Is Our Economy In Safe Hands?
By Ravi Perera
Going by commonly used economic indicators such as the rapidly depreciating rupee, the fast depleting foreign currency reserves and the stagnant real estate as well as the stock markets the ineluctable conclusion is that our economy is in deep and worsening trouble. In a troubling global economy, and we are very exposed to global trends being much dependent on our imports for sustenance and exports for income, the chances are that things would get much worse, before settling down. Being a poor country, when it comes to manoeuvring in rough economic seas our options are limited and even that, going by the record, severely handicapped by the patent lack of navigational skills required in such waters. Never have we reached the high rates of growth that countries like China, India and the Asian tiger economies have recorded.
Not so long ago, just three years to be precise, Sri Lanka had all the reason to look forward with optimism. The LTTE, the terrorists group which had bedeviled the country for nearly three decades, was utterly destroyed. Their destruction was so total that there is not even the remotest possibility of going back to that era again. With the closing of that dark chapter not only did the unfortunate reputation for death and destruction this country had acquired buried, but also the era when we had to carry a groaning defense budget, which nearly broke the camel’s back, economically speaking, ended.
In addition, Sri Lankans working in foreign countries were filling the coffers with their hard earned foreign currency. Our major commodity exports, mainly tea and rubber were fetching good prices in the world markets and the now mature garment industry could be counted upon to bring a steady income. The long suffering hotel industry looked forward to the day when they could confidently polish their floors, break the cobwebs and greet the expected tourists’ influx. And in fact tourist arrivals recorded a marked improvement after 2009.
With such positives operating why have we come to a situation of such uncertainty and worry today?
Leave alone the complexities of advance economic theories; it is disappointing that the government has not been able to even bring the end game of the terrorist war to a satisfactory closure. The soldiers have done their duty by destroying the enemy. But even with the LTTE completely out of the way, it seems we are still struggling with various post-war issues like accusations of human rights violations which really amount to a failure on the part of the government to handle diplomatic and legal matters with the required openness, prudence and intelligence. A government cannot have the luxury of claiming the credit for the valiant performance of its forces and at the same time carry no blame for the excesses thereof. In our own Constitution, human rights are justiciable. If the system is working the victims would surely seek the intervention of our courts. But the mentality of this government is like that of bandits. The law like all other things is something to use and abuse to your advantage. They will use the state apparatus without any hesitation to protect any culprit as long as he or she is conceived as a supporter.
Such small mindedness is also reflected in the manner in which the economy is handled. Firstly and fundamentally it goes against the nature of our present leadership and specifically that of the Rajapaksa mentality that anything in the country including the private sector should be outside of their sphere of control and abuse. No private sector institution can claim any autonomy today. The tentacles of the state are so long and pervasive that only cronies and shameless sycophants can do business successfully in this country. Therefore it is wrong for us to claim that there is a private sector here. What we have is a kind of support service for the family in power. If you look at some of the shadowy players in the Stock Market it is easy to see their various connections with the powers that be.
The same goes for things like pension funds, airlines, corporate boards, etc. They have become institutions open to subversion and abuse at the whim of the politicians and their families.
Of course it is obvious that to clap you need two hands. Our so called business titans have for too long corrupted and greased the palms of the politicians to have any moral standing. They have to now respond to every wag of the finger of the politician. But in the present regime they have come up against a set of people who will use them in a manner these businessmen never anticipated. So when the Rajapaksas demand that they become toadies and fellow participants in all their schemes our big businessmen really have no capacity to defer. Even when the President flies to a foreign country our so called captains of industry accompany him as a kind of extended court of a feudal potentate. So shameless are they that many of these fat cats travel as guests of the state on tax payer’s money. By such invitations the politician subverts the businessman. As a society, we seem to have long lost the right to resist even an act of moral decapitation.
In the pervasive state dominated system development is very much depended on mega projects sponsored by it. These are not always based on pressing national needs or economic imperatives. In recent times huge amounts of investments have gone in to developing the remote and sparsely populated Hambantota Province. An international airport, a huge harbor, a state-of-the-art film city, huge sports complexes are some of the mega projects taking place there presently. It is well known that this favourable attitude towards that province is not because of any comprehensive national development plan or some perceived economic potential of the area. It is only because the President comes from there. If he was born in a village in Anuradhapura for example, that vital area with easy access to both the North and the East could have just as easily had an international airport.
We can argue about the wisdom and practicality of all these projects endlessly. Whatever we may say, there is no getting over the fact that the economic indicators reflect a lack of confidence in the government. That is something we cannot argue about.