Policy strategies for Sustainable Economic Development Planning | Daily News


 

Policy strategies for Sustainable Economic Development Planning

– Part 2
Universities must broaden their courses and appeal
Universities must broaden their courses and appeal

Sri Lankan policy makers argue that Sri Lankan graduates are unemployed because of their education is not job oriented. This is a very old idea and is only a partial truth. The actual cause of our unemployment problem is the slow economic growth associated with wrong economic policies. Sri Lankan policy makers should understand that if Sri Lanka could record high level of economic growth, she would able to generate jobs for even liberal arts graduates.

Sri Lanka needs political scientists, sociologists, theologists and language specialists. Similarly, Sri Lankan society is based on the Sinhala Buddhist culture which has been evolving over more than two thousand five hundred years. Hence, the Sri Lankan education system should not neglect teaching eastern languages such as Sinhala, Pali, Sanskrit, Hindi, Tamil, and Urdu etc. These languages may make a significant contribution for building our traditional knowledge system. The liberal art education should not be treated as garbage in the Sri Lankan education system because it has high potential in satisfying some social needs in the country. However, this should not be treated as an argument against promoting technical education, computer science, and teaching foreign languages in Sri Lankan Universities. In addition, Sri Lankan policy makers should understand that the education is not a private commodity. In economics, education is treated as a merit good. Education and public health have social benefits. They are treated as investment or formation of human capital in economic development process. Hence, there is high level economic rationale for the provision of free health and education. Sri Lanka is known as a country, which records slow economic growth but high level of social progress. Though Sri Lanka records 2.5 economic growth in recent years and the value of human development index (HDI) was 0.780 for Sri Lanka in 2018. Thus, Sri Lanka records 71st position out of 189 countries and territories in the world with respect to HDI. Free health and education significantly contributed to this high level of socio-economic development in the country during period of post-independence. Sri Lanka use tax payers’ money to provide free health and education. Hence, Sri Lankan government should continue with free education and health during the era of COVID-19. This will contribute to preserve the social equity by reducing gap between rich and poor in the country. High level expenditure on health and education may also lead to stimulate the economy during era of COVID-19.

The most important fact is that currently, these developed countries do not follow the Neo-liberal economic model. Their current development approach is a market friendly, welfare-oriented, sustainable economic development model. Those well-developed market economies give a high priority for protecting the natural environment and conservation of natural resources (i.e. water, forest, and land etc.) in their development planning process.

They also give a high priority for their traditional knowledge in economic development planning. The writer has seen that many research universities in western countries allocate funding for building their traditional knowledge system which appreciate the sustainable development policies. The liberalized economic policies are mainly designed for the developed market economies. Therefore, such economic policies are not consistent with the structural characteristics of Sri Lankan economy. As a result, many development policy strategies (i.e. devaluation, promoting foreign investment, and privatization), which were implemented under the umbrella of economic liberalization were not able to achieve expected outcomes. For example, Sri Lanka governments have been using the devaluation of exchange rate to enhance export competitiveness in the country over last 40 years. To achieve export competitiveness through the devaluation, there should be elastic supply of and demand for our exports.

However, our export supply is inelastic and the demand for our export is also inelastic in the world market. Similarly, manufacturing sector which, was established under the liberalized economic policies mainly concentrated on the textile and garments. Foreign investors invested in those industries because of the abundance of cheap unskilled labour in Sri Lanka. The value added of this manufacturing sector remains at low level because textile and garment industry depend on imported raw materials. Wage rates in free trade zones remain below the subsistence level, which are insufficient to maintain the basic needs of a worker. As a result, manufacturing industries in Sri Lanka have caused an over exploitation of unskilled young labour.

