Columns

Arising from the country’s economic crash resulting in a declaration of bankruptcy in 2022, the Government has resorted to multiple strategies and actions to rescue the country and the people. Opposition parties as well as independent economists continue to discuss and debate the possible ways out for the country.

While some are ideologically averse to turning to the IMF for help there are yet others who think otherwise and see the IMF as the way forward. The Gotabaya Rajapaksa regime and many of those who were part of that government state that they were aware that they had to turn to the IMF but did not or could not do so due to the bull headedness of those at the helm of the government at that time.

The consequences of such a failure has made the task of economic recovery that much more difficult and made people’s life a greater struggle than what it need be. The consequences of such ineptitude stands out in stark contrast to the foresightedness of the Bangladeshi Government when faced with a similar situation.

According to economic analysts the government of Bangladesh by taking timely action in seeking help from the IMF not only managed to salvage the economy but were able to make significant progress to the extent that they were able to give Sri Lanka which was gasping for breath a loan of 200 million dollars.

The recent Supreme Court judgement which held the high officials of the Gotabaya Rajapaksa government responsible for the failure of economic management confirmed that inaction had contributed to Sri Lanka’s economic predicament.

However one of the weak points in the Ranil Wickremesinghe Presidency’s efforts to salvage the economy from the abyss that his predecessor’s government had plunged the country into is the lack of sufficient sensitivity to the plight of the poor and vulnerable who have had to face the brunt of the fall out of the economic crisis.

Added to this is the fact that some of the measures that are taken by sections of the government seem at cross purposes with the overall objective of economy recovery. This is very apparent when one examines some of the actions of the Ministry of Trade in recent weeks and months.

The core of the economic crisis was the lack of foreign exchange available for the Government to manage the economy. It did not require the IMF to tell the government that foreign reserves had to be increased and the budget deficit had to be bridged by increasing revenue and reducing expenditure.

In the context of the unimaginable difficulties faced by the poor and vulnerable, the Ministry of Trade and Food Security’s claim last week that Lanka Sathosa had made a profit of Rupees two hundred million is difficult to comprehend.

The goal of Lanka Sathosa which is Sri Lanka’s largest state owned retail chain has been, since its inception, to maintain low prices for the products sold by it in order to minimize the cost of living for people and thereby surpass the private retailers in attracting consumers.

According to media reports after 10 years, Lanka Sathosa has made a profit of over 200 million rupees for the year 2023. According to these reports Lanka Sathosa was a loss-making institution which has been turned into a profitable institution during this difficult period.

It is also claimed that it is after settling the loans taken in the past that a record profit of 200 million rupees has been made for the year 2023. While in normal times this could be claimed as an achievement resulting from good management in the current context whether making such large profits is desirable is questionable.

As a State owned entity Lanka Sathosa’s role is to make available goods at minimum prices which would in turn compel private retailers to keep prices down in order to remain competitive. This in turn would benefit the poor and vulnerable particularly in these difficult times.

As a state owned entity there is a social component in Lanka Sathosa’s activities as much as making profits. This is very much like the Sri Lanka Transport Board which has to run buses on unprofitable routes in order to provide services to the public and not do so only on profitable routes. In the case of Lanka Sathosa while it need not sell goods at a loss it can help the public by keeping prices down.

Another inexplicable action by the Ministry of Food has been when it resorted to importing eggs when there was a shortage of eggs in the local market or when the prices of eggs went up. Rather than making poultry food available at cheaper prices to make the cost of production of eggs cheaper it resorted to expending valuable foreign exchange to import eggs from India.

Similarly when rice millers were causing a shortage of Keeri Samba in the market without pressurising them to put the adequate stocks the rice millers had into the market the government resorted to expending scarce foreign exchange to import rice.

Clearly these turbulent times are difficult to navigate. Yet decision makers cannot be absolved from the task of finding innovative but consistent solutions. In all these the needs of the poor and vulnerable must be kept in the forefront. (javidyusuf@gmail.com)