{"id":249529,"date":"2026-10-22T01:54:42","date_gmt":"2026-10-21T20:24:42","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=249529"},"modified":"2026-10-22T01:54:42","modified_gmt":"2026-10-21T20:24:42","slug":"economic-strategy-political-stability-the-need-for-pragmatic-reform","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/economic-strategy-political-stability-the-need-for-pragmatic-reform\/","title":{"rendered":"Economic Strategy, Political Stability & The Need For Pragmatic Reform"},"content":{"rendered":"

By Sugath Amarasekera<\/a> –<\/strong><\/span><\/p>\n

\"\"

Sugath Amarasekera<\/p><\/div>\n

The government faces a difficult strategic challenge. While it is rightfully pursuing justice in emblematic cases of corruption, abuse of power and serious crime, it must simultaneously recognize that the most immediate concern of the people is the improvement of their economic lives. This is particularly important in a political environment where reactionary right-wing forces are waiting for an opportunity to exploit public dissatisfaction and regain political power.<\/p>\n

The government’s efforts to bring those responsible for corruption and major crimes to justice are commendable and deserve public support. However, justice alone cannot sustain political legitimacy if people’s material conditions continue to deteriorate. The people overwhelmingly voted this government into power because they believed it represented a people’s government\u2014one that would fundamentally change the way the country is governed and improve their lives. Many still believe that the government is genuinely trying to do so. But patience is beginning to wear thin, and an alternative economic narrative is increasingly gaining traction, particularly among younger people.<\/p>\n

The emerging argument is relatively straightforward: economic recovery cannot be achieved simply by stabilizing the existing economy; it requires expanding the productive capacity of the economy by injecting capital, stimulating demand and generating productive employment. Since the economic crisis of 2022, the economy has remained constrained, and much of the emphasis has been placed on stabilization rather than expansion.<\/p>\n

People do not necessarily experience macroeconomic stability in the same way that economists measure it. They experience the economy through their wages, employment opportunities, food prices, housing costs, education expenses and purchasing power. If their living standards are not improving, they will understandably question whether economic stability is actually benefiting them.<\/p>\n

The government and the Central Bank have rightly focused on controlling inflation and maintaining relative stability in the rupee. But stabilization cannot become an end in itself. Stabilizing a stagnant economy merely preserves the status quo. What people are expecting now is a visible improvement in their living conditions\u2014falling poverty, rising real incomes, productive employment and greater economic opportunity. If these improvements do not materialize, frustration will inevitably grow.<\/p>\n

There is also increasing skepticism about an IMF-centred economic strategy that has dominated policy implementation since 2023. The programme has contributed to macroeconomic stabilization, but stabilization has come alongside a severe deterioration in living standards. Poverty, which was relatively low before the crisis, has risen dramatically, while employment and productive economic activity have not recovered sufficiently. At the same time, worker remittances have become one of the country’s principal economic lifelines, rather than being complemented by a sufficiently strong expansion of domestic production.<\/p>\n

One of the central problems is the collapse of domestic demand. Heavy taxation introduced to strengthen government revenue has placed further pressure on household purchasing power and businesses. A substantial proportion of government revenue is also absorbed by debt servicing, leaving inadequate fiscal space for productive investment. Consequently, the economy risks becoming trapped in a cycle in which the government concentrates on preserving fiscal and monetary stability while the productive economy remains weak.<\/p>\n

This is where a more pragmatic economic strategy is required.<\/p>\n

Sri Lanka cannot achieve sustained recovery merely by managing scarcity. It must expand the economic pie. That requires the deliberate mobilization of capital towards productive sectors, infrastructure, industry, agriculture, technology, energy, housing and services capable of generating employment and foreign exchange. The objective should be to create sufficient productive capacity and demand to generate sustained economic growth\u2014potentially in the range of 7\u20138 percent annually over an extended period\u2014rather than simply achieving a technically stable but socially stagnant economy.<\/p>\n

The government therefore needs to distinguish between macroeconomic stabilization and economic transformation. The former is necessary, but it is not sufficient. Monetary and fiscal discipline should be used as instruments to create the conditions for productive expansion, rather than becoming objectives that override the need for growth.<\/p>\n

There is an important political dimension to this.<\/p>\n

Being people-centred does not mean avoiding difficult economic decisions because they may initially be unpopular. On the contrary, genuine pragmatism sometimes requires governments to make decisions that may appear politically risky in the short term but are essential for improving people’s lives in the medium and long term.<\/p>\n

The real challenge for the government is therefore not simply how to retain power, but how to remain in power by delivering tangible economic progress to the people who placed their trust in it.<\/p>\n

If the government fails to produce visible improvements in employment, incomes, purchasing power and living standards, an alternative political narrative will inevitably emerge. That alternative is already beginning to gain traction. The danger is that reactionary forces, including sections of the old political and economic establishment that lost power through the ballot box, may exploit this growing frustration. Their political influence may have diminished, but their financial resources, institutional networks and connections within the deeper structures of the state have not necessarily disappeared.<\/i><\/i><\/p>\n

This creates a potentially dangerous situation. If economic frustration becomes sufficiently widespread, forces opposed to the government’s political transformation could present themselves as the alternative\u2014even if their previous policies contributed substantially to the crisis.<\/p>\n

The government therefore faces a strategic choice. It can continue to prioritize stabilization and wait for growth to emerge gradually, or it can adopt a more proactive economic strategy that deliberately mobilizes capital, expands productive capacity, restores domestic demand and creates employment.<\/p>\n

The latter is not a rejection of fiscal or monetary discipline. It is a recognition that stability without growth is ultimately unsustainable, both economically and politically.<\/p>\n

The government should therefore act before public patience is exhausted. Its greatest political asset remains the people’s expectation that it represents a genuine break from the old system. But that expectation cannot be sustained indefinitely through political rhetoric or a people-centred narrative alone.<\/p>\n

Ultimately, people will judge the government by whether their lives improve.<\/p>\n

Justice is necessary. Good governance is necessary. Macroeconomic stability is necessary. But none of these can substitute for economic progress. The government must now move from stabilizing the crisis economy to building a growing economy. If it fails to make that transition at the right time, the political consequences could be far more serious than the economic risks of acting decisively today.<\/i><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

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