The day after tomorrow:

Deceptions and truths of Sri Lanka's economic development

Manoj AKMEEMANA

Any patriotic citizen in our country would not disagree that as a nation, we Sri Lankans could proudly rejoice in the wake of a new era of peace and harmony by defeating the LTTE, after three decades of brutality and bloodbath by Tamil-Nazi terrorism.

After 500 years of colonial rule, we Sri Lankans seem to be obsessed with a rather dull, defeated and backward mentality prevalent until our cricketing heroes brought the honour of the world cup to our nation in 1996.

It gave us vigour and vitality to form a more positive mentality as a nation, at least in the field of sporting.

Today, a historic opportunity is being created to stand up and march as a winning nation in the world.

Today we are fortunate to observe that all over the country - North to South; East to West; remote villages to affluent cities; a wide spectrum of Sri Lankans without differences of race creed or religion, proudly talk about defeating terrorism and a new hope for a new country. The political leadership of President Mahinda Rajapaksa and the incomparable professionalism and bravery of our Armed Forces created this positive, victorious mind set among a wider section of our nation.

With new hope for a new era, we ought to look at the many challenges facing us as a nation in a new perspective.

Over a long period of time, intellectuals, policy makers and politicians talked about the Sri Lankan economy with a negative, backward-looking connotation. Even today, in a gloomy world economic crisis, this negative is fuelled and nurtured by many a person in a superlative degree. Some politicians pray for a failed economic front to satisfy party politics and the hunger for power, despite winning the war against terrorism.

New terminology is a trend to wrap these negative economic perspectives and most policy makers, politicians and intellectuals talk about "winning the economic war".

Some assume that the connotation of winning the economic war may be negative when comparing our economic development with regional counterparts.

The most popular comparison is the 1956 Sri Lanka and Singapore, and Lee Kwan Yu's achievement to show how backward we are as a nation.

This Singaporean comparison obviously fuels the negative mindset especially when comparing the experience of larger cities, its architectural and infrastructure marvels, underground railroads, massive expressways and colossal shopping malls which are sometimes much larger than some of our suburban towns. No doubt Singapore has achieved a lot and is a success story, but is it the correct example to compare ourselves and assess our success or failure?

Greatest challenge

Today the greatest challenge is not winning the economic war, but rather defeating the backward pessimistic mentality of interpreting our development. Therefore, it is of utmost importance to defeat the "Singaporean syndrome of development comparison" if we as a nation are serious in building a new country for future generations. We need to understand and appreciate our achievement in economic development during the past three decades and compare it with other regional counterparts and developed nations such as Singapore as well to fully understand where we stand.

Those who talk about "economic development" sometimes forget that it has a wider and more profound meaning than simply economic growth (GDP growth) and per capita income. But development has many facets such as improving the quality of a human life; social, ecological, political, cultural development and equality in many aspects.

It's also more meaningful to compare how much we have grown during the past three decades compared to other nations.

It is obvious that Sri Lanka's achievement over the past 28 years is commendable compared to many of the other developing nations and is closer to Singapore's growth than India.

However, this achievement of Sri Lanka becomes somewhat incomparable when we consider the setbacks during this period, which include two JVP insurrections, four Eelam wars of the LTTE, and the worst natural disaster in modern history, the 2004, tsunami.

Extraordinary resilience

The Sri Lankan economy has shown extraordinary resilience to all these man-made and natural disasters. During the past 30 years, Sri Lanka has hardly had any peace due to uninterrupted terrorist attacks in various forms by the LTTE. But in contrast to the popular argument that military expenditure had dragged the economic development, it can be argued that rather, it had helped create the resilience of the economy in the face of the world's most ruthless and sophisticated terrorist outfit.

It is evident that considering the regional resources as well as the security threat level for the country, Sri Lanka has managed its military spending within acceptable norms, as shown in the graph.

Another important aspect is to analyse the manner in which a country's economic benefit or growth is distributed or shared within its population. This factor reflects the level of inequality and poverty of a nation. The chart shows the level of inequality as indicated by the Gini index among the regional nations.

The lower the gap, the more equitable the distribution is. The figures show that comparatively, Sri Lanka has cascaded its economic benefits to lower levels of the society compared to many other countries in the Asian region.

From another point of view, just imagine, if one can live a healthy life and comparatively longer life span, have access to a decent education, healthcare and sanitation facilities, are these not the factors to identify the quality of life. If one can look at the 'quality of life' of an average Sri Lankan without prejudice, we can see that it has improved over the past 30 years in several aspects compared to most of the other nations.

Deriving dividends

Critiques, both local and international including donor agencies and nations criticized the "subsidies" given to health, education and other public expenditure as non required expenditure for the state.

The local promoters for "market economies" have extensively criticized using the taxpayer's money without having a "proper price tag" for it. But the indicators reveal that as a nation, we are deriving the dividends of our investments through these subsidies.

As a nation we can be proud that we have achieved a comparatively significant development during the past three decades despite the fact that we still do not have large manhattans and skyscrapers, expressways, and reliable underground rail road's and other infrastructure.

But in a way, one could argue that Sri Lanka is the best achiever in the Asian Region in showing a resilient, but determined growth, considering the level of destruction and instability that had prevailed during these three decades.

The author's objective for this article is not intended to infer that the country should relax and day dream in a comfort zone, especially during the worst global economic downturn in recent times.

Instead it is to share a few facts and appreciate the progress made, and invite all countrymen to be motivated to build a winning mindset to face the new realities and opportunities created for us and to be rid of the Singaporean syndrome of development comparison.

It is said success breeds success, and a winning mindset brings victories! As we have proved to the world that terrorism can be defeated by a localized solution, we as a nation should have our own model for economic development and to secure a sustainable position in the global development.

Patriotism in the war front should be extended to the front of economic development. The winning habit and the strategic military mentality need to be extended to the socio-economic front. The change in the mindset will then help us as a nation to reap the new opportunities and take our country to the zenith of economic development.

Manoj Akmeemana is a Senior Banker in a leading private commercial bank with over 19 years ' experience in Sri Lanka and overseas.