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Top economist portrays SL’s economic ills with colourful metaphor

26 May 2017 12:03 am - 0     - {{hitsCtrl.values.hits}}

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By Chandeepa Wettasinghe
The ostriches, lame ducks and Icaruses in the government must be caged for it to take flight like a flamingo and transform the dead economy into a competitive Asian Tiger, a senior economist in the country told a forum in Colombo, this week. 
“The Sri Lankan government is at present made up of these. We have the ostriches, we have lame ducks and Icarus, but for the flamingo to take flight, this (caging) must be (done),” Former Central Bank Deputy Governor and leading economic commentator, W. A. Wijewardena said.
He said the government is like an ostrich, losing political capital defending wrongs which the whole world is aware of; a lame duck due to daily infighting and the mythical Grecian Icarus, who attempted to escape a prison with wax wings that melted when he flew close to the sun, which hurtled him to his death, akin to the government burning fingers through consistently weak policies.
Various quarters of the society have been complaining of these shortcomings of the government over the two years that it has been in power, although this is perhaps the first time that the South African Mont Fleur political scenarios have been applied to this regime so colourfully.
Wijewardena, who was speaking at the Logistics Leaders Evening organized by the Chartered Institute of Logistics and Transport at the National Chamber of Commerce of Sri Lanka, did not have many kind things to say about the successive governments that ruled the country since its independence. 
He pointed out that the import-dependent, debt-fuelled economy has not advanced due to government policies, which change after each election cycle.
According to him, the resulting hopelessness is portrayed through socio-economic indicators compiled locally and abroad, with primary education as the only undisputed redeeming quality of Sri Lanka.

“In fact, it’s just like reading through an obituary notice, because everything presented in the Central Bank Annual Report doesn’t talk about any happy news,” he added.
Wijewardena’s views appear slightly more extreme than those of Central Bank Governor Dr. Indrajit Coomaraswamy, who early this year said that the economy was in the hospital but out of the ICU, a statement which drew the wrath of the then Finance Minister Ravi Karunanayake.
Wijewardena said Prime Minister Ranil Wickremesinghe’s aim of achieving a 7 percent sustained growth, which would double the gross domestic product every decade to create a rich country within a generation similar to that of the Asian Tigers, is noble, but detached from the reality.
“We have to give him credit for coming up with such an ambitious programme, but of course things are not very palatable,” he said.
He pointed how multilateral agencies revise down Sri Lanka’s growth forecasts every time the Central Bank or the Finance Ministry comes up with unrealistic GDP growth numbers. 
 “Sri Lanka is still a rural agriculture-based society, and we need to beat the middle income trap. So we need to tap into the 4th Industrial Revolution. So, there is a need for a quantum leap. This is only possible through policy consistency and technological changes,” he said.
However, he said Sri Lankan society would face an extreme culture shock, if the government attempts to leapfrog straight past three industrial revolutions into the current 4th Industrial Revolution without a proper desensitization programme.
“There will be a massive culture shock unless they grow up with it. I don’t think we can avoid the shock and it will be a huge issue, unless tackled properly. There will be bloodshed on the streets,” he said.
Wijewardena called for a policy making capsule, similar to one undertaken in Malaysia, to be implemented in Sri Lanka, where policy makers, bureaucrats, academics, the private sector and civil society leaders are all sent to a retreat until they come up with a sustainable growth strategy to ensure policy consistency and collective ownership of policies.
 He said that they would have to identify potential globally competitive industries, foster innovation, manage the balance of payment crises, simplify taxation, deregulate the economy, reform the state-owned enterprises, the bureaucracy and the budget, and restructure the financial sector to maintain stability without the need for bailouts.
“The policies need to be consistent and passed. One day a policy is announced, the next day it’s withdrawn and the following day it’s implemented again. The private sector and foreign investors are confused. There also needs to be transparency. The government needs to say why each policy is announced,” he said.

 


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