Today, Sri Lanka is bankrupt, inflation is rampant, the economy is at a standstill and the country’s socio-political order is in crisis
Sri Lanka’s economic crisis continues to exacerbate. Decades of shortsighted policies and halfhearted reforms weakened our foundation. Sudden global crises pushed us to the brink. Appalling mismanagement took us over the edge. Today, our state is bankrupt, inflation is rampant, the economy is at a standstill, and our socio-political order is in crisis. Can Sri Lanka come out of this crisis and who is going to provide leadership for recovery? Dr. Harsha De Silva has answered these questions with an Extended Ten-Point Plan for Economic Stabilization and Equitable Growth. The Plan is founded on principles of the social market economy and provides a centrist alternative to the country’s already polarized economic policy landscape.
“Our core vision is to create a well-functioning, competitive, market-based system that works for the wellbeing of all Sri Lankans. In order to achieve this, we must transform our economy into an ecosystem driven by market competition and competitiveness while providing public support and social protection. We firmly believe that market competition is the key to economic success of an individual and the economy; yet we know that this requires regulation and assistance. We therefore believe that the social market economy provides a real and moderate alternative to all the other political and ideological extremes under discussion in Sri Lanka today”, emphasised Dr. Harsha De Silva. This is at a backdrop where the nation seems to have no centrist alternative to the Nation’s economic woes. The blueprint further states, “As we stabilize, we must also grow. It is essential that we promote trade, industry, agriculture, and services by unshackling markets, increasing competitiveness and productivity, promoting exports and investment, and integrating with global production networks. Transforming the public sector into a productive, efficient, digitally enabled workforce that serves the needs of Sri Lanka’s citizens, is also vital for growth. Reforms in the energy and utilities sectors are particularly important. Land and labor market reform will enable and amplify this growth. These reforms will enable more citizens to access the opportunities stemming from growth. However, this will not be an easy path, but it is our only route out of debt and towards sustainable inclusive development.”
The plan focuses on 10 key points; Transparency and Accountability, Debt Crisis Management, Monetary and Exchange Rate Policy, Revenue Consolidation, Expenditure Control, Trade, Agriculture, Industry and Services Promotion, Public Sector Management, Energy and Utilities Reform, Factor Market Reform, and Stronger Social Safety Nets. The 10-point plan makes special emphasis on Social Safety nets to help the most vulnerable members of society. “Targeted, means-tested cash transfers within a strong, transparent, effective social safety net must safeguard those who need it most. Key proposals include:
Increase the minimum wage which is currently Rs.12,500 per month to reflect the inflationary impact and strengthen the enforcement mechanisms
Provide cash transfers to vulnerable sections of the population directly to bank accounts/mobile money accounts, using existing databases.
Consolidate welfare schemes under the WBB and build a united beneficiary database, using a Unique ID model (e.g., India’s Aadhar) designed and implemented with technical and financial assistance.
Dr. Harsha further highlights that, “We need to break down the walls and build bridges to the world, however we must prioritize the well-being of our citizens, ensuring equal opportunities and equitable distribution of wealth, even as we strive to enhance productivity and create wealth. Neglecting the sufferings of our people cannot be the foundation of any program or policy, for a truly humane approach is imperative.” This is the only alternative to divisive and ideologically outdated economic policies unsuited for a globally connected world.
