The Sunday Times Economic Analysis

The Sunday Times Economic Analysis By the Economist

Dreaming about dreams or Bombay dreams in London?
At the time of writing the Prime Minister and his entourage would be enjoying "Bombay Dreams" at a theatre in London. Would their thoughts stray to their own dreams for peace with economic growth? Certainly the people of Sri Lanka would be dreaming of better days. Their dreams would be modest. The dreams in Colombo, Jaffna, Trincomalee, Batticaloa, the rural areas and the suburban cities would invariably differ. Their present conditions and experiences would unquestionably influence their dreams. Some may dream knowing their dreams could never be transformed into reality: the stuff of "Bombay dreams".

The dreams in Colombo may be the most varied. No doubt the bullish run on the Colombo bourse must make many in the business community happy. Their dreams are of larger profits and less taxation. The middle classes would be preoccupied with the mundane concerns of life, making their money go further with prices remaining tolerably stable.

The poorer people would dream of more basic concerns like food for their families, transport costs, medical expenditures and the education of their children and of jobs that they do not have.

Peace would be uppermost in the dreams of those in the North and East. They would no doubt be dreaming of the reconstruction of their homelands with the US $4.5 billion of foreign assistance. They would dream of peace to pursue their daily activities: a return to their humdrum but peaceful existence of the dim past.

The poor in rural and urban areas would no doubt share the dreams of their countrymen in the North and East for somewhat different reasons. They would look to peace as a necessary condition for earning a better livelihood, the education of their children and improved health. Theirs would be a dream for basic needs in a country where around one fourth of the population live below the poverty line. Furthermore, the consumerism and conspicuous spending they see all around them may be kindling dreams for a materially much better life.

Then there are the others whose dreams are sinister. Their dreams are to dislocate the economy and increase poverty and unemployment that would provide them with the raw material to overthrow the government and come into power, so that they too may go to see "Bombay Dreams" in London. And then there are the dreams of those who want to heap misery on their own people so that they may have a portion of this land to rule as their homeland by eliminating their kinsmen who are a threat to their power.

The dream of the vast majority of citizens is for a permanent peace that would enable economic prosperity. Economic growth and prosperity would be the only means by which the citizenry could obtain their basic needs and move on to a progressively better life. Peace alone will not achieve their dreams, but without peace it cannot be achieved. Peace is a necessary condition, not a sufficient one. The dreams for the better life can only be realised with peace.

Much as peace is a pre-condition, the other requirements for rapid economic growth are numerous. We need to utilise the foreign assistance for reconstruction effectively. We need political stability. Economic reforms, law and order, improved work ethics and private property rights are essential. These do not exhaust the essential conditions. They are only some of them. Domestic savings must be enhanced with foreign direct investment. A more disciplined national life is essential to cope with the demands of a globalised competitive world.

The country stands at an economic crossroad where the path to economic reconstruction and growth is inextricably connected with the attainment of peace. A massive US$ 4.5 billion dollars is to be used for reconstruction. Apart from the direct benefits to the devastated regions and the people there, the inflow of these funds over a period of four years would boost the overall economy.

This commitment of aid has already boosted business confidence and ensured a favourable market sentiment in the stock market. If business confidence is further enhanced foreign direct investment flows could also be substantial. Then the prospects of rapid economic growth would be more assured. That is part of the economic dream, but iconoclasts may dream the opposite. Whose dream would come true? In real life, dreams must be made to happen. It is our right to make it happen. Otherwise our dreams would remain "Bombay Dreams".

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