President and Finance Minister Ranil Wickremesinghe, in his Interim Budget for the balance period of 2022 expressed his intention of introducing a 25-year national economic policy to take Sri Lanka out of the present economic malaise and make it a rich country by 2048 (Available at: https://www.parliament.lk/files/pdf/budget/2022/interim-budget-speech-2022-en.pdf). This is his long-term economic strategy for delivering prosperity to Sri Lankans, while addressing the immediate economic issues through a bailout package from the IMF, reinforced by similar financial assistance from multilateral financial institutions like the ADB and the World Bank.
This is not the first time when a Sri Lankan leader had expressed his wish to make the country a rich country within a generation, normally in about 25 years, as had been attained by countries like Singapore, South Korea, Taiwan, and Hong Kong. But in all these instances, it just remained a wish that did not deliver any result at the ground level. So far, the President has not presented this national economic policy to secure the support of all the stakeholders involved. This article summarises an action plan which his policymakers could consider when framing the proposed national economic policy.
I have selected four broad areas for analysis, listed under economic and political fields.
- Attracting Foreign Direct Investments from high tech export-oriented firms.
2. Modernising the education sector to suit the new job requirements of the aforementioned firms and promoting Research and Development capacity within the country’s university system and the specialised research institutes.
- Introducing administrative reforms that include the appropriate choice of the Cabinet in size and composition.
2. Framing a consistent and persistent national development policy with a long-term focus by following the principles of democratic economic policy governance.
The President had presented several policy plans when he was the Prime Minister during 2015-19, some annually as policy statements and two others, one as a medium-term policy document titled Vision 2025 in 2017 and the other as a National Export Plan in 2018. Observations on these policy statements made by independent analysts had been that though they had covered all the important policy areas, they will just remain ‘wish lists’ unless concrete plans have been introduced to support their implementation (For example, access: https://www.ft.lk/columns/Vision-2025-Part-1-Need-for-moving-from-a-wish-list-to-a-concrete-plan/4-639757 and the series of articles on same and https://www.ft.lk/columns/Part-I-National-Export-Strategy-2018-22-Disrupt-the-economy-fast-if-the-goals-are-to-be-attained/4-659860 ). Subsequent events have proved that these observations have been valid. To prevent the same fate from falling on the President’s present wish, a concrete plan needs be prepared to carry it forward.
Let me focus on 1 and 2 above relating to attracting FDIs and developing supporting technology. Both these policy actions are in fact interconnected and, therefore, should be implemented simultaneously.
A. Attracting High Tech Firms under FDIs
There are two issues, one is the outreach to these firms abroad and the other is their location in Sri Lanka. In the case of the outreach, I suggest that they should be tapped at the home country of their location. For this purpose, the most appropriate strategy should be to use Sri Lanka’s diplomatic missions abroad. The most appropriate missions are those located in Japan, South Korea, China, UK, and USA. Each of these missions should be assigned a target and monitored closely to ensure their success. Missions that will realise their targets on time can be compensated financially as an incentive. If each of these Missions can bring at least two such high tech firms to Sri Lanka initially, that can be considered a success.
Regarding locations, I suggest that they be established in every province. To suit the requirements of different investors, they may be offered locations outside each provincial city like Jaffna, Trincomalee, Mannar, Hambantota, Galle, Kandy, and Ampara. It is also important to locate one to be served by the Port of Colombo and airports in Katunayake and Ratmalana. As an added note, it is highly recommended to keep tourism in mind too when establishing these zones because initially a lot of foreigners will flock to them intrinsically driving a higher demand for the tourism sector.
B. Developing the Technological Base
Sri Lanka’s university system, despite the criticism by some, is staffed with a nucleus of scientists who have proved to be on par with globally renowned scientists when they work outside the country. If appropriate incentives are provided, they will help Sri Lanka develop its technological base. Investors who are willing to invest in scientific research can be offered tax breaks by the Government. The research they undertake can be combined with teaching programmes, so that the graduates who pass out from universities will be equipped with the necessary skills that are being demanded by those high-tech firms that are to be invited to Sri Lanka. These firms can also provide the necessary on-the-job training to the undergraduates involved.
Offer larger tax breaks for investors who are willing to invest in our State university sector to find talent to fill the jobs created gradually (because that would be cheaper for them than getting personnel transferred here for higher wages from already established branches overseas). This engagement would have to be broad-based, ranging from revising syllabuses, to offering internships/job training at the newly established firms.
