Long awaited national policy

Sri Lanka President Maithripala Sirisena

Most of the developed countries, as well as rapidly developing middle-income countries have stable national policies to guide development in various sectors. These national policies ensure continuity of the development process, despite the change of government due to electoral politics.

Our neighbour India, despite a multitude of problems and abject poverty, succeeded in overcoming many challenges because of its consistent national policies, starting with five-year plans implemented from the time of independence. The first five-year plans were implemented by the Congress Government, which ruled India from 1947 to 1977.

However, even after the changes of government since 1977, the national plans were implemented without any hurdle, despite the changes in government. Pakistan, Nepal, and Bangladesh, too, implemented a series of five-year plans to ensure continuity in the development process since 1947, 1952, and 1972, respectively.

To fill the national requirement of a long-term national plan, the ‘Sustainable Sri Lanka: Vision and Strategic Path’ was launched last week.

As President Maithripala Sirisena explained, this document is a guideline for a national discourse to shape Sri Lanka’s collective future and make the country a sustainable, upper middle-income Indian Ocean hub that is economically prosperous, competitive and advanced, environmentally green and flourishing, and socially inclusive, harmonious, peaceful, and just.

The draft national policy covers every aspect from economy, finance, industry, agriculture, environment, health, education and similar other things. It provides policy guidelines to strengthen fiscal consolidation and improve tax collection efforts, adopt prudent monetary and exchange rate policies to achieve internal stability, increase export earnings and foreign direct investment (FDI) flows to achieve external stability, through supply-side reforms that improve export competitiveness, and a strategic approach to trade agreements, promote sustainable agriculture through productivity improvements to address persistent poverty in the rural areas, rationalize wasteful expenditure, particularly by ensuring the precise targeting of social welfare programmes for poor households, create more job opportunities, especially for women and youth,

to address inequality concerns and make growth more inclusive, provide better opportunities for the growing senior citizen population to contribute their experience towards sustainable development and improve their retirement social security safety nets and continue with ongoing efforts to review and restructure strategic State-owned Enterprises (SoEs), by strengthening professional management and accountability, and minimising political interference, the focus should be on efficient performance of the SoE, rather than on ownership.

Doing Business Indicators

It also aimed to improve Doing Business Indicators, specifically with regard to enforcing contracts, paying taxes, registering property, and getting credit, to improve economic efficiency and enact and enforce necessary legislation to promote transparency and accountability, and thereby minimize corruption.

The report also listed out several recommendations in the environment sector, such as implementing urgent short, medium, and long-term measures to reduce vulnerability to disasters like droughts, floods, landslides and adapt to climate change, take early action to prevent air pollution due to heavy traffic congestion in major cities and introduce smart and sustainable transportation systems, including non-motorized transport, electric vehicles and electrically operated public transport systems, implement participatory approaches to control deforestation and increase forest cover, and reduce soil erosion, land degradation, and enhance soil fertility and introduce environmentally friendly waste disposal methods.

It also addressed preserving ecosystem services and improving ecosystem health, and minimizing adverse impacts on human health (such as chronic kidney disease of unknown aetiology and dengue), by reducing water pollution from all sectors, especially industry, agriculture, and waste disposal, through better enforcement of laws, regulation and pricing policy, replacing fossil fuel based power generation for national grid by using modern renewable energy and promoting application of renewable energy in industrial and commercial applications.

Reducing taxes on vehicles and machinery running on renewable energy, such as electric cars, implementing circular economy principles in all resource consuming enterprises to eliminate wastage, and encouraging recovery of resources and implementing organic and biodynamic agricultural practices to reduce the use of chemical fertilizer and agrochemicals, to prevent long-term health impacts and enhancing soil properties are some other recommendations.

While it is necessary to recognize the intricate inter-connections between economic and environmental issues, social sector issues need to be recognized in their own right and policies and strategies need to be developed to address them.

The achievement of Sustainable Development Goals (SDGs) over the next thirteen years would depend as much on progress on the social front as on the economic and environmental fronts. In this regard, the sound management of the country’s human resources is critical. There are serious issues in the labour market that need to be addressed urgently. An increasing exodus of labour may not be sustainable in the long run and could damage the economy and society.

While migrant workers and their families, as well as the country at large derive considerable benefits from overseas employment, in particular from remittances, it is also necessary to recognize its negative outcomes, in particular loss of skilled labour and wage inflation, resulting in higher cost of production and labour shortages.

The development of evidence based policies in the areas of education, skill development, research and innovation, employment, social security, protection of vulnerable groups, income distribution, food security and similar other things is an urgent step that needs to be taken. Policies also need to be developed on governance related issues mentioned above.

Diversification of economy

The diversification of the country’s economy away from the present urban-based service sector domination will help to create more balanced productive employment in both rural and urban areas. Promotion of rural industries based on agricultural raw materials is an important step that can be taken to narrow the present rural-urban disparity in terms of employment and income.

Other effective measures that are necessary to reduce income inequalities include progressive income taxation, improvement of public educational services to cut down private tuition, introduction of a contributory health insurance scheme to minimize out of pocket medical expenses, adequate income support to the poor and vulnerable groups on the basis of a reliable and fair means test and the improvement of public transport services.

Persisting ethnic tensions that threaten national unity and peace need to be defused through effective educational, language and decentralization policies and programmes. Social cohesion should be promoted through school and community level programmes.

It is also imperative that Sri Lanka integrates its economy closely with the global economy through strengthened trade and financial relations, to maximize the chances of realizing the set targets. A simultaneous focus on providing adequate safety nets to safeguard the poor and vulnerable will help in ensuring that growth is inclusive, as recognized in Vision 2025.

Also essential are reforms in fiscal, trade, investment and labour market policies, as discussed in previous sections, to remove existing impediments to achieving higher rates of economic growth. This will facilitate the next step of making the transition by 2030, to high middle-income status, and becoming an Indian Ocean hub, built on a knowledge-based, highly-competitive, social-market economy.

For a long-term national policy, the cooperation and commitment of political leadership, policymakers, technocrats, and educators are essential. As President Sirisena stressed at the launch, to achieve the expected outcomes of this futuristic agenda proposed for the education sector by 2030, everybody will have to join forces.

(President’s Media – By Sugeeswara Senadhira)