Mahinda Chintana on local requirement:

Economic resurgence clearly visible in past four years

Government achieved it while fighting LTTE terrorism:

"The Mahinda Chintana economic policies have been focused on local requirements and the aspirations of the people for the first time in the post independence history of Sri Lanka," said Senior Lecturer of Economics of the University of Colombo, Dr. Ranjith Bandara.

Following are the excerpts of the interview with the Sunday Observer staffer Gamini Warushamana.

Since independence from the British Colony in 1948 there were several economic policy shifts in the country and we have experienced several economic models.

Neocolonial economic policy was adopted from 1948-56 which looked after the interests of the colonial masters. It helped them to continue exploitation of resources of our motherland. Therefore those policies did not actually focus on local issues such as poverty, disparity in income distribution and wealth, dependency and unemployment. Differences of social classes were very significant at that time.

