As expected and as usual, the Central Bank is embroiled in a controversy with the widely-respected global rating agency Standard and Poor’s (S&P) over the state of Sri Lanka’s vital banking sector.
S & P in a report last Tuesday said Sri Lanka’s banking sector had plunged to a high-risk category but the Central Bank responded by claiming the S & P rating was baseless and that Sri Lanka’s banking sector was sound and resilient.
UNP parliamentarian and Economist Dr. Harsha de Silva said instead of contradicting and confusing the people, the Central Bank and the Treasury should face realities and take effective steps to put the economy on a solid foundation from which Sri Lanka could go on the path to sustainable development.Whatever the rhetoric, the rosy pictures and the high rates of growth or per capita income projected by the Central Bank or the Treasury, the reality is that millions of Sri Lankans are struggling to find three square meals a day because of the soaring coast of living and other factors.
If the situation is tough for workers, the crisis facing farmers is deep and desperate. For centuries our farmers have been field commanders of Sri Lanka’s economy and agriculture is part of our civilization. But all that is gone with the wind. Last week the media reported that some 200,000 kilos of paddy had been destroyed because farmers could not get a reasonable price while some 20,000 acres of cultivated paddy had been destroyed due to the lack of water because the reservoirs were running dry. We wonder what explanation or excuse the pundits in the Central Bank and the Treasury would give for this.
Another cost of living crisis last week was the vegetable soup. Prices of most vegetables soared by about 100% amid a fresh controversy over the means of transport. There was uproar in Parliament with Trade Minister Johnston Fernando accusing the opposition of trying to manufacture shortages or price hikes while the opposition accused the Ministry of putting the vegetable trade in a mess. While they traded charges, millions of people found they could not afford to buy even one vegetable for their plate of rice and the poorest of the poor had to be content with rice and some green leaves or rice with pol sambol or salt. As the cost of living soars, with the value of the rupee dropping, rampant corruption, fraud and waste of public funds are continuing with politicians and officials from top to bottom plundering the resources of the people.
The economic crisis in the US and the EU shows that the globalised capitalist market economic policy is dying. The Government needs to realise this and work out a new people-centered economic policy.