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The price of economic recovery

Considering the appalling condition in which the local economy was at the end of 2001, the country could feel relieved over the modest growth which was recorded over the past year, although much remains to be done to ensure even a degree of economic stability. Business has been picking-up, and the Colombo bourse has been, generally speaking, buzzing, but the relative peace which has been enduring upto now at home needs to be complemented by peace abroad if a rich harvest of economic gains is to be garnered during 2003.

The external dimension to economic recovery has to be emphasized at this juncture on account of concerns that war clouds are gathering over the Gulf. There is certainly reason for concern because a military onslaught on Iraq could have highly destabilizing worldwide economic convulsions. Particularly, cash-strapped economies such as ours need to look sharp primarily on account of the impact on oil prices of an eruption of war. As the business community in particular has already pointed out, a cascading effect on a wide range of local prices cannot be avoided if an oil price spiral occurs amid the severe economic dislocation that war brings about. To put it plainly, a war in the Gulf would put paid to all our hopes of registering some progress on the economic front and of delivering even the much looked-forward to "peace dividend".

While we hope that wise counsel would prevail in the Gulf, it behoves the State and the people to take maximum precautions to ward off a devastating economic crunch. While the wide masses of the poor have very few economic options, in that their existence is one great and grim struggle for survival, the more privileged social strata, including the political, bureaucratic and business elites, could display better resolve to act with a deep sense of social responsibility. Superfluous spending and waste, for instance, should be drastically curtailed and eliminated. The same goes for affluent lifestyles and corruption.

We hope the emerging economic strains would have the beneficial effect of making the more affluent social strata think deeply on leading lives of sacrifice and compel them to take the relevant practical measures to make economic austerity rather than extravagance the order of the day.

Even if the worst fears of the public are not to materialize in the Gulf, it is our belief that a new chapter in our economic existence needs to be opened in 2003. The ideal combination in this new order of things should be careful economic planning and austerity coupled with entrepreneurial vibrancy and hard work.

It goes without saying that the Government needs to set the trend in this direction. We are glad that a financial reforms package has already been mooted and that State sector institutions in particular would be called upon to exercise tight financial discipline. We hope these proposals which seem fine on paper would soon be a reality. For, it would be most heartening to find Government departments working towards financial targets and being more accountable to parliament and its committees.

However, discipline and accountability should also begin in the lives of State functionaries and politicians. It is examples at "the top" that would be emulated by the public. Extravagant living by politicians and self-aggrandizement by those wielding power, on the other hand, would only invite the wrath of the people and stir social disaffection.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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