Once this connection between the new high-tech zones and the university system is built, the much-needed funds will flow to universities to undertake the required research and it will lead to the correction of the university system from top-down.
Emulating this trend, the school system will also adjust/align itself automatically as time passes.
C. Cabinet and Administrative Reforms
With regard to the Cabinet, it is more than sufficient to have around 21 Cabinet portfolios. Shadow Cabinets should be appointed at the Provincial Council level (that is, the 9 Provincial Councils), with each ‘Shadow Cabinet Minister’ directly reporting to the Cabinet Minister. These Shadow Cabinet Members should meet the political officers, explained below, appointed to the Divisional Secretariats within their province every week and report back to the Cabinet Minister who will report to the Cabinet which includes the President. This will create a two-way feedback loop.
Cabinet Ministers should be paid an adequate salary, but they should also be required to pay their taxes and engage, if necessary, supporting personal staff at their cost. However, the political officers attached to the Divisional Secretariats should be paid by the State from allocations for implementing the long-term national development plan which should necessarily be a decentralised plan.
Political officers, selected from different parties, should be attached to the Divisional Secretariats to implement the plan. Since they are selected from different parties, they have the ownership of carrying forward the development plan. It will also help Sri Lanka build consensus among different political parties that may come to power over the plan period.
The President has proposed a system of Grama Sabhas to steer development from grassroots level. This is a new development, because all previous development plans were aimed at developing the country through a top-down process. His plan will help Sri Lanka to ensure development via a bottom-up strategy. The political officers selected from different parties should be deployed to these Grama Sabhas (14,000 of them to be established as per President’s speech on 6 September 2022 at the 76th Anniversary of the United National Party) to interact with the public, present the plan to them (conduct several public seminars) and get the necessary feedback for its effective implementation. The ‘political officers’ are the key people in holding this cycle running for the next 25 years.
It will be the duty of these political officers to interpret if the plan conforms with the expectations of the public and identify the gaps/shortcomings/possible improvements in the plan. This will be a process which will take several months.
D. Consistency and Continuity of the Development Plan
The central problem here is that in this journey, there will be a lot of ups and downs, although the outcome will usher prosperity and a higher standard of living for all citizens. In that light, political change is inevitable, given the aforementioned swings in the economy.
Here, it is important to begin with a comprehensive document laying out what exactly the plan should be and how we are going to execute it. As mentioned before, this cannot be a centralised plan. Input for same should be taken from all over the Island. This is a massive undertaking.
First, the present government should come up with the plan and consensus on it should be reached with the different parties. For that purpose, political officers selected from different political parties and attached to the Divisional Secretariats should be thoroughly briefed about the plan and equipped with an in-depth understanding of the execution strategy/due process. This will be facilitated if the ‘Grama Sabha’ concept is institutionalised by law.
This is how political leaders, in the absence of unity among parties in the Parliament, can come together on the key factor of finding out the requirements of the public and reporting back to the central committee/agency established for the purpose of finalising the National Development Plan. This committee consisting of a diverse array of resource personnel/public officials/professionals/politicians/consultants etc. can then reconciliate and adjust the plan accordingly to arrive at the final policy framework document.
Then, due to the bumpy ride we are in for, the Civil Service is of essence to ensure the political authority sticks to the plan. That is the only practical way to ensure consistency in policy direction. Since our Civil Service is extremely weak in executing this core function inherent by default to an institution worthy of being recognised as the ‘Civil Service,’ extraordinary measures will have to be taken to ensure the entire bureaucracy understands and sticks to the plan.
Here the ‘political officers’ who did the bulk of the work of talking to the public at Grama Sabhas should be appointed to the 331 Divisional Secretariats to provide oversight, monitoring, and guidance.
It is essential to note that it is of utmost importance that the fresh cadre of ‘political officers’ can be strictly defined as being ‘young’ (<40 years, preferably even younger).
It is my belief that solutions to Sri Lanka’s economic problems would dramatically accelerate development on the economic front along with the installation of the all-important education reforms needed for at least our future generations to successfully face the challenges of the 21st century, while solutions to problems relating to governance and administration will ensure that the envisioned prosperity shall not continue to remain a mere dream.
About the writer:
The writer holds a B.Eng. (Hons) in Software Engineering from Staffordshire University UK @ Asia Pacific Institute of Information Technology, is a Planter by trade and currently a student at the Bandaranaike Centre for International Studies (BCIS).
By M. Kushan L. Fernando