Some important issues for Sri Lankan legislators, the Executive, policymakers, Central Bankers, economists and thought leaders to ponder over:
- Stiglitz believes that the austerity plans in the EU nations, especially by the debt ridden poorer nations of the group is akin to a collective suicide pact and is an act madness promoted and enforced by the more powerful nations of the Group?
- In the above context and environment do Sri Lankan legislators, the Executive, policymakers, Central Bankers, economists and thought leaders,
- Hold similar or divergent views on the prescription for Greece, Portugal, Italy and Spain?
- Believe the economic policy continued in Sri Lanka in enhancing foreign borrowings and investing in infrastructure and other projects some of which may have no real or competitive sustainable socio economic returns is a valid policy prescription?
- Accept that running high budget deficits in the name of development and full employment and allocating national resources and spends to projects/activities that fail to conform to internationally benchmarks on economy, efficiency and effectiveness is an acceptable prescription in the longer term for Sri Lanka to dream of becoming the next ‘Wonder of Asia’?
- Accept Sri Lanka whilst exposing itself to widening trade deficits adopting a trade policy, tariff structures and exchange rate policy conflicting with the expansion of exports is in the longer term interests of sustainable growth in Sri Lanka?
- In the face of trade sanctions imposed on Iran by the EU and the US, with Sri Lanka as a nation dependent on crude oil imports mainly from Iran (80%) and the local refinery tuned to process the Iranian type high density crude,
- What options does Sri Lanka have?
- Will Sri Lanka qualify to and be able to get a special waiver from these sanctions?
- If Sri Lanka is able to win some concessions from trade sanctions, as an import and export dependent nation, at what lower level of transactions with Iran can Sri Lanka survive -say can it live with a 10%, 25%, 33% or 50% reduction in present levels?
- Are there ways around the sanctions, especially in making settlements say in gold etc not involving bank linked settlements?
- Can barter with tea be an option of settlement?
- Will long term credit until sanctions are lifted be a possibility?
- Can India, Russia and China help Sri Lanka to effectively get round the sanctions?
- If any Sri Lankan banks are listed for having effectively violated sanctions by EU and US controlled Banks will these foreign banks impose penalties, retentions or holdovers of a part share of transaction proceeds, even involving trade done through such local banks by Sri Lankan businesses with countries other than Iran?
- Finally if Sri Lanka breaks sanctions in some ways what further international repercussions and negative head winds will come our way?
- Dr. Amithya Sen believes India can never catch up with the positive comparative social indicators of China, even in the longer run even with higher than annual growth contributions over China,
- Can this be attributed to the lead China now has over India to be so large to give it an unassailable position?
- or can some political economists believe and interpret it as that it as a reflection of ;
- Command economy vs open economy natural outcomes?
- Centralised State led autocratic governance vs democratic governance led outcomes?
- Capability, skills, technology and values and attitude differences between India and China?
- What lessons can Sri Lankan policy draw from these interpretations in compiling policy prescriptions for Sri Lanka?
(The writer is a former Chairman of the Ceylon Chamber of Commerce.)
