There is a fox in one of the stories in Aesop’s fables who craves for some real sweet grapes. But they are beyond his reach and suddenly, the sweet grapes become real sour to the fox. According to modern psychology, the mental state the fox in Aesop’s story underwent is called cognitive dissonance.
This anecdote of the fox and the sour grapes is now relevant to Sri Lanka more than ever. When we look at the events that unfolded during the last few years, we cannot but help wondering whether authorities who rule this country are suffering from serious cognitive dissonances.
Earlier, the grapes were the GSP+, the concessionary tariff scheme enjoyed by Sri Lanka’s exporters to the European market. The European Union removed the GSP+ facility enjoyed by Sri Lanka citing the country’s failure to meet human rights requirements that are relevant to be eligible for the tariff concession.
Instead of trying to set its human rights record straight, the authorities acted quite similar to the fox in Aesop’s fables. Some even went to the extent of saying that the loss of GSP+ was good for the country as it will press on exporters to find new markets for their exports.
Press conference after press conference was held by the Treasury and the Central Bank to assure people that removal of GSP+ had no effect on the country’s economy and exporters, particularly the apparel exporters who were heavily relying on this facility, had not found new markets to sell their products.
But the final outcome of GSP+ was the closing of number of garment factories all around the country, depriving thousands of their jobs. Economists estimate that the cost of the GSP+ removal to the economy would be about US $ 1.5 billion.
Two day’s back, the fox came back to the stage with the Central Bank dropping plans to obtain further financial assistance from the International Monetary Fund (IMF). The Central Bank issuing a statement made a pathetic attempt to establish that it was them who refused further assistance from IMF and not otherwise. However it was quite clear the whole thing again was another ‘fox and the sour grapes’ story.
The result, according to economists would be the country will have to raise money through commercial loans at higher interest rates to bridge a humungous budget deficit.
In fact, Sri Lanka was trying to enter into an Extended Fund Facility (EFF) of about US $ 1 billion with the IMF for fiscal support. In this backdrop, how useful could that US $ 1.5 billion that the country was deprived of with the loss of GSP+ have been? May be that’s why the government is believed to be working towards re-applying for GSP+ status from the European Union.
In a recent forum, Professor Razeen Sally, a top international economist expressed his surprise about Sri Lanka’s foreign policy.
“It strikes me that Sri Lankan foreign policy, which of course includes foreign economic policy - is completely lopsided,” he noted.
As he very rightly opined, Sri Lanka should be friendly with major powers while strengthening relationships with nations that matter to the core economic interests of the country.
Therefore we urge the authorities that now it’s high time to drop their dim-witted deeds and get their act together to face the realities. If not, it would be another miracle if Sri Lanka becomes the miracle of Asia.