Despite the General Elections being done away with, there continues to be a sense of uncertainty pertaining to the effective nature of a new National Unity Government in terms of laying down a path for long-term economic direction.
Post the Presidential Elections in January this year, economic experts and analysts pointed out that Sri Lanka was in need of reforms in order to ensure a clear path for a long term economic growth. Analysts pointed out that Sri Lanka needed to focus on an export-driven economy which would also bring in large Foreign Direct Investments (FDIs).
The interim budget presented by the interim UNP government also received flak due to the various one off taxes such as Super Gain and the taxes on Telecommunication service providers.
However, analysts stated that the future of Sri Lanka’s economic path depended on the outcome of the General Elections since there was still an uncertainty which prevented certain decisions being taken due to the fact that it was a minority government.
The Nation Gain spoke to experts in various sectors on their views of the present situation soon after polls and their views on the possible outcomes once a National Government is formed.
The tail should not wag the dog – Schaffter
Chairman and Founder of Janashakthi Insurance PLC, Chandra Schaffter stated that all parties and individuals forming the National Government should look at working together and be willing to go beyond the halfway mark. “Otherwise there is no point in people trying to come together in trying to form a government,” he told The Nation Gain.
Speaking further, Schaffter also spoke about the effective nature of such a government adding that it would be effective as long as a small number does not influence the rest of the government members. “It is ok as long as the tail does not wag the dog,” he said. He also spoke on the state of the opposition adding that we had a strong opposition.
In terms of the signal given to the outside world, Schaffter said that the foreign investors looked at the country’s stability before taking a step. “They are anxious to know the situation. The current situation should help in bringing them to the country,” he added.
Schaffter stated that the interim government, during its limited tenure, has had a decent track record. “If you take the 100 day program, the government had managed to do most of its during the limited period. So I’m positive that the new government would continue the trend set out after January 8,” he added.
President of the Tourist Hotels Association of Sri Lanka (THASL) stated that the elections signaled a sense of stability in the country which would in turn increase tourist arrivals.
“Stability is important for tourism. We hope the current government gives more focus on the industry in order to strengthen it. We hope to see results during the next two years,” he added.
In addition, Cooray pointed out that the immediate signal of the elections for the foreign countries was positive and would bring in more investments. “Sri Lanka has now built cordial relationships with several countries including India and has also neutralized with the European Union (EU). This would diversify the countries that would invest in our country. It is not healthy for a country to have investments from one country,” Cooray added.
The future Government has to focus on empowering the country’s Small and Medium Enterprises (SME) and Micro Financing sector, CEO, Hatton National Bank PLC, Jonathan Alles says.
He stated that both sectors were in need of assistance and added the current situation had given the opportunity to improve them.
In addition, he also pointed out that whatever Government takes over, should not delay in bringing key economic reforms. “The interim Government appointed soon after Presidential polls had discussed a lot of plans pertaining to the country’s long term economic policies, so it cannot afford to take more time to look at them,” he said.
Senior tax consultant N.R. Gajendran stated that a National Government should not result in more costs to the government by way of increased ministries.
He said the UNP would have anyway opted for a national government even if it had obtained more than 113 seats since it was pledged by the interim government. “So, a government under the UNP would anyway have been a National Government,” he said.
Speaking on the uncertainty period following the Presidential Elections in January, Gajendran said that the General Election marked the beginning of the end of the turbulent uncertainty period faced by the country’s economy.
On a possible drawback of a National Government, Gajendran said that such a formation could lead to a situation where the number of ministries is increased in order to accommodate other members. “This would result in more expenditure for the people and the government,” he said.
“This government had pledged to keep the number of ministries down. However, those who join should not look at their own interests. Otherwise it would be an added cost,” Gajendran added.
“The logic behind a National Government is to come to a collective decision and take collective responsibility. Therefore, it will not be difficult to pass reforms and laws since they would have a wider range of input before the bill is finalized,” he added.
Further, Gajendran emphasized the need for a ‘constructive’ opposition. “There would be many ideas and opinions floated within the National Government. Therefore, a constructive opposition is pertinent that we have an opposition that comes up with constructive criticisms and ideas that the government would look into in a serious manner,” he added.
Govt. now has time to focus on policies – Deshal de Mel
Senior Economist at Hayleys PLC, Deshal de Mel says that the elections had given the Government should look to have an inclusive decision Making process while formulating policies for the country’s economic future.
The interim government received criticism from the country’s business community for not involving them time to focus on long term policies adding that parties in the Government would have to reach common ground for it to be successful in implementing key policies.
He pointed out that while it was easy to pass reforms in a National Government, it would be equally difficult to come to an agreement pertaining to certain contentious bills. “Changing policies immediately would sometimes give a negative signal. But the government could make those changes gradually according to the betterment of the country,” he said.
Speaking to The Nation Gain, de Mel pointed out that while it would be easier for a national government to pass resolutions, it would be equally difficult to come to a consensus when passing certain contentious bills. He pointed out while the Expropriation Bill, which looks at reviving underperforming enterprises, would not be considered controversial the Land (Restrictions on Alienation) Bill might be contentious since it involved a lot of national interest.
Fast track stalled projects – Dr. Surath Wickramasinghe
President, Chamber of Construction Industries Sri Lanka (CCI), Dr. Surath Wickramasinghe said that they would adopt a wait and watch approach until the formation of the National Government to ascertain their direction in terms of the economy.
He however said that the new Government would have to give priority to fast track the numerous projects that were halted post Presidential polls in January this year. “There have been discussions and moves to revive certain projects. They need to be fast tracked, he said.
Director, Colombo Stock Exchange, Dakshitha Thalgodapiya speaking to The Nation Gain was optimistic of a strong opposition that would enable the Government to be on its toes.
He also pointed out that the UNP, which is the main party, to deliver its pledges to the people since it does not have a majority. “The UNP does not have a majority and therefore needs the other parties. So these parties would ensure that the UNP acts properly and as no party had the majority,” he said.