By Sanath Nanayakkare

Our task is to identify and implement the reforms that have a higher impact on social and economic dimensions while at the same time investing in our people, education, technology and bridging the gap between the haves and have-nots, for which we need those outside of parliament to bring their influence to bear on those who take decisions in parliament, President Ranil Wickramasinghe said on Friday.

“To achieve this end, the government will set aside additional funding and the private sector will also need to contribute to it via higher taxation, higher productivity, penetrating into niche markets and adopting highly competitive export-oriented business models that run on higher wages, to ensure upward social mobility across all segments of the society,” he said.

He made these remarks while speaking as chief guest at the ‘Let’s Reset Sri Lanka’ forum hosted by Advocata Institute.The two-day fireside chat by Advocata featured lessons from Thailand’s reform experience after the Asian Financial crisis in 1997 with insights from Dr. Veerathai Santiprabhop, former governor of the Bank of Thailand and a number of panelists who are experts on privatization, social safety nets, debt crises, structural adjustment, trade policies, labour market, robust resolution framework for resuscitation of businesses, unlocking land for development etc.

Further speaking the President said: During the financial crisis of Thailand in 1997which was called the Tom Yam Kung crisis; IMF came forward to help it recover from it. During the Global Financial Crisis of 2008-2009, it was again the IMF that stepped in. Whether we like it or not, Sri Lanka needs the support of the IMF at this juncture. Now this is an issue the whole parliament has to consider. If any member of parliament or any political party says we are not in favour of it, then we have a right to ask what their proposed solution is. When we are negotiating with the IMF one of the biggest issues that we face is that when a government changes in Sri Lanka its policies also change. So the main issue is not the substance of the negotiations but whether we are prepared to abide by an agreement as a country. If you are not prepared to do that, then the parliament has to be accountable for its consequences. That’s very clear. One can’t say one is in favour of part of the IMF programme and not with the balance part. This is a matter relevant not only for members of parliament but also for all those outside of parliament. You must also bring your influence to bear on those who take decisions in parliament at this critical hour.”

“We know the path we have to take. And in doing so, we should be able to ensure the sustainability of our foreign debt, our domestic debt and we should also be able to navigate the crisis without getting caught in geo-politics of Asia. The period ahead is certainly going to be a difficult one. Bur we all have to go through it. If anyone has a better formula or proposals that will make things easier, then we are willing to hear it and the parliament can decide between the two sets of proposals. Otherwise there is no other way but to bite the bullet.”

“While taking measures to stabilize the economy, we must prioritize the socio-economic dimension of the crisis. We have over six million people who are under malnourishment and unemployment has affected a large number of people. So we have to consider the social and economic dimensions of the reforms and the restructuring that we are going to undertake. We already see the impact of the shortage of fuel on the economy and high inflation which spilled over into the political and social fronts. Now we are slowly getting back to some stability. We can’t afford to face a second incident. I don’t think we can stand that strain again. So while looking at the economic side of it, we need to look at the social side of it as well. For me, that’s the most important part of the restructuring. How are the people affected and how are we going to cushion it? Even with the IMF, there is an agreement that the vulnerable groups have to be looked after. But we have to find the resources for this. This is easier said than done. That’s the path I’d like to see the whole community engage in.”

” The main instrument for social mobility is good education. Full education has not functioned for the last 2-3 years in the country as a consequence of the pandemic and the shortage of fuel. As a result, the main instrument for upward social mobility is now broken. We have to restore it. We must also reduce the gap between the haves and have nots. This also means that we will have to have higher taxation, even taxation on wealth. We have to resort to these measures firstly for economic recovery and secondly for social justice. We must realize that the time we spend on stabilizing the economy is also the time we have to use for reforms; to change the laws, to change the system and to change our institutions. I think this should take about a year.”

“Apart from the government’s role in these affairs, the business community also has to think anew. When you see the growth of Indian, Bangladesh and Pakistan economies, their l logistics sector has made a key contribution. With our strategic location, our logistics sector should be able to perform better in Colombo, Hambantota and in Trincomalee. Secondly, we should keep faith in renewable energy. I think we have to serious about getting a report on the potential of producing nuclear energy in Sri Lanka. The more energy you have, the more you can sell it to India and also put it to good use domestically.’

‘We have to survive as a nation. We have to become a middle income economy and then to higher income economy. We have to modernize our agriculture and fisheries for sustainability. And all those transformations need to be environment-friendly. Also, women in Sri Lanka that accounts for more than half of our population need to be more productively integrated into the economy.’

“We need a social market economy today. Just as much as one makes money and make bigger profits, there must be more money available to improve these sectors. The housing needs must be met in the next 15-20 years. Rural areas need to get rid of poverty. As we are a small country, we can do these. A highly competitive economy doesn’t run on low wages. It runs on higher wages and higher productivity. We need to create that environment.”

“We have to look beyond South Asia for regional economic integration as South Asia is beset with politics. We need to explore opportunities in ASEAN as it is a big, growing market where income levels are much higher. Later on we can look at Africa; East Africa especially. In the meantime we need to maintain our strong economic relationship with Europe and the U.K. The U.S. is undergoing changes and I think that will create benefit for us too.”

With globalization came in the view that ‘greed is good’. I don’t think that it is the order of the day any more. The Colombo Stock exchange (CSE) today is identified not with London Stock Exchange. There are many concerns about the Stock Exchange about it being controlled by a few people. I can’t list shares of SOEs on the Stock Exchange and help a few people. If public entities are to be listed on CSE, we must all be satisfied that it is neutral and it benefits all. Either the Stock Exchange must broad base or a new institution will have to be established.”

“The global situation next year is not going to favourable to anyone. Year 2024 will turn out to be better. In the meantime we need to put necessary reforms and restructuring in place. Due to the crisis, all are suffering. The lower end of the income curve suffers the most. There have to be meaningful changes. There has to be rise in income. Education facilities need to be enhanced to ensure upward social mobility for all. At the end of the day, our people must feel that their suffering has not been in vain. The young wants a new system. So let’s undertake a review of all things in the past and work together to reconstruct the future of our people,”