Sunday Nov 24, 2024
Sunday Nov 24, 2024
Friday, 6 March 2015 00:05 - - {{hitsCtrl.values.hits}}
By Senuri De Silva and Radhi de Silva
A top economist on Wednesday declared that the welfare state in Sri Lanka was no longer affordable and that the country needed drastic policy reform to achieve desired socioeconomic prosperity.
“The welfare state is no longer affordable as displayed by the successive deficits in the National Budget that is brought on mainly by recurring expenditure and excessive borrowing since 1977. The latter made Sri Lanka a ‘donor darling’ but the irony is that donor generosity allowed us to get away with it and not undertake key reforms,” Former Director of Economic Affairs at the Commonwealth Secretariat, Dr. Indrajit Coomaraswamy, said in his keynote address at the National Law Conference of the Bar Association of Sri Lanka under the theme ‘Sri Lanka Legal Summit 2015 – Governanc
e, Regulation and Investment – The Way Forward’ on Wednesday.
Sri Lanka has been getting what Coomaraswamy referred to as “never, never money that sustained us living beyond our means” with about 5-7% of the GDP coming from foreign aid, two-thirds of which has been from the concessional window of the World Bank, about 15% accountable to the Japanese at an interest rate of 2% or less and the remaining aid has also been at a rate of less than 2%
“With no access to that concessional money, Sri Lanka is now pushed into borrowing from the far more brutal and potentially oppressive scrutiny of international markets at commercial rates which is sending the country into crippling debt rather than towards development,” he said.
For these reasons he argued that the welfare state was no longer affordable. However, he added that many people would refer to the welfare state as “the Sri Lankan way” of looking after its people by giving them the financial support they needed and were not willing to give it up just yet. He then went on to argue that the Sri Lankan way had never been beneficial to the country to begin with.
However, Dr. Coomaraswamy noted that Sri Lanka at present is enjoying the most propitious circumstances for development, unprecedented when taking into account the last 50 years of its history and the best use of this period could only be brought about by drastic policy reforms.
Coomaraswamy listed out four areas for political reform that would bring the country out of a cycle of debt. They were fiscal consolidation in the budget, shifting resources from low productivity to higher productivity areas, elevating the labour market to high value production, privatisation or accountability of state-owned enterprises to increase their productivity and changing the public services to be more productive.
He said Sri Lanka needed to move away from low-productivity agriculture, low technology manufacturing and traditional services such as retail, wholesale trade and public administration where it currently stands, to high productivity agriculture, high technology manufacturing and modern services such as financial services, ICT/BPO and shipping aviation. “On that trajectory the key issue is increasing productivity and competitiveness.”
Social and economic justice
The Chief Guest at the Sri Lanka Legal Summit 2015 Chief Justice K. Sripavan also shared his thoughts on a number of topics ranging from the importance of good governance and accountability to the creation of social and economic justice as well as the vitality of freedom of speech while maintaining ethnic and religious harmony in order to maintain national solidarity. 
“The way forward for our country at this crucial juncture is to create a society where there is social and economic justice,” he said, pointing out that these outcomes could be brought about by religious harmony, the creation of equal opportunities as well as accountability and good governance.
“Accountability and good governance have been inseparable twins. If one does well the other flourishes well. The integrity and independence of the Judiciary, police, armed forces and public officials are an important reflection of the type of governance that exists in the country,” the Chief Justice noted.
“Freedom of expression is one of the basic conditions for the basis of democracy and for the development of every citizen including the legal fraternity. There must be freedom for every individual to express ones views and the freedom of association. Everyone should have the freedom to propagate and profess their religious doctrine so long as it does not conflict with the moral conscience of the community,” he added.
He further stated that responsibility for good governance lay not only with the Government but also with other institutions and organisations such as businesses and religious institutions which should maintain this national solidarity by displaying responsible leadership in business, good corporate governance and social responsibility. He also advised religious institutions to foster decent values rather than create “religious divisions or any other objectives.”
The Chief Justice also stated that the law summit was the first event that he had attended since his appointment and applauded the fact that it was taking place “in the background of a new era of change that promotes a culture of transparency and justification.”
The technical sessions of the conference took place yesterday, with the principal sessions focussing on governance, regulation and investment.
Dr. Jayampathy Wickramaratne PC made the main presentation on ‘Governance Reforms’ and the session’s panel included Bar Association of Sri Lanka President-Elect Geoffrey Alagaratnam PC, who acted as Session Chair, former Supreme Court Judge Justice Saleem Marsoof, PC, Solicitor General Suhada Gamalath, PC, former Ceylon Chamber of Commerce Chairman Chandra Jayaratne and the former Dean of the University of Colombo Law Faculty, N. Selvakumaran.
The session on investment was chaired by K. Kanag-Iswaran, PC and principal presentations were made by Deputy Minister of Highways, Higher Education and Investment Promotion Eran Wickramaratne and Jetwing Hotels Chairman Hiran Cooray, who spoke on the ‘Opportunities and Challenges faced by Investors’.
Inland Revenue Commissioner General Wasanthi Manchanayake, Controller of Exchange D.M. Rupasinghe, Customs Director General Jagath P. Wijeweera and Board of Investment of Sri Lanka Investment and Promotion Executive Director Renuka M. Weerakone were the panellists.
Central Bank Governor Arjuna Mahendran and Securities and Exchange Commission Chairman Thilak Karunaratne lined up to speak on the future plans of their respective Institutions, while Deputy Minister for Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs, Dr. Harsha De Silva spoke on the role expected of these regulators.
Sankarshana. A. Parathalingam, PC chaired this session with National Development Bank CEO/Director Rajendra Theagarajah and Colombo Stock Exchange CEO Rajeeva Bandaranayke acting as the other panellists.
Bar Association Deputy President Prasanna Jayawardena, PC and Bar Association Executive Committee Member Anura Meddegoda also spoke at the technical sessions. The Members of the Summit Committee include attorneys-at-law Kushlan Seneviratne, Ruwandhi Thanthrige, Himali Orugodawatta, Dinesha De Silva, Samantha De Soysa and Ruvinda Welikala.
Pix by Upul Abayasekara
