The next UPFA Government:

Challenges ahead

The effective implementation of the Mahinda Chinthana -2010 policy package itself would be a great challenge for the to-be-elected representatives. But specifically, four major challenges, among others, appear to deserve special attention at this decisive moment of time

Dilum ABEYSEKERA- Attorney-at-Law

The upcoming general election is of special significance as it is the first time we to elect our representatives to Parliament after the dawn of peace.

At the Presidential Election held in January, a vast majority of Sri Lankans approved President Mahinda Rajapaksa’s manifesto Mahinda Chinthana- Idiri Dekma (Vision for the Future) and voted him for a second term. That was both a vote of gratitude for delivering what was promised in 2005 including peace, and a vote in anticipation for harnessing the dividends of peace in making Sri Lanka a developed nation.

Development is in the forefront of the Government policy statement

Any independent person who goes through this election manifesto would find it a timely and much-needed-for policy document. It is drafted with a clear understanding of what went wrong during the six decades since independence that led to a war in the North two youth uprisings in the southern part, and to the failure in achieving the ‘expected’ goals of the market-oriented economy introduced in 1978. In such a background, MC -Vision for the Future program seeks to address a broad spectrum of issues in the social, economic and political spheres many of which still remain unresolved since gaining independence in 1948 and even from before.

Therefore it is likely that the vast majority of voters who stood by the President and his policies would further opt for maintaining consistence with those policies at the upcoming general election as well. Because it is the same MC -Vision for the Future policy document that the United People’s Freedom Alliance (UPFA) has put forward to seek people’s mandate at this General Election as well.

Why people need UPFA ?

Simply because it is obviously the UPFA, or rather the strength of its constituent parties, that can best handle the challenging role of the next Parliament in the post-war context. Therefore at this crucial moment, it is relevant to think about the nature of challenges that our elected representatives will have to face in performing their core function of law- making. Also the gravity of such challenges can be taken as an implication of the type of representatives who should be elected to Parliament. In whatever representative party, the need for professionals, non-professionals with comparable work experience and intellectuals who can put their intellect into practice, is of paramount importance for the public benefit.

Achieving sustainable peace

The laws to be passed by Parliament and the decisions to be taken by the new Cabinet have to ensure that the recent military victory achieved at high cost, both in terms of human lives and public money, would not be reversed or weakened but instead be transformed into sustainable peace. This challenge would entail, among other things, restoring economic and political stability in the war-torn areas and re-building ethnic harmony.

Winning the ‘Economic War’

The legislature will have to pave way for achieving victory in the ‘Economic War’ as envisaged in Mahinda Chinthana -Vision for the Future. As the mechanism to face this second challenge, future representatives will have to provide for a sound legal and regulatory framework to meet the high level of economic targets such as reaching US $ 4000 per capita income by 2016, maintaining an economic growth rate of 8 percent during the next six years, among other things. Here the challenge for the legislature would be to make sure that the benefits of economic growth are successfully translated into quality of life (i.e. overall well-being) for the whole population. In other words, the laws passed by Parliament/ decisions made by the Cabinet may not help broaden income inequality among people, as much as practicable. To this end, laws need to ensure participation of poor people in the economic growth process so that they are directly benefited, rather than merely anticipate that the benefits may ‘trickle down’ to them. If our representatives fail to face this second challenge successfully, it may lead to the failure of the first challenge as well.

Correcting past mistakes

Correcting past mistakes is necessary to deal with the second challenge. For instance, as pointed out in the UNCTAD’s Investment Policy Review for Sri Lanka (2004), at the time of introducing market-oriented economic policies in 1978, the Sri Lankan legislature failed to change the host of policies and procedures that generally discouraged private investment. Instead, the legislature created the Greater Colombo Economic Commission (presently the Board of Investment of Sri Lanka) as an expeditious means to relieve only a qualified set of investors of burdensome taxes, regulations and red tape. In other words, the legal and regulatory framework of Sri Lanka that did not fit into a market economy was not consistently reformed to make a level playing field for private investment of all sizes. This situation adversely affected the SME (small and medium scale enterprises) sector of the economy that comprised the majority of entrepreneurs.

The dual investment regime so created in the past, along with the concentration of private investment within the Western Province later resulted in anomalous economic conditions with a significant imbalance of provincial contributions to the gross income (GDP) of the country. The proposal in Mahinda Chinthana program to have a legal and institutional framework to coordinate the activities of the Board of Investment, Urban Development Authority, Tourism Authority, Export Development Board, National Environmental Authority and the Mahaveli Authority with the objective of investment facilitation and time reduction, would be a corrective step in the right direction.

Need for efficient legal framework

Despite many market- related institutional changes carried out in the past three decades, the present state of efficiency of our legal framework relating to business is ranked as low as 105th in a list of 183 countries, according to the ‘Doing Business 2010’ report of the World Bank. Singapore tops this list as the No. one country in the world to do business. That is because the laws of Singapore (like in most developed countries) that impact on the economy are continuously subject to revision and reform based on feedback from affected people, rich and the poor alike. A good example is the ‘Pro- Enterprise Panel’ of Singapore that helps remove regulatory barriers to business by continuously acting upon feedback from the public. What happens in Sri Lanka is effecting changes to law on an ad hoc basis by adopting a typical top-down approach. Therefore we urgently need to have a system like the ‘Pro-Enterprise Panel’ or the ‘Legislation and Law Reform Division’ of the Attorney General’s Chamber of Singapore, if we are to make our laws and procedures more responsive to people and their livelihoods.

Effective remedy for poverty

The MC -Vision for the Future policy recognizes the importance of assuring property rights in the real estate of the poor. Relief measures like ‘Houses for all’, ‘Land for the farmer’ to enable each and every farmer to own a block of land or claim legitimate right to the already possessed land, assuring rights of the Ande cultivator, providing alternative lands for the victims of land slides in the hills, and similar measures would have a strong positive impact on poverty reduction.

It is relevant to recall what the renowned Peruvian economist Hernando de Soto stated in his classic “The Mystery of Capital” - “Property without title is dead capital...

When poor people are given properties with marketable title, they will use such property to create capital and will later come out of poverty as entrepreneurs....” Here the real challenge for the legislature is to make an enabling institutional and legal framework to facilitate self-employment, access to credit, efficient settlement of legal / contractual disputes, etc among others.

And the fourth challenge for the legislature would be to make use of the prevailing peaceful environment to lay the foundation for sustainable development, and thereby to make Sri Lanka the “Wonder of Asia”. This is not so difficult a challenge, given that the preceding three challenges are met. Because what Adam Smith said over two centuries ago cannot go wrong for Sri Lanka - “Little else is requisite to carry a state to the highest degree of opulence from the lowest level, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things”.

Who can face these challenges on our behalf

Undoubtedly it is our representatives who can make a productive contribution to the affairs of Parliament, and who can discuss policies rather than criticize people or events. Considering the more serious tasks ahead in achieving sustainable peace on the one hand and making Sri Lanka a prosperous nation on the other, there is no doubt that our people will make an intelligent choice of representatives to be elected to Parliament at the upcoming general election.

It is noteworthy here that the social cost of having a bad representative in office is not only the total cost of his salary and perks but also the huge cost of losing the invaluable service of a good representative if he was in office instead of the other.

Sri Lanka is now at crossroads after 30 years, and the even more difficult task of taking us from there needs representatives who can individually make a worthwhile contribution towards development rather than piggyback on others. Let’s hope that the next Parliament will be a House of learned and talented representatives who can perform well in the global knowledge economy and make Sri Lanka the emerging Wonder of Asia !