The key actors must rise up to the occasion
Sri Lanka’s electoral system and its method of choosing the final winners through the preferential system often have led to some unpredictable outcomes. Therefore on the 5 August parliamentary election, the voter has a choice.
The first is to elect 196 MPs from 22 electoral districts who are most likely to promote economic development and being able to continue to improve transparency, accountability, integrity and sustainability. The second is to give a party a working majority in parliament – 113 seats or more to govern. So many Sri Lankans feel a sense of disenchantment about representative politics and governance. They include corruption, failure to implement policies that would lead to new economic opportunities, failure to implement policies to improve public services and the challenges sometimes to people’s rights.
The attitude and conduct sometimes of our political class is causing many to turn away from representative politics. Successive governments have encouraged patronage and dependency on government handouts of different forms. Many Governments have not done enough to ensure that our economy grows and have taken the easier option of raising the required funds by taking loans. 5 August elections gives us therefore an opportunity to elect members to the 16th Parliament who have the will and the capability to address many of these issues.
There is still a large gap between the haves and have nots in our society. To emphasise this point the President has said the facilities that are available in our urban centres are lacking in rural areas and that the education facilities and healthcare facilities are not equal in most areas. Further he pointed out that job opportunities have not spread to all regions and these inequalities are not due to racial or religious reasons, these are common problems that the country faces. However he noted for strengthening the ability for people to live freely, we must first address the economic problems that affect the public.
However as a country to get to the next phase of development to address these issues we need to first get out of the middle income trap. According to IMF and other data Sri Lanka in the last 10 years has added $ 37 billion to the GDP, while Vietnam added $ 158 billion and Bangladesh $ 217 billion. Taiwan with a similar population like Sri Lanka added $ 107 billion.
One of the main reasons Sri Lanka has got caught up in the middle income trap (The middle-income trap is the situation in which a country’s growth slows after reaching middle income levels) is because we are not investing sufficiently in early childhood development and skilling its workforce properly.
If this segment is helped with targeted education loans or given other support, they will get the skills that they want. This has been a critical element of other countries that have broken out of the middle income trap. Also the current poverty alleviation programs needs to be resourced creatively because they provided too few funds to make a genuine impact on the lives of recipients.
Recipe for success
Most countries around the world struggle to implement good policies and only a few have succeeded in reaching high-income status and sustaining that growth. Take Turkey, which was growing towards high-income status but then experienced a huge slowdown, or Argentina, which reached high-income status but fell again to middle-income status because of policy and political uncertainty.
While those countries like Poland and Taiwan that moved through the middle income trap swiftly, their economic growth was inclusive, jobs and salaries increased, inequality across income groups and provinces reduced, education levels increased and poverty declined drastically.
For a start it is important to get the public institutions right – economic but also political – and guide reform with a shared vision. Also countries like Poland sustained its high growth with a performing democracy – one that supported a socially responsible market economy. Such a vision facilitated remarkable policy continuity spanning 18 governments since democratisation.
Therefore the creation and strengthening the structures of the basic democratic institutions at the local and national levels is critical. The support structures, helps to create a political consensus for deeper economic institutional change and sustainable public finances. Then ensuring macroeconomic stability is key to keep inflation and public debt under control.
Integrating local markets into global markets help increase national competitiveness. We need foreign direct investment to enable our domestic firms to participate in international value chains and exposed them to the international markets, which will provide access to better inputs, capital goods, and technological transfers, good reforms and solid investments in human capital, which can result in large gains in educational attainment and ensure broad-based access to quality education across all income groups and regions to pull people out of the poverty trap. Creating competitive and open markets is required to provide business opportunities for firms and jobs to increase business growth and also earnings. Their prosperity will generate demand for goods and services. Opening up to global capital intelligently will give the economy a massive boost. The country needs to shift resources from low to high productivity sectors for exports to make the transformation.
The Sri Lankan economy needs a fresh spurt elections and needs to rise as a whole, not in parts only. Achieving and sustaining growth requires the mass mobilisation of financial as well as human capital and the space for private enterprise to thrive.
If not, large sections of the population will not see their lives improve and will be left behind. Therefore the quality of healthcare, education, affordable housing and skill development for the deprived masses is a must.
The country should do all it can for a much needed upsurge in economic activity post 5 August 2020. We are living through a global health crisis with no modern-day precedent. We therefore as country need to emerge from this crisis collectively stronger.