Lengthy
wish list for 2004
What began as a year of hope ends on a somewhat gloomy note with
the prospect of peace looking increasingly uncertain and with it,
the recovery of the economy and corporate profits.
Although many
companies have been reporting healthy results in recent quarters,
the jubilant mood of the business community has turned to despair
in the last few weeks as the power struggle between President Chandrika
Kumaratunga and Prime Minister Ranil Wickremesinghe shows no sign
of being resolved. This is bound to affect sentiment among investors
thinking of taking long-term risks as it already has in the stock
market whose free fall was temporarily interrupted last week by
the artificial propping up of certain shares on very thin volumes.
It therefore
comes as no surprise that peace and political stability is high
on the business community's wish list for 2004 along with the desire
for an end to the confrontation between the president and prime
minister. Although these two national leaders don't appear to realise
it or seem deaf to the pleadings of the rest of the country, a workable
cohabitation arrangement between the two is imperative if Sri Lanka
is to progress as a nation.
The uncertainty
generated by the power struggle has already started to affect the
economy. Its impact on the economy will only get worse the longer
the crisis drags on. An early resumption of the peace process can
also be ruled out until the two national leaders sort out their
differences - hence the importance of resolving the cohabitation
crisis triggered by the president's takeover of three key ministries.
There are increasing
signs that the failure of the two main political parties to sort
out their differences, despite the most serious threat to the country's
survival posed by the demands of the Tiger separatist movement,
can only result in a premature general election. Another key item
on the business community's wish list is the desire for less elections.
No economy
can function effectively if there is no law and order. For some
time now the business community has been crying out for a more effective
implementation of the law given the increasingly brazen nature of
the crimes that are taking place and the inability or unwillingness
of the political leaders to stamp out such lawlessness, particularly
among their own party faithful. Despite the fact that rampant crime
will obviously discourage investors, neither of our two main political
parties seems ready to rein in the excesses of their supporters.
Consistency
in government policies is another long-felt desire of the private
sector, which for long has had to put up with the uncertainty and
disruption caused by sudden, even drastic changes in the policy
regime. Such indecisiveness and lack of consistency is definitely
not good for business. The more successful economies manage to ensure
consistency in economic policies even when there are changes of
government.
More transparency
on the part of the corporate sector and those organisations that
regulate them, such as the Securities and Exchange Commission, is
a desirable feature that many must look forward to in the new year.
A free and accurate flow of information is essential for a market
economy to function effectively.
Any restrictions
on the right to know of the investing public will only hurt the
system in the long term. One wish that is certainly close to the
hearts of businessmen is the desire for business leaders who are
truly independent and have the courage to confront wayward politicians
and force change. Too often business leaders have too close a connection
with the ruling party and politicians in key decision making positions.
They often lack the ability to act impartially in the interests
of the overall business community. |