COL war amidst
rising prices of essential consumer goods especially after November
last year is becoming an embarrassment to the government.
in gas, wheat flour and bread are the most significant. The promise
to bring down consumer prices has once again proved hollow and despite
assurances that the ceasefire and lower defence costs will bring
a never-before peace dividend, living costs have soared.
argue that the fundamental weaknesses in the economy, such as dependence
on imports, huge debt burden and inadequate savings and investment,
have a crucial bearing on price hikes.
is rubbing its hands with glee and preparing to launch a "pots
and pans" campaign on February 18 to protest over rising costs.
People are being urged to step out and make a noise with whatever
they can. This is to be followed by a general strike. The government
is lucky the opposition is ineffective that it cannot mobilise the
people and mount the kind of protest that has paralysed Venezuela
for instance. But remember the JVP together with Opposition leader
Mahinda Rajapakse's doggedness as a street campaigner and his famous
"Jana Gosha" campaigns in the late 1980s could make inroads
into southern support for the peace process.
If a war breaks
out in West Asia there would be serious repercussions on the Sri
Lankan economy like rising oil prices and foreign exchange losses
if expatriate workers are forced to return home. Jitters over the
war has already reduced demand and prices of Arabian-favoured tea
varieties from here.
Bank projects an economic growth of over five per cent this year.
This will not be an easy task while fundamental weaknesses in the
economy and political uncertainties prevail.
It would indeed
be tragic if success on the peace front is jeopardised by incompetent
economic management for it is unlikely that people in the south
would support a peace deal if they feel the government won't tackle
the cost of living issue and ensure provision of basic services
which are taken for granted elsewhere.
It s not surprising
that economic issues are on the backburner when the two key figures
driving the peace process are also responsible for economic reforms
and raising jobs (and expectations). Ministers G.L. Peiris and Milinda
Moragoda are constantly abroad on the peace front, meeting LTTE
leaders and the international community.
approach in the peace process is not there when it comes to economic
issues. Questions are being raised by the man-on-the-street and
even the business community over the need for the peace process
to be driven by a ministry and a minister assigned only this responsibility.
The duo may
argue that they are effectively tackling their assigned tasks in
equal proportion. But the hands-on approach is necessary in both,
not only in peace. For example, Minister Peiris spends a lot of
time at post-cabinet media briefings talking about peace; less about
industry and simple things like job creation, etc. Perceptions are
also important. Even the media keeps following the tracks of the
two ministers on the peace front, not their other responsibilities.
On the other
hand an already bloated Cabinet keeps getting bigger. The instability
of our political situation and the still fragile peace process are
significant uncertainties that could result in severe setbacks to
economic growth. The plain truth is that the economy is still weak.
Without remedial action to fix these weaknesses, we cannot expect
a significant and sustained economic recovery.