enterprises, feel they are still neglected.

The success of the cease-fire, which has held for one year, is greeted with unanimous relief, although there are misgivings about where the peace process will lead to and the ultimate shape of a solution. Despite the government’s repeated pronouncements about its concern for small and medium enterprises and the need to give them a helping hand, the businessmen who represent this sector are clearly unhappy with the government’s attitude towards them and the incentives that are provided.

One of the main concerns of small and medium enterprises is the fear that their businesses will get destroyed by a flood of cheap Indian goods under the Indo-Lanka free trade pact, given the lower production costs on the sub-continent and the vast economies of scale Indian manufacturers enjoy. This is a very real fear, which the government would be unwise to ignore.

The chambers which represent largely big business have said that the government has spent the past year putting the country’s economic fundamentals, which had gone haywire under the previous regime, on a sound footing, laying the foundations for growth and prosperity in the years ahead.

They have pointed out that there will be some inevitable hardship in the interim, while the economy gets back into gear, and the need for an effective social safety net to protect the very poor from the cruel inequities of market capitalism.

As a Business Environment Survey has shown, the 80 percent rise in the stock market, the curtailment of inflation, cuts in interest rates and the stability of the rupee, are all solid indicators of economic progress.

However, many concerns remain, not the least of which is the corruption that seems to be deeply ingrained in the social fabric of the country, the continuing deterioration in ethical standards and in law and order and the incompetence and inefficiency of government ministers and bureaucrats. The public, which is being asked to tighten its collective belt and put up with more hardship, cannot understand why they have to put up with such a bloated Cabinet.

Despite the hype surrounding this regime’s ‘technocratic credentials’ and the presence of high-profile ministers from the private sector there are still serious questions about the administration’s efficiency. The so-called pro-business government has turned out to be not so efficient after all, although to be fair by the regime it must be said that it had to face unrealistic expectations from the public.

The government also seems to be unwilling to take the tough decisions that would really improve efficiency and seems to be unwilling to upset unionised labour, despite its rightwing reputation. As the Ceylon Chamber of Commerce rightly points out no real improvements can be made until the country improves its productivity and thereby the competitiveness of its industries.

Wage increases that are not matched by improvement in productivity will result in inflation and take away the very benefit that the wage earners seek, it has said. Furthermore, the country is still saddled with an abundance of holidays.

The question of equity is also a nagging concern. If the fruits of market capitalism cannot be felt and enjoyed by all, naturally it could lead to social unrest of the type this country has witnessed before.

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