Government’s denial of debt not a vibrant strategy - MP Harsha | Daily News

Government’s denial of debt not a vibrant strategy - MP Harsha

The alternative economic policy adopted under the Vistas of Prosperity and Splendour does not match with any economic policy in the world and similar ones in history have failed, Samagi Jana Balawegaya MP Dr.Harsha de Silva said in Parliament yesterday.

He said the government’s policy was to fill the high budget deficit by way of a Magic Money Tree (MMT) or just by printing money which in turn increases the inflation rate and depreciates the Rupee.

Commencing the Committee Stage Debate for the last day on the financial heads of Finance Ministry, Money and Capital Market and State Enterprise Reforms State Ministry, Samurdhi, Household Economy, Micro Finance, Self Employment and Business Development State Ministry under the Budget proposals for financial year 2021 presented to the Parliament by Prime Minister Mahinda Rajapaksa on November 17.

He said Central Bank Governor Prof W.D.Lakshman speaking at the Sri Lanka Economic Summit 2021 recently said that the government elected to power on an alternative policy platform.

“According to the Central Bank Governor the policy framework highlighted in the Budget statement points towards several novel alternative features. Domestic “production economy” has taken the centre stage,” MP Harsha de Silva said. “Lakshman also said at the summit that the domestic production activities are promoted, with directed attention paid to selected economic sectors, with a clear focus on export as well as domestic markets.”

MP Silva said that according to the Central Bank Governor, the government is not surprised that most international organisations, rating agencies, as well as certain domestic quarters, which are so used to certain traditional ways of thinking, remain sceptical about these alternative policy stances without making the effort to understand the new framework.

Silva further said that the Central Bank Governor continued to say that COVID-19 has made the country gain first-hand experience about the gravity of what Ian Goldin and Mike Mariathasan call the butterfly defect of globalization in their recent book titled ‘The Butterfly Defect: How Globalization Creates Systemic Risks’, showing how a virus, having gained pandemic proportions, could keep on crippling economies across the world for over a year.

“Hence the Central Bank Governor says that this butterfly defect has paved the way for the country to engage in introspection about our economy and economic policy,” Harsha de Silva said. “Hence as always were, the government has a negative view over the global relationships and say they could develop the country in isolation.”

MP Harsha de Silva said that however the same authors Ian Goldin and Mike Mariathasan later said that stopping globalization will not stop global threat but amplify them and the solution is in working together to make globalization safe and sustainable and not working against it.

MP Harsha de Silva said that in 1970, Dr. N. M. Perera too adopted the same principles with a socialist oriented approach and failed. Even Latin America and India could not succeed although they adopted the same principle.He queried as to how Sri Lanka could succeed by adopting such a principle.

He also said that even the Citi Bank report had said that Sri Lanka’s debt is on an unsustainable path but the government is appearing to be in denial. He added the report also said that the denial is not a strategy. He added, hence, the alternative economic policy that has been adopted under the Vistas of Prosperity and Splendor does not match with any economic policy in the world and similar ones in history have failed.