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
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
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
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
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
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
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.