Colombo Telegraph

A New Approach To Eradicate Poverty In Sri Lanka

By Vasantha Raja

Vasantha Raja

Finance Minister Ravi Karunanayake’s mini-budget (29th) – with substantial offers to ordinary people – will be most welcome by many. Clearly, the minister must have taken the oncoming parliamentary election into account in designing the budget. However, occasional salary increases and random price-reduction of essential items are neither durable nor eliminate endemic poverty.

The new government’s 100-day program, in contrast, clearly has the potential to make a worthy contribution to Sri Lanka’s unfolding democratic revolution. But, remember, the existing constitution is a hotchpotch of uncoordinated patchwork; therefore, ad hoc changes will not be sufficient to do a solid job. Only a specially designed Constituent Assembly comprising experts and delegates from different communities, in my view, can fix the problem in the future.

Whatever the limitations facing the new administration, one must accept the fact that defeating Rajapaksas’ Mafia-regime electorally is a positive start.

The people of Sri Lanka seem to be already feeling jubilant and free, above all, fearless. This shows that the 8th of January marks something more than a ‘regime-change’; above all, an apparent ‘leap’ in mass consciousness. In other words, Rajapaksas’ ruthless regime seems to have unwittingly triggered a social backlash that has become irreversible. Perhaps, that’s the most important accomplishment.

*Finance Minister Ravi Karunanayake’s mini-budget – with substantial offers to ordinary people – will be most welcome by many. Clearly, the minister must have taken the oncoming parliamentary election into account in designing the budget.

But, the new administration should realize that the spreading of mass anger beyond democratic demands into areas of economic oppression may well be the next stage of Sri Lanka’s emerging social revolution. One must realize that the democratic revolution is inseparably linked to the economic emancipation of the masses.

The question is: Does Maithripala Sirisena’s capitalist administration have an answer to the ceaseless continuation of poverty in Sri Lanka? I don’t think so. For, profit-driven market economy all over the world has clearly shown that poverty is an unavoidable part of the system. Worsening rich-poor gap has become an established phenomenon on a world scale. Consequently ‘system-change’ becomes crucial to the elimination of poverty and, in order to do that, the whole approach to economic development will have to change. In other words, profit-driven market economics will have to be replaced with people-centred socialist economics.

The market economics is generally based on the so-called “trickle-down vision”, according to which the state’s task is to facilitate the best conditions for investors to make more and more profit, so that the capitalists’ wealth would eventually ‘trickle down’ to the lower classes. Thus, even infrastructure developments are carried out by capitalist states in line with the above-mentioned general vision, i.e. attracting investors.

However, in practice, the ‘trickle-down’ theory has demonstrably been falsified by facts. The truth is: rich-poor gap has been widening relentlessly. And, this truth is valid for Sri Lanka too. Therefore, if the economists want to honestly focus on people-centred development and eradicate poverty for good, they will have to think outside the box and develop a new vision. I like to briefly explain what a people-friendly, nature-friendly, government in Sri Lanka should do to address this problem:

The socio-economic infrastructure in a country is the foundation of its economy. Therefore, it is the key to eradicating poverty. National health, education, housing, water distribution, transport networks, communication, gas & electricity supply are all part of infrastructure.

In some countries, including Sri Lanka, aspects of health and education are available free of charge, though often these services are run in a half-hearted, disorganized, apathetic manner. Thus, many governments are clandestinely trying to privatise them for capitalist profit-seekers to exploit and serve the middle-class and rich layers’ interest in society.

A socialist government in Sri Lanka should totally change the existing approach, and focus on ‘rational planning’ to develop all aspects of infrastructure targeting ‘Common-Welfare’, not profit. This means: introducing free health, free education, free housing, free buses, free trains, free electricity, free gas, free water, free-phones and so on, thereby, the state assuming the role of providing the basic needs to all citizens without discrimination.

Obviously, a socialist administration should have the heights of the national economy – i.e. the banking system and the industrial capital – under its control, in order to realize these targets. Moreover, all infrastructure projects should become a public concern fully funded by the state. Nationwide creation of high quality hospitals, schools, housing projects, railways, road networks, and nationwide expansion of energy and water distribution – in brief, infrastructure development in general – should have one vision: ‘the creation of a healthy, educated, stress-free people’ to enjoy life while engaging in creative activity.

The socialist government will have the dialectical notion of ‘visionary planning’ as the guiding model for infrastructure development. Obviously, all administrations will have to systematically unleash billions of rupees to continuously fund the maintenance and development of infrastructure, in line with short-term, medium-term and long-term schemes. But, as I shall explain later, this will in turn produce an unprecedentedly productive society full of socially useful things (unlike the consumerist society of the market economy).

[Note that in this kind of welfare-societies – where uninterrupted continuation of infrastructure development becomes essential – the democratic structure of electing, changing and removing administrators will have to change dramatically. But, this is another issue to be considered separately.]

Let me come to the next point now: A gigantic effort of this proportion will invariably produce a massive labour force that earns a substantial amount of money for the work they do. And, since the working population does not have to spend their income on basic necessities, the workers’ spending power would increase immensely, and this will produce a massive demand for workers needs – mainly for food, furniture, clothes and so on. As a consequence, the country should bristle with economic activity where small businesses and farming/fishing communities flourish in trying to meet the workers’ demand.

Thus, in the new welfare-centred society, all citizens (workers, farmers and entrepreneurs) with a reasonable income can easily make a proportionate contribution (tax) to the state’s coffers, in order to maintain and improve the freely accessible services. Since none has to spend on basic needs, paying taxes will not be a burden at all for the citizens.

In advanced capitalist countries, there are many benefits and services available for the unemployed, disabled and so on. But, I argue, such models become a disincentive for people to work, particularly in low-pay jobs. But, with the model I have proposed, nothing of the sort will happen; because the free-services are available for everyone. Thus, a socialist ‘welfare-society’ will be an incentive for all healthy people to choose work in line with their own abilities and interests.

Also, since Sri Lanka is a small part of global capitalism and a socialist world-order is yet to replace the capitalist order, Sri Lanka will have no choice but to resort to ways of earning ‘dollars’. On this point, I suggest the state should focus on developing Sri Lanka’s tourist industry as its central foreign-exchange earner, on top of other well-known Sri Lankan exports.

Obviously, the ongoing tragic exodus of poor people leaving for the middle-east as slave-labourers should dramatically drop in the kind of welfare-society I visualize here. But, that’s a good thing. For, unlike the capitalist governments, a socialist administration will not have to depend on middle-east’s suffering domestic servants’ remittances as a source of foreign-exchange.

Consequently, a socialist government will tap the full potential of Sri Lanka’s scenic & cultural beauty as a magnet to attract foreign travellers as never before. I shall not go into details here of numerous incentives available to draw in tourists to see the only country in the world with a fully-fledged welfare society.

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