By W.A Wijewardena –

Management of Economic Policy – Part IV

The crusader of good governance in healthcare system

Dr. Anuruddha Padeniya, Medical Specialist and President of the 18,000-member strong Government Medical Officers’ Association – better known in its acronym as GMOA – has always been a newsmaker.

He has led his professional body, standing firm despite attacks by critics, against what he has believed to be threats to his profession, state sector medical service, healthcare delivery, senseless bureaucratic and political interference in the country’s medical system – all relating to his professional field. In that sense, he has been a crusader of good governance in the country’s healthcare system.

His leadership skills have been amply demonstrated by his ability to organise and direct all Government medical professionals under the umbrella of GMOA to attain its goals. When GMOA led by him decides that its members should go on medical leave collectively, all Government hospitals, except emergency services, get paralysed. His track record is such that there is no single battle which he has led has ended up in defeat. Hence, he is feared by his opponents but loved by his members.

War against alleged Indianisation by GMOA

Dr.Padeniya’s latest battle field has not been in the medical profession but somewhere else. He and his GMOA have ventured into a new battle, supported by other professional bodies as well, against what has been termed as ‘Indianisation’ of the Sri Lanka’s economy.

Right now, the battle has been against the Economic and Technology Cooperation Agreement or ETCA which the Government has proposed to sign with India. But the battle-cries of GMOA officials made in different forums indicate that it would not be limited only to ETCA; it has already been extended to Indian ambulance services, Indian doctors and Indian Government’s ventures in Sri Lanka. Pretty soon, it would be extended to all other Indian interventions in Sri Lanka because GMOA considers them to be a threat to national security.

In fact, this was announced by Dr. Padeniya himself when he addressed a gathering of professionals who had been led by him in person in a march in the streets of Colombo to theopen theatre in Colombo’s Viharamahadevi Park. Dr. Padeniya’s speech on this occasion has portrayed his wisdomon trade and related matters which could be termed ‘Padeniya Chinthana’ on the subject.

Challenging India by challenging Government’s economic policy

Dr. Padeniya and GMOA are surely challenging the economic policy being pursued by the Government currently. In that policy package, India is elevated to an important status due to several reasons. It is Sri Lanka’s neighbour just sitting to its north. It is gradually transforming itself into a vibrant economy with high economic growth propelled by its seamless adaptation of modern technology. It has already signed facilitating comprehensive economic partnership or cooperation agreements with Singapore, South Korea, Japan and Malaysia and is on its way to sign another one with Thailand. These agreements have placed it in the unique position of being a partner of the now fast growing Asian Supply Chain, the mechanism that feeds the production of goods and services by countries in the region for international markets. Above all, India has the fastest growing middle class, estimated to be at just 60 million or 5% of the population today.

But according to economist Homi Kharas, formerly at the World Bank and presently at the Bookings Institution, by 2020, India will have the third largest middle class in the world, followed by China and USA. But by 2030, it will have the largest middle class in the globe accounting for nearly a fourth of the global middle class consumption in the whole world (available here ). Sri Lanka cannot ignore this vast market which is available just at its next door. Access to that market, therefore, helps Sri Lanka to produce for a market bigger than the market in the home country.

GMOA has role in commenting on economic policy as a civil society organisation

Some have expressed reservations that intervening in the country’s economic policy is not in accord with GMOA’s mandate. But that is not a valid argument. That is because in an economic democracy which the present Government has vowed to establish in the country as a part of its social market economy policy, civil society organisations have all the rights to discuss, debate, dissent and drive-in the country’s economic policies.

In this context, GMOA is an important civil society organisation which has a membership of some 18,000 professionals drawn from the highest stratum of the intelligentsia of the country. Free views expressed by GMOA, therefore, enriches the processes involved in the country’s economic democracy. Hence, instead of dissuading, GMOA should be persuaded by all means to participate freely in discussions on the country’s economic policies. In the same way, Dr. Padeniya, being a professional with independent thinking, has all the rights to express his free mind in an economic democracy.

Unveiling of Padeniya Chinthana at the Viharamahadevi Park

‘Padeniya Chinthana’ on ETCA, presented by Dr. Padeniya in his moving speech at the Open Theatre of the Viharamahadevi Park is a mixture of some valid points, weak arguments and irrelevant matters. His fluency in communicating in Sinhala language is a skill about which even a politician should feel envious. In a 30-minute long speech, he spellbound his audience to an unreserved attention to be disturbed only occasionally by encouraging cheering by his fans at some of the bold statements he made against the Government and India.

