"unethical" economic conversion of the JVP
JVP's change in heart about its economic policies should have sounded
sweet music to the business community and investors. In fact it
had the opposite effect.
the current parlance, it was deemed an "unethical conversion".
Only a strategic opportunistic move rather than a real change of
heart based on conviction. The sudden U turn in JVP policies has
no credibility, given its historical record, recent utterances,
vague generalisations, inconsistencies and contradictions.
alone will be the test of whether they have in fact espoused new
economic policies or have announced such changes to merely make
themselves politically acceptable to the SLFP and the people at
large. If they are convinced that Marxist economic policies are
outdated and impractical in the current global economic context,
it is indeed a good foreboding.
this were so, then the alliance between the JVP and the SLFP would
be truly historic, especially for the future economy. There is considerable
difficulty in believing the JVP's sincerity regarding their new
economic policies. For one, till the eve of the alliance they spoke
in derogatory terms of the market economy and its constituent components.
Although the JVP speaks of the private sector not needing to fear
their policies, they do at the same time speak of certain sections
of the private sector that they are opposed to.
may in fact turn out to be a large chunk of the modern capitalistic
enterprises. There is clear evidence of their hostility to privatisation,
when they speak of the sale of " viable state ventures ......to
political favourites". The economic policies enunciated in
the agreement are vague generalities except for their clear opposition
to lending agencies on which the Sri Lankan economy is highly dependant.
is a strong opposition to foreign direct investment and collaboration
with foreign entrepreneurs. The JVP speaks of a national interest
in economic policies and the encouragement of local industry, agriculture
and enterprise. These areplatitudes meant to please the masses rather
than specific directions in policy. Basically the economic programme
is unrealistic, and if implemented, there is little prospect of
rapid economic growth.
is a set of policies that would return the economy to the pre-1977
inward-looking controlled economy. Such policies have been proved
inefficient, both by our own experience and that of other countries
in the region. The Sri Lankan economy, owing to its smallness and
underdeveloped nature, requires foreign capital and skills.
is not, as the Alliance statement's preamble states "rich in
natural resources". It has hardly any resources required for
industrialisation. Sri Lanka would always remain an export-import
moot question is whether the alliance with the JVP is a reversion
to state dominated economic policies or has the JVP accepted the
broad framework of capitalist policies. Most people think that the
latter is very unlikely and that the rhetoric is only a means to
forging the alliance. The actual policies of the new alliance could
be one of a state-controlled economy that would no longer be export-oriented
or dependent on foreign capital.
changes of governments and drastic changes in economic policies
impeded post-independent Sri Lanka's economic progress. These reversals
in economic policy were to a large extent responsible for the lack
of confidence of foreign and local investors and the low levels
of economic achievement.
election of the People's Alliance in 1994 was a noteworthy event
in the economic history of the country. It marked a watershed in
economic policies. The PA government on assuming power enunciated
a set of policies that were broadly the same as that of the previous
President's Statement of Policy on the economy and the subsequent
Budget Speech made this clear. There was a reversal of the previous
policies of the SLFP- led coalition and for the first time there
was continuity in economic policies. The PA government was responsible
for some of the most significant privatisations such as Sri Lanka
Telecom, NDB and the plantations. For the first time, the two main
political coalitions pursued similar economic policies. Is the new
alliance a further broad consensus in economic policies or retrogression
to diametrically opposite policies?
are in fact two critical ways in which the new alliance could spell
disaster to the economy. This is through the responses of the LTTE
and Tamil parties to the alliance.
the antecedents and the recent stance of the JVP on the peace issue,
the LTTE may refuse to continue the negotiations. A reversal of
the peace process would indeed be a deathblow to the economy. There
is hardly any need to spell out the consequences of such an eventuality.
other economic concern is that the multilateral agencies and donors,
who are deemed hostile to the country by the JVP and now the alliance,
are not likely to be forthcoming with aid and assistance.
two factors are likely to put back the economic advancement of the
country once again. The country requires giving the JVP a further
probationary period in opposition to allow them to articulate their
policies clearly and fashion them in a consistent and pragmatic
manner. Then we can test out the sincerity of their economic conversion.