Are we losing the economic battle?

By Sagala Rattnayaka

I  was in London just before the riots broke out.  Visiting a well-known super store, it was obvious that trouble was nearby.  The sales were offering unbelievable bargains.  Sri Lankan made clothes were cheaper in London than the factory seconds without labels we find at the clothes shops in Colombo.  Even then, goods were not moving.  The shops were empty compared to the usual bustle I have experienced before in London.

The Garment Industry in Sri Lanka has already started feeling the pinch in the second half of the year.  The Tea Industry, especially the Low Growns, is also near reeling with the crises in the Middle East.  Tourism is also not seeing the expected post war levels.  This is a chunk of our foreign earnings, and much of it from the jobs.  With the economic crises of Europe and the United States, more industries in Sri Lanka will start feeling the hard times.

Although the war has been won, it now appears to be just a battle won in the bigger war of running the country.  Looming now is a defeat at the battle of the economy and law and order.  Is the Government preparing for this battle?  It is hardly to be seen.

The Governments eagerness to artificially hold the value of the currency as well as hold the interest rates has quickly eaten up the rupee liquidity we saw in the banking system a few weeks ago.  Most of the developed economies have allowed rates to move up gradually because delay can eventually cause sharper and higher rise.  This is a risk that the Central Bank is appearing to take possibly due to Government interference.

Additionally, badly selected development projects are also hurting the economy.  The Hambantota Port – huge cost overruns, and now unable to service the large vessels for reasons known to the nation but being denied by the Government.  The Norochcholai Coal Plant – it was known that unloading coal in the seas off Puttalam would be difficult.  The coal unloading is now taking place in Trincomalee and then being transported in trucks clear across the country. Leaving aside environmental damage, the cost increase per unit by this ridiculous blunder defeats the very purpose of a coal plant.  I mention just a couple to stay within the allowed length of the column.

Then two months ago there was the scandal about the import of substandard petrol.  This caused the breakdown of a few thousands of cars, and even many a fuel station pump.  The cost to the nation has conveniently gone undisclosed.  The perpetrators have got away with no legal proceedings, and the errant supplier rewarded with a further order this time for diesel.  Now there is the report of the import of substandard cement.  The effects of this would be definitely disastrous with the possibility of the collapse of structures.

The Grease Yaka (Devil) has however taken away the media spotlight and peoples’ concerns away from such serious issues.  Whether intentional we will probably never know.  With reports that many of the suspected grease devils who have been apprehended, belong or have belonged to the armed forces, there is a breakdown of confidence in the Government’s intentions.

A glance at the media headlines and street chatter would indicate growing signs of discontent in society.  Although still passive discontent, because the fear to speak out still prevails, recent times have seen that uncontrolled power eventually collapses.  If the Government does not take heed of the signs – signs that continued bad governance could lead to the breakdown of the economy, law and order – an uncontrollable Yaka may be in the making.

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