How practical are their poll promises?
The economic scenarios of the United National Front (UNF) and the United People's Freedom Alliance (UPFA) are summarised in their manifestos. Most other political parties contesting the elections are not interested in economic policies. Their concerns are parochial and insular: policies relating to religion, culture, rights of minorities and other particular sectarian interests of the communities they represent.

Ironically, their voting power could determine the economic policies of the country. The UNF has taken the position that the future of the country rests with the establishment of peace. The Prime Minister has articulated the position that without peace, there is no possibility of solving the economic problems.

The enhancement of investment, foreign assistance, provision of job opportunities and the increase in income, he argues, are not possible without peace. Peace, he argues, is possible only with a UNF government. Its economic policies are a continuation of the policies begun in 2001, as proclaimed in the Regaining Sri Lanka strategy.

The UPFA takes the position that it too is for peace and that the war will not be allowed to resume. The economic policies are, however, expected to be different from those of the UNF. The main differences are expected to be in an enhanced welfare orientation with larger expenditures on Samurdhi, health and education. Health expenditure is expected to increase to 2.5 percent of GDP from the current level of less than 2 per cent.

Especially significant is a reversal in the PA position on privatisation. The UPFA will halt further privatisation. Specifically the two state banks and several other utilities will not be privatised. The policy of not privatising the state banks, in particular, and halting privatisation in general, could have an important bearing on assistance from the IMF that has insisted on the privatisation of at least one state bank as a condition for assistance.

In the event of the UPFA coming into office, it would be interesting to see who would bend - the government or the multilateral agencies. Other public utilities, too, would remain in the state with promises of more effective administration of them. Some public enterprises would be dissolved and their assets distributed among people. This is especially so with respect to land still held by the state plantation corporations.

The UPFA says it will halt privatisation of health services and private health facilities would be governed by regulations. There is uncertainty on trade policies: especially the continuation of the liberal import policies pursued by the UNF and PA governments since 1994.

Import control policies could have a serious impact on future economic development policies. There is more than a hint that the UPFA would return to an adapted form of import substitution industrialisation with controls on imports of goods that could be produced in the country. Such a policy could face serious constraints, be high cost and would affect the development of competitive capacity.

Import substitution industrialisation has to be managed with a great degree of selectivity and discretion that the country's politicisation does not permit. Several UPFA policies are likely to find favour with the poorer sections of the people, in rural areas and among small farmers. They have been promised many subsidies and supports.

The promise of employment to the unemployed graduates is another popular element in the party manifesto. A basic blemish in the UPFA manifesto is that the costs of the increased expenditure on health, subsidies on fertiliser and agriculture, increased expenditure on health, education and social services, would be an unbearable burden on the public finances.

Although the manifesto speaks of decreasing the public debt, it increased significantly during the PA regime and continued to increase in the last two years as well under the UNF. Neither party has proposed any specific measures to bring down the debt.

If the security situation deteriorates, higher expenditure on defence is likely to increase the debt and the promises of subsidies and other benefits may not only have to be shelved, but perhaps such concessions have to be reduced from the present levels.

There is no concrete way by which the UPFA is expected to increase expenditure on the proposed programmes. There are divergences in the interpretation of these policies by the two main constituent elements, the SLFP and the JVP.

Consequently, there is uncertainty about the UPFA's economic policies. Promises are easy to make but difficult to keep. Being in a financial bind, where tax resources are inadequate for servicing of the debt, defence, public service salaries, pensions and welfare at current levels, there is little scope of providing the relief measures that are being promised.

The incumbent government is restrained, as any new promise would have to face up to the question why these were not given during its period in power. The extravagant election promises, if kept, could increase the public debt and strain capital expenditure essential to generate economic growth.

Reading the Sandhanaya manifesto in between the lines indicates its likely policy thrust. These UPFA policies are likely to attract less foreign assistance, especially from the multilateral agencies.

However, the ultimate economic policies may not be the Utopian ones that are promised. Resource constraints, the policies of the IMF, the World Bank and the WTO, may be the determinants than the promises in the manifestos of political parties. Equally decisive would be the manner in which a government handles the critical national issue of a durable peace settlement.

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