THE ANALYSTS GOT THEIR WIRES CROSSED

'Neo liberal economics' cry the pundits and the assorted regular screamers and breast-beaters about the power price hikes, and that would have been alright if they had paused to ponder whether the tariff increases in fact smack of neo-liberal policies. Most of the analysts have in the first place cottoned onto the word neo-liberal because of the assumption that it is part of the IMF conditionalities that power tariffs be rationalized. It goes with the territory - anything that is perceived to be as a result of an IMF diktat is taken to be neo-liberal policy, as if that's code for IMF recommendations.

The fact is that whether the power tariff hikes are due to IMF recommendations or otherwise is largely irrelevant. They could not be anyway; not this year. Sri Lanka is not taking out any kind of adjustment facility from the IMF at this point in time, and therefore the question of conditionalities does not arise.

But yet, the rather glib allegation is that the tariff increase is all in pursuance of neo-liberal policy. Does that mean that any policy that seeks to rationalize and adjust the economy on an even-keel is squarely neo-liberal? That would be, as they say, a hell of a how-do-you-do.

The only upshot of such a supposition is that an economy would theoretically be complete only when everything is given totally free. From cradle to grave, food, entertainment, education, utilities, books - all of this should be supplied gratis by the state. How could any well maintained economy not be neo-liberal in that case, particularly when it is deemed that removing a utility subsidy is essentially neo-liberal?

In the first place what is happening now is not a removal of a subsidy, but a scaling down of it, and this too until the coal fired power plants are made operational. Such rationalizations of subsidies are the regular work of keeping an economy running.

If that's interpreted to be neo-liberal, the regular economies of the world would be welfare models that would give almost everything gratis from cradle to grave, and how workable is that? This is why those who use labels such a neo-liberal and those self-appointed 'economists' such as Harsha de Silva should have a rudimentary knowledge of what a neo-liberal economy is, before they use the label more in the manner of a bludgeon or a cudgel to beat up the government with, rather than a name for a model on how an economy should work.

These people should learn what neo-liberal means. It means, for instance, what was once contemplated during the time of the UNP - the total 'nationalization of water resources.' It was at this time proposed that every water source be vested in the private sector, and that there should be a charge for all potable water including the water that collects on one's roof gutters!

This is the kind of policy that was tried once in Bolivia, which led to riots and anarchy -- naturally! Neo liberal policies also mean the privatization of all essential services, and the random and abrupt seizure of a country's wealth such as say the indigenous plant gene pools for example, which were to be raided right here in Sri Lanka, if a previous SLFP government has not intervened to stop that trend in time.

An administration that is contemplating making the Senaka Bibile drug policy legal cannot be neo-liberal. The Bibile policy is the exact antithesis of what neo-liberalism means. The current drug policy is neo-liberal but no country can avoid it easily because the rapacious pharmaceutical industry bandits are implementing this policy, figuratively speaking, at the point of a gun.

The Senaka Bibile policy will make far reaching changes that are almost socialist in flavour - but that's what's required when the health of the people are concerned. Utilities are different. Utilities are not life and death, and have to be provided at reasonable rates while keeping economy, country and society viable, workable and trim. Doing that as best as possible is NOT neo-liberal economics.