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Friday, 6 October 2017 00:00 - - {{hitsCtrl.values.hits}}
By Lloyd F Yapa
The Government has formulated a new vision – Vision 2025. It is quite comprehensive, though a few shortcomings exist.
The first component of a vision is a shared sense of purpose which provides an understanding of the need for coordinated collective effort – for subordinating individual interest to the larger objective that can be achieved only by the collective effort.
The second component of a vision includes specific and measurable goals that must be achievable and give hope to all who seek it. A third important component consists of the directions or the strategies to be adopted to achieve the goal. (The National Defence University, USA.)
A vision is needed for Sri Lanka to create a consensus on building a culture by way of a ‘collective effort’ in this country to drastically alleviate poverty and reduce inequality of incomes among the people. The leaders of the country have to undertake this responsibility.
According to management gurus James C. Collins and Jerry I. Porras (authors of ‘Built to Last,’ 1997), a major function of effective leadership is the creation of ‘a clear and shared vision to secure commitment and vigorous pursuit of that vision’. Sri Lankan leaders have failed to do so for improving the wellbeing of the people, for instance by explaining the connection between the expansion of investment (especially FDI due to the local scarcity of capital, technologies and global market access) for manufacturing for export and for earning badly needed foreign exchange on the one hand and poverty alleviation on the other.
Instead what we have is a peculiar culture that has been created by most of the politicians who have emerged after 1956. Its main driving force appears to be short-term political gain; these politicians would not hesitate even to arouse communal conflict and public demonstrations to gain this end (thereby preventing investors particularly foreign direct investors from investing here), indicating a complete absence of a passion for serving the needs of the people. Instead there is an inclination on the part of most politicians to enjoy life at the expense of the taxpayer and even to rob the Treasury; some of them would even go to the extent of demanding bribes for approval of projects from investors or harass them for grant of personal favours.
They have also created bogus nationalism using which teaching of English (which is a tool of gaining knowledge and communicating with other communities speaking other languages and with the rest of the world) in schools was given up. The so-called leaders have in addition destroyed the efficiency of the public service through politicisation (and not appointment and promotion of officials on merit).
In other words, the leaders of this country have not given the people any hope of recovering from the difficulties of living faced by them; in fact they have done the opposite of pulling them down to a deep hole from which recovery is difficult. This is indicated by the desperation felt by the people to leave the country legally or illegally to earn a better living or resort to demonstrations and strikes against development programmes. Thus an all pervading vision is necessary to unite the people for a collective effort to pull them out of the rut they are in.
The method of formulating a national vision is therefore important. This is not the first time that the present government has issued a vision statement. The first detailed vision statement was published in November 2015. Since a couple of other visions have also been proposed by the present Government already in its third year of operation without creating a consensus on the means of alleviating poverty and achieving prosperity, it may be relevant to discuss a method of preparing a more appealing one, while dwelling on details of the latest vision, to achieve the results desired by the people speedily; it could be as follows:
1. Describe the present situation (preferably with details of internal strengths and weaknesses along with external opportunities and threats). The current vision statement first discusses only the weaknesses/constraints facing the economy; it does so without adequately focusing on the major ones like the absence of a consensus on the direction of development desired and the risk to investors particularly FDI (created by the ethnic conflict, which has not yet been resolved, the poor law and order situation, the mess of regulations and rampant corruption).
2. Indicate the way forward starting with the goals and the quantitative objectives or targets to be achieved or on the basis of the short term and long term needs of the population. The latest vision appears to ‘give hope to all who seek it’, by saying that it will ‘create an environment to achieve higher incomes and better standards of living’. But by saying that this goal will be achieved by making ‘Sri Lanka a rich country by 2025’, a sinking feeling is created as there is doubt whether the Government could be in power by that time and as it has failed to create trust in its capabilities so far!
Fortunately it does mention that this goal will be achieved by adopting ‘social market economic policies’ (an economic system in which industry and commerce are run by private enterprise within limits set by the Government to ensure equality of opportunity and social and environmental responsibility, ‘The Free Dictionary’), perhaps implying that it could be realised if the next government also follows the same policies. This is true as most countries have prospered by adopting it.
Further, the Vision’s ability to appeal to the people could have been improved by using the easily understood UN’s Sustainable Development Goals such as ‘no poverty, zero hunger, good health, quality education, gender equality, clean water and sanitation,’ etc.
