Trivialising economic issues and concerns is an unfortunate recent development. They detract from the serious concerns, difficulties and problems facing people. They may be indicative of a lack of knowledge and understanding of economics and also a means of distracting people from serious economic problems. Serious consideration of national economic issues is an essential prerequisite to resolving economic problems. Such trivialising is not confined to economic issues: they encompass a whole range of fundamental national issues.
In contrast, the President has made serious and thoughtful statements on the economy on several occasions. The most recent statement was at the handing over of the Central Bank Annual Report for 2011 at the Central Bank Auditorium on April 9. He drew attention to the vital issue of ensuring that the fruits of economic growth reach the entire community and that the people are not left behind in the process of high economic growth.
This perspective in the context of boasting about the 8.3 per cent growth rate and the 8 per cent in the previous two years emphasized the need for growth to benefit all sections of the people. The need for economic growth to be inclusive is one of the serious issues that should be addressed. Growth with equity has been an underlying theme of the President.
Ministerial statements
In contrast, several government ministers have been guilty of trivialising economic concerns. Such ministerial utterances show a lack of understanding of the issues, inadequate seriousness of economic concerns and disregard and disdain for the economic plight of people. One would expect ministers to be more responsible in their utterances. Such declarations have brought ridicule to the ministers themselves and they may not be taken seriously on other issues as well.
Some statements could have serious international economic consequences even though other ministers have assured that these statements are not the government's position: only the personal views of the minister.
Living on Rs. 7,500
The well publicised statement of a minister -- who has taught economics before he entered politics -- that a household could live on an income of Rs. 7,500 a month was a trivialising of an important issue. The cost of living is a serious problem for low income earners. Recent policy changes have raised the prices of essential food items, fuel and transport costs.
The minister's attempt to explain how a family could live on a Rs. 7.500 monthly budget has only subjected him to further ridicule. Such statements betray a lack of serious concern for a problem people have to grapple with in their daily lives. A responsible minister trained in the dismal science of economics was expected to explain why the rise in prices occurred, make a plea to bear with it or advise the government on measures to mitigate the problem, rather than make irresponsible statements belittling the rise in the cost of living.
Boycotting imports
Irresponsible statements that we should boycott imports from particular countries owing to political differences on a specific issue was a dangerous proposition. The Media Minister was quick to respond that it was not government policy and that he himself was not boycotting imports from the United States. Yet it had reverberations when a foreign delegation pointed out that Sri Lanka imports very little from the US, which is Sri Lanka's main export market for most goods. Such boycotting, if taken seriously, could have had responses that would have been disastrous for the country's trade and economy. It was a case of "mama matama gahaganawa": I will hit me myself.
Although the US is not likely to take such statements seriously, consumers in the US propelled by the diaspora there could mount a campaign to boycott Sri Lankan goods and shopping chains could join in to please customers. Such a scenario ignited by a foolish statement by a minister could have serious implications for the economy that is in the throes of a balance of payments crisis owing to the large trade deficit. Ignorance of economic realities is astounding.
Distracting from economic concerns
Such captivating statements tend to distract the government and people from the serious concerns on the economy. It is no secret that the country faces serious economic problems. This is why the currency was devalued, tariffs were increased and the prices of essential commodities hiked. The current economic problems should be discussed, explained and countervailing measures taken to resolve the problem. Instead fruitless debates on foolish statements are a distraction from serious concerns of the government and people.
Unfortunately the opposition too is drawn into fruitless debates on these trivial statements in order to ridicule the ministers concerned and the government. This only helps the moves aimed at distracting the attention from the serious issues. It is the responsibility of the opposition to analyse and discuss economic issues in a manner that policy makers would take its criticisms and suggestions seriously. Such serious discussion is woefully inadequate.
Taking economics seriously
Taking economic issues seriously is the first step towards taking appropriate policy measures to resolve the problems. Last week, we pointed out that the Central Bank and the government did not take the emerging balance of payments problem seriously till it got critical. This column repeatedly pointed out the emerging large trade imbalance and the need to take policy measures to curtail the trade deficit. Instead the Central Bank thought it fit to emphasise the growth of exports rather that the massive trade imbalance that was developing and its balance of payments implications. This too amounts to trivialising of issues, however sophisticated it may be. Refusing to recognise the problem expecting it to pass away is a trifling with serious economic issues.
The complacency that characterised the responses to the serious balance of payments crisis aggravated the problem that could have been resolved by less drastic measures than what were taken later. It appears that the government took the problem seriously only when it needed the IMF assistance. The bareness of the Central Bank's denial was obvious when the government took several drastic measures towards the correction of the imbalance.
Record economic growth
The Central Bank keeps pointing out that the last two years experienced record economic growth rates. No doubt the economy has made progress in the last two years, though the precise rate of growth may have deficiencies in calculation. A pertinent question in the minds of many, who view the economy in a serious and non-politicised perspective, is how is it that a country that had two years of 8 per cent growth had a serious trade imbalance? Policymakers must address these issues rather than do a marketing exercise on how wonderful the economic performance has been.
Bitter truth
Early recognition of economic problems is important in taking appropriate countervailing measures. Trivialising economic problems won't resolve them. The first step towards remedying the fundamental economic problems is taking them seriously. Let's face the fact that there are fundamental weaknesses in the economy that require serious thought and policy responses.
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