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Sustaining economic recovery

It may not be exactly a cause for rejoicing but the economic growth achieved by this country over the past few months, although modest, is encouraging. Certainly when viewed against the bleak backdrop of a year's economic stagnation and negative growth, the 2.5 per cent growth in our GDP in the latter half of this year holds out a lot of promise.

It must be recalled that economic ruination was our lot when the UNF Government took over the reins of office in December last year. Considering the fact that we have had to start from scratch in putting the economy together, the growth rate achieved so far is praiseworthy, although the country is yet to get out of the woods.

It is obvious that the current spell of peace has to be perpetuated if the process of economic recovery is to be speeded-up. The cessation of hostilities ushered in under the MoU is, easily, the best thing which has befallen this country for a long time and it is likely to be the view of the majority of people that this order of things remains.

In fact, peace and relative contentment could be the biggest enemies of some sections of the opposition which are notorious for churning popular disaffection and conflict. Their opposition to the peace process could very well be rooted also in this fear of an economic recovery and its immediate consequences - popular contentment, total acceptance of the Government and a steep decrease in economic grievances. So, the opposition to the peace process could be multi-dimensional.

However, the expectation of the people is that the Government soldiers on with the peace process until a final resolution is reached. Meanwhile, popular support for the peace process would increase in proportion to the economic benefits it generates. The Government is correct in this assessment because the exercise of merely making the "correct noises" about peace is unlikely to garner the necessary popular backing for the negotiatory process. The people need to taste, touch and feel the concrete benefits of peace. It is then that they would extend more support for the peace process. This was the principal burden of Premier Ranil Wickremesinghe's recent addresses to international fora. Economic assistance for Lanka's total recovery needs to be extended now.

Meanwhile, as long as the current spell of peace holds, foreign investors would give more serious thought to investing in Sri Lanka and eventually launch concrete investment projects which would help in realising part of the much spoken of "peace dividend". It augurs well that we could now look forward to a much reduced defence budget but the money thus saved must be used in productive investment which would prove beneficial to the people. If these positives do not materialize the people could not be faulted for turning sceptical and cynical about the Government's prime agenda.

So far, however, the economic recovery, though modest, has enabled Lankan policy planners to take the country's case more boldly to the donor community and to lobby them more cogently for sustained economic assistance. This is what Finance Minister K.N. Choksy is about at the moment and he too was at pains to emphasize the positive spill-over effects of the peace process and Government's economic reform program.

While sections of the international community clearly back our peace process and have expressed willingness to inject Lanka with the necessary economic assistance, they are unlikely to be particularly impressed by the bickering which is continuing between the Cabinet and the President. Frankly, all would come to naught if political instability erupts once again, this time centred on a power struggle between the President and the Cabinet.

There are no ready made formulas for resolving problems of this kind but it is imperative that the two sides put the interests of the country over short-term gain and go in for compromise and flexibility in their dealings with each other.

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