While government economists are boasting about an increase in foreign reserves, the growth rate and per capita income, independent economists say Sri Lanka is surviving on borrowed money and borrowed time and this borrowed sand castle could crumble in a storm.
Last week, the Central Bank–which like many important state institutions is headed by a political appointee – said the balance of payments continued to record a surplus with a comfortable overall surplus expected this year.
But independent economists said the build up in the country’s foreign reserves over the past year by around US$ 2 billion was based on borrowed cash and was unsustainable in the long-term towards ensuring a stable rupee against the dollar. They said the dollar had been moving in the range of around Rs. 127-128 since January this year compared to Rs. 121 in March last year.
Meanwhile the cost of living is soaring to Mars and going beyond the reach of millions of the people who are struggling for survival while political leaders are continuing to indulge in their luxury or extravagant lifestyles. Recently the prices of diesel and petrol were increased, leading to increases in the prices of a multitude of items and bus fares. But the Ceylon Petroleum Corporation is continuing to tell lies about the price of crude oil it buys, as we pointed out in an Editorial last week. Lies, damn lies and bloated or distorted statistics have become part of our political culture because most politicians today have degenerated into living a lie, or worse still, they have become a living lie. According to reports, electricity rates are likely to be virtually doubled soon, while from April 1 the government has imposed a 15% tax on the growing number of super-market chains, which as expected have said they will pass on the increase to millions of customers. When the globalised capitalist market economic system was launched, its advocates claimed one of the main intentions was to make the customer the king. Now that so-called king has lost the crown and looks more like a clown in a political circus. Government leaders say the increase in the cost of living is largely beyond their control. This is another damn lie. For instance the CPC is continuing to tell lies about the price it pays, while corruption continues with the import of sub-standard fuel through a process where some officials are making millions of rupees. Even the prices of medicinal drugs could be controlled if the Government sincerely and effectively implements the National Medicinal Drugs Policy. But vested interests including trans-national drug companies have allegedly given millions of dollars not only to health officials but tragically also to medical consultants to delay or sabotage the implementation of the NMDP while the Health Ministry continues to tell sugar-coated lies. The people cannot and will not go on eating lies, and if the Rajapaksa regime does not act fast to reduce the COL, its moment of truth may not be far away.