The vision for a New Sri Lanka

As the Treasury Secretary has stated in many post budget seminars, this budget as much as an outcome of a consultative process definitely indicates that a lot of hard work and thought has been given in to. It is the most sincere hope of every Sri Lankan that the Mahinda Chintanaya Goals (MCG) will bring in much needed economic stability and peace to this war ravaged nation. Post Independent Sri Lanka must disprove the grand old wise man’s connotation of human condition “Men are born, they suffer, they die”.

Finance Ministers
Sri Lanka’s post independent era has been marked with contrasting policies, divisions, conflicts and economic suicide. Nevertheless we have also witnessed strong personalities holding the mantle of Minister of Finance. Notable among them are late President J R Jayawardena, Felix Dias Bandaranaike, Dr N M Perera, and Ronnie de Mel. In recent times originating from the late President Ranasinghe Premadasa’s period into Chandrika Kumaratunga’s regime there has been an increasing tendency for the President to take the Finance minister’s position and given this background it’s no surprise that incumbent president Mahinda Rajapakse too decided to keep this all important ministry to himself.

Distant dawn
Perhaps this is the only occasion that a government budget has focused beyond the customary one year and set eyes upon a 10 year time zone to raise the living standards of people, though there have been many long term development programs. In this context late President Jayewardene’s economic package in ushering a liberalized economy within an export led growth regime gave indications of a sustainable growth until the north east conflict attained war proportions. The late Dr N. M. Perera, an alumnus of the prestigious London School of Economics (LSE) who became famous with his “demonetization” policy was bold enough to request people to tighten their belts to sight a distant dawn that was in the horizon. NM will also be remembered for his resoluteness in the famous bank employees strike in 1972 and the formation of the National Savings Bank which has matured to become a strong public financial institution today

IRD in transformation
Listening to the Inland Revenue Commissioner General A. Wijepala one would be comforted by the fact that the sleeping revenue giant has woken up. Tax payer friendly attitude, improved facilities to tax payers, new offices and training to higher officers are encouraging news. We hope that that the tax chief will meet with success in reaching a one million tax file target from the present unbelievable 200,000.It is important to bear in mind that it’s the private sector (comprising corporate sector, small entrprenuers, self employed, farmers, fishermen, etc) who provide the revenue to the government and hence their issues must be resolved to satisfaction with speed.

Strong institutions
Whatever the economic principles and sincere thoughts of the government the institutions play a key role in achieving the objectives. In this context one doesn’t get comfort from the recent episodes involving heads of two key public institutions in the tea sector. The tea sector is performing below its potential and the government’s regulatory bodies must be manned by competent personnel to serve the needs of the industry and the trade. Despite being a leading producer nation yet only a few Sri Lankan brands have emerged in the global market and it’s the regulators duty to work towards these goals to enhance the export revenue.

Fiscal policies alone cannot take us to great heights, good governance and law and order too are important to provide a conducive environment for investments.

Productivity
According to recent findings of a Central bank economist population growth is slowing down and the elderly dependency ratio is rising, labour force participation is low, productivity levels remain low and stagnant. Need for timely changes in labour market regulations and in existing educational system to suit the changing environment have long been identified but have not been implemented due to resistance by interested groups. High growth environment requires an increase in productivity and those in productive employment. Such growth could provide more goods and services and contain the price level escalation.

Sri Lanka’s potential
Despite years of civil war and associated setbacks Sri Lanka is still a resourceful country in South East Asia and has the potential to emerge as a prosperous nation. The potential is immense and possibly these assumptions are behind the MCG objectives. Despite increasing urbanization still 70 per cent of the people live in the villages and this potent force could bring in an agricultural revolution. If Mahaveli opened up the NCP, provided them with good roads, irrigation facilities we see some similarities in the south today with almost all the roads getting a face lift and the expressway emerging, these will undoubtedly pave the way for increased economic activity. It is our sincere desire that travel to Matara will soon be less than three hours compared to the present four hours or more. This momentum must move to the North and East too, its heartening to note the development plans for Trincomalee the beautiful coastal port city which is today a war zone. Email - suvink@eureka.lk