Consistency for growth

CONSISTENT policies have always been a challenge for Sri Lanka, but its importance has been brought to the forefront yet again by the Sri Lanka Economic Summit that wrapped up on Thursday. Right from the onset, it was clear that the oft-repeated but rarely-listened-to issues were to dominate the three-day conference with economists, politicians and private sector professionals agreeing on a few basic principles to take the country forward.

Delivering a keynote address peppered with bold remarks, World Bank South Asia Chief Economist Dr. Kalpana Kochhar said global risks and vulnerabilities were high, largely due to inconsistent economic policies and lack of political will in advanced countries. This scenario has created a bumpy road ahead for developing countries, including Sri Lanka.

Noting that in recent years Sri Lanka has done relatively well compared to other developing nations with the peace dividend being beneficial, Kochhar however cautioned that a continuation of recent trends cannot be taken for granted. According to her, Sri Lanka’s best near-term defence is a strong offence by implementing policies to boost investor sentiment, regain competitiveness, attract Foreign Direct Investment (FDI), diversify exports and build a strong foundation for sustainable growth.

Guest speaker author, columnist and management consultant Gurcharan Das, giving his perspective, insisted that Sri Lanka needs to be able to move rapidly. The second aspect highlighted was rule of law and the third accountability – three requirements of a successful nation. The rules of business and economics are universal – there is no such thing as a Sri Lankan way of doing business. He also said corruption occurs when one does not carry out reforms. The lesson here is to get governance right, after which the private sector in Sri Lanka will just take off.

On subsequent days and especially at the round-up sessions, these simple points were elaborated on with various examples cited. The political panel, which was composed of prominent politicians from all leading parties, reiterated the same ideals and urged the Government to take steps immediately. They agreed that the ‘five hub’ concept was a sound strategy, but insisted that the Government needed to move out of business while establishing a strong regulatory framework upon which the private sector could function.

Government ranks speaking at the session were quick to point out the end of the war and massive development projects as a plus, but had to acknowledge that aspects highlighted by the economists needed to be considered. Regardless of their stonewalling, the overall sentiment of the audience also seemed to back opposition sentiments, with some comments getting loud applause.

Corruption, delays, red tape and deep politicisation hampering investment have long been felt not only by the business community but also the masses, which have to fork out bribes for the simplest task. Inconsistent policies have shut out or driven away business in a number of sectors and caused loss of employment and revenue to Sri Lanka.

Sri Lanka is enjoying its eighth year as a middle income country, according to the Finance Ministry, and it is time that the peace dividend is improved through the Government’s dedication to consistent policies supported by transparency and good governance. Not only would this boost investment, but it would also filter down to the basic levels, the masses, and raise the standard of life. Creating such a win-win situation has been delayed too long.