The Recipe for the Government’s Disaster Recovery Strategy – Sajith – The Island

by Saman Indrajith

Opposition and SJB leader Sajith Premadasa told parliament on Friday that the government’s economic stimulus package, announced in the House by Speaker Ranil Wickremesinghe, would cause serious humanitarian problems if implemented.

Premadasa said the economic plan, envisaged by the government, would lead to further contraction in the economy, causing more hardship for the public. “We cannot get out of the current crisis by putting people’s lives at risk,” he said.

President Wickremesinghe, in his roadmap to recovery, failed to address the most vital issues that needed to be addressed for the country to emerge from the current crisis, Premadasa said, adding that 6.3 million people were facing severe acute food insecurity and their situation would worsen if the government did not provide relief.

“The President said that the Buddha had, in the Kutadanta Sutta, mentioned four principles that King Maha Vijita should follow to rebuild a nation. Accepting real advice, understanding the real nature of the problem, seeing the problem as a whole and finding solutions according to a plan, and fully implementing the plan with confidence were those four points. However, we wonder if the government has correctly identified the problem. We present this 20-point plan in the hope that the President will consider them to save people’s lives from imminent danger.

“The first point is debt restructuring, and the IMF bailout for Sri Lanka and their sustainability. The loans we have obtained are bilateral, multilateral and sovereign bonds. Reportedly, a staff level agreement has been reached with the IMF. Again, there are statements that this is not a deal but a deal. Some say it’s an agreement, or a pact. Others call it a pledge. The IMF is said to have pledged US$2.9 billion over four years as part of its expanded financial facility project. The IMF cannot give money if there is no proper agreement. We asked the government to present this agreement to Parliament, but the government did not. How could the government expect our support to implement an economic recovery plan when it is not assessing Parliament on the content of this so-called agreement? The outgoing President, as a member of the opposition, has repeatedly demanded, in this same Chamber, that the government not hide the agreement with the IMF from Parliament and the people. No need to make accusations that the opposition is not supporting it when the government continues to hide this deal from us. We need to know what the government has offered for financial assistance, in its discussions with the IMF, bilateral and multilateral discussions and discussions with sovereign bondholders, the Paris Club, the London Club .

“The second point is that the government should include a strong economic growth strategy in its plan. We have gone from positive growth levels to negative growth levels. To get us out of this crisis, the government must put in place policies to further contract the economy. On the one hand, taxes are increased to increase government revenue and, on the other hand, social spending is reduced to introduce so-called targeted spending. We understand that bankrupt countries must follow strict measures, but we do not agree with plans to make the economy contract further. The president’s speech did not mention any growth strategy. Anyone familiar with the Keynesian aggregate demand formula C+G+I+XM, will understand that this government plans to reduce demand to drive down consumption and drive down investment and truncate the economy to get out of the crisis. The consequences of such plans, if implemented, will have a serious effect on people who are already in dire situations. What we need is a strategy for growth, not another contraction of the economy to put people’s lives at risk. The economy cannot be revived by a small group of people, confining themselves to small rooms, to make plans.

The Leader of the Opposition said the government must visit the people and understand their woes and the destruction caused by bad economic decisions. The third point is the soaring cost of living and inflation which the President did not address in his statement. In this country, today, there is a hyper-inflationary situation. Food prices are expected to rise by around 100 percent. The government is forcing the economy to contract so that it can control demand-driven inflation. What we have now is cost inflation. This cannot be fixed by contracting the economy or setting the stage for businesses to collapse. Our plan should have a social democratic orientation.

The fourth point is poverty reduction. Poverty has multiplied in recent months. Monetary poverty, consumption poverty and social poverty have increased in our society. Poverty has now reached the level of the middle class. Of our population, 60-70% now live in poverty. This has a corrosive effect on our society. Social unrest is high in both urban and rural areas. This crisis requires immediate targeted interventions. We must channel our limited funds to save the lives of the poor. Now is the time for the wealthy to pay attention to this problem.

“The increase in malnutrition is the fifth problem to be solved. Statistics from UNICEF, UNFEA, FAO and WFP show the appalling social conditions faced by the masses and the children of Lanka are extremely vulnerable to worsening social crisis. They show that around 6.3 million people are facing moderate to severe acute food insecurity and that their situation would worsen if no adequate life-saving assistance and livelihood support were provided. We now rank second among the most malnourished countries in Asia and sixth in the world. The president’s statement did not mention how to fix this problem. We must help children and pregnant women.

“The sixth problem is the crisis in the health sector. The hospital system shut down without medicine and surgeries were halted. Drug prices have increased by 300%. According to a survey by Save the Children, 75% of children in Lanka experience intense stressful conditions and psychological disorders. The President’s statement also did not address this issue. As the opposition, we provided aid worth Rs. 159.7 million to the hospital.

“Unemployment is the seventh problem we are asking the government to tackle. The industrial and independent sectors have collapsed. People in the top layer of the workforce are leaving the country. Due to growing unemployment, we are on the threshold of a massive societal crisis. Huge youth unrest is preparing to explode soon.

“Rising debt is a problem that needs to be addressed. This is the eighth issue in our 20-point plan to save the economy. In 2019, debts per capita stood at Rs 597,605. By April 2022, it had almost doubled to Rs 1,0952,000. The President’s statement also did not address this issue.

“The ninth problem is to restore income-generating exports. This could be done despite the crisis. When the country was like a torch, burning on both sides, in the period of 1988-89, the then government successfully completed the establishment of 200 garment factories to create jobs amid the crisis,” Premadasa said.

Premadasa said controls on the import of raw materials have led to the decapitation of domestic industries and this is the 10th problem the SJB has identified among the 20-point plan to be addressed. Point 11 was to immediately tackle the growing wave of crime. which is rapidly spreading across the country.

Premadasa said increasing the ease of doing business and ending corruption was the 12th point. He said the government should recover money stolen from the state, through various scams, and use the money to increase state revenue. He urged the government to recover the stolen funds through an anti-corruption program and the UN’s Stolen Asset Recovery Assistance Programme. Ensuring food security is the 13th issue in the 20-point plan presented by Premadasa.

He said saving the small and medium-sized businesses on which 4.5 million people depend was the 14th question. People engaged in SMEs were now in debt and the government had no plan, and it allowed the banks to take back their remaining properties through partial executions, he said. The 15th point was to revive the construction and tourism industries to save the jobs of hundreds of thousands of people.

The 16th point was state intervention to restore the country’s education sector which was in disarray following the economic crisis which produced reports of hundreds of school children fainting in schools because they were starving. The government boasts of providing midday meals to 1.1 million children. There are 4.3 million children and how could the government tell the hunger of one child from another, he asked.

Taking immediate action to prevent brain drain, ensure youth and qualified professionals in participatory governance and relaunch development projects were the 18th, 19th and 20th challenges of the SJB plan to deal with the economic crisis, he said. he declared, adding that the president had failed. to provide solutions to these problems.