Economic freedom: a liberty which Sri Lankans never aspire for

Sri Lanka has been ranked 116 out of the 165 jurisdictions examined by the Fraser Institute – a prominent Canadian think tank – for its Annual Economic Freedom of the World Report – 2023. Sri Lanka’s ranking represents a decline in the economic freedom of its citizens, as it was ranked 104th in 2020. 

Similarly, the Heritage Foundation, a US-based conservative brain trust, has positioned the Island at the 136th place from 176 countries in its Annual Index of Economic Freedom – 2023. The rankings by the Foundation are determined by 12 quantitative and qualitative factors, grouped into four broad categories: the rule of law, government size, regulatory efficiency, and open markets.

All these indicators point out the pathetic status of the country in terms of economic freedom. As per the Heritage Foundation’s rankings, Sri Lanka is featured in the “Mostly Unfree” category while its Canadian counterpart too has placed us in the bottom half. In fact, the Foundation’s economic freedom index puts both India (131) and Bangladesh (123) ahead of Sri Lanka, which represents a huge failure on the part of policymakers, as Sri Lanka was the first South Asian country to adopt open economic policies. Furthermore, it places the South Asian Island at the 28th out of 39 countries in the Asia-Pacific region, and its score remains below the world and regional averages. The US think tank had observed that Sri Lanka’s property rights are undermined by an inefficient judicial system that remains susceptible to corruption and political influence while the heavy State presence in the economy discourages private-sector development. 

Weirdly, eccentric citizens of this country too have preferred political regimes that advocate repressive policies which inhibit the freedom of choice of individuals. There are pseudo-economists who claim that Sri Lanka would have become a highly developed economy if the controls that were introduced by Late Premier Sirimavo Bandaranaike in 1970s were allowed to continue, while Late President J.R. Jayewardene, who introduced policies that greatly expanded the economic freedom of people, is vilified for removing trade barriers and opening up new avenues for the private sector. 

Throughout the last two decades, the voters have demonstrated a tendency to reject politicians who espouse liberal economic principles. On the other hand, groups that champion trade restrictions and increased State interventions have been given power over and over again. For example, the two-year Ranil Wickremesinghe administration, which implemented measures such as downsizing the public-sector employment besides privatising State-owned enterprises was voted out in 2004 and was replaced by a political dispensation that was driven by the JVP ideology which later enlarged the public sector by providing jobs to unemployable graduates apart from terminating the privatisation of unproductive state enterprises. Even now, the NPP (the successor to the JVP) spokesman on economic affairs – Chaturanga Abeysinghe chastises President Wickremesinghe’s efforts to reform loss-making enterprises to gain acceptance among opportunistic trade unionists for political expediency.    

Unfortunately, the space in the mainstream media (particularly the vernacular media) of this country is dominated by Leftist ideologues, and therefore, the public discourse is heavily slanted in favour of narratives that demonise economic freedom. In that backdrop, the Advocata Institute’s efforts to educate the benefits of economic freedom via the vernacular media deserve appreciation. 

The Heritage Foundation asserts the ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination. Echoing the same viewpoint, Fred McMahon, an accomplished scholar who leads the publication of the Economic Freedom Report of the Fraser Institute, claims that when people are given the freedom to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives. If we Sri Lankans want to experience prosperous and healthier lives, a paradigm shift in our thinking patterns is necessary which must lead towards the abandonment of the short-sighted fondness towards beliefs that admonish economic freedom.