a must: Yet not by peace alone
we seeing a glimmer of peace at the end of a two-decade dark tunnel?
That peace is a must for robust economic growth is undisputable. Yet
peace alone will not ensure it. Peace is a necessary condition, not
a sufficient one.
have shown that the country has sacrificed significant amounts of
economic growth owing to the war. There are the direct losses in
agriculture, fishing, tourism and other activities in the North
and the East. There have been serious impacts on foreign and domestic
are the losses in growth owing to the strain on the public finances
of the country and the ability of the government to play its role
in investing in infrastructure. And the less tangible impact on
monetary and fiscal policy that has not provided the proper climate
for private investment.
One can go
on and on with the list of direct and indirect economic impacts
of the war on the economy. The human costs and social disruptions
are not only incalculable human tragedies for which no monetary
values could be denominated, they have also had economic impacts
of serious indeterminate proportions. The adverse economic impacts
of the war are rather well known though perhaps underestimated.
There is however
a false notion that once a durable peace is achieved, the economy
would boom again. An economic boom there surely will be with the
dawn of a durable peace. Economic activities in the North and East
would be revived. The vast tourist potential of the East could be
harnessed, fishing would bounce back, agricultural activity would
return to normal and new economic enterprises could be established.
All these would
be part of the expected and likely peace dividend. An economic boom
would no doubt result in the aftermath of the peace. The reconstruction
of the North and East would set in motion a series of multiplier
impacts on several sectors in the economy.
would not be confined to the areas of reconstruction, but encompass
economic activities elsewhere. The committed foreign assistance
would relieve the balance of payments, though the net impact would
be weakened by additional imports. Yet economic growth can only
be sustained with a host of policies put in place and changes in
values and approaches that are needed to attain economic growth
in a harsh competitive global environment.
many areas of economic, educational, legal, administrative and other
areas are needed to ensure a sustainable growth. To sustain the
economic growth momentum there has to be a series of changes that
would ensure adequate investment and productivity gains. In industry
the country could make headway only if we improve our competitiveness
in international markets.
competitive edge appears to be diminishing in several exports. The
overall macro-economic disadvantages could be eased by improvements
in fundamental economic conditions, especially with respect to the
There are however
a number of other factors that have to be looked into, such as the
development of infrastructure, especially the provision of energy
at lower cost and improvement in road and transport conditions.
The lesser expenditure on the war and the possibility of re -deployment
of men and materials from the war effort must be looked into.
We have stressed
the need for higher investments to support agriculture. These investments,
both direct and indirect, must aim at raising yields in our crops
that are currently far below their potential.
The more difficult
issues that need to be resolved to ensure sustained and higher economic
growth relate to rather controversial areas such as the reform of
labour regulations, educational changes that would ensure better
skill development on a larger scale, administrative reforms that
would ensure an efficient public service, and the development of
a legal system that ensures property rights and speedy justice.
The restoration of law and order is of course of the utmost urgency.
It is the difficulty of undertaking necessary reforms, developing
a work culture conducive to higher productivity and establishing
law and order that would constrain the attainment of sustained higher
Let us hope
for peace that is so essential for economic growth, but also prepare
ourselves to ensure the other conditions that would are essential
if we are to benefit fully on the long run.
A final word,
let us hope that the peace negotiators would have in their minds
the enormous economic gains that are awaiting a durable peace.