Comment: Political consensus will boost confidence of all sectors

Budget 2007 is scheduled to be presented in Parliament on November 14 by President Mahinda Rajapaksa who is also the Minister of Finance. This will be his second Budget presentation. The budget is an account of how the government plans to obtain the revenue and spend it in the next fiscal year.

In the wake of the 2007 budget a new political culture is developing in the country. the new political consensus between the government and the main opposition UNP on the peace process will boost the confidence of all sectors in the country.

However, businessmen too wish this consensus should extend to the economic sector as well. Especially, this is what the business community has been appealing to politicians for decades.

Today, all fast growing economies in the world are proving that political differences should not be roadblocks to economic growth. In China, the Communist socialist political system has not been a stumbling block to its economic reforms.

Chinese leaders have realised challenges in the globalised (flat) world and face them in their own ways. In India the Communist party (M) bargains with the Congress on issues such as privatising some sectors (insurance, telecom) and tries to get the best for the country but it does not break away from the government or jeopardise the country and economy.

This political culture (Indian) has set a good example to our party leaders as such consensus and support is vital for the government to reap maximum benefits from its budget.

The President and his team of officials are meeting all stakeholders including the trade chambers, trade unions, professionals and civil society groups to get their views, to be incorporated in the forthcoming budget. All sectors want their grievances be addressed in the budget.

Year 2007 is the second year of the government under the Mahinda Chintana policies. The next budget will also reflect the continuous economic policy of the UPFA government for the third year, because both the Mahinda Chintana and Rata Perata policies of the UPFA are similar in broader terms.

The economic policies of the government are different from the previous UNF government policies under the "Re-gaining Sri Lanka". They were branded as extreme neo-liberal policies and consequently defeated by the people after two years.

In 2004, it was a challenging task for the UPFA government to shift economic policies to a national oriented track. Some sectors argued that this would not help the country to come out from a crisis situation. During the first year of the Mahinda Chintana and in three years of UPFA government, most of the pledges given in the election manifestos were fulfilled.

Traditionally these were considered as popular political ploys but the proposals of the UPFA manifesto did not remain mere ploys. People appreciated the government's response of keeping such promises without delay.

The fertiliser subsidy, other subsidies to the marginalised people, higher salaries for government servants, new recruitment to the government sector and higher government investment are some of them. Whatever the prophets of gloom dream, these policies helped the economy to reach the set target and economic growth rate of about 8%.

The political and economic landscape in the country has changed. The peace process has been stalled and the hostilities between the LTTE and the government has increased. As usual, the business sector is seeking tax and other concessions to face Global and local challenges.

Granting these demands is also challenging as the government needs more income to counter growing expenditure. However, these are not challenges faced by President Rajapaksa or the government personally. These are challenges faced by the whole nation, whatever race or religion.

We have been sacrificing everything for peace, for two decades but yet not achieved it. As we have realised on many occasions in the past war is imposed on the government, so it is inevitable circumstances that forced the government to face it.

The real challenge before the government is to maintain the higher economic growth achieved during 2006 under an adverse political climate.

In this scenario the government has to revise its policies based on its achievements in the last three years.

We have to assess the achievements of each and every program the government has implemented. If any program is behind target the government should revise or reschedule it. For instance, we have to assess the productivity improvement in the state sector including the contribution of the 40,000 graduates.

If these graduates' productivity has not sufficiently contributed towards the growth then the government has to rethink or find alternatives to address the unemployed graduates' issue.