Economic development and society

Sri Lanka has entered a new era in which our people will no longer be at war with one another. The dark days of conflict came to an end after 30 years in May 2009

Prasad GUNEWARDENE

Economic development is a priority based on the concept of reconciliation and national unity to achieve a common nationhood. In that perspective, economic development must be accompanied by the fundamental transformation of the entire socio-economic fabric of the society. Linking collective resources is a measure to maximize the synergy of combined actions to effect socio-economic changes required by the society.

Economic stability

In this post-war period, where economic stability can be spoken of, achievements of much needed macro- economic balances will ensure the creation of an atmosphere conducive to growth and development. The significant factor is to manage public finances to prevent the public sector siphoning off too much of the national wealth to meet recurrent expenditure that would be too high. Such a control will certainly help to curtail tax burdens on the masses.

The government seems to be treading on that positive path with a close monitoring system adopted at district level, personally supervised by President Mahinda Rajapaksa.

At the recent District Development Meetings, the President uncovered several irregularities in the handling of public finances and warned officials not to waste public money.

The recent announcement by the Central Bank of Sri Lanka that certain measures would be adopted to relax exchange controls is an added feature to foster economic development.

A phased out relaxation on exchange controls must be adhered to, under a strict monitoring process to prevent siphoning off national wealth under dubious reasons.

Development strategy

A comprehensive Growth and Development Strategy must be designed with the participation of social partners, labour organizations and the private enterprises to further plan the economy of the country. Sri Lanka should view Asia and the South Asian Region for greater economic cooperation that will create economic integration among member countries.

It will then generate a balanced regional economic development process in the region.

Closer economic cooperation between Asian and South Asian nations will also help to meet trade and economic challenges thrown at them by Western countries who attempt to monopolize the trade and economic system at global level. The government must educate the people on the important factor that there is simply no adequate funds within a national budget to deliver full services with subsidies all the time. To provide relief to the needy, programs at central and provincial level must be well-planned before implementation.

Such costs must be evaluated by a team of financial experts from both the State and private sector to prevent malpractices and irregularities.

Infrastructure development means to build a more comprehensive equitably owned economy. These are areas of concern to accompany fundamental transformation of the entire socio-economic fabric of the society.

Budget deficits

Successive governments having battled a 30 year war experienced high budget deficits that cannot be bridged overnight or just one year after the war ended. In addition, all budgets have largely funded recurrent expenditure.

That fiscal legacy had been carried forward as an annual ritual. A practical and meaningful economic development process at grass root level would avoid a crisis in public finances.

The economic development pathway could be made brighter with increased confidence and a turn around in the private sector fixed investment system.

The current performance in the financial markets is a positive indicator in that direction.

Economic development cannot be limited to democracy and rights of the people to exercise their voting rights to a mere five or six year period as a common practice.

It has to be extended to the level of restructuring the economic power of the people to build an economically stable nation.

The State, private sector and the people are the key role players in economic development.

The Writer is a free-lance journalist. He can be contacted on [email protected]