Can we have political/ economic stability at last?

By the time you are reading this column, the country would have most probably got to know the composition of the next Parliament and in which direction the island would move forward over the next five years. When a General election is held immediately after the Presidential Election, the empirical evidence suggests that the political party/alliance of the candidate which won the latter emerges victorious with its vote share rising considerably compared to the biggest poll in the country. 

Yet, the voter turnout at a parliamentary election is less than that of presidential poll. Unlike the previous parliamentary elections, not a great deal of interest was witnessed from the electorate for the poll that was held yesterday. The NPP supporters and propagandists, who worked tirelessly to make Anura Kumara Dissanayake President, did not demonstrate the same level of enthusiasm and euphoria in the quest to select the legislators of the next Parliament and the publicity campaign of the party which won the Presidential election looked somewhat lacklustre and lacked the appeal its PR efforts reflected to capture the presidency.

Despite the aforesaid limitations, the NPP is widely expected to obtain a majority of seats and form the next Government. From 2022 July to the recent Presidential election, the country was led by an Executive who was not elected by people while the political party – the SLPP – which dominated the legislature had become extremely unpopular in the aftermath of the unprecedented 2022 economic crisis. Thus, in the eyes of the general public, the previous administration lacked legitimacy which seriously undermined its critical economic reform agenda. A Government which has a strong public mandate would be better positioned to get through the essential yet politically unpopular economic policies. 

The heightened political stability together with clarity about the trajectory in which the nation would move forward over the next five years would undoubtedly create a conducive environment to attract foreign direct investments as well as promote the emerald island as a sought-after tourist destination. The investors, both local and foreign, were adopting a wait-and-see attitude over the last few years due to persistent political and economic uncertainty.

Nevertheless, the newly elected Government would be left with no option but to have a continuous engagement with the IMF to sustain the economic recovery the country has been experiencing since the $ 4.5 billion bailout package was secured from the global lender in March 2023. In terms of bringing about economic recovery, the new Government should refrain from appeasing their segments of supporters who expect economically unfeasible tax cuts, salary hikes, and various other freebies. Reforms to SOEs in terms of improving their financial viability should also continue despite the affinity the NPP has historically enjoyed with trade unions that have stood in the way of implementing the necessary changes to relieve taxpayers from the inefficient and unproductive public enterprises.

Meanwhile, few business leaders and professionals supporting the Government have called upon to undertake fiscally irresponsible tax cuts to advance their self-interests. The next Budget should not accommodate such selfish requests despite the pressures that may be exerted. Some are urging the Treasury to provide a preferential, low tax rate to export companies. Which country in the world offers a preferential corporate income tax rate to the export sector?

The last five years have been truly disruptive and turbulent for Sri Lankans. After having experienced the nightmare of a global pandemic, the islanders had to go through a dreadful economic crisis. The Wickremesinghe Presidency brought stability and tranquillity, but he was not popular. All citizens are now yearning for stability and progress in every respect, and let us all strive for a much better country.