By Paneetha Ameresekere
October marks the 17th month since the war end. But, apart from Indian investments, or, promises from private sector companies from that quarter, of investing in the island, no other investments appear to be forthcoming, despite the fruits of peace that the country is now enjoying after 26 long years of war.
Investments are needed to create jobs in the country, to cater to the thousands who enter the job market from the university and schools’ systems annually.
This in turn will ensure political and social stability in the country and will also lead the island into the realms of prosperity.
Former President J.R. Jayewardene, the architect of the country’s open economy, upon being elected to power, once said that his first priority is jobs, second priority is jobs and his third priority is also jobs.
We do not know what the incumbent President, Mahinda Rajapaksa’s 1st, , 2nd and 3rd priorities are, but what is seemingly visible is that economic activity in the form of foreign direct investments (FDI) needed for job creation not taking off unlike then, a signal that new employment opportunities are not forthcoming, despite the re-opening of the northern and eastern parts of the country, or 1/3rd of its land mass, coupled with a further 2/3rds of its seas, inspite of whatever may be the statistics that the Government controlled Census and Statistics Department may be churning out for public consumption, or for that matter, to please the ears and eyes of the powers that be, from time to time, at present.
One company bighead whose name for obvious reasons cannot be divulged, seemingly went to the extreme by telling this reporter recently that the 18th amendment to the Constitution sounded the death knell to FDI, not in so many words, but in words as forceful as that.
The recently passed 18th amendment did away with the two term time bar for the Executive instituted in Jayewardene’s 2nd Republican Constitution of 1978, whilst at the same time annulling the 17th amendment to the Constitution which prescribed the institution of independent police, elections and bribery commissions, et al, by relegating the role of such appointments to the President, with the passing of the 18th amendment.
That company director, whose firm has dealings with investors, viewpoint was that the 18th amendment dealt a blow to the functioning of such independent institutions which were critical to win investor confidence, an obvious prerequisite for investments to take place.
But with the removal of the functioning of those independent institutions, and the establishment and institutionalization of the rule of law seemingly vested in the Executive by this amendment, do not help to brook confidence among the investor community of the certainty that justice and fairplay would not be meted out according to the” whims and fancies” of the President, thereby bringing to question the credence that all are equal before the law.
The 18th amendment to the Constitution therefore has a far wider impact than that which is political, it transcends beyond the realm of politics to even impact on investments.
Investing in the stock market is not going to create jobs, however, investing in the real economy will.
Therefore the necessary conditions will also have to be made to attract investments into the real economy, and not just the stock market only. Investors know there is always an exit mechanism available if investing in the stock market.
But has the necessary groundwork been or being created to investors, for the functioning of a fair and equitable entry and exit mechanism, free from corruption, if they invest in the real economy as well?
Better if Rajapaksa and his Government, in this scenario of diminishing investments, think twice before dismantling the BoI tax regime, carte blanche or not, as per the alleged recommendations, dished out by the IMF, in order to enhance the country’s tax revenue.
Jayewardene, the founding father of the 2nd Republican Constitution, in defence of his creation, said that the country needs a strong Executive, untrammelled by the whims and fancies of Parliament, to push through much needed development works.
But if the contrary is taking place, and with the cost of living soaring and the masses purchasing power diminishing, Rajapaksa, together with his three brothers and his eldest son, who, apparently form the inner sanctum of the present Government, in as much as Jayewardene, together with Ministers Lalith Athulathmudali, Gamini Dissanayake and Ronnie de Mel formed the inner sanctum of that Cabinet in years gone by , should put their heads together and have a relook at the whole system of government and governance, and correct where they may have had gone wrong, and place the economy back on track, before it’s too late.