We have all got used to what the Sri Lankan economy was supposed to be like. The country would spend money it didn’t have and buy things it couldn’t afford, and end up throwing a grand party for a while. But then, the bill would come due. 

The country might have thrown a bit of a tantrum when it realised that it now had to pay for the good times, but one way or another, the country tightened its belt. But then, people would start grumbling, remembering the good old days when they didn’t have to pay taxes and everything was cheaper. 

Soon, there would once again be enough space to start the party again. As unsustainable as it was, this was a much easier economy to do business in. You didn’t need to do anything but coast when things were good and all you needed to do was hunker down when things were bad.

It is impossible to overstate how different the economy is today. The Government is saving far more than it spends and the country is actually producing more economic value than it spends. We have never been here before. 

None of the playbooks written for the Sri Lankan economy work anymore, but even worse, the new playbooks haven’t even been thought of yet. To make things worse, just at the time that Sri Lanka is playing a completely new game that we don’t even know the rules of, the world has decided to start playing a much older game again: great power politics. 

These sets of changes might not have happened before in the same way. But change itself is not new to Sri Lanka. Despite the familiar shape of the economy, it has still been through many new forms across the last century. 

Enough of these forms have featured alongside big global changes as well. We moved away from our late colonial moment exactly alongside the moment the world went to war. Sri Lanka’s first decade or two of post-colonial promise was just alongside the huge recovery in Europe and Japan. 

The next round of change for Sri Lanka – the decade or two before liberalisation – was when the US stopped building up the world and started buying what the world built instead. We had our shining moment in the capital markets just around the peak of American hegemony. 

We went into a long period of debt and development just when China became the world’s factory. Sri Lanka’s long recession started just when China started to stumble in its own model. Sri Lanka’s economic story, however familiar, was still very much a global story.

Despite all these changes, there were constants that kept the economy going. Sri Lanka always ran its accounts into deficits, the country always kept itself political, and business always had its usual action plan. What changed within were the specific businesses and the specific sectors. 

Think of all the firms that were taken over by the government before the sector liberalised later. Here, agility was paramount to staying around. Shift your business model, shift your firm, and even shift your entire sector. That is a lesson that Sri Lankans should still hold. Even if the changes today are completely different to those of the past, changes are changes nevertheless.

There are more lessons to be learnt from each of these periods: the kinds of business that went under, the types of activities that worked, or the skills and people that these periods required and the skills and people that were sent abroad. While any specific lesson might not be what is applicable today, a wider curriculum could very much help anyone going through change.

Despite all the ‘positive’ news and ‘positive’ numbers, this is still a difficult moment to be in the Sri Lankan economy. What do you do when everything looks like it’s changing and you don’t know how to act? Like with any form of change, the simple answer, once again, is to be on your feet and be ready to move fast. 

‘Resilience’ is probably the only word Sri Lankans can agree on as a self-descriptor. That resilience might still be needed, but with how much the world and the economy have changed, that might not be all we need. Perhaps it’s finally time to look for another word.

(The writer is the Head of Macroeconomic Advisory at Frontier Research, a Colombo-based firm that engages in macroeconomic research and advisory for corporate and investment clients on Sri Lanka, South Asia, and Southeast Asia. He can be reached at chayu@frontiergroup.info)

(The views and opinions expressed in this article are those of the writer and do not necessarily reflect the official position of this publication)