Two Years Of “Yahapālanaya”: Is Development A Mere Mirage?

By Ratnam Nadarajah –January 18, 2017

Ratnam Nadarajah

8th January 2015 for most people in Sri Lanka was a new dawn, a new President followed in July with the formation of a National Unity government, with a promise of good governance and all that goes with the new broom.

There were all sorts of promises and mega plans for the nation. Also a promise to bring to account all those robbed the country during the previous regime.

Here we are two years down the line; what have we achieved. Not much, to say the least. Yes, we have borrowed to the tune of billions of dollars from various sources to prop up the economy, to service the loans and debts accumulated by the previous regime and currently to service the legislators needs and demands.

When simple checks and balances are made, there is nothing to show for; in the eyes and minds of the populace. “A week is a long time in politics”. Harold Wilson (who was also instrumental in formulating “the white heat of technological revolution” in the UK).

But two years is a lifetime in any book!

The balance sheet shows zero progress in the sphere of development of the nation. There have been many meeting, well hyped symposiums, and statements over the past two years. But to date there is nothing concrete except the recent fiasco of Volkswagen car assembly plant foundation laying exercise. Which turned out to be disappointing. The same thing with the so called Italian company funded tyre factory.

Let us start from the fundamentals of development:

Our citizens want to improve their living standards, want jobs especially for the youths; they look forward to the government of the day to take initiatives to full fill their election promises.

In evaluating the degree of economic development of nations, most commonly used indexes are the Gross Domestic Product (GDP), Gross National Product (GNP), and the Human Development Index (HDI). I dare say, we have made no significant progress in the last two years.

For any development to take place we need the resources; man power, material, infrastructure, and capital as pre-requisites. Do we have the skilled workforce in enough numbers to meet the demands of modern and technologically based industries we want to create and produce high value products? The short answer is no. The available pool of qualified technicians, engineers and managers is rather wanting in practical experience and training to meet the requirements of these employers both local and foreign multinationals. This is the egg and chicken situation.

A critical challenge for manufacturers will be to approach footprint decisions in a more nuanced way. Labour intensive industries will almost always follow the path of low wages, but others, with more complex needs, must weigh factors such as access to low-cost transportation, to consumer insights, or to skilled employees.

For policy makers, supporting manufacturing industries and competing globally means that policy must be grounded in a comprehensive understanding of the diverse industry segments in a national or regional economy, as well as the wider trends affecting them. For example, shapers of energy policy need to consider; higher or lower energy costs will affect which segments, how great the impact is likely to be, and what magnitude of difference will trigger a location decision. Environmental factors are another important aspect to be considered at the planning stages. We do not want to be the dumping ground. Policy makers should also recognise that their long-term goals for growth, innovation, and exports are best served by supporting critical enablers for manufacturers (such as investing in modern infrastructure) and by helping them forge the connections they will need to access rapidly growing emerging markets.

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