Rajapaksa’s bad gotten worse under current regime – Prof. Sally

Razeen Sally

By Shabiya Ali Ahlam 
The Sirisena-Wickramasinghe coalition has plunged the Lankan economy from bad to worse since coming in to power by pursuing vote buying loose fiscal policy leading to macro-economic instability, a renowned economist said. Just hours after hammering the incumbent regime for derailing the economy, Professor Razeen Sally, the Chairman of the Institute of Policy Studies – a local economic policy think tank based in Colombo – said what was bad under the Rajapaksa regime had gotten worse under the coalition government. 

Since opening the economy in 1977, Sri Lanka has been running loose budgets that have been the main form of instability which led to most of the economic ills.  Speaking at the first Islamic Finance Forum for South Asia (IFFSA) 2016 held in Colombo yesterday he reminded that the country has now been given a golden window of opportunity since independence and thus should not let it go down in the drain.  Painting a gloomy picture of the Lankan economy, Professor Sally cautioned that the current “window of opportunity”, that paved the way for “real” change, would expire eventually. 

Thus the essential policy is for the government to get its act together if it intends on steering the economy in the direction promised when it took control last year. 
Asserting that only such a policy would allow the witnessing of a real change, bringing Sri Lanka closer in achieving its potential, Sally said, “The bad news is really on the economy since only little has changed. As in India, there were big expectations that there would be serious transformation.” 
He pointed out that despite the two landmark elections last year, nothing had changed other than the regime itself. Not even change of people since the old elites continue to be very much in charge. “What we see is musical chairs of a kind taking place around the cabinet,” quipped Professor Sally who is also Associate Professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore. 

“The government still has not been able to get a handle on public finances, either on the tax or the expenditure side. We have an IMF package on condition there will be serious tax reform. Some people have doubts if that would come into provision. But overall there has been no credible plan fledged out with the detail for serious reform by this national unity government,” asserted Professor Sally. While much attention is essential at this point of time on taxation, expenditure, improving the domestic business climate, opening up to foreign trade, attracting multinationals with their global value chains, a continued drift is what is observed.  He attributed the current outcome to “complicated political reasons”.

Despite having painted a grim picture on the nation’s economic position, Sally pointed out the ‘good’ from the change in leadership was that the political atmosphere was more liberal and independent than before.  It was acknowledged that without the underlying problems being resolved, it was “too soon to expect the issues to be sorted in such a short time.   “However, there are beginnings of moves in the right direction,” he said in an optimistic tone. 
Pic by Kithsiri de Mel