BY EDWARD THEOPHILUS

Fiscal Policy

Fiscal policy became a vital issue after the conditions created Korean War in early 1950s and Sri Lanka was unable to design and develop a good fiscal policy to the country.  It seemed that the economic authority treated fiscal policy and monetary as alternatives despites in our university classrooms education in which we were educated that fiscal and monetary policies are not alternatives but complimentary to fix weakness in one by others.  Fiscal policy has been continued without a proper solution and all governments ruled in the country used borrowing as the way to cover budget deficit and it was inflationary and pushing the country to a debt trap. After 1995, many countries used different techniques to solve fiscal problems but Sri Lanka hasn’t opened a creative debate on this matter and stuck in a mud puddle.  Still Sri Lanka has good solutions to fiscal issues, however, politics in the country doesn’t allow to use right policies.  During the last several years of the Rajapaksa regime, there was a systematic strategy to gradually solve the problem and the yahapalanaya disturbed the strategies and fiscal policy entirely forced to house of yahapalana rouge and complicated the fiscal policy. 

Land Rights

This is highly complicated issue involved in legal, politics, ethnic and religious issues.  Land right is essential for business investments and how to decide the allowing land right for various business purposes and how to decide the value of lands for business purposes.  Sri Lanka has intense competition to gain land rights for business purposes and there are legal barriers for foreigners gain and access and local people to sell lands to foreigners for business purposes. The government has submitted the State Land (Special Provisions) Bill to the Parliament on 28.06.2019 and Mr Neville Ladduwahetty expressed legal opinion on that bill that it affects the sovereignty of people and with approval by people at a referendum it cannot be passed (Island: 17.07.2019).

The issue in relation to land rights need to be discussed in an open forum like making new constitution at least 2 to 3 years with the participation of all sort of people in the country and it should not be a decision like Don Juwan Dharmapala style decision in the past.

Access to Credit

Access to credit also a complicated issue and many people in the country has no clear idea about it without practically association with problems. As I had been involved in credit management and credit policy making in a government bank and doing practical research on this area, I understand practical, theoretical, policy issues as well as corruption issues about access to credits in Sri Lanka.  There are fundamental issues such as capital shortage of bank and financial system of the country and to solve this problem, politics in the country has become an impediment and this issue needs to be openly talked by relevant people and politicians. There are effective solutions to the problem but bureaucrats involved in credit management have no idea how to solve the problem.

Credit administration also a complicated problem in the country as it is involved in gigantic corruption of credit administrations of banks and non-bank financial intermediaries and politician’s involvement with it. I have seen that credit administration blames to politicians in many occasions they made decision because politicians influenced to them but it not truth. Credit administration made decision as a part of corrupt practices and they attempt blame politicians when the credit decision goes bad.  In this situation, credit administration must be able to educate credit policy and procedures to politicians and prevent bad credit decisions.

The other important thing is that Sri Lanka must allow good market player with strong capital base to play with strong controls.  Most probably Chinese banks can play a better role to increase access to credits.

International Politics in Sri Lanka

Sri Lanka has been involved in international politics since 1990s and it appears that the country has difficulties to manage international politics with one voice of political parties.  In Western countries and many other Asian, African and Latin American countries have one voice on international relations but in Sri Lanka, policy on international relations is not clear and especially political parties have no clear ideas on what to do in this arena.

Why do we go along with a policy view of an international bloc need clearly understand considering the possible benefits to the country?  Many politicians have no knowledge, experience and skills to assess.  In this situation, many politicians can be brought by international powers with a small sum of money or benefits.  Recently I watched a TV program in Sri Lanka, which was a talk show with a lawyer.  I had difficulty to judge whether the layer is knowledgeable, skilful or experience person as he was talking bullshit to mislead people of Sri Lanka without knowing international politics.

I had a feeling that the person was a bait of international politics to mislead Sri Lankans. However, he was highly unsuccessful as he could not present the idea people to believe or accept.

International politics change quickly and friends become enemies and enemies become friends.  This is the dynamism and if this dynamism understands by political parties and come to uniform policies it can easily handle international politics.