The newly
elected government comes from a series of open consultations undertaken by a
think tank that branded itself for about two years as ' Viyathmaga ' or the
Erudite's Path. Therefore, the exercise involving Malaysia's policy capsule has
already been completed, saving the president a lot of time at a time when the
critical buzzwords were urgency and swift action. Nevertheless, in the light of
emerging global as well as local trends, it is now essential to reassess the
main components of the newly elected government. Besides, a Manifesto is merely
a blueprint outlining only the significant policies pursued.
Each such
strategy must formulate into a comprehensive plan of research that removes
inconsistencies, shedding that is irrelevant today and concentrating on the
future rather than the present. The development of these work programs requires
the Central Bank's inputs to prevent The newly elected government from
conflicting with the policies of the bank. Once approved, the government, the
private sector, and political leaders will sign it off. Hence it is the only
way the newly elected government can become the country's political ideology.
Modest
economic goals in The newly elected government
The newly
elected government has some small financial goals to achieve in 2020-5 relative
to those set by previous governments over-ambitious goals. Economic growth
should lower from the current 3% to 6.5%. Per capita income currently at $4,000
will raise to $6,500, a midpoint on Sri Lanka's journey to a high-income
country. There are three main macro variables to be held below certain
thresholds that are not far from these numbers at the moment. It is necessary
to keep unemployment below 4 percent, which is the current rate in that amount.
Inflation is going to be below five percentage points, one percentage point
above the current maximum. The predictions are that the government’s budget
deficit will be below 5% of GDP, a dramatic reduction from the present 6% plus.
Often targeted
were too difficult, if not impossible, targets. One concerns the loan rates of
commercial banks where The newly elected government plans to bring them below
10%, compared to the current 11% to 20% loan rates. The other is the exchange
rate. The newly elected government plans to stabilize the exchange rates by not
falling below the current LKR 182/USD.
Both are determined on the market and are, therefore, beyond the president's proclamations.
Any attempt to
subvert the market would have immediate and long-term economic growth
disastrous consequences for the other goals. Therefore, working closely with
the Central Bank, which is the authority for both policies, is necessary.
The return of
Central Government
The newly
elected government's main feature is the central role that the government would
play in controlling the economy. Under the President, a National Policy and
Planning Commission or NPPC is to be set up. Most definitely, the seasoned
economist Dr. P.B. Jayasundera or just PB, the president's advisor, will lead
it. He has proven himself, as Finance Advisor earlier, to be a competent policy
director and on-time deliverer.
Also, under the previous administration, there
were two related bodies: a Cabinet Committee on Economic Management or CCEM
under the Premier in the first three years and a National Economic Council or
NEC under the President in the two years. Both of these organizations focused
on fire-fighting and economy-related micro-problems and failed to develop a
coherent national plan. The current NPPC should avoid this drawback. It already
has a relatively comprehensive economic policy that covers all sectors as
initially designed by the Viyathmaga VBS/AT/19122019/Z_TB4
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