16 May, 2021

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An “Alternative” Path To Nowhere

By Ameer Ali

Dr. Ameer Ali

The Governor of Central Bank, Prof. W. D. Lakshman, a trained economist, respected academic and a proud colleague of mine at Peradeniya, stated sometime back that President Nandasena Gotabaya Rajapaksa’s (NGR) promise of prosperity and splendour would be delivered through an “alternative and novel” path of development, without giving much details about it. However, from his subsequent interviews to the media and public speeches one could gather some sigh posts of that heavenly path. The Governor’s or more appropriately his master NGR’s development model is based on a bundle of thought bubbles, which in economic parlance, would translate into guaranteeing adequate liquidity through printing money to facilitate market-based economic activities and transactions, low interest rates to encourage domestic investment, ad hoc import substitution measures, affirmative action to encourage domestic production especially in agriculture, and above all, not to seek assistance from IMF. That strategy might have been the need of the time when the world economy was hit by Covid-19 and countries were desperately taking steps at least to maintain the pre-pandemic status quo. However, while the world economy seems to be on a slow recovery path, maintaining the same strategy at home, without introducing structural changes to the economy to favour the most productive sectors, may worsen rather than improve peoples lives. Already, the alternate path has driven down the value of domestic currency, increased prices of consumer essentials, created supply constraints for local manufacturers, reduced government revenue, and brought down the level of foreign reserves to a historic low.

In the meantime, with debt obligations looming large during the current year, Prime Minister MR and his State Minister for Money, Capital, Market and Public Enterprise Reforms, Ajith Nivard Cabraal (ANC), have flown to Bangladesh and Oman respectively, in search of credit assistance, either through currency swaps or loans. There is nothing novel about this except the two countries they have approached now are Muslim. Bangladesh, until recently, was a textbook case of Third World poverty and misery, but has performed admirably well by the optimal utilization of its cheapest resource, population. While the other, Oman, which was historically rural and agrarian, because of petroleum bonanza has emerged from a fishing village into a capital surplus economic megalith. There is a lot to learn from the experience of Bangladesh in the utilization of human resource. One cannot expect Sri Lanka to perform well economically when its human resources are used sub-optimally because of ethno-national politics,   

While MR and ANC are looking for friendly Muslim nations for loans and currency swaps, back at home, President NGR, who is also the Minister of Defence, and Retired Admiral Sarath Weerasekera, the Minister of Public Security, are busy making the entrepreneurial Muslim community a scape goat for the 2019 Easter Sunday massacre, while allowing those who masterminded, financed, enabled and executed that horror go unpunished. When an entire community is suspected of extremism and kept under constant surveillance, its energy and enthusiasm to function freely and contribute to economic production is jeopardized. This is true of the Tamil minority also, which is constantly harassed and its economic resources are being plucked away under false pretences just to safeguard the regimes Sinhala Buddhist vote bank. This is a political strategy at the expense of economic development and to win back the collapsing popularity of the NGR and his parliamentary retinue. It is also a diversionary tactic to hide the failure of the alternate model, which is leading to nowhere. 

The controversial Colombo Port City (CPC) with all its fiscal and financial privileges and freedom seems to be another arm of this development model, just as Hambantota Port was under MR Presidency. Yet, CPC is of a different genre. It would, with all its privileges, emerge as a state within a state and an attractive destination for illicit offshore finance, whose economic and financial benefits to the country are highly questionable. Experts are warning already that it would be a magnet for attracting unsavoury financial activities and shady economic deals, which would adversely affect government revenue and real national economy. Would the esteemed Central Bank Governor and Professor guaranty that this would not happen? If he cannot, it would only show that he too has succumbed to pressures from his political, masters.

Finally, the alternate model totally ignores the economic impact of oppressing the two minorities. Unfortunately, recent developments in economics have made it an objective science by detaching from it the significance and role of the human factor in economic development. After all, an economy exists for the people and is created by the people. Without people there will be no capital, no technology and not even economic and development models. Therefore, when a section of the population is oppressed, threatened and kept under security surveillance its contribution to economic production will be sub-optimal at best and minimal if not none at worst. This is what happening in Sri Lanka now. Public sector investment and development of regions where the minorities are concentrated are trivial and the most prominent activity in the name of development undertaken by the government seems to be land grabbing for colonization yet by more Sinhalese. This ethnic rebalancing is economically disruptive and socially oppressive. It cannot be part of any development model, let alone the alternate path.    

However, there is also another danger arising from this situation. Because of systemic discrimination against and oppression of minorities, a significant sector of the country’s skilled, entrepreneurial, intellectual and hardworking human resource has emigrated, settled abroad and contributing magnificently to other countries’ development. Sri Lanka’s loss is foreigners’ gain. As a result, like the Jewish community before Second World War, the expatriates have now grown into a force to be reckoned with. Originally, it was largely Tamils, but now there is also a small but steadily swelling Muslim contingent. There is also a Sinhalese diaspora, which is also becoming increasingly critical of the alternate model.

