Economic growth is not the only measure of human development

The 2022 economic crisis in our country was epitomised by the declaring of bankruptcy. Its effects were the severe shortage of foreign exchange and the sovereign default on $51 billion of external debt.  Dwindling reserves led to debilitating shortages of fuel, food, medicine, and electricity, sparking massive civic protests,  skyrocketing inflation and shortages of all manner of basic goods in the open market.

The accumulation of all these problems led to the collapse of the then government. The subsequent election of Ranil Wickremesinghe as President as per Constitutional requirements saw Lanka’s re-emergence out of bankruptcy via an Extended Fund Facility (EFF) from the International Monetary Fund (IMF), and an Indian $4 billion Line of Credit which restored the credit-worthiness of the country.

The period saw an intense period of reforms, and recovery was focused on fiscal targets. 

At the end of Wickremesinghe’s tenure as President, Anura Kumara Dissanayake (AKD) was elected President in March 2024, leading to the historic victory for his NPP winning the general election in 2024. The NPP’s promised “system change”                    - establishing a new social order grounded in good governance,  transparency, anti-corruption and the rule of law as its flagship programme.

Through it all,  we still have the repayment of our international creditors hanging over our heads.

Today,  the country’s economy has regained a measure of stability. Inflation has eased and foreign reserves have improved,  and our economic outlook is positive. Yet,  to repay our still outstanding foreign debt,  economic stability alone is not sufficient. Economic expansion and growth are essential.

Presently while wages remain stagnant, the cost of living is rising beyond the reach of the common man/woman on the street. Taxes were imposed on all manner of goods and services from basic foods to essential medicaments as one of the means of repaying our debts. Yet taxes alone cannot repay debts, we need economic growth and expansion.  

In other words,  we need an influx of foreign investment into the country to help in its growth. This does not seem to be happening at the moment. In the 1970s President J.R. Jayewardene’s blueprint for economic growth was his “open economic policy” of 1977 to attract foreign investment.

Sadly,   that era’s open market system was largely based on crony capitalism, leading to growing corruption, which soon led to economic stagnation. 

President Mahinda Rajapaksa’s attempts to attract foreign capital were based on large infrastructural projects like the road and transport system. But that was based on family bandyism. Soon,  major corrupt practices crept into all forms of activity. Ultimately,  it drove investors away from the country.  

Corruption therefore has been the bane of economic development in the country. In 2024 Lanka ranked 121 out of 182 countries in the corruption index.

The NPP’s answer to economic development has been a promise of  “system change” countering corruption and establishing good governance, including an anti-corruption drive and the rule of law as its flagship programme.  As a result of the present government’s anti-corruption drive, today Lanka ranks 107 out of 182 on the Transparency International Corruption Perception Index.

The US Department of State’s 2024 investment climate statements notes a drawback to investment in Lanka was its track record of weakness in combatting corruption. It seems government’s anti-corruption drive is proving successful and we may have turned the corner as per controlling burgeoning corruption in the country.

This is good news. Healthcare is still more or less free to all citizens in our country. Yet fewer than 49% of Americans can afford healthcare. In our country education is provided to all citizens from kindergarten to university level at state expense. Yet in the US, the richest country in the world, Pew Research and New America surveys show that approximately 90% of Americans believe higher education has become too expensive for the average person. 

We provide health and education at state expense, but in the richest country in the world they spend billions of dollars on for instance bombing Iran, yet the average American cannot afford healthcare or education.

Let’s appreciate the positives in our country instead of shamelessly running like some of our political parties do, to bleat to other countries of minor issues/failures here.

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