3. Formulate strategies of realising goals by first asking the people how weaknesses and threats could be overcome and how to build on the strengths and opportunities, to encourage them to take part of the responsibility for the final version (the Vision 2025 first describes a constraint facing the economy currently and then introduces a solution or strategy to solve it). There has not been any prior public consultation.
One of the first strategies in the new vision is solving the macroeconomic problems facing the country such as the tax revenue shortfalls, over expenditure, the public debt including the massive foreign debt. In this connection, the measure suggested to deal with the loss making State-Owned Enterprises (SOE) ‘monsters,’ is restructuring them to ‘operate as commercially viable enterprises with accountability’.
The problem is that the Government and even the previous Government has been mouthing this mantra and not being serious about it. The main reason for this could be that all governments in Sri Lanka have been using these as dumping grounds for their party faithfuls (ignoring their suitability to the posts) and as openings for resorting to corruption.
Even if ‘restructuring’ takes place, these may not succeed as most politicians think that if for instance if the SOE concerned deals with cashew, the person heading it should possess a knowledge of producing cashew! This is nonsense; what is required is thorough management ability, perhaps one of the scarcest in this country.
Unfortunately the external debt problem may also not be solved as some of the measurable goals/the objectives of the current vision may not be achievable like its export earnings target of $ 20 billion within the next three years.
The reasons are : a] it does not focus hard on the absence of investment to create the capacity to produce manufactured products and services (not non- tradable products such as roads and buildings which could generate commission/bribes) for the global market (Sri Lanka’s domestic market being too small to achieve economies of scale to lower the unit costs) and b] it does not focus on considerable reduction of import tariffs/duties to get rid of the strong ‘anti export bias’ and create competition among firms to pressurise them to invest and innovate for value addition to goods and services to satisfy the needs of global customers.
The vision states that para tariffs (like the various import tax exemptions and the cesses/taxes on exports) will be eliminated; as for import tariffs/taxes, it merely says they will be ‘simplified’; therefore there is a suspicion that protection of domestic firms without export market orientation may continue. The vision, however, rightly deals with improvement of productivity (or increase of outputs while lowering inputs to reduce unit costs) in factors of production like land, labour, and capital, as well as information technology, to support export expansion.
Several other strategies in the Vision 2025 that need comment are those relating to land/agriculture, education and the public service. The authors of Vision 2025 have to be congratulated for including a strategy on land/agriculture as manufacturing for the global market, tourism, development of the country’s geographic location, etc., will only result in a long drawn out trickledown effect and therefore may not successfully deal with poverty (and inequality of incomes) especially among the rural population of 17 million people in the near future.
The proposal to ‘offer clear transferable titles’ to land and establish a land market (it is not clear whether ownership of leased land will be given) is well and good; but consolidation of fragmented subsistence holdings should be the objective to improve agricultural productivity. Its recommendation for ‘establishment of large scale agro enterprises’ may mean something else; it may refer to large estates to be set up by private investors and not the enabling of millions of farmers of this country to improve their incomes.
There is a well-thought-out strategy in this vision for dealing with the mismatch of skills demanded and what is actually produced; inaction by the Government on this major weakness is surprising; without focusing on this problem and while talking about creating a knowledge economy, priority has been given to less important facilities like the grant of tablet computers free of charge, medical insurance and scholarships!
As for the very important strategy of improving the efficiency of the public service, there are no details; whether it would be done by selection and promotion of officials on merit or otherwise has not been mentioned.
4. Use every opportunity to communicate the vision including the strategies to create a culture among the people to realise the goals speedily, while instilling trust by showing short-term successes; in democracies it has to be done by consultation and consistently educating them using a language that they could understand, to create a culture of collective action.
This completes the vision declaration; the rest is a formulation of a plan of action, implementation, frequent monitoring of implementation, especially while coordinating and synchronisation of the programs of all the institutions.
Despite the above-mentioned shortcomings, the current Vision 2025 is the most comprehensive and professional growth-oriented economic policy declaration made by a government in Sri Lanka. It should have made its appearance much, much earlier and been made popular for results to be obtained.
(The writer is a development economist and author of the new book ‘Export Competitiveness in South Asia , with special reference to Sri Lanka’, published by the Godage Book Emporium.)
