The desired social thinking which contributes to the growth of the economy

It is not enough to have a sound set of economic policies to get a country to the development path. The people of that country should have matching thinking and they should come forward to benefit from those sound economic policies – Pic by Shehan Gunasekara 

There are various opinions expressed these days that the Sri Lankan economy is in dire straits. The Opposition blames the Government, and the Government blames the previous Government. The previous Government blamed the Government prior to that. Apart from the blaming game there are two fundamental issues in the Sri Lankan economy and these two issues have prevailed over decades during the time of all the governments with few exceptions.

These two issues are the budget deficit, which is the gap between Government revenue and the expenditure, and the deficit of the current account, the main portion of which is the difference between exports and imports of the country. When there are budget deficits, if the additional expenses are used to increase the production of the country and thereby make the current account favorable through increased exports, the issue is reduced to a great extent. 

We can see few statistics to understand the gravity of the issue. The export of goods and services as a percentage of GDP was 28% in 1990, 39% in 2000, 19.5% in 2010 and 23% in 2019. The tax revenue to GDP as a percentage of GDP was 19% in 1990, 14.5% in 2000, 11.3% in 2010 and 11.5% in 2019.

Recognising entrepreneurs and entrepreneurship

If we go to the ground level who are the people who contribute most to uplift the economy? Government servants, accountants and lawyers contribute to the national economy by providing their services. However, the most prominent group who contribute to the upliftment of the economy are the entrepreneurs. Considering the status the country is in, the entrepreneurs who produce and export are the most important group out of them.

In our society do we recognise them and what is the social thinking towards entrepreneurs and entrepreneurship of this country?

During the time we had a closed economy prior to 1977, there was no such recognition to the entrepreneurs in the society at large. In rural areas there was much recognition to the academics and the professionals. An entrepreneur was considered as a person who gains undue profits most of the time. In an old village there was a much recognition to a schoolteacher or to a local physician. 

Everyone is engaged in giving and taking as Hermann Hesse claimed in his landmark novel Siddhartha in 1922. An academic or a professional or an entrepreneur also are engaged in giving and taking. An academic gives his knowledge and gets a payment or a salary. A professional gives his service and gets a specific fee. An entrepreneur gives either goods or services and gets money in return.

Not only that, our entire society is based on giving and taking. The priest advises the devotee and in return gets his meals or other consumable goods. A soldier gives his strength and gets back his salary or pride or both. A politician gives his service and gets back the salary together with commissions or reputation or both. A country is also producing goods and engaged in giving and taking. That is imports and exports. 

Entrepreneurs contributes the most to an economy of a country. Therefore, they should get more recognition in return. Presently the entrepreneurs get more recognition compared to the situation prior to 1977. A lot of academics ran down the economy-based revolution that took place in this country in 1977. They labelled it as a system of generating money even by killings dogs. 

If I quote from the biography of Prince Siddhartha, one should either become a Buddha or become an Emperor. In other words, one should either be spiritually rich or materially rich or both. Our country achieved neither spiritual prosperity nor material prosperity. It is stuck in the middle. Those who are responsible for shouldering the spiritual progress of the people are engaged in politics and promoting ethnocentrism.

The future of this country is in the hands of the small and medium entrepreneurs spread throughout the country. Therefore, I believe that the recognition the academics, doctors or lawyers get should be given to the entrepreneurs as well. 

Promote new thinking, design new products and services

Also, they should design new products and services. A country cannot rise without new thinking and new products. Kumaratunga Munidasa once said that the nation which does not produce new things, does not rise in the world. Once begging is not possible, it lies down singing the swan song.

Our culture does not promote new thinking. We do not wish our children behave like Prince Siddhartha. We like obedient children. We like those who are aligned with the existing system and those who maintain the status quo. Students in the universities are also not rebels. They are thinking in line with certain ideologies.  Venerable Velivitiye Soratha, the first Vice Chancellor of the Vidyodaya University who was a prominent scholar produced by our country, once said that the university students should be revolutionaries. Revolutions should not of violent type or of Nalin de Silva type but of intellectual type. We should shed conservatism and embrace creativity. It provides immense support not only to our lives but also to our businesses.

Our graduates expect Government jobs in most of the time. I know graduates who have quit private sector jobs and accepted low-salaried Government jobs. They said as reasons that the Government jobs secure a pension after the retirement and unlike in the private sector it was not necessary to work hard in the public sector. There is no benefit to a country from such protectionists and slackers.

Protectionism is a cultural aspect of some of our entrepreneurs. As Sun Tzu pointed out, in a war there are instances when a military should be defensive or offensive. When Sarath Fonseka was commanding the war, he applied the offensive methodology. Defying Sun Tzu, he attacked the strongest points of the opponents not the weakest points.

He said that the intention was to reduce the manpower of the opponent. A defensive strategy can prevent a defeat, but to win one must be offensive. 

Economic policies for Sri Lanka

Our country is of 25,000 square miles and has a population of 21 million. Therefore, it is not appropriate to design economic policies to protect our small market. Our economic policies should be designed to win the world market and hence promote exports. Those should be offensive and not defensive policies. When those policies are set, we should have an offensive army of entrepreneurs to achieve the targets. There is no point of doing business just to save one’s own skin. 

To be satisfied with what one gets is a great component of our culture. Maybe we have this value due to the influence of Buddhism. Unfortunately, it can be a cause for laziness. Maha Ariyawansa sutta is in Chatukka Nipatha of Anguttara Nikaya. The sutta was praised by the Buddha with seven introductory points at the beginning compared to Maha Satipattana sutta which was considered as the crown of Theravada Buddhism was having only five introductory points. Therefore, the sutta is important. The crux of this sutta is to be satisfied with what one gets. Emperor Ashoka praised this and according to Rasavahini, an ancient Sinhala text, there were all night dhamma sermons based on this sutta.

That may be the origin of satisfying with what one gets. This is a good quality at the personal level but at the level of the economy of the country it is disastrous. It is not possible to promote a successful business or an economy of a country by satisfying with what one gets.

Promoting a business needs an insatiable hunger. It may ruin a person spiritually, but it is needed for the economic growth of a country. However, there are successful businessmen who developed their businesses with insatiable hunger for it but at the personal level are satisfied with what they get. This is an art of living, an art of doing business and an art of capturing and letting it go. Entrepreneurs should master this art.

The influence of Marxism which was prevailed over a period in our country may be one reason to have a public opinion against the private businesses. Russia and China have now abandoned the Marxist theories. China has now introduced a new economic model called socialist market economy. What we need is businesses which ensure profitability irrespective of the ownership which can be public or private. The benefits to the economy should be distributed among the masses through the tax system. 

We need a progressive social thinking to support this economy. This thinking should not be a thinking of work to live but a thinking of live to work. The Buddha, Jesus, and Muhammad lived to work. They did not work to live but most of us work to live.

Therefore, it is not enough to have a sound set of economic policies to get a country to the development path. The people of that country should have matching thinking and they should come forward to benefit from those sound economic policies.