A summary of ‘Padeniya Chinthana’ as pronounced by him in the speech under reference is as follows.

Padeniya Chinthana: ILFTA’s failure is a failure of economists too

The Indo-Lanka Free Trade Agreement or ILFTA, already signed with India and now in operation, is a failure. This is because the whole trade created under the agreement has been in favour of India and Sri Lanka has got only 0.7% of the total trade and India has got the lion’s share even according to the latest data pertaining to 2014. It is the economists who have advised for ILFTA. Since ILFTA has been a failure, it is economists who have failed the country. The failure of economists has been shown on a previous occasion too. That was when they advised that the country should go for a hedging deal and that deal ended in massive losses. The burden of the failure has been passed on the people of this country compelling them to pay for losses over many years into the future.

Padeniya Chinthana: Don’t rely on continuously failing economists

But economists have not taken responsibility for their failures. Hence, to continue to act on a group of professionals who have failed the nation is not a sound strategy. It is like continuing to seek medical treatment from Dr. Padeniyaas a medical specialist when patients under his care have continued to die. As such, economists should not be given the monopoly power to decide on the country’s economic policies. It is these economists who have even misled the politicians.

Padeniya Chinthana: A national policy on trade agreements a must

The proposed ETCA is definitely not for Sri Lanka’s benefits. That may be the reason why secrecy has been maintained about the proposed agreement throughout. When GMOA asked for full information relating to the proposed ETCA, the response received from the authorities has been in the negative. Hence, GMOA has now written to the President of the country stressing the need for full disclosure. GMOA, as a professional body requests the Government to first have a ‘national policy’ on international trade agreements to assure that they will not compromise the country’s national defence, citizens’ security and future well being of the people.

Padeniya Chinthana: Parliamentarians are not to be trusted

In this context, it is unwise to depend on the Parliamentarians for delivering the best for Sri Lankans. That is because most of the Parliamentarians today are with low educational qualifications, without competence in English language and even when they know their English, not in a position to grasp the meaning of the clauses filled with technical jargons. Hence, they might raise their hand to approve of it without bothering about the implications of ETCA for the country’s national security. ETCA is simply one peg in the more harmful ‘Indianisation’ of the country that is taking place at present.

Padeniya Chinthana: Proposed Ambulance Service is a threat to national security

This was evident from another move of the Government to introduce a pre-hospitalemergency ambulance service in the country with Indian support. Though authorities maintain that ETCA does not include health services, this ambulance service directly and ICT services indirectly have permitted Indians to penetrate into the country’s health sector from the backdoor. This is because ICT today encompasses all the economic sectors of a country. As such, GMOA cannot allow ETCA to include ICT sector. The pre-hospital emergency ambulance service being offered to Sri Lanka through a ‘not for profit Indian venture’ called GVK EMRI or GVK company’s subsidiary, Emergency Management and Research Institute, is a surreptitious attempt at providing all the confidential bio data of Sri Lankans to Indians. This compromises Sri Lanka’s national security. The organisation of the Sri Lankan outfit to provide the service has given unnecessary powers to the Indian company. This is not acceptable.

Padeniya Chinthana: The Government should provide the ambulance service

Hence, GMOA is of the opinion that such a pre-hospital emergency ambulance service has to be provided only through a domestic mechanism and not through Indians. Sri Lanka’s state sector ambulance service is very effective and efficient and it can handle this job too. Hence, this arrangement is a gross betrayal of the country. GMOA will not allow such a betrayal. This is because GMOA loves this country. Dr. Padeniya himself had rejected earlier offers to work in USA as a medical specialist but returned to Sri Lanka because he could not agree to sacrifice his love for the country. He ends his speech pledging GMOA’s ‘non-partisan, non-political and professional’ support to protect the country which he terms as a ‘land of merit’ by taking leadership against ETCA.

Some valid points in Padeniya Chinthana

There are some valid points which Dr. Padeniya has raised in his speech. He has declared that economists should not have the sole authority to decide on national economic policies. Strangely, this view on economists is in accord with what economists too believe as their role in society. In any society, economic policies are too important to be left only to economists. The role of the economists is to analyse the good and the bad sides of policies, and present to policy approving authorities, as French Economist Claude FrédéricBastiat declared in 1850 for good economists, their impact not only for today but also for many more years into the future. It is up to those in society to examine what economists analyse and decide the best policy for the nation.

Padeniya has been truthful about Parliamentarians

Another valid point in Dr. Padeniya’s speech is his reference to Parliamentarians. He declared that Parliamentarians are not a reliable group since they might consent to a proposal without even knowing what it is. One has to look at only how Parliamentarians have behaved in the recent past to validate Dr. Padeniya’s claim. Parliamentarians raised their hand to pass the 18th Amendment to the Constitution and repeal the 17thAmendment. The very same Parliamentarians acted as puppets in a string to repeal the 18th Amendment and pass the 19th Amendment to the Constitution. Hence, one cannot disagree with Padeniya when he says that the nation cannot rely on Parliamentarians to protect the rights of citizens.

Padeniya’s cry for transparency should not be ignored

Dr. Padeniya also cries for transparency in, full disclosure of and accountability for public policy. He demands for a consultative process when important public policies are proposed. This is indeed a valid point which the Government should not ignore. That is because it is in accord with the good economic policy governance which the Government is planning to introduce to Sri Lanka. Hence, as a leader of a civil society organisation, Dr. Padeniya has simply voiced aloud in public forums what the citizens have also been demanding. The Government cannot find fault with him on this count.

Padeniya Chinthana on trade needs significant improvements

However, Dr. Padeniya’s reading of international trade, bilateral trade agreements and the importance of India to Sri Lanka at this juncture are not up to the wisdom and intelligence of a top professional of the country. He questions boldly why Sri Lanka should do trade. Trade allows a nation to sell its surplus output to the rest of the world. It, therefore, leads to specialisation which in turn contributes to effectiveness of the policies and efficiency of the economy. We benefit immensely when we allow a medical doctor to treat us. That is because our learning medicine and treating us is a near impossibility in terms of the limitations on our time, resources and talent base. Hence, we allow others to specialise themselves in medicine and choose to buy their services when we need medical treatments. This principle of trading, valid for an individual,is valid for a nation too.

Small economies can do trade successfully with big economies

Nations engage in multilateral trade with all other countries which is the best for them. However, when multilateral trade is impeded by the erection of tariff and non-tariff barriers, it is best for countries to enter into bilateral trade agreements with a selected country or a group of countries.

Dr. Padeniya, having expressed his doubt about the success of such bilateral trade agreements has challenged economists to show any success case of trade agreements. His fear is that when a small country enters into a trade agreement with a big country, the small country allows itself to be swallowed by the big country. Accordingly, his implication is that Sri Lanka should not attempt to have a trade agreement with its big neighbour to the North. This is an unfounded and irrational belief on the part of Dr. Padeniya. Singapore, Hong Kong, Taiwan and South Korea are relatively small economies. But they do trade successfully with big economies like USA, China and Japan.

NAFTA has benefitted both Mexico and Canada

A classic example of the success of a smaller country entering into a trade agreement with a big country is provided by the North American Free Trade Agreement or NAFTA signed by Canada and Mexico with USA in 1994. Prior to signing it, USA had a trade surplus of about $ 3 billion with Mexico. There was a fear among Mexicans that NAFTA will allow USA to increase that surplus further. Despite this fear, during the period from 1995 to 2015, Mexico had a trade surplus with USA amounting on average to $ 44 billion per annum. Similarly, NAFTA enabled Canada to increase its trade surplus with USA which stood at about $ 15 billion per annum to a level of $ 40 billion. Thus, there is ample evidence of the success of bilateral trade agreements if Dr. Padeniya just cares to explore into.

Arguments against the ambulance service is a ‘red herring’

Dr. Padeniya’s reading that pre-hospital ambulance service to be established by Sri Lanka and India jointly is a conspiracy hatched by India to compromise Sri Lanka’s national security is filled with naivety. It is a public-private partnership to serve the patients in Sri Lanka drawing on the rich experience of India’s GVK EMRI, a not for profit organisation functioning under India’s GVK Group.

To serve its customers efficiently, the new outfit is to maintain a database of the registered customers; Dr. Padeniya equated it to invading the privacy of Sri Lankans by Indians with the objective of compromising Sri Lanka’s national security. This is a practice even cab services do maintain today. Hence, to see it as a compromise of national security is a demonstration of naivety on the part of a top professional of the country’s leading 18,000 medical officers.

Fight Padeniya Chinthana in intellectual forums and not in the streets

Dr. Padeniya’s arguments against ETCA are hollow and groundless. Hence, there is no necessity for the Government to fight him in the streets by bringing people claiming to be supporting ETCA to the streets. His hollow arguments can easily be fought in intellectual forums.

*W.A Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, could be reached at waw1949@gmail.com