Yaha Badu budget is the headline of an article in the centre page of a major Sinhala paper recently. It is remarkable because this paper is generally considered as unsympathetic to the yahapalana government. In fact Prime Minister Ranil Wickremesinghe had to state openly, how false reporting in this paper could promote racism in the country.
However in this article the professor interviewed has said that the theme of this budget is ‘Blue Green economy’. Blue Green means water and earth. Sustainability is included within these two words. Lanka economic activities should be performed in both sea and land. Proposals of this budget have spread into both these domains. Not only that, it has given some ideas about how these activities could be carried out. With that theme of the budget, is not only attractive but also carry many ideas on sustainability. May be because the finance minister is a fashion professional; he made his presentation with clarity, order and as a perfect presentation.
Financial operations
Budget has looked into poverty alleviation too. First such aid programme was introduced to the country while still under British occupation. As early as in 1939 -the rice ration- provided rice free to all sections of the population. This programme was continued even after the gaining of independence and into the 1960s. Today it is named Samurdhi action. A World Bank funded study has found that Samurdhi misses almost 40% of households ranked in the lowest and poorest, while a substantial number of households with higher relative welfare receive Samurdhi consumption grants and other forms of Samurdhi assistance.
Around 44% of the total Samurdhi transfer budget is spent on households from the third, fourth, and fifth in poverty line - those who are well-off in relative terms. In addition the Samurdhi scheme misses out on around 40% of the poorest families. While applauding efforts of various governments to help needy sections of the population, the report mentions Lanka Tamils, Indian Tamils and Moors are less likely to receive Samurdhi benefits. Also there are allegations that political affiliation and voting patterns influence allocation of Samurdhi consumption grants. To cut a long story short, the poverty alleviation scheme does not seem to be reaching the neediest families in the country. There is hope that will arrest under Yaha Badu financial operations.
On the other hand well known leftist has made these points:
It doesn't matter what they said. Or did not say in 2015, but the influence of strong right wing ideology aside, the Finance Ministry manned by corrupt people, l would definitely seek ways to sell off state assets CHEAP that are profitable or have a potential to double or triple profits with better management and less political corruption.
What is being proposed now through listing valuable assets in the stock market is creeping privatization, nothing less. The majority of the assets will end up under the control of the rich.
We were made to understand that the unity Government would opt for structural changes in management, bringing in expertise from outside the current team, public - private participation in ownership and management, etc, etc. We should support these approaches without diluting state sector shares in ownership and future profits.
State assets including shareholding in revenues are important to maintain welfare provisions under growing capitalist societies. There are practical limits to taxation and debt financing to support rising welfare provisions.
The concept of public private partnership has also been extended to foreign direct investment, in many countries, often the state using lands owned by them as state equity in such ventures. I have not heard about these from the Unity Government.
Foreign investments
Popular socialists do not totally denounce foreign investments but welcome investments in selected areas, according to one such socialist leader. Even if they come to power, such a policy may be implemented. These radical statements have come out recently, at a seminar organised by a Lankan friendship circle. “We do not denounce foreign investors but welcome them to invest in selected areas. There are valuable natural resources in our country but presently; however the country only produces five kinds of chemicals using these resources. Problem is, Lanka does not have sufficient technology to enhance marketable products using the natural resources found there. Therefore we are compelled to seek help through foreign investments. Clearly such corporation is needed in sectors such as these. Therefore we are for controlled, selected foreign investments,” the socialist leader explained.
This proposal is very similar to New Economic Policy (NEP), the economic policy of the government of the Soviet Union from 1921 to 1928, representing a temporary retreat from its previous policy of extreme centralization and military socialism. The policy of War Communism, in effect since 1918, had by 1921 brought the national economy to the point of total breakdown. The Kronshtadt Rebellion of March 1921 convinced the Communist Party and its leader, Vladimir Lenin, of the need to retreat from pure socialist policies in order to maintain the party’s hold on power.
Accordingly, the 10th Party Congress in March 1921 introduced the measures of the New Economic Policy. These measures included the return of most agriculture, retail trade, and small-scale light industry to private ownership and management while the state retained control of heavy industry, transport, banking, and foreign trade. Money was reintroduced into the economy in 1922 (it had been abolished under War Communism). The peasantry was allowed to own and cultivate their own land, while paying taxes to the state.
National development plan
The New Economic Policy reintroduced a measure of stability to the economy and allowed the Soviet people to recover from years of war, civil war, and governmental mismanagement. The small businessmen and managers who flourished in this period became known as NEP men. However local socialist did not refer to this similarity or tried to compare local situation with what happened in Russia.
Speaking further, he said the socialists in a period like this where liberals are in power do not press for an economy without a private sector; however that the private sector should work according to the national development plan. “Our belief is that the private sector should not be allowed to work independently without coordinating with the national development strategy, but work with participation in the a national development plan,” he said. Clearly all socialists today can see the disastrous path selected by Stalin and his followers.
At that time the NEP was viewed by the Soviet government as merely a temporary expedient to allow the economy to recover while the Communists solidified their hold on power. By 1925 Nicolai Bukharin had become the foremost supporter of the NEP, while Leon Trotsky explained the necessity of extension of the revolution to the industrial west. Without the change in the industrial west, Russia cannot build socialism in Russia alone. There cannot be socialism in one country; particularly, in an under developed country without the backing of the international proletariat.
The NEP was dogged by the government’s chronic inability to procure enough grain supplies from the peasantry to feed its urban work force. In 1928–29 these grain shortages prompted Joseph Stalin, by then the country’s paramount leader, to forcibly eliminate the private ownership of farmland and to collectivize agriculture under the state’s control, thus ensuring the procurement of adequate food supplies for the cities in the future.
This abrupt policy change, which was accompanied by the destruction of several million of the country’s most prosperous private farmers, marked the end of the NEP. It was followed by the reimposition of state control over all industry and commerce in the country by 1931. Premature socialist revolutions could bring disaster unless there is a proper perspective to win the support of the proletariat of the industrialized western world.
Add new comment