A response to Wijewardena on Hausmann’s “message”

Monday, 8 February 2016 00:00 - - {{hitsCtrl.values.hits}}

Below-lead-1-Ricardo-Hausmann

Ricardo Hausmann

By Prof. Sirimevan Colombage

I am pleased to note that Mr. W.A. Wijewardena has now taken a U-turn from his original viewpoint with regard to Ricardo Hausmann’s deliberations at the Sri Lanka Economic Forum held last month.

In his original article ‘Ricardo Hausmann’s message: Restructure exports for growth choosing products over which you can compete with others’, which appeared in the Daily FT of 11 January 2016, Wijewardena gave the impression to the readers that Hausmann has brought a miraculous prescription from the prestigious Harvard University to treat the ailing Sri Lankan economy.

I contested Wijewardena’s argument in my article ‘Harvard’s Ricardo Hausmann has no fresh message for crisis-ridden SL economy’ which appeared in the Business Times (Sunday Times) of 24 January 2016.

Then, Wijewardena in his more recent article, ‘Hausmann and Govt. in the hot seat’ published in the Daily FT of 1 February 2016, took a completely opposite position from his original viewpoint expressed in the earlier article.

Wijewardena starts his second article by stating, “Economists are a funny species. You speak to two and get three opinions. But in today’s context, this may be a very fair statement about them. That is because you speak to two of them, you are likely to get more than 100 opinions.”

I feel that this statement is a gross insult to economists as well as to their scientific discipline, Economics. Two economists may never agree on a particular issue due to each one’s perception grounded in sound economic theories and empirical findings. That does not mean economists are a funny lot as claimed by Wijewardena.

Disagreement among economists is a notion commonly applied in a lighter vein. It is inappropriate to use this subjective notion to dilute the well-founded critique raised by me against Haussman’s deliberations at the forum, by giving the impression to the readers that economists may have diverse opinions, and therefore, a single viewpoint cannot be expected from these confused species.

In contrast, I still hold only a single opinion about Hausmann’s presentation as argued out in my article based on robust theoretical and empirical underpinnings, i.e. Hausmann has no fresh message for Sri Lanka, although the Government must have expected quite a lot from the Harvard team for preparation of its economic agenda to revive the crisis-ridden economy.

I contended in my article that Hausmann has repeated the age-old textbook stuff and his deliberation at the Economic Forum is identical to a defensive PowerPoint presentation of a postgraduate student rather than a vigorous initiative to spearhead policy reforms for the ailing Sri Lankan economy as expected by the Government by inviting these foreign experts to the island at this juncture.

Wijewardena concludes his second article by saying, “Hausmann is already in the hot seat being challenged by local economists. Thus, the Government which has invited him as an economic advisor is also in the hot seat.”

So Wijewardena is now agreeable with my argument at last. I am delighted that two economists who had two contrasting opinions earlier now hold only a single opinion!

(The writer, an economist, academic and former central banker, can be reached at [email protected])