Progress and poverty

There was a time when the neo-liberal approach to development was given free rein in this country. Those were the days when even 'Robber Barons' were gladly welcomed to invest in this country. However, less emphasis was laid on public welfare because the neo-conservative administration which was ushered in 1977, showed very plainly that social welfarism was not its favoured ideological base. While the 'closed' economy that existed in the years immediately preceding the socio-economic sea change of 1977, was no ideal development paradigm, liberalizing the local economy with relative unrestraint, was not the way forward either.

While the distribution of welfare benefits liberally and injudiciously does not smack of sound economic management, there did not seem to have been an ongoing and thorough assessment of the social consequences of thus liberalizing the economy as never before. While the separatist rebellion in the North-East assumed unmanageable proportions, the country was witness to another failed and bloody youth upheaval in the South. In fact, the latter matched the former in its brutality and savagery and Sri Lanka could be said to have done very well to come through the Southern uprising still intact, while the Northern uprising was to remain for quite a while more before it fell to President Mahinda Rajapaksa's lot to see an end to the 'running sore' which was the Northern separatist conflict.

It would be inadvisable for one to hazard a simplistic explanation for the eruption of the Northern conflict, but on a comparative basis one could take the position that the state of the economy impacted more substantially on the Southern uprising of the late eighties, than on the Northern conflict, although the imprint of economic factors could be found in the latter 'theatre' too. In the case of the Southern youth, it was quite evident that the lack of employment and kindred 'rice and curry' issues played a determining role in their taking to arms against the state, inasmuch as the same factors prompted them to challenge the state through the force of arms in April 1971.

Retrospectively, it could be said, therefore, that not much thought was given to the socio-economic consequences of the 'open economy' experiment of 1977, although the system in some of its essentials has been perpetuated to this day and is still being considered an 'engine of growth', although much more thought is being given to the social effects of this growth paradigm with the advent of the Mahinda Chnthana ideological perspective.

It could be said that the Mahinda Chinthana is acting as a corrective to the relatively directionless liberalization of the 'open economy' years. The country seems to be learning from its mistakes in matters of economic policy and this is the way it should be. Moreover, the proof of the pudding is in the eating and we have it on the authority of Monetary Cooperation Senior Minister Dr. Sarath Amunugama that Sri Lanka's poverty level has dropped to 14 percent and that the problem is on a steady decline. He added that some 1.6 million Sri Lankans working abroad have been a significant factor in this decline.

However, it is not only a question of treading what may be called middle ground between the policy extremes of a tightly 'closed' and relatively 'open' economy. As explained by President Mahinda Rajapaksa to the Commonwealth Business Forum, a couple of days back, it is also a question adopting a comprehensive economic vision which takes cognizance of the fallout of a country's economic policies on the people. Mahinda Chinthana has helped ground the country's economic policy on the ideals, aspirations and the culture of the local people and it is in this vital respect that present economic policy differs from its predecessors.

The challenge for the current administration has been to attune economic dynamism and growth with the traditional values of the people and in this endeavour it has succeeded to a considerable degree. Economic growth and material advancement are important but they cannot run counter to the cooperative spirit that characterizes traditional Lankan culture. Growth, in other words, should accompany redistributive justice and in this task the state has made some progress. This accounts for the declining poverty level in the country.

That said, there is no room for complacency. The wheels of the economy should continue to whirr and the state and other stakeholders should continue to be conscious of the fact that our human resources should be steadily developed. Our youth in particular, should never have reason to labour under the impression that their employment prospects are bleak. Our economic prospects should be consistently bright to keep their spirits high.