Time to grasp the nettle

By Dr Upul Wijayawardhana

At last, a government politician has spoken sense! Although our politicians often make sensible suggestions while they are in the Opposition, they succumb to delusions of grandeur upon savouring power. As such, it was so refreshing to note that the Energy Minister Udaya Gammanpila has come out with some hard truths, as detailed in the news report by Shamindra Ferdinando “Gammanpila says country is in ‘debt trap’” (The Island, 10 January). At the inauguration of the National Trade Exhibition at the BMICH on 06 Feb., in the presence of Prime Minister Mahinda Rajapaksa, the Minister stated that the ‘economic time bomb’ had exploded about five years earlier than anticipated as a result of the Covid-19 epidemic.

Gammanpila’s arguments seem plausible. Anyway, no economist has so far contested his assertions though he had received some flak from some of his colleagues in the government, who blame the Covid-19 epidemic for the economic mess the government is in at present. When we got independence from the British in 1948, we had a surplus budget with no problems of foreign exchange. Britain may have sapped our resources during the prolonged occupation but whatever we blame the British for, we cannot blame them for leaving us bankrupt though Britain itself was bankrupt at the time. But that was due to a good reason; Britain paid a high price by fighting a war to safeguard freedom. When Queen Elizabeth II was crowned queen of the United Kingdom, Canada, Australia, New Zealand, South Africa, Pakistan, and Ceylon, on 2nd June 1953, rationing was still in place in Britain and the public donation of a part of the rations ensured a grand celebration!

Rationing in Britain ended only on 04 July 1954, the last food item to go off ration being meat. However, cheese production remained depressed for decades as during rationing, most milk in Britain was used to make one kind of cheese, nicknamed Government Cheddar. It was only in the mid-1990s that the revival of the British cheese industry began and today Britain is the country that produces the most varieties of cheese in the world, much to the annoyance of the French! I highlighted this as one instance of the upward trajectory Britain has taken since 1950s whereas ours has been in the opposite direction.

It is fair to say that it is our staple food, rice is the main reason for our present predicament as successive governments used rice as a political tool to win elections. When one party offered rice at subsidised rates the other offered free rice to all, even the rich! We imported what could be produced locally and started borrowing for consumption, not for development as many other countries have done. By the actions of successive governments, we are on the verge of bankruptcy.

As rightly declared by Minister Gammanpila, first thing that the government should do is to accept the country is in a deepening crisis, not due to Covid-19, but as a result of a debt trap of its own and previous governments’ making, which is largely due to living beyond our means. I totally agree with the Minister’s assertion that instead of deceiving the masses, the people should be taken into confidence and the gravity of the situation explained. We may have to go through a difficult few years but would ultimately succeed, if we grasp the nettle now and take tough decisions. The government should seek the support of the Opposition and do hope the Opposition behaves in a responsible manner. It is imperative that the government consider even extreme measures like forming a true national government to save the country. The Minister should be congratulated on being bold enough to state that leaders had to set an example by making sacrifices.

What has been lacking is long-term planning and every effort needs to be made to encourage local enterprises, be it agricultural or industrial. We have to get out of the culture of worshipping capitalism and importing everything. Minister Gammanpila has rightly questioned the logic of the country importing fruits worth USD 68 Mn, spices worth USD 127 Mn, vegetables and grains USD 384 Mn in 2021. We have so many different varieties of bananas what is the point in importing apples? A year ago, one of the big issues was turmeric. When the government banned imports there was a huge outcry, but the farmers increased turmeric production. With good planning we should be able to achieve self-sufficiency in many things, including foodstuff.

The other issue that needs urgent attention is corruption as well as indiscipline. It has to be admitted that this government has made considerable progress in its operations against the underworld as seen by the regular detection of drugs and arrest of drug dealers. It is a shame that a strong government gave in to the teachers’ demands, made at the wrong time even if they were justifiable. By giving in to one group of state workers, the government has invited trouble; other public employees are demanding pay hikes. If their demands are met, the government has to print more money and that will inevitably lead to inflation, which affects everyone. It is high time this vicious circle was broken!

As Mr Gammanpila has stated, the government lacks rupees and the country is short of foreign currency. It is duty of the President and government to take his views on board and act accordingly.