Economic thinking in SL: Running in reverse?

Wednesday, 15 October 2014 00:20 - - {{hitsCtrl.values.hits}}

By Rohan Samarajiva I read an interview with Athuraliye Rathana Thero, MP, while in Yangon (Rangoon), the commercial capital of Myanmar (Burma). This is an exciting place to be in at this time. I have been coming here since 2011 and the change is palpable. New roads and buildings. Roads crowded with traffic. Mobiles in the hands of most people in cities. Myanmar has already overtaken Sri Lanka on the FDI Attractiveness Index (133 versus 159). In the year ending 2014 March, Myanmar attracted $ 4.11 billion in investment. It’s not all good. People worry about rents going through the roof. About there not being enough network for the million plus mobile SIMs that have been sold by the new entrant mobile operators. About the peace talks being shaky. About their democracy being imperfect.

Yangon, the commercial capital of Myanmar, is an exciting place to be in at this time

MP Athuraliye Rathana Thero Great hope on the economic front But this is a land of great hope on the economic front. After having been kept in an economic deep freeze for decades, people from all walks of life welcome the loosening of restrictions. The stultifying controls that the military rulers had put in have not all been removed, but people have hope they will be.

For example, tourism is booming. From extraordinarily low levels, it has already overtaken Sri Lanka, with over two million tourist arrivals recorded in 2013. But many of the military-era restrictions are still in place. Guest houses that will allow small players to participate in the boom are still not legal despite there not being enough hotel rooms. But people talk about problems positively. They believe it’s only a matter of time before Myanmar will become normal. The mobile eco systems are developing fast. Myanmar may be the first country to leap frog directly to smartphones. Yangon has hosted some of the largest bar-camps in the world, with attendance exceeding 6,000. The operators are encouraging independent app development, going as far as incubating start-up companies, but taking equity stakes only when they reach revenues of a million dollars within a specified time. These all examples of economic policies that promote decentralised innovation. These are the conditions under which human creativity thrives. This is also what works. Central planning Yet, in the second decade of the 21st Century MP Rathana Thero wants Sri Lanka to establish central planning. Central planning consigned India to a Hindu rate of growth of 2%. It took Myanmar, one of the most prosperous parts of the British Empire, into the least-developed country (LDC) grouping. India is planning to abolish the Planning Commission. Myanmar is removing the detritus of a planned economy. And we have serious people making serious proposals about a planned economy. Having experienced the actual working of a planned economy in the 1970-’77 period, when the government decided what we would eat, what we would wear and how many people could be invited for a wedding, it boggles my mind that the journalists who conduct these interviews do not ask harder questions. Perhaps they do not know how bad things were in the 1970s. But surely, the MP Thero could have been asked why he was proposing a Planning Commission for Sri Lanka just like what they have in India, when the Indian Planning Commission is “dead man walking”. The least we can ask of our representatives is that they keep up with the news and choose their models correctly. He should have said Pakistan. Even China no longer thinks planning is relevant. They got rid of the Planning Commission in 1998 and folded it into the National Development and Reform Commission.