SRI LANKA NEED ECONOMIC DISCIPLINES
Posted on October 7th, 2021

BY EDWARD THEOPHILUS

Many Sri Lankans have misunderstood the meaning of economic disciplines and they also misapprehend economic disciplines in broader terms. When introduced market economic strategy in 1978, the attention of policymakers was broadening trade policies relating to imports and other aspects of trading, including investments. The simple purpose of economic liberalization in connection with political aspects was for businesses to show full of consumer items on the supermarket shelves and small shops of villages. In short, the market policy accommodated shops for imported items. The shortage of consumer items was a significant rhetorical argument during the election in 1977 and the elected government wanted to show shelves of shops with consumer items. It was a political strategy to attract voters to the government side and indirectly helping rich countries to promote exports to Sri Lanka and attract foreign aids to the country. Mr. Colvin R.de Silva described this situation as promoting window shopping. He further explained that the economic policy allowed people for marketing with empty pockets because the open market policy discouraged gaining revenue by many working-class employees and promoting a production-based economy.

The positive aspect of the market economic policy was producers found a market and price for products. The meaning of economic disciplines broadly explains to take effective controls to prevent disadvantages that possibly create to the economy by imposing bountiful regulation in various economic activities. The best examples were Singapore, Australia, and many Western countries, where broadly used tariffs to prevent the unnecessary volume of imports. Many economic policymakers of Sri Lanka were confused with the idea and how the deregulation concept operated in Western countries and how they adapted the policy without harming their economic advantages and domestic production process. With Singapore, international politics is associated with the market economy. For example, Singapore, South Korea, Taiwan attracted foreign investments as an effect of the Cold war, and these countries were strengthened by American investments. Australia uses market regulatory authorities and the ombudsman role to prevent disadvantages to lower-income earning people.

The deregulation in Western countries was supporting market expansion. Product quality was the secret weapon of marketing products with consumers’ confidence in other countries. The market has been a critical requirement to expand the economy with higher aggregate demand. In Sri Lanka, disciplines had not been implemented since the operation of the market economic system in 1978. The deregulation in developed countries meant removing barriers to expand the market and opening the economy to the outside world, and the intention of opening the economy was to expand the export market.

Economic disciplines are a broader concept related to many areas of the economy and may be related to removing regulations that restrict the expansion of the economy. When regulation is removed, the economy opens for competition, which may support the lowering prices of goods and services while improving the product and service quality.

Investors can bring money from outside and promote entrepreneurship, encouraging investors to discover new markets, products, and make profits. The market competition would remove dishonest entrepreneurs and attract capital from internal or outside. It is a theoretical aspect. Many economics textbooks explained the situation and abundant strategies associate with marketing such as trade agreements, cooperation-related memorandums, and many others.

However, in Sri Lanka, there is about 15% population is crying for strict regulation promoting restrictions for their advantages and the cry of this group of people undermines disciplines and justice. Justice should be everybody and economic disciplines do not mean helping only unproductive people. For example, it can take pricing of rice, and rice price must be at the level that farmers encourage to produce more and when the production level increases, the price will reduce to an equilibrium level, and, for example, Japan is rice consuming country and the regulation system would not allow importing rice for domestic consumption. In Sri Lanka, major issues relating to rice are increasing production and distribution among consumers.        

The opening economy to the outside world doesn’t mean that the entire economy may float in the way without controls and economic advisors of the government had not been understanding the concept intending to regulate.   

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