Musical chairs in Parliament, street protests will not solve economic crisis

Our excitement in Parliament (the shouting and screaming) is not on debating how to resolve these problems. It is all about remaining in power on the part of the Government and the desire of those wanting to capture power

Saturday, 7 May 2022

We have a major economic crisis. It affects the whole nation. It needs the urgent attention of the Government. The causes of the crisis are very clear, and what needs to be done in overall terms is equally clear. The knotty problem is to wade through the difficult consequences that arise when taking steps to address the crisis.

The economic crisis

There are three parts to it.

1.Government expenditure exceeds revenue.

2.Dire shortage of foreign exchange.

3.Large debt and the inability to repay it.

Our excitement in Parliament (the shouting and screaming) is not on debating how to resolve these problems. It is all about remaining in power on the part of the Government and the desire of those wanting to capture power. It is all about positions and power. We, the long suffering public, don’t give a damn about who is in power. Our only concern is about whether those in power are solving our economic problems. It is sad and a matter of grave concern that those demanding a change are not providing any manifesto of what they will do if the President/Prime Minister resigns and they get the baton of power to govern the country. None of the major groups in the opposition have put forward plans on how they will resolve the current economic crisis and then lead us to prosperity.

The next crisis

We will have the next hullabaloo in Parliament if the President resigns/the Government falls and a new Prime Minister has to be appointed. All indications are that one or the other will happen. Pandemonium will be triggered as there is no political party/leader with a clear majority. All aspirants to whatever throne that becomes available (President or Prime Minister) will be running about in a frenzy trying to get the numbers that will get them to the throne. Sadly solving our economic problems in a meaningful manner will be forgotten.

Measures to address economic crisis

When a new government is hopefully appointed, that may not be the end of dissent and debate. The various political groupings have not shown any evidence of their plans on how the economic crisis can be resolved and it is unknown whether there will be unanimity on the tough measures required to address the crisis.

There are three key problems to be resolved. Inadequate government revenue, acute shortage of foreign exchange, and high debt and no funds to repay debt,

There are many things that will have to be done to address these issues. To reduce government expenditure to bring it more in line with government revenue, drastically prune the two major items namely the military establishment and roads. To increase revenue taxes will have to be raised.

All major infrastructure projects should be deferred indefinitely, until the country can afford such projects. Our economic crisis of no foreign exchange and high debt have been caused by the Mahinda Rajapaksa Government’s pursuit of projects. Projects like the highways, the Hambantota port, Mattala airport, Suriyawewa cricket ground, Nelum Kuluna, Port City, had no economic payback, were of very limited benefit to the country, caused a severe drain of foreign exchange and created mega debt. We must nurture carefully our exports and tourism, our major sources of earning foreign exchange. They in combination have the potential to get us out of the current crisis and longer term be huge contributors to the growth of our economy.

The difficult challenge is how to protect them and the health services in the midst of our current foreign exchange crisis. We will have to provide diesel/power to keep these industries alive. That means shifting the burden to the people. Keep them without power from 11 p.m. to dawn. Provide the vital inputs that have to be imported to sustain these industries and temporarily squeeze the import of non-essentials. The trade-off is poverty today for prosperity tomorrow.

The real challenge

The real challenge is to find a leader completely untainted by corruption with no mates/relatives steeped in corruption. As perception is reality until it is demonstrably disproved it rules out the Rajapaksas as a clan due to the widespread perception that corruption has at least brushed their palms. They sadly have not attacked this perception by disclosing their assets from the distant past to the present and an open letter to all banks here and abroad to disclose their assets.

With Rajapaksas out of it, who can inspire the country with a credible vision of the future towards which we can visibly inch forward every day and in the interim accept the hardships which should also decrease steadily?