Hence, the garment industry was not an effective solution for either unemployment or foreign exchange earnings. Though labour exports to the Middle-East (again unskilled labour) countries generate considerable amount of foreign exchange, the socio-economic cost of such earning (i.e. divorce, child refugees, and human right violation of immigrant workers) is very high. Considering such adverse socio-economic impacts of these liberalized economic policies throughout last forty years, it is not rationale to use such a macro-economic policy framework for future development planning in Sri Lanka in the presence of COVID-19. Though Sri Lanka has a high potential for agricultural based industrialisation (which makes a high value added to the national economy compared with the textile and garment industries), policy makers did not give sufficient attention to develop agricultural sector in Sri Lanka. Therefore, Sri Lankan policy makers should seriously consider in formulating an economic policy framework which, is consistent with the structural characteristics of Sri Lankan economy. To achieve reasonable and effective solutions for the current socio-economic and environmental crisis, policy makers, civil society, intellectuals, and other stakeholders should seriously think about formulating a national economic policy framework for Sri Lanka. This national economic policy framework should be free from all kinds of political interventions. Such a national economic policy framework should be consistent with sustainable development which integrates economic efficiency, social equity, and ecological sustainability.

It is impossible to find solutions for the current Sri Lankan socio-economic crisis without such a national economic policy framework. The writer thinks that the current government should take immediate actions to establish an independent national economic planning council to make policy decision on national and regional level economic development issues. This institution should be free from both personal and political interventions.

Its development policies and programmes should not be changed based on the changes in ruling regime in the country. This national economic planning council should be represented by national experts who, specializes various fields of economic development. Similarly, these national experts should have a sound knowledge of historical, social, political, and economic background in Sri Lanka. The economic development process is related with not only economic issues but also other social, political, historical, cultural, and environmental issues. Therefore, without sound knowledge of Sri Lankan geo-political factors and socio-economic structure, it is impossible to prepare a sound national economic policy framework for Sri Lanka. According to writer’s experience, Sri Lanka has enough national experts to prepare such a national economic policy framework. Political authority should have the skills and knowledge to utilize those human resources efficiently and effectively. To create such a political culture, the members of the parliament should consist of professionals who have clear vision on the future development in the country.

Policy makers in the current ruling party should also understand the difference between private sector business development planning and macro-economic development planning in the country. The Yahapalanaya government always attempted to maximize financial gains without considering the socio-economic and environmental consequences their projects and policies. Media discussions with high level economic decision makers attached to the Yahapalanaya regime reflected that they did not have a clear understanding of the difference between private sector business development planning and macroeconomic development planning.

The private sector aims to maximize financial profits without considering the socio-economic and environmental consequences of their economic activities. A democratically elected government should not act as a private company. Such a government has ethical responsibility to improve overall social welfare of its citizens.

Therefore, government macro-economic development planning should focus not only economic growth but also poverty reduction, income redistribution, and environmental sustainability etc. There are both qualitative and quantitative methods in economics and public policy analysis that could be used to select the development projects and policies which, maximizes social welfare of the wider society. It is the responsibility of the government to appoint knowledgeable and patriotic professionals as policy makers without narrow political biases. Furthermore, the proposed national economic planning council should have power and authority for identification, ex-anti evaluation, implementation, monitoring, and ex-post evaluation of development projects and policies.

When the national economic planning council identify development projects and policies, it should analyze the impacts of such projects and policies on economic growth, social equity (i.e. redistribution of income), and environmental sustainability. If such an analysis shows that those projects and policies have negative impacts on economic growth, income redistribution, national security and environmental sustainability, the proposed economic planning council should take actions not to implement those project and policies.

The design of such an institutional structure and forming a national economic policy framework will help Sri Lankan government to implement economically efficient, socially acceptable and environmentally sustainable development projects and policies in the presence of COVID-19. All responsible citizens such as professionals, clergy, public, and other intellectuals should exert pressure on the Government to move Sri Lanka toward such directions. Without such a move, it is impossible for Sri Lanka to achieve sustainable development which integrates economic growth, social equity, and environmental sustainability during the era of COVID-19.

(Concluded)


Visit Kapruka.com Sri Lanka's Largest online shop. Over 125,000 unique categories such as Fresh Flowers, Cakes, Food, Jewllery, Childrens Toys and other Sri Lankan e-commerce categories. Low delivery cost to most cities here and free delivery in Colombo.

Add new comment