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President Anura Kumara Dissanayake faces the formidable challenge of eradicating corruption, establishing national unity, transforming the country’s work ethic and values, and achieving economic development.

The economic challenges loom large, but the task before the new president is much larger. It involves uniting the ethnic and religious communities, eradicating corruption, introducing a work ethic, adopting sound economic policies and developing a capacity to implement pragmatic policies.

We must be a nation that is not burdened by history but learns the lessons from our past, decides pragmatically and implements policies effectively. These are reversals from current national behaviour.

Historic

This historic mission of building a united country, changing its political culture, and fostering values that are conducive to national harmony and a work ethic are formidable tasks for the new president and the government.

Committed

The new NPP-JVP government says it is committed to eradicating corruption, building a united nation where all communities are equal, and following economic policies that ensure growth with equity. Achieving these is formidable but necessary.

Policies

Sri Lanka’s economic future will be determined not only by economic policies alone but by the gamut of policies to transform the nation’s future. This is a formidable task.

Unity

Forging national unity is a pivotal prerequisite for economic development. How parties campaigned for the election lends hope of the government resolving the issues of discrimination and ensuring ethnic and religious harmony.

Most parties have vowed to unite the country on a basis of equality for all communities. Meaningful steps should be taken towards national unity, which is essential for economic development.

Economic challenge

An immediate challenge the new government faces is the continuation of the IMF’s Extended Fund Facility (EFF). How will the IMF arrangement be continued with some modifications that would give relief to the hardships people have experienced? This is no easy task, as revenue would have to be increased in an acceptable manner to be able to give relief to low-income earners and the poor, who have been badly affected by increases in prices, reduced employment, and inadequate wages.

Taxation

A new system of taxation that ensures higher revenue is essential to not only achieve an acceptable fiscal deficit but also fulfil many of the election promises, such as enhanced social security and subsidies.

Policy shift

In the run up to the election, a shift in the NPP’s economic policies was visible. The party moved from its leftist posture to a more left-of-centre stance. Its more moderate stance on the IMF arrangement, as well as a modification on the issue of privatising loss-making enterprises is indicative of a more balanced approach towards the IMF.

The NPP was also mindful of the importance of international trade and foreign investment.

Important

It is vital that the EFF arrangement with the IMF is continued to ensure international confidence and attract foreign investments.

If the President asks for more than what the IMF could agree to, there is a prospect of the discontinuance of the IMF arrangement that would make the economic recovery more difficult. On the other hand, the IMF must recognise the adverse impacts of its policies and devise policies that achieve the macroeconomic goals with equity and social justice.

Privatisation

Another issue facing the government is the privatisation of state-owned enterprises. The NPP opposed privatisation of national assets. There appears to be a shift in policies to one of selective privatisation. For instance, the NPP is amenable to the privatisation of SriLankan Airline.

Without the privatisation of a large number of lossmaking state enterprises, it is unlikely that the fiscal burden could be reduced, nor can the economy grow rapidly. How this requirement of the IMF could be overcome remains to be seen.

Concluding reflection

The economic challenges are formidable. The recovery of the economy from its current fragile state has been compounded by the extravagant promises given in the election manifesto of the NPP. The President and the next government would face unprecedented economic challenges.

We are at a historic moment in the country’s history when a social, cultural, and political transformation could change the destiny of generations to come. The promises of President Dissanayake must be implemented to bring about such a transformation of the polity and society. Honesty, meritocracy, pragmatism, and hard work are vital to usher in such a transformation.

The success in eradicating corruption would be a pivotal factor in propelling economic growth. It would also be important not to pursue doctrinaire policies. We must not be burdened by history, we must learn from past experiences. Successive governments have been weak in implementation. Pragmatic economic policies must be effectively implemented.

Let us hope that the five-year period of President Dissanayake will usher in an honest administration a nation with equity, opportunities, and sufficiency for all.