It is no secret that the recent setback that Sri Lanka suffered at the UNHCR Council in Geneva bears a Tamil seal. That seal is destined to receive international recognition if oppression of Tamils continues unabated at home. As noted earlier, MR and his State Minister recently ran to Muslim countries seeking financial assistance. If Sri Lanka continues with its alternate model without reconciliation with minorities, and if markets in the West become less receptive as a result to Sri Lankan exports in the future, those of Muslim countries would become crucially important.  However, if Muslim community at home also continues to suffer oppression, that may impact economic relations between Sri Lanka and Muslim countries negatively. It is therefore imperative for those who berate about the alternate and novel model to pay more attention to some of the non-economic factors that impinge on the economy. As it is, the model is taking the country nowhere. 

*Dr. Ameer Ali, School of Business and Governance, Murdoch University, Western Australia

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Latest comments

  • 6
    3

    Dear Dr Ameer Ali,

    It is always easier to be wise on hindsight, But forget about the minority concerns for a moment and If you are the Governor of Central Bank

    What is the development model you would recommend to Sri Lanka?

    The Colombo Port City whether we like it or not is a reality how could it is used effectively as a financial hub for development?

    • 5
      11

      “What is the development model you would recommend to Sri Lanka?”
      —-
      I asked the same question on a previous occasion but there was no response.
      AA keeps on repeating the problems that we all know but never come up with solutions.
      AA always start with the economy and end up with problems of Muslims.

      • 0
        0

        Eagle Eye,
        .
        And I asked you to give an unambiguous Yes/ No answer to the question of whether you are the racist Mahindapala (HLD). You have not answered that question yet.
        .
        As I’ve said, he writes much better than you do.

  • 4
    12

    AA,
    “…and the most prominent activity in the name of development undertaken by the government seems to be land grabbing for colonization yet by more Sinhalese.”

    Let me remind you that this country which was called Sinhale for thousands of years is the country of Sinhalayo and Vedda Eththo who evolved in this country. Have you ever heard native people colonizing their own country? Colonizing is done by foreigners. Dravidians and Europeans colonized Sinhale.
    Tamil Muslims who came to Sinhale as refugees and Arab Muslims who came as traders sought asylum from King Senerath of Kandy when faced persecution by Portuguese. The King felt sorry for these guys and asked Sinhalayo to allow them to settle down in interior parts of the country, marry Sinhala Buddhist women and convert them to Islam. So, Muslims are occupying Sinhala land.
    During the time North East was controlled by LTTE Tamil terrorists, they chased away Sinhalayo from these areas. The land vacated by Sinhalayo were grabbed by Muslims. When Sinhalayo went to claim their land Muslims chased them away and refused to hand over the land owned by Sinhalayo. So, it is the duty of the Government to take over land occupied by Muslims and hand over to Sinhala owners.
    As an academic you should not distort the facts.

  • 9
    1

    A simple economic model for development needs
    1. Stability, not military Dictatorship.
    2. Peace and Unity.
    3. Accountability.

    • 4
      10

      Ajith,
      Sinhala terrorist Rohana Wijeweera and racist separatist Malabar Vellala Tamil politicians who promoted and supported Tamil terrorists are responsible for ruining political stability, peace and unity in this country. The latter group should get the bigger share of the blame because Tamil terrorism lasted for three decades.

      • 0
        0

        Eagle Eye,
        .
        Isn’t it correct to say that Mahinda Rajapaksa went to Geneva on behalf of Rohana Wijeweera?
        .
        Wijeweerawasnot a man whom I approved of, but Ido have great respect for AKD now.

  • 3
    8

    “When an entire community is suspected of extremism and kept under constant surveillance, its energy and enthusiasm to function freely and contribute to economic production is jeopardized.”
    —-
    This is the situation prevailing in the whole world. Because of terrorist activities carried out by Muslims, people are suspicious of Muslims. That is something Muslims earned by their actions.
    Can someone tell us how to differentiate a peace loving Muslim from a Muslim extremist?
    Can someone tell us how to differentiate a Muslim who is not a terrorist from a Muslim terrorist?
    Extremist ideology exist in the mind. From the external appearance, no one can differentiate a non-extremist from an extremist. Who expected rich guys with very good education will carry out suicide attacks killing innocent people.

  • 4
    8

    AA,
    “This is true of the Tamil minority also, which is constantly harassed and its economic resources are being plucked away under false pretences just to safeguard the regimes Sinhala Buddhist vote bank.”
    —-
    Can you please tell who is constantly harassing Tamils?
    Can you please tell what are the economic resources plucked away from Tamils under false pretenses and by whom?

  • 5
    0

    Forget about all these models, theories and studies.

    Let us all try to go to heaven.

    Go back to what was said 2000 years ago !

    • 0
      0

      deepthi silva,
      .
      I respect most of the things that Jesus (Eesa to Dr Ameer Ali) said 2 millennia ago, but I have no faith in the existence of a place called heaven.
      .
      Even if there is a Supreme Being he would be very different from the Old Man whom Michaelangelo painted in the Sistene Chapel. Also, if there is only one Supreme Being would it matter if you called him (or her?) Jehovah, God, or Allah? Actually you could even call “it” Shiva!
      .
      I don’t believe in purchasing “Insurance Policies”.
      .
      On the other hand, it is high time we banned plastics, stopped taming elephants, reformed MMDA, and stopped the population explosion worldwide.

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