The Covid-19 pandemic that broke out in January last year has led the Sri Lankan economy into a technical recession causing unprecedented hardships to the entire citizenry.
Long-term lockdowns and other stringent health restrictions imposed to curtail the spread of the pandemic have created a drastic loss of household revenue. Also, the impact has created a massive loss of foreign exchange earnings. The two combined factors have produced scores of startling and unpleasant problems to the day-to-day life of the general public.
In his New Year message, President Gotabaya Rajapaksa stated that the country should move forward with self-confidence, dedication, and unity in 2022. He emphasised that the New Year will provide an opportunity to further the steps taken by the Government to pursue and overcome challenges and strengthen the people-centric economy as pledged in his manifesto ‘Vistas of Prosperity’.
It is no secret that the general public is facing much day-to-day destitutions during the past few months. Commodity prices have risen up to unbearable levels. Some of these problems have arisen due to unavoidable circumstances caused predominantly by the pandemic associated occurrences. However, there are other enormously sensitive issues surfaced due to the gross inefficiency of some of the politicians and officials in the Government.
Drawback
The biggest drawback for the Government, according to this writer in this regard, is the Government’s failure to communicate properly with the masses even in public issues that are not caused by their fault. The Opposition and other dubious anti-Government elements are having a field day due to the sluggish approach of the Government media machinery. The relentless scathing attacks by the Opposition through both conventional and social media are not countered effectively.
The main stream media, particularly powerful private television channels are giving enhanced coverage to negative news. In order to compete and to obtain higher ratings, most of the channels give more airtime to exaggerated pessimistic news in their respective news progras.
However, the general public opinion is that the Government authorities are not adequately sensitive to their grievances. Logically, even if these institutions and authorities attempt to provide solutions, such actions are not communicated to the people effectively. Lack of information flow to the grass roots is the most likely reason for the escalation of public fury and annoyance.
In the political front, although the Government enjoys a two-third majority in Parliament backed by the powerful executive presidency, the noise made by the evidently week combined opposition cannot be ignored. The voters brought in a leader who has capability as an administrator and experienced leader with overall knowledge in 2019, with an overwhelming majority.
Genuine
Even though this selection of the majority of the citizenry was genuine and timely, the gruesome events that followed immediately after the presidency decelerated his ambitious plans laid down in the manifesto.
The country is rapidly turning back to normalcy. However, the general public seems conveniently overlooking the drastic and overall negative results they have experienced for nearly two years. Nobody recalls that the enormous pandemic-related health expenditure the state was compelled to spend and that the country’s financial reserves were exhausted affecting the entire economic performance.
The colossal decrease of foreign currency reserves is the biggest challenge the Government has to confront in 2022. Not only the external loan repayments due in 2022 but also the impact on the importation of essential supplies such as fuel, medicine, essential food items and so on has become a nauseating issue for the Government.
Nevertheless, as a consolation, the Government has managed to increase the total foreign reserves to US$ 3.137 billion, up from US$ 1.5 billion in November 2021.
The decline of reserves occurred due to several reasons that were beyond anyone’s control. On top of the total loss of tourism income of nearly US$ 4 billion, foreign remittances from expatriates around the world has dropped by 50 percent during the past few months, according to sources. The only solace as of today is the creditable performance of the export sector.
Even in the midst of the current severe foreign exchange crisis, the Government has taken a bold decision to offer a substantial economic relief package to the country.
Measures
On January, 4, the Finance Minister Basil Rajapaksa announced an array of relief measures worth 229 billion rupees. They include a special allowance of the country’s Government service employees consist of 1.4 million persons, and also to retirees and disabled soldiers.
In the same package, the Government has offered financial assistance for an ambitious island wide home gardening program, subsidies to the farmers who suffered crop reductions, price reduction of wheat flour to plantation sector workers, and an additional allowance for Samurdhi recipients.
This move by the Government was a clear blow to the Opposition’s anti-Government propaganda campaign. However, in a clear opportunistic political move, soon after the announcement was made, the Opposition politicos changed their strategy from ‘cost of living’ slogan to ‘money printing’, disregarding the enormous benefits the public will enjoy with the package contents.
However, the public irritation directed towards the Government due to shortages of a few essentials such as cooking gas, kerosene, and milk powder was melted down to some extent with the introduction of the relief measures.
In the context of economic revival, in one of the recent articles, this writer mentioned that the long-term remedy for the foreign exchange crisis is to draw foreign investments and increase exports.
Consecutive Governments directed their focus on short-term relief on foreign exchange requirements rather than implementing a steady policy framework to resolve this dire necessity.
Due to many serious issues, compared to many other countries in the region, foreign investors show reluctance to invest in Sri Lanka. Political manipulations, low ranking classification on “Ease of doing business index’, stringent labour laws, comparatively high labour wages, and some other sensitive issues discourage them from investing.
International credit ratings play a substantially important role in investments in any country. Hence, the recent Fitch and Moody’s downgrading must be addressed by the Government as priority. In order to attract investments, the Government must immediately concentrate on economic reforms through strong and unwavering structural changes.
Instead of changing the economic policies whenever a new Government is established, a consensual solution must be introduced by both Government and Opposition political parties together.
Unfortunately, the current practice is that whichever the political party that comes into power either annuls or delays proceeding laid down previously. This is the most grueling and continuing curse to the nation’s economy.
Intellectuals, professionals, and politicians appear in media almost every day, mostly in television discussions, offer numerous solutions, suggestions, and constructive proposals to improve economic conditions of the country. Although a few of these amazing opportunities may be controversial or contradictory, most others seem realistic and pragmatic.
In particular, internationally recognised and vibrant Sri Lankan business leaders constantly offer exceptionally viable proposals. Even a layman can understand that these ideas, if properly implemented, can completely solve the foreign exchange requirement.
Not only can the debt pile be reduced, but also the general living standards of the citizenry can be improved tremendously if these proposals are put into practice. However, the political culture in the country is the biggest obstacle that prevents executing these lucrative projects.
For example, if an investor needs a land for an agricultural project, the Opposition political parties vehemently object, crying out loud that the Government is trying to misuse state land. Since independence, this is the typical common action of whichever the party in Opposition.
Belief
Recently, a politician belong to the SLFP that still represents the Government from Kurunegala District, in a public rally, shamelessly announced that political moves are more important than the development projects in the country, to be in power.
This is perhaps the common belief of majority of the politicians in Sri Lanka. They only are concerned about winning the next elections rather than public well-being.
The citizenry desperately needs solutions to their grievances. Similarly, the country needs economic freedom, political stability, and social independence to progress as a nation.
Considering the present powerful combination of executive presidency and legislature with a two-third majority, perhaps, this is the best and final opportunity the country can expect to achieve greatness.