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No true economic recovery without political changes

13 Sep 2022

Reiterating a cause for concern raised by a number of local and international parties, United States Agency for International Development (USAID) Administrator Samantha Power on Sunday (11) stated that political reforms and accountability should progress in parallel to economic reforms. The bitter truth is that the root cause of the majority of the issues pertaining to the economic crisis have a great deal to do with the country’s selfish and corrupt political culture, which prioritises its own interests over those of the country. For example, the unbearably massive public sector workforce is an outcome of successive power-hungry governments that recruited workers for jobs that did not exist in order to garner votes. Today, the public sector has become a burden on the country that the Government cannot shed. At the same time, the abuse of power to nourish and conceal corruption and protect corrupt figures has been a menace that almost all successive governments continued. That is why Sri Lanka, despite changes in the party in control of the Government, has failed to see much action taken with regard to large-scale corruption cases, some of which were exposed by international entities.  In addition, many foreign loan-based “white elephant” projects that have not provided the expected benefits but increased the country’s debt mountain instead are a result of the said corrupt and incompetent political culture. When it comes to inflation, a major contributing factor has been successive governments’ harmful practice of making the Central Bank of Sri Lanka (CBSL) essentially a money printing institution and allowing governmental fiscal policies to dominate the CBSL’s monetary policies. We also cannot forget the infamous organic fertiliser plan, which was a political decision that disregarded expert objections, and is one of the main reasons behind the prevailing food insecurity issue. The simple message illustrated by this handful of examples is that the country’s economy cannot be fixed without fixing its political culture. There can be no sustainable economic recovery without political transformation. However, despite this reality, the current Government and President Ranil Wickremesinghe – who claimed that he can steer the country out of the economic abyss it is in – have shown a great lethargy when it comes to political reforms. At the very least, promises and plans regarding an all-party Government, which was expected to bring experts of all parties together while ensuring transparency in the Government’s affairs, has been conveniently forgotten.  In addition, when it comes to necessary political reforms, the fact that a significant share of Ministers of the incumbent Government held ministerial portfolios in the erstwhile Government that the people wanted ousted, owing to its incompetence and corruption, is an alarming fact. What different outcomes we could possibly expect from those who were part of the very administration that triggered the economic crisis is a question worth asking. This is not the first time that the importance of political reforms in Sri Lanka’s economic recovery and reforms was highlighted. Earlier, entities such as the World Bank and the International Monetary Fund, as well as various countries, have pointed out that political stability should be reached through political reforms in order for Sri Lanka’s economic recovery to be fast and sustainable.  However, such concerns have fallen on deaf ears. The administration of President Ranil Wickremesinghe appears to be going after mere financial assistance just to get the bare minimum, in a context where there is more international assistance available for Sri Lanka on the condition that the country roots out corruption, establishes the rule of law, and brings about political reforms.  Unless the Government rids itself of the apparent misconception that the economic crisis is merely financial, and unless it takes steps to change the political culture for the better, this will not be the final economic crisis Sri Lanka will have to face.


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