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Need for multipronged reform programme stressed
Pre-budget discussion
The need for multi-pronged broad reforms to stabilise the economy and to ensure long-term policy consistency were some of the key highlights at a pre-budget discussion held on Oct 21, addressing a number of economic issues currently faced by Sri Lanka.
The discussion, titled ‘Budget 2022: Sri Lanka’s Path to Economic Stability,’ was organised by NextGenSL and the Friedrich Naumann Foundation for Freedom in Sri Lanka. Justus Lenz, Policy Advisor for Economic and Financial Affairs at the Liberal Institute, the Friedrich Naumann Foundation for Freedom’s think tank, delivered the keynote speech, in which he shared Germany’s experience in economic revival with the hope of encouraging Sri Lanka to embark on broad and meaningful reforms to revive the economy, said a joint press release issued by NextGenSL and the Friedrich Naumann Foundation.
It said: Lenz drew attention to the fact that Germany’s success was based on four primary factors — 1) Free markets, property rights, and unregulated prices 2) The rule of law, infrastructure, and social policies provided by the state 3) Abstention from direct market interventions (mostly) and 4) Free trade and the EU’s common market.
“Actual economic growth depends entirely on entrepreneurs who develop products and services. But in order to drive development and progress, entrepreneurs need a well-functioning market order which provides freedom and security,” he told the audience. “Facing enormous difficulties, West Germany implemented the Social Market Economy and placed its trust in free markets, the entrepreneurial spirit, and an open society. East Germany bet on central planning and top-down control. In the first 10 or 20 years, the race to prosperity seemed to be a close one. But the long-term effects of both free and controlled markets soon became obvious,” he said.
“A lesson that can be drawn from looking at our experience in Germany is that reforms towards a free-market order can be very successful. If one pursues this direction, it is important to consider that success can take time. The implementation time can be painful and long, as seen both after 1948 and 1989”, adding, “Of course, there is no easy recipe for implementing a free-market order such as the Social Market Economy,” he added.
Following the keynote speech, a panel discussion featuring Prof. Sirimal Abeyratne, MP Mayantha Dissanayake, Sanjaya Mohottala, Chairman, Board of Investments, and Justus Lenz took place, primarily focusing on Sri Lanka’s need for broad economic reforms. Sathya Karunarathne of the Advocata Institute moderated the discussion.
Expressing his views at the panel discussion, Prof. Sirimal Abeyratne, a veteran economist, said that Sri Lana should move away from ad-hoc changes and work towards an overall reform package. “Even measures such as the removal of price controls should have come as part of an overall reform package. Without such an approach, there is going to be an enormous impact on low-income groups,” he said, adding that Sri Lanka should not look for short-term solutions for long-term problems.
“Budget is a short-term policy plan which only focuses on a period of 12 months. But it has to be consistent with a long-term plan. The absence of such consistency has been the problem in Sri Lanka,” he explained, adding that it was important to understand that a budget could not grant relief without someone paying for it.
“We had the space to print money during the early stages of the pandemic. Now, the vaccination process has seen significant progress and Sri Lanka has done a commendable job with the vaccination drive when compared to many other developing nations. As a result, inflation and aggregate demand are increasing, limiting the Central Bank’s ability to finance the budget deficit,” he pointed out. Prof. Abeyratne was also of the opinion that the current import controls were an “easy way-out” for Sri Lankan lawmakers.
“We must first understand what hinders the growth of domestic production. There are many factors contributing to this situation, but we brush them aside and resort to import controls because that is the easy way out. As a result, the core issues will remain the same,” he explained.
Parliamentarian Mayantha Dissanayake stressed the fact that both the Government and the opposition must work together with a common agenda to revive the economy and to reach a consensus on long-term policy reforms. “There is an urgent need to restore the trust of investors in the country. For this, a clear and cohesive message should be sent out,” Dissanayake said, adding, “We must find ways to restructure the management of these loss-making SOEs. They have become a severe burden on the economy. I would like to suggest a Temasek-like model for the divestment of government stake in these SOEs. Sri Lanka must strike a fine balance between the aspects of a welfare state and the much-needed economic reforms.”
He was also of the strong view that all reforms must be done in strict adherence to democratic practices, aiming to improve the efficiency and effectiveness of these SOEs. “I am a firm believer of monitoring and evaluation processes. This is why I believe getting rid of the National Audit Commission is an undesirable move by the current administration. Sectoral Oversight Committees, another important tool to ensure accountability, should have been allowed to continue,” the MP said.
