Pathfinder Foundation’s 10 basic principles for achieving economic recovery

2 April 2020 12:00 am Views - 530

The usually active, crowded Colombo streets deserted due to the indefinite curfew. 
Pix by Pradeep Pathirana

 

Short-term

• Continued enforcement of social distancing, including the lockdown of hotspots, to ensure that the number of infections does not exceed the capacity of the health system. 
• Delivery of essential food and pharmaceuticals, with a special focus on maintaining supply chains, particularly in lockdown areas. 
• Clear inclusive  frameworks for the private sector to support the government to address the health crisis and stabilize the economy. The private sector needs to respond rapidly and effectively to meet immediate and urgent needs. 
• Increased income support for the poor and vulnerable.
• If necessary, the augmentation and rapid and effective implementation of the initiatives taken by the Government  of Sri Lanka to grant debt moratoria; liquidity injections; and guarantees to support firms, especially SMEs and severely affected sectors to maintain the viability of businesses and save jobs. 
•  Assessment to be made of the damage experienced by each sector of the economy (including large scale job losses) and formulation of remedial measures to revive each sector as quickly as possible. A Task Force drawing on all stakeholders could be established to formulate an action plan, for each important sector, focusing particularly on short-term measures. In this connection, it is a concern that Sri Lanka’s four largest sources of foreign exchange, remittances, apparel, commodities and tourism have been adversely affected. 
•  A clear plan to be devised by the government to increase resource mobilisation through raising domestic debt and tapping into official sources for external financing, particularly through the emergency facilities being launched by the IMF, World Bank, ADB and other specialised agencies. 

 

Medium-term

• The development of medium - term budgetary and monetary frameworks to ensure that a post - crisis recovery is sustained. This could be the basis for securing external support, including from the IMF, to maintain debt sustainability. Hard questions need to be addressed, including the affordability of a national airline and other ‘debt creating’ Government enterprise in their present form. 

 

 Long-term

•  An inclusive Task Force, composed of the best minds of the country, instructed to think outside traditional paradigms and look for practical ‘beyond the box’ solutions, and pursue measures which will anticipate the arc of paradigm shifts in the production of goods and services over time. It is important that this process be carried out with a long-term perspective in mind in a non-political fashion. In the ultimate analysis, Sri Lanka should now build a strong foundation so that the country will be ready to leapfrog technologically and economically once the world  emerges from this extremely difficult period.
•  Food security is likely to assume even greater importance in the post-pandemic world. In this connection, high priority should be attached to a comprehensive review of land use, crop mix, and the domestication of supply chains. 

(This is a Pathfinder Alert. Readers’ comments are welcome at www.pathfinderfoundation.org)