Is Ranil’s Budget Only A Dream Of A New Economic Order?

- colombotelegraph.com

By Rusiripala Tennakoon –

Rusiripala Tennakoon

We are all entangled in a chase for a change. In the democracy we are encircled, the pace towards this has been glacial running into decades extending into generations. And right now, the critical circumstances we are faced with keep pushing us towards this goal with more vigor. It appears that all concerned are concentrating on this move considering it as the only panacea for all ills. Assistance, guidance, borrowings and grants are among the targeted reliefs sought in the course, from any and all available sources. Multilateral and bi-lateral agencies are in the principal focus in this exercise.

In the Democratic set up we are engrossed; government is more concerned with how to get re-elected in effecting certain changes although they know what should be done. Accordingly, either we need a little bit of totalitarianism, which some may call dictatorship, OR a new generation ready to be at the helm striving for a complete change, with knowledge of exactly what should be done. Since the governments are ready to move forward only if there is wide acceptability, the desired change would be possible  only with a directed  influence from outside the parliament.

Most of us agree that we are plagued with corruption, subject to oppression and suffering from bad education. And we are living in hope, amidst a corrupt system, that needs to be changed as soon as possible. While those in the forefront protesting and agitating for a system change remain focused on political change, many are concerned with a system that puts an end to the ineffective and corrupt state holding them back preventing the opportunities to use their talent, knowledge and a level of education that paves the way for reaching their ambitions. There is general consensus that the root causes of all these problems are political and the resulting consequences faced by them including the calam;itous economic situation emanated from the political power that has been continued over generations exercised by a group of few selfish characters who monopolized the political arena. Hence their prime concern and interest is to change this first and foremost.

Be that as it may, we now have to look within to see whether there has been any positive contribution towards this expectation. As the period was considered a transitional watershed for bringing about this system change, many of us anticipated measures or at least a directional approach to full fill this hope. The Budget for 2023 would have been made a milestone in this course. Alas, what we saw in the end was a mere repetition of the cliches and jargons we were made to hear so often over a long period through many other budgets. A system change cannot be brought about only by proclamations. The change should obviously be spelled out in no uncertain terms backed by concrete proposals that could be credibly accepted. Let us examine the prelude of the 2023 budget that conveys  the true sense of the contents like the preamble to a piece of legislation.

The much exalted and glorified highlights were;

  • Passport and Visa fees to be increased;
  • Set up a presidential commission to set up a State Revenue Authority;
  • Micro Finance activity in Sri Lanka to be regulated under a body created;
  • A special program to identify high-net worth individuals to promote taxation;
  • Underutilised state lands to be released for export crop cultivation on a long term basis
  • Set up a presidential committee to explore state sector reforms;
  • To permit the release of some vehicles held up in Customs due to import control issues;

Then as national level issues the following;

  • Enter into unidentified regional economic agreements;
  • To pass new laws pertaining to economic transformation;
  • Western province ,Trinco and Hambantotato be developed as new economic Zones;
  • Expert committee to be st up to cultivate cannabis (Tri Loka Patra under the new nomenclature)

Now which of these proposals  fall within the following pronouncements as given in the preamble?

Quote,

“pledges to  introduce a new economic order to suit world trends ”

“Economic order introduced in 1974 is no longer valid,and our aim is to take the country towards a new economic order…”

“Govts.  Which have ruled the nation since independence have focused on social welfare”

“they have concentrated on making popular decisions rather than the right decisions. They made the Govt. popular temporarily. We cannot go on the same path anymore”

“it is essential to go on a new path. This budget is designed to move out of this habit of depending on the government for everything”

“We have made right decisions rather than popular decisions in this budget” 

Having said all these the budget states that “Sri Lanka will move towards a social market economy” 

Apart from the many glaring and obvious contradictions contained in this preamble as seen above I thought of examining this highly praised cure-all elixir proposed in the budget as ‘market economy’

Quote,  

A lesson learned in Germany from the rise of the nazi regime in the 1930s was, that there should be a social balance in society. The gap between poor and rich should not be too large as this might provide a fertile ground for the rise of extreme right or left wing policies with anti democratic implications. Every citizen of the newly founded Federal Republic of Germany should benefit from an economic stability and growth. Therefore the notion of a “Social Market Economy” was developed and implemented in the 1950s and since then it has been a success story. The notion seeks a middle path between socialism and capitalism. Social Market Economy can be described as an economic order which in a framework of market economy aims for social security and social equity by means of political intervention and measures in line with the market. It aims at maintaining the mechanisms of the free market while simultaneously ensuring social equity by keeping a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare and public services by using state intervention. …………..”

Some important references in this short description of what this “social market economy “ is relevant to us in the context of the budget proposals and its preamble.

  1. It is an old theory going back to about 1950 implemented in Germany soon after the Nazi regime.
  2. When the gap between the haves and have-nots becomes too wide, there is a tendency for a  rise of extreme right or left wing policies with anti democratic implications.
  3. Social Market Economy can be described as an economic order which in a framework of market economy aims for social security and social equity by means of political intervention and measures in line with the market  
  4. State intervention is ensured in maintaining the balance between market forces and social welfare and public service.

Aren’t these a little different to the Social Market Economy enunciated by our Finance Minister?

The original German Model envisages government intervention I public service and social welfare, whereas our the system proposed in our budget is designed to move out of this habit of depending on the government for everything”

The true social market economy provides for an economic order which in a framework of market economy aims for social security and social equity by means of political intervention and measures in line with the market.

All this invariably points to the arbitrariness of the policy framework proposed in our budget which in a deeper sense points towards a Neo Liberal agenda much suspected as a stratagem attributed to the behind the scene operators manipulating our policy making.

IN conclusion we would like to invite the attention of the policy makers to more relevant factors that affect the society today in a fast changing Global Context than trying to slog and speculate  over outdated theories not suited to resolve the current impasses we are in. For most of our legislators these may sound as novel inventions sufficient to appease their fear psychosis developed as a result of public resentment. But such propositions do not fit in to the concept of any new economic order that the masses are aspiring or in keeping with the new world order anticipated by the people. 

The need for a NEW INTERNATIONAL ECONOMIC ORDER advocated by the developing countries has a long history.  It is on 1st May 1974 that the UN  General Assembly adopted the Declaration for establishment of a new international economic order followed by an accompanying program of action.   

It has to be stated that the Non Aligned Movement was a key player for this movement. In 201 UN General Assembly adopted a resolution “Towards a New International Economic Order reaffirming the 1974 decision reiterating the objectives such as the principles of equity,sovereign equality, interdependence, common interest , cooperation and solidarity among all States.

What was envisaged under such a broad based program were a way beyond the new economic order spelled out in our budget. It included a wide scope incorporating;

  • New rules of International trade,
  • A reform of the international monetary system;
  • Fiancial and technology transfer incentives and assistance for industrialization projects in developing countries;
  • Promotion of corporation among the countries of the South with a view to greater individual and collective autonomy broader participation and enhanced involvement in international trade.

Fortunately we had visionary politicians who had a foresight and were really and seriously concerned with the growing global trends. Unfortunately, due to influence and pressure from power blocks these visions did not materialize. But today the global trends demand a serious reconsideration for a new economic order for the world.

The new International Economic Order is a set of proposals advocated by developing countries to end economic colonialism and dependency through a new independent economy”

The post Is Ranil’s Budget Only A Dream Of A New Economic Order? appeared first on Colombo Telegraph.

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