{"id":185645,"date":"2017-12-18T04:34:17","date_gmt":"2017-12-17T23:04:17","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=185645"},"modified":"2017-12-22T20:00:15","modified_gmt":"2017-12-22T14:30:15","slug":"coomaraswamy-chinthana-the-rationale-of-the-countrys-economic-policy-package","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/coomaraswamy-chinthana-the-rationale-of-the-countrys-economic-policy-package\/","title":{"rendered":"Coomaraswamy Chinthana: The Rationale Of The Country\u2019s Economic Policy Package"},"content":{"rendered":"

By W A Wijewardena<\/a> –<\/b><\/span><\/p>\n

\"\"<\/a>

Dr. W.A Wijewardena<\/p><\/div>\n

The need for demystifying economic policies<\/b><\/span><\/p>\n

Economic policies have always been mysteries to laymen. They have become mysteries because top economists often present them in a language not comprehendible by ordinary people. Policy makers design policies after much labour and thought. Yet, they fail to explain their rationale to people, leaving them in a state of confusion. This leads to the creation of a trust deficit between the policy makers, on one side, and those who are to benefit from policies in the long run, on the other. It also gives opportunities for those who feel being threatened by new policies to put pressure on governments not to go for them by mobilising people and other forces to serve their cause. <\/span><\/p>\n

As a result, even the policies which are essential and carry high economic costs if they are not implemented are abandoned in mid course due to prolonged public protests. Sri Lanka\u2019s past is full of such instances. It also explains why Sri Lanka\u2019s economic growth had been low \u2013 about 4.4% on average annually in the whole post independence period \u2013 and why it had been a laggard compared to its peers. The present government which has experienced a declining economic growth rate \u2013 4.8% in 2015 and 4.4% in 2016 \u2013 has particularly been vulnerable to this ominous development. As the latest economic data suggest, the performance of the economy in 2017 would be most disappointing for the government with the growth rate estimated to be slipping even below 4%. This makes the realisation of the ambitious targets pronounced in Vision 2025 of the government \u2013 an increase in the average income of a Sri Lankan, known as the per capita income, from US $ 4000 in 2017 to US $ 5000 by 2020 \u2013 extremely challenging.<\/span><\/p>\n

SLEA\u2019s attempt at disseminating economic information<\/b> <\/span><\/p>\n

In this background, the Sri Lanka Economic Association or SLEA, the topmost body of economists in the country, had ventured into the task of generating an open and free discussion of the policy package being proposed by the present government. This it did by hosting a public forum on the direction of future economic policies in Colombo last week. In fact, such a discussion would have been generated by the government itself before SLEA ventured into it. Yet, as the government had done on previous occasions, it appeared to have thought that its job was over after the documents containing the policy had been released either in Parliament or in a gala event thrown luxuriously at a public place.<\/span><\/p>\n

Government\u2019s lukewarm approach<\/b><\/span><\/p>\n

This writer in a number of articles published in this series attempted to analyse those policies for the benefit of the public and government policy makers (available here<\/a>, here<\/a>, here<\/a> and here<\/a>).\u00a0However, the response received from the government was a stark silence, probably because an open discussion or a critical evaluation of its policies by the public would have been considered not to its liking. <\/span><\/p>\n

The tense situation in the public forum<\/b><\/span><\/p>\n

In the SLEA forum under reference, from the government side, Dr Harsha de Silva, commonly referred to as Harsha, Deputy Minister of National Policies and Economic Affairs, took the podium. Harsha had come to prominence by being the firebrand critic of the economic management of the previous administration and, therefore, was the best-qualified to represent the government in the forum arranged by SLEA. The private sector had been represented by the Chairman of the Sri Lankan brand, Nature\u2019s Secrets, Mr Samantha Kumarasinghe, equally known for being critical of the present government\u2019s policies, especially its trade policies. In between Harsha and Samantha was the Central Bank Governor, Dr Indrajit Coomaraswamy, with the difficult task of presenting a balanced view, compared to the pro-view by Harsha and the counter-view by Samantha. The audience had been treated to a tension filled evening with the exchange of arguments followed by counter-arguments. It is a healthy sign since economic policies should be debated freely before a final agreement is reached. It should always be remembered that dialogue, though it may be fiery, is always better than enforced consensus from the nation\u2019s point of view. A detailed report<\/a> of the tension mounted discussion has been presented by Daily FT<\/em>. <\/span><\/p>\n

High flown economics need be simplified<\/b>\u00a0 \u00a0 \u00a0 \u00a0 <\/span><\/span><\/p>\n

Governor Coomaraswamy\u2019s presentation at the forum on economic policy (available at: https:\/\/www.youtube.com\/watch?v=tmbD_82XReY<\/span><\/a> ) deserves further elaboration. That is because what Coomaraswamy had presented in high-flown technical terms was totally appropriate for the audience at hand consisting of the country\u2019s top economists. However, if it is to be conveyed to public at large, it need be converted to ordinary man\u2019s language to facilitate understanding by them. Such an exercise is necessary since, as this writer had encountered during the weekend, even the final year undergraduates or the MBA students of a well known state university could not properly explain the rationale of the policy package described by Coomaraswamy. Hence, this article aims at taking the ordinary folk through the policy package, as pronounced by Coomaraswamy, to be implemented by the government in the next few years.<\/span><\/p>\n