GL brings in the sunshine

Everything is rosy in Paradise Isle. Now with our ‘macro economics in a sound situation’ we are zooming ahead into the next millennium on high tech. That’s what the immaculately clad Deputy Minister of Finance Prof G.L.Peiris said in his talkathon in parliament on Thursday

Prof. Peiris on Thursday, was Sri Lanka’s Sanath Jayasuriya in economics, hooking every conceivable statistical indicator of the state of the economy over the boundary. Following world economic recession, the growth of the world economy was expected to grow by only 3.1 per cent this year. The economic growth of the Asian Tigers dropped from 6.7 per cent to 4.4 per cent. Projections for the Western hemisphere too was a meagre 3.4 per cent . But Sri Lanka in 1997 recorded a growth rate of 6.4 per cent and this year it is expected to be over 5.0 per cent despite the adverse impact of the East Asian crisis on investment, the professor claimed. The budget deficit which was hovering around 10.6 per cent in UNP times had been brought down to a manageable 6.5 percent. Within 4 years of the PA government 700,000 jobs had been created. The Tharuna Aruna Scheme involving the private sector for employment of graduates had created 5000 jobs with some of the recruits earning over Rs 10,000, There will be 75,000 more overseas jobs and within the next two years 150,000 to 200,00 jobs will be provided.

‘The economy is responding magnificently to our vision and policies. Incomes rose substantially, an average of the 5 percent per year and we are now approaching the levels of middle income countries of the world. Incomes have come to be distributed more equitably than in the past. Unemployment had declined steadily, Prof. Peiris claimed.

If these statistics provided to Prof. Peiris by the Central Bank are correct, Sri Lanka is truly on the road to success. We sincerely hope they are correct. Last year too Prof. Peiris cited such exciting statistics. But are they reflected in the lives of the ordinary people?

Could it be said that the the living standards of the middle class and the poor are better than what they were in 1994?

Mr. Ronnie de Mel, the UNP Finance Minister who presented 11 consecutive budgets when asked for his comments by The Island had said that it was the worst budget produced in the fifty years after Sri Lanka’s Independence and that it was the budget of ‘a dying government’. Trotskyite firebrand Mr. Vasudeva Nanayakkara, who is a member of the Peoples Alliance coalition says that the test of the pudding is in the eating and that the pudding the masses have been eating was bitter while the rich have been eating delicacies at the expense of the poor. Prof. Peiris admits that ‘the fruits of economic development will take time to reach the poor and vulnerable sections of our society’. A variety of welfare ad hoc schemes such as the Samurdhi Programme which assists two million families are targeted towards the poor, he has said. He quotes a Central Bank survey which claims that the income share of the richest 20 percent of income receivers declined from 57 percent in ‘86/87 to 53 percent in ‘96/97 while the income share of the poorest 40 percent increased from 11. 3 percent in ‘86/87 to 12.8 percent in ‘96/97. But Mr. Nanayakkara says that the labourer who earned a Rs.100 ten years ago had a better living standard in comparison to one who earns Rs. 200 today.

What is perhaps missing or lacking in Prof. Peiris’s budget is an analysis of the rate of inflation. The Central Bank still computes a cost of living index which has been aptly described as the cost of lying index. The rates of inflation are such that the statistics of the Central Bank will be doubted by the citizens who believe in the popular saying about statistics: Lies, Damn Lies and Statistics.

Prof. Peiris as the minister who presents the budget cannot be faulted for going on Central Bank statistics but he should, as a prudent politician, check on these statistics and their relevance in terms of benefits to the people. There were many leaders of this country who were misled on statistics of experts such as the late Mr. Dudley Senanayake on agricultural statistics.The professor also cannot be blamed for pampering the private sector which was rejuvenated from a moribund state by the UNP and identified it as the ‘ Engine of Growth’ which the PA too accepted and are pandering despite hangovers of socialism still persisting.He like all other finance ministers of the world has to keep pandering to the private sector in the hope that it will deliver the goods

But is this the end of the story about how Sri Lanka purses will fare in the coming year? No. The midnight gazette will have many more chapters as an addendum.

(We apologise to our readers for repetition of last Friday’s editorial on Saturday due to a technological misadventure. The Island is in the process of adopting a computerised technique in the layout of its pages)