BY EDWARD THEOPHILUS

The economic conference held in Colombo several years ago especially focused on economic issues such as foreign debt, regulation, and export performance. They were quite significant issues not only in Sri Lanka alone but also in many third-world countries.  The major macroeconomic attention of the conference was based on three vital aspects, competitiveness, government fiscal stability, and maintaining long-term sustainable economic growth. The current world problem of the Covid 19 crisis display that macroeconomic variables are subject to fluctuation and the concept of economic stability directing policy-makers to arm with policy ideas that could adapt to a fluctuating environment, is the essential thing to do in an unstable environment. The idea of a production economy was ignored by the conference, most probably to continuing import liberalization, which supported the Western and Asian countries associated with the thrust on the market economic system.  These three aspects were interconnected with economic reforms, which have been rhetoric of the international financial institutions such as IMF, World Bank, and Asian Development Bank towards developing countries since the ending of the cold war in the early 1990s.

Sri Lanka already identified several issues related to economic competitiveness and value engineering issues in the public enterprises during the 1977 general election, and the government budget presented for 1978 by Mr. Ronnie de Mel highlighted some of these issues in the budget speech with complicated corruptions had been in the country since 1956 socialist era mentioning a poem of John Milton. The elected government in 1977 initiated several policy measures for trade liberalization and market-oriented economic policies as they were essential conditions under the environment of that time.  The policy initiation of Sri Lanka and radical changes intended to implement in the economy were kicked off before Australia introduced many competitive measures into the economy.   Many criticisms against Sri Lanka’s policy initiatives, most probably because of ignoring the point of becoming a production economy. Later, rapid economic progress achieved in the country despite the assembled views of left political parties ascertained that the market economic policies were the right strategies for the country to entertain the public.

Although Sri Lanka initiated a competitive policy framework, it was lacking positive controls for good governance and economic disciplines when compared to Singapore, Malaysia, and Australia where had been undertaken a market economic system with strong economic disciplines. The countries where initiated liberal policies never undermined the process of production and the productive economy as they were associated with job creation and balanced growth.

The elected governments since 1990 have not been attempted to abolish the fundamental policy directions of the economy initiated in 1978 despite the market economic system rhetorically used as a baleful to blame in the political platforms by opposition political parties before elected them to office. The backsliding of open economic policies was a major challenge and the hardest task for elected governments in the 1990s. Politically motivated propaganda in public meetings and newspapers, the government with leftist ideology was willing to continue market policies in the country as it appeared satisfaction of public by the economic environment by such policies. The general public of Sri Lanka did not want to go back to the inward-looking policies of the so-called Bandaranaike era, which created queues and black markets for each essential item. Although the prices were a bit higher under the market economy, scarcity was not an issue and the producer too gained the right price for their products at an open market.

The trade competition of Sri Lanka involved many sectors to improve the product quality of the economy supporting the market-oriented equilibrium rather than an artificial counterpoise maintained by the Bandaranaike regime with a massive scarcity.  The initial way of competitiveness of the country is required by deregulating several key markets.  The main market was the financial market which consists of trading banks, non-bank financial intermediaries, investment banks, stock market, and superannuation market.  These market operations have been involved with a heavily regulated labor market and a rigid trade union system in the country. 

The budget speech of 2015 and the government policy initiatives reflected some tiny endeavors to deregulate the financial system but it appears that the effort was becoming purely unsuccessful because the contract between the president and the prime minister concerning policy implementations seem to be contradictory to each other based on either the political ideologies of the unity government or the policy disagreement between two different bosses of the government.

When economic reforms presenting it needs to understand the complexity in the South Asian region where can be observed disparity among all races and such differences clash with the policy implementation process.  The nature of economic development and growth in the Asian Region is that the ethnic similarity has contributed to stable economic progress in China, Soth Korea, Japan, Malaysia, and Taiwan. However, the South Asian Region has many disparities relate to religions, races, castes, and attitudes. The government of Sri Lanka has taken many steps to unite all human groups in the country, however, many groups using inconsequential points use to halt progressive steps. For example, China and India have large volumes of population and in the process of economic policy implementation India reflects a failure, the major reason is ethnic deviations of people in India.  Sri Lanka has limited ethnic groups and some factors such as castes are less influential in the economic policy process, notwithstanding, the actual situation, the diversity of ethnic groups in Sri Lanka have altered to a negative influential factor to create a competitive and productive economy in Asia, and value engineering in public enterprises.   

Mr.Gotabaya Rajapaksa and Sri Lanka Podujana Peramuna wanted to avoid two bosses’ practices in the yahapalana regime to collective policy development integrating many political groups to a single government. The elections in 2019 and 2020 gave the mandate to the current government and becoming a competitive economy is an essential role and it needs to understand that competitiveness associate with several factors such as competitive pricing of products and services, innovations, value engineering in government and private firms and promoting market logics to attitudes of people.

The current nature of the political environment indicates that although the two bosses practice ended after the presidential election in 2019, the aspect of uniting the country seems to a failure or going to be failed on disguised diversity and religions attempt preaching against the selfish thinking practically religions failed to take the message to the wide society.  

Sri Lanka cannot afford for losing production and service firm’s power play of trade unions and the government needs to take actions for cracking down on Trade Unions that have become unreasonably powerful under the current regime may become a serious barrier to the competitiveness of the country. The experience in many factories in the past trade unions did harmful competitiveness as well as members of trade unions forcing firm owners to close factories and service firms.  The government needs to develop strategies and mechanisms to deal with trade unions and they need to be educated the public on the points of inflation, disturbances related to COVID 19, depreciation of the monetary unit.

Although many universities are providing education in Sri Lanka, the education system has visibly failed to eliminate mythical attitudes in the country, and many academics, as well as highly educated people, are either trust forecasts of uneducated astrologists and mythical instruction of soothsayers. These are signs that Sri Lanka’s constraints to be a competitive and productive economy in Asia.  Logical thinking is a vital factor for developing attitudes supportive the progress.  W.W.Rostow indicated in his stages of economic growth, the economic take-off would not be sustained if people of the country are slavers of mythical beliefs. This is a significant issue related to growth and development. It seems that although the government policy has failed to take modernization and technology to the rural economy mythical soothsayers have already invaded the technology to sow mythical attitudes in the country.

Value engineering in public enterprises relates compatible policies relate to cost-cutting, productivity, competitiveness, innovation, and cost leadership in public enterprises. Trade unions have swallowed public enterprises and political appointments to boards have failed to cut feathers of trade unions and value engineering should be the motto of public enterprises. If these work successful, Sri Lanka could be a productive and competitive economy in Asia, and public enterprises could be launched to value engineering and eliminating fiscal problems in Sri Lanka.

Sri Lanka has many limits to the growth and attitudes of people whether they are living in urban areas or rural areas they are affixed with delusion and changing or salvation of people from delusion is the essential condition for economic prosperity, politicians, religions, and policymakers are in an ocean of myth and people migrated to other countries from Sri Lanka too in this mythical world.  How can change this situation?