Facets of leadership

Response by Plantation Industries Minister Mahinda Samarasinghe at the breakfast meeting between Sri Lankan business leaders and former Malaysian Prime Minister Dr. Mahathir bin Mohamed

It is a particular honour to follow so distinguished a speaker as Dr. Mahathir, our special guest. It will be superfluous to dwell at length on the record of achievement of such a globally well-known personality.

However, I must point to some facets of his leadership which are of immediate relevance to Sri Lanka in her attempt to revive and resuscitate her economy and achieve enhanced economic growth at the present time.

What strikes me as most important is Dr. Mahathir’s unshakeable commitment to his native country and the well-being of its people. Genuine feeling for one’s motherland is at the core of every successful leadership. Dr. Mahathir demonstrated this in no small measure during his four-decade political career including 22 years as head of government. Our President in his historic address to the national legislature and to the people in May last year after the resounding defeat at terrorism, emphasized this quality and called on all Sri Lankans who love our homeland to work together to support him in assuring a better future for all.

Secondly, Dr. Mahathir demonstrated commendable creativity and flexibility in guiding the ship of state through, what were at times, troubled and turbulent waters. The responses to global, regional and local exigencies which Asia in general and Malaysia in particular was called upon to adopt were as multifaceted as they were numerous. During his stewardship, the rapidly growing economy and the exogenous and endogenous shocks it was called upon to withstand demanded constant reshaping and fine-tuning of policy responses. It was this flexibility perhaps that enabled Malaysia’s recovery from the Asian Economic Crisis of the late 1990s. Encouraging growth in equity markets whilst applying strict banking and financial sector supervision, large scale public investment in key economic sectors along with appropriate and proportional policy interventions, were notable facets of this era.

Allied to this was steadfast opposition to the prevailing economic orthodoxy - encapsulated in what is popularly known as the Washington Consensus. Dr. Mahathir resolutely withstood pressures from the global economic powerhouse and international financial institutions which were perceived as promoting the philosophy and policy objectives of that powerhouse and of a particular regional bloc. His imposition of capital account controls in 1998 to deal with the immediate aftermath of the crisis were at the time a brave and unprecedented step. Now with the benefit of hindsight and several reams of economic and academic analysis, we can say that his was a visionary initiative.

As we in Sri Lanka look to take advantage of the vast array of opportunities offered by the end of the armed conflict, we must not uncritically and unhesitatingly adopt the formulaic policy frameworks which are now presented in a metamorphosed form and is known as the augmented Washington Consensus or AWC. This new orthodoxy marrying the neo-liberal agenda with democratic governance, is what drives several policy initiatives that are prescribed for nations such as ours.

What the Malaysian experience teaches us is that we must forge a path for ourselves, keeping national interests and the welfare of the Sri Lankan people uppermost. Of course we must not reject these frameworks out of hand just because they emanate from predominantly western sources, but we must, like Dr. Mahathir, exercise prudence and judgment in the timing and pacing of what may appear to be salutary reforms.

Another lesson that we can draw from Malaysia is the firm grounding of that country’s economic development initiatives in the Asian context.

Dating from its initial industrial programs, the experience, expertise and entrepreneurial know-how of Asian nations was emulated, adopted and co-opted. From its flagship projects in heavy industry, the Petronas Twin Towers, the Sepang circuit and many others Malaysia has forged a unique and instantly recognizable brand with an Asian orientation. The ingenuity and impetus for this was provided by the leadership of our special guest on this occasion. Sri Lanka, under the leadership of President Mahinda Rajapaksa, is forging closer economic ties with its Asian neighbours in economic, social, cultural and developmental spheres. This event is symptomatic of this policy thrust aimed at bringing countries in this region even closer together. Just as in the economic sphere, a degree of fearlessness and candour in articulating the national interest in the field of diplomatic relations and international affairs can only help to safeguard national sovereignty, protect our vital interests and raise the national profile on the global stage. Dr. Mahathir’s forthright stances on many issues of global importance, have been an inspiration to us in smaller developing countries. Our own interactions, while acknowledging the concerns and interest of fellow members of the international community, must be respectful but never be from a position of subservience and undue deference.

Malaysia, like Sri Lanka, has a richly diverse social make-up. One of the challenges in achieving development and economic growth in a pluralistic society is ensuring that it is broad-based, inclusive and equitable. No segment of the national population should feel excluded and marginalized.

This inevitably leads to disaffection, discord and instability. This is why President Rajapaksa only a few days ago pointed to the close correlation between development and peace. Speaking at the Business Forum organized jointly by the Indian and Sri Lankan Chambers of Commerce barely a week ago, the President said:

Today, we extend our hand of friendship and opportunity to all nationalities and communities, while we are well on our way to bring about a true reconciliation within our communities and extensive economic empowerment among our people. We strongly believe that to bring permanent peace there must be development. As I have often said, ‘there is no peace without development, and no development without peace.’

This then encapsulates our vision a vision for development with equity. In this we can draw valuable lessons from Malaysian efforts. One of the most notable achievements that strikes me are the record levels of reduction in poverty. Incentivization of historically disadvantaged sections through targeted policy initiatives is another. We must also be mindful of the oft quoted note of caution struck by Dr. Mahathir in which he stressed that the privileges extended to these communities should not be used as a crutch. I agree that any advantage or facility extended must be used as a stepping stone to greater heights and not merely as temporary support. It is also important to be mindful of the need to adjust these policies when the purposes to be achieved are realized. All programs of affirmative action should be reduced or discontinued once the desired parity between segments of the populace is accomplished. Malaysia provides us with a good example of refining these measures from time to time with changing circumstances and once certain goals and targets are achieved.

As President Rajapaksa stressed in his recent comments about economic prospects for the future, our economic fundamentals are sound and our macro-economic management helped us overcome the worst effects of the economic crisis. Now, with the advent of peace we must strive to attract investment in key sectors of our economy. Virtually limitless opportunities have opened up in several areas in which Sri Lanka welcomes partnership. As the President pointed out:

Those of you who are keen to explore, will find abundant opportunities for investment in Sri Lanka. The scope is immense: from infrastructure, to agribusiness, to manufacturing and to a range of services. You will also find that our country offers a rare package of skills, capacity, and a willingness to learn and adapt. Our policy is vibrant, our package is enticing and exciting, and you would do well to join us in our forward march.

While we believe that the private sector is the primary engine and driver of growth, we must borrow a leaf from Malaysia’s book. Public investment as and when necessary on a suitable scale is necessary to foster and supplement growth. We must at the same time nurture and safeguard local entrepreneurship and business. Although these initiatives in selected areas may be granded “economic nationalism”, we must while encouraging stronger and more productive business ties with regional and global players, also strengthen our national economic base. It is only then that we will be able to overcome the inevitable vicissitudes and tribulations that face any developing nation state in the modern era.

Our way forward then is clear. Malaysia and Sri Lanka share many historical, cultural, business and economic ties. Closer cooperation will only be of mutual benefit. It is my hope that this forum and others like it in the future will promote closer dialogue and partnership.