Govt. should ensure its economic policies are not mere hallucinations: economist

Days ahead of the budget, a corporate leader cum economist called on the government to maintain consistency among its economic policy statements, the budget and post-budget enabling legislation, to ensure that the government policies are not mere hallucinations and the economic actors are not insane to expect different results from poor implementation.

Former Ceylon Chamber of Commerce Chairman Dr. Anura Ekanayake, who is also an economist, quoted Thomas Edison and said that “vision without execution is mere hallucination”.

“We know that Vision 2025 is the third or fourth—there’s a little debate—economic policy statement of ‘Yahapalanaya’ in three years. That’s the statement side. Now look at the execution side. The last two budgets, the two budgets so far of the government, did not seem to be for me, consistent with the immediately pressing policy statements,” Dr. Ekanayake said.

Further, he noted that after each of these budgets, there were no post-budget enabling legislations to give effect to the proposals in the budgets.

“So, it created an enormous amount of confusion and it remains. It remains, friends. So, how can we talk of investment?” he questioned.

Dr. Ekanayake went on to say, “It reminds me of Einstein’s statement—or at least it’s attributed to him—that ‘doing the same thing over and over again and expecting a different result is insanity’. So my big question is are we merely hallucinating or are we really insane? I leave the answer to you.” 
The government is attempting to introduce business-friendly reforms to increase investments into export-oriented industries to place the country back in the high growth trajectory.

Meanwhile, Dr. Ekanayake said that most economists agree that budget deficits are at the core of most of the country’s macroeconomic challenges, along with an economy that became more inward oriented since 2000.

The 2018 budget—termed a short ‘designer budget’ by Finance and Mass Media Minister Mangala Samaraweera—is coming just two months ahead of the local government elections in January.
Some are questioning whether the government will be able to maintain fiscal discipline ahead of this election, amidst commitments made to the International Monetary Fund to maintain discipline in line with the US $ 1.5 billion Extended Fund Facility currently in effect to ease the balance of payment challenges.

All former Sri Lankan governments and the current government have practiced the doling out of election goodies to gain votes in elections. 

The current government aptly demonstrated this in 2015, when after forming a minority government following the presidential election in January, an interim budget brought in proposals that helped push the expected budget deficit of 4.4 percent of gross domestic product up to 7.4 percent, ahead of the August general election.

Former Central Bank Deputy Governor W.A. Wijewardena last month said that while this government is the only government he could depend on to deliver reforms required to sustain long-term growth, the government’s medium-term focus is on winning elections to remain in power to deliver the said economic growth. (CW)