The Sunday Times Economic Analysis

The Sunday Times Economic Analysis By the Economist

Kadirgamar’s inimitable role in the economy
Lakshman Kadirgamar had made an indelible impact on the Sri Lankan economy. His role in the economy during his eleven years of political life was extensive. His entry into politics in 1994 proved indispensable for the PA. He was the one who inspired confidence in the economic policies to be pursued by the People's Alliance.

There were considerable fears that the PA would reverse the liberalised economic policies introduced by the UNP government in 1994. This fear hung over the minds of the business community, as well as the enlightened public. Kadirgamar assured the people in his election broadcasts that no government would be impractical enough as to go back to the outmoded policies of the past. It was his reasoned statement that gave credibility to the economic policies of the PA government. His assurances that the PA would not go back to the rigid state controlled inward policies of past SLFP governments were persuasive. Lakshman Kadirgamar had the power to convince the people – a trait which the Prime Ministerial candidate did not have.

His presence as a key minister of the government strengthened the government's resolve to continue market-oriented policies. It was the influence of Lakshman Kadirgamar and the late Dr. Lal Jayawardena, a close confidant of Chandrika Kumaratunga, that ensured the broad continuity of economic policies and the characterisation of the PA economic policies as open economic policies with a human face.
The first economic policy statement of the PA government enunciated these policies in no uncertain terms.

It said, the government stands committed to building a strong national economy within a market framework. The principal engine of growth is expected to be the private sector, both domestic and foreign. The role of the State is to provide an institutional framework that is wholly supportive of rapid private sector development. In order to do this effectively, the government will pursue market-friendly policies that support rather than supplant markets. Accordingly, government intervention will be limited to areas where markets fail to function effectively and therefore need to be strengthened or supplemented, so that they serve the welfare of the people.

For the first time since independence a change of government assured a continuity of economic policies. The government announced its commitment to continue market friendly open economic policies. It too gave private enterprise the lead role in economic activity and pledged to support private enterprise. There is no doubt that Lakshman Kadirgamar was a strong influence in ensuring this continuity of economic policies.

His role in the economy did not end there. He changed the horrible image of Sri Lanka as a killing field and placed in perspective the actual conditions that prevailed in the country. He convinced the international community that despite the terrible terrorist activities in the country that the economy was functioning and that foreign investments were unharmed. He was the prime person who infused foreign investor confidence and convinced the international community that the country was a relatively safe place for tourists.

On his foreign trips he devoted time to meet business organizations and address foreign business communities. His foreign mission was wide-ranging, with commercial diplomacy being one important objective of his. He believed strongly on the need for strengthening trade ties around the world. Trade he believed was the vital lever of economic growth for a small trade-dependent economy. This led to his key role in forging, strengthening and expanding trade relations.

The Indo-Sri Lanka and Pakistan-Sri Lanka Free Trade Agreements are outcomes of his endeavours. He strove to develop a similar pact with the US and enhanced trade relations with China. He pursued trade diplomacy with a passion. He was able to add muscle to our trade policies owing to both his office as well as his competence.

An indirect manner in which he contributed to strengthening our trade was by striving to improve the country's diplomatic service. He strove hard to improve the quality of the Foreign Service personnel and to enhance its capacity. This too had an impact on our trade and investment. A professional foreign service was to him a pre-requisite to effective diplomacy.

Lakshman Kadirgamar's role and contribution was multifaceted. The continuity of market-oriented economic policies, primacy for the private sector in economic production and services, the international confidence he built at a difficult time, his commercial diplomacy, and the expansion of trade relations and enhancement of the capability of the Foreign Service are among his singular contributions to the national economy.

His intellectual capacity, understanding of economic policy, skills of persuasion and the confidence he inspired were exceptional. Though his contribution to the country's economy was crucial, yet it was only one element of his total involvement in national affairs. He is irreplaceable as a foreign Minister. He would be equally missed on the economic scene.

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