He said another pressing problem confronting Sri Lanka at the moment is brain-drain. Even during the time of war, when a number of political leaders were assassinated, we did not see a brain drain of this magnitude,” he said. “This is a serious problem the government must address through meaningful reforms.”
BOI Chairman Sanjaya Mohottala said Sri Lanka’s focus at the moment was to create a compelling environment for FDIs through consistent immediate and long-term reforms. “What we need from the budget the most is stability,” Mohottala said. “This includes better clarity, better transparency, and better consistency.” He added that the country must set the foundation to double the GDP in 10 years with the minimum inconsistencies while addressing a host of other areas and assured the audience that the current administration was working on a number of measures to address the issues faced by investments including ‘simplifying’ the system.
“We must now get out of the pandemic mindset and look for opportunities. We are currently working towards building the capacity in the legal sector to remove some of the impediments. Digitalization of the legal process is a must. Also, we are working to build infrastructure allowing the justice system to address all regulatory-related issues expeditiously,” he said, proposing a pragmatic policy on taxation that would create a better climate for the youth to work in Sri Lanka.
In his remarks at the panel discussion, Justus Lenz said every country must find its own way to address its own. “But we must not forget that good policies are not expensive. Long-term commitment to stability and free-market reforms are not expensive,” he stressed. The German expert also pointed out that it was critically important to remain optimistic and create a long-term consensus on reforms without losing clarity.
Ireland’s gymnastics federation has apologised for the allegedly racist treatment of a young Black gymnast who was skipped by an official handing out medals to a row of girls last year.
Footage posted on social media last week of an event in Dublin in 2022 showed the official appearing to snub the girl, the only Black gymnast in the lineup, who looked bewildered.
“We would like to unreservedly apologise to the gymnast and her family for the upset that has been caused by the incident,” Gymnastics Ireland (GI) said in a statement posted on its website on Monday.
“What happened on the day should not have happened and for that we are deeply sorry,” said the statement. “We would like to make it absolutely clear that [GI] condemns any form of racism whatsoever,” it added.
The video posted on Friday soon went viral and drew widespread condemnation of the girl’s treatment, including from star United States gymnast Simone Biles, who said she sent the girl a private video message of support.
“It broke my heart to see the video. There is no room for racism in any sport or at all,” Biles, a seven-time Olympic medalist, said Saturday on X, the platform formerly known as Twitter.
Biles’s US teammate Jordan Chiles described the incident as “beyond hurtful on so many levels”.
In an earlier statement, GI defended the official who it said had made an “honest error” but acknowledged it received a complaint from the parents of the girl alleging racist behaviour in March 2022.
GI said an independent mediation had led to a “resolution agreed by both parties in August 2023”, that the official had written an apology and that the girl had received her medal after the ceremony.
However, the Irish Independent on Sunday anonymously quoted the girl’s mother as saying GI had failed to publicly apologise and that she would take the issue to the Gymnastics Ethics Foundation in Switzerland.
Welcome to Ireland where people get away with racism! This little black girl broke my heart. Don’t skip this post without leaving a million heart for her. Make her famous… pic.twitter.com/YYMIP1IALZ
— Mohamad Safa (@mhdksafa) September 22, 2023
(Aljazeera)
News
SJB: State audit vindicates no-faith motion against Keheliya, remedial measures urgently required
By Shamindra Ferdinando
Opposition MP Harshana Rajakaruna yesterday (25) said those who had defeated the no-confidence motion (NCM) against Health Minister Keheliya Rambukwella should peruse the latest State audit report on the Health Ministry.
The Gampaha District SJB MP said the Committee on Public Accounts (COPA) at a recent meeting chaired by State Minister Lasantha Alagiyawanna had strongly criticised the Health Ministry over the continuing waste, corruption, irregularities and mismanagement exposed by the National Audit Office (NAO). The Parliamentary Watchdog Committee emphasised that Health Ministry explanations/responses to the issues at hand were not acceptable.
Dr. G. Wijesuriya, Deputy Director General (Medical Services 11) at the Health Ministry had cut a pathetic figure by trying to defend politicians and officials responsible for the sorry state of affairs in the health sector, MP Rajakaruna said, adding that Dr. Wijesuriya failed to explain how 97 doctors had been allowed to serve in the Health Ministry though the cadre was only 37.
The Wickremesinghe-Rajapaksa government acted as if the defeat of the NCM by a majority of 40 votes had been an endorsement of Health Minister Rambukwella’s actions, MP Rajakaruna said.
A total of 113 MPs voted against the NCM while 73 MPs voted in favour. Thirty-eight lawmakers skipped the vote taken on 08 September.
The NAO report should be examined against the backdrop of the dismissal of Opposition concerns over the continuing deterioration of the public health sector, the former UNPer said. That report was nothing but an indictment of a vital ministry, lawmaker Rajakaruna said, pointing out massive waste particularly at a time of unprecedented financial crisis was an unpardonable crime.
Minister Rambukwella, Health Secretary Janaka Sri Chandragupta and Director General of Health Services (DGHS) Asela Gunawardena owed an explanation how they allowed such waste and corruption as the government struggled to maintain basic and essential services. Referring to the damning NAO report, MP Rajakaruna said that Rs 349,025,664 worth medicine, equipment and other items had been discarded during 2022 due to low quality while all state hospitals experienced severe shortage of drugs. According to the report, the use of medicine, equipment and other items worth Rs 31,751,024 had been temporarily stopped due to concerns over quality but by the time the Health Ministry took a decision in this regard, such medicines were already issued to patients.
During COPA proceedings, SJB MP Hector Appuhamy questioned the Health Ministry top management why the State Pharmaceutical Corporation (SPC) continued to make emergency purchases thereby wasting precious public funds.
COPA Chairman Alagiyawanna and Attorney General W.P.C. Wickremaratne, who is also the ex-officio Chairman of the Audit Service Commission (ASC), appointed after the change of government, censured the top management of the Health Ministry for its failures at all levels, MP Rajakaruna said.
The Opposition lawmaker said that the ACS should vigorously pursue this investigation. The ASC consists of W.P.C. Wickramaratne, retired Justice Nihal Sunil Rajapaksa, Mrs. Nandaseeli Godakanda, Gnananantharajah Thevagnanan and A M Dharmajith Nayanakantha.
MP Rajakaruna said that the Health Ministry also admitted before COPA that 957 doctors had left the country between the period of August 2022 and August 2023. Of them, 526 had taken long leave, 163 resigned and 197 vacated their posts, the lawmaker said, adding that instead of addressing the issues at hand taking tangible measures to reassure medical professionals, the government played politics with the developing crisis.
The SJB spokesperson recalled how Prime Minister Dinesh Gunawardena, during the three-day debate on the NCM, stressed that the Opposition accusations directed at Minister Rambukwella were unsubstantiated. The Premier had no qualms in declaring that there was no basis for the NCM and the Opposition was making an effort to deceive the public, MP Rajakaruna said, urging MEP leader Dinesh Gunawardena to examine the NAO report. President Ranil Wickremesinghe and Premier Gunawardena should deal with the crisis in the health sector without further delay, the MP said, warning the failure to do so would result in a catastrophe.
MP Rajakaruna asked Premier Gunawardena to read his declarations during the debate. The NAO report has endorsed the NCM regardless of the outcome of the vote, MP Rajakaruna said.
By Norman Paliahawadane
Kandy Diocese Bishop and Chilaw Apostolic Administrator Rt. Rev. Dr. Valence Mendis says it is ludicrous that the government has chosen to appoint more committees to probe the Easter Sunday terror attacks instead of implementing the recommendations of the Presidential Commission of Inquiry, which probed the carnage. Delivering his sermon at the Holy Mass offered at the Holy Cross, National Shrine, Marawila last week, Bishop Valence Mendis said the government authorities for the past four and half years had engaged in futile exercises wasting time and public funds in the name of probing the Easter Sunday attacks. Now, it was very clear that the government had no genuine desire to find the truth or deliver justice to the victims and their family members. Just another committee was the latest joke of a series of such gags. “If they are genuinely concerned about delivering justice then they should implement the recommendations of the PCoI. We are sure that authorities did nothing about more than 80 percent of recommendations of the PCoI to ensure justice,” the Bishop said.
Treasurer of the Kandy Diocese Rev. Fr. Nelson Samantha, Rev. Fr. Peter Charles, and Administrator of the Shrine Rev. Fr. Niranjan Dayalal were present.
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