Significance of Keynesian Economics for results-driven economy during pandemic in SL

John Maynard Keynes known as the father of Keynesian Economics

The impact of COVID 19 virus not only infected lungs of humans but also the heart of Sri Lankan economy at large in terms of employment, gross domestic product, worker remittance, foreign reserves, income distribution and many other economic and social variables. 

Demand supply driven prices have exhibited inefficiencies in the market due to significant price fluctuations while making black markets and positioning prices of certain commodities above the average purchasing power of people. 

Travel restrictions to manage the COVID spread made the situation harshest and enhanced the magnitude of active government interference to ease unnecessary rituals in the economy while making human lives secured and comfortable at least above the minimum standards or to ensure that they do not move below the minimum standards. 

Keynesian Economics reveals the inevitability of the effective and efficient interference of the government in economic activities to steer the economy towards desired goals and especially through the period ofchallengingdue to an external shock while pulling the economy away from the inefficiencies caused by ineffective demand and supply forces. 

Agriculture and agriculture market 
Though agriculture amounts for the least sectoral contribution to the gross domestic product, the agricultural output survives locals during the pandemic. Nevertheless, exempted travel restrictions for agricultural effort is not compensated in good health during the post-harvest period. 

Artificial market practices have exceeded the natural price mechanism, making either one of the parties in the market as severely affected. Free distribution of the harvest among people was reported in recent history due to poor market coordination. Relatively higher prices, specially for vegetables were also reported when markets are open after several days of closure while transferring the ultimate burden to the final consumer.  

Government interference in terms of well-equipped managerial solutions to fill up identified gaps in the markets are essential towards supply of harvest and its distribution Island wide. As an example, the domestic vegetable market is larger compared to the production or the cultivation and its continuous. The only prerequisite is the government involved market coordination with sound managerial mechanism for its best practices. The emergence of such a methodology will bring more prosperity to farmers and many other involved parties while circulating money within the economic boundary. A simple accessible technology for the distribution of the harvest to final consumers will enhance the benefit volume even during the travel restrictions. 

Industry and service sector performance
Prolongation of both industrial and service sector activities cannot be interrupted due to the majority of employments secure their household income for the final consumption while contributing mainly to the gross 
domestic product. 

The persistent and close scrutinizing of health regulations via policy implementation are necessary to gain results not only for health sector but also for the entire nation.

Tourism and foreign investments 
Bio -Bubble Tourism is indolently evolving and expected to boost with the enduring vaccination among nations. Sri Lanka has tested the Bio Bubble Tourism in several times and has a potential to move forward with lessons learned.  At least the environment with dedicated Bio Bubble Tourism will create milieu for foreign investments too. 
The Port City and foreign investment expectations would come true with effective and efficient government interference in market activities not only functioning as a regulator but also a producer. This strategy was tested and proven in many newly industrialized economies by welcoming Multinational Companies (MNCs) with substantial investments. 

Human capital development and discipline 
Human Capital is the most valuable resource for any country at any cost. Development of Human Capital primarily with education is important for the journey of development.  Numerically increased literacy among Sri Lankans has to be further enriched with qualitative aspects too. 

Discipline based primary education, knowledge based secondary education and skill based higher and vocational education with sound ethics and attitudes will lay the foundation for human development process who loves and take care of the traditions and values of any nation though there are strange cultural differences. 

Foreign educational alliances and exposures are recommended to be mapped with Sri Lankan education system as the healthy way of connecting with global nations and to develop further. Government regulations are mandatory to ensure the accomplishment of expected outcomes in the industry. 

As final remarks, the strong government intervention as a goal setter or the driver of development, it is needed to bring private sector to possible heights while practicing sound managerial mechanisms to support natural demand supply sources to move towards pre-defined economic destinations. 
(The writer is Senior Consultant/Lecturer at School of Business, National Institute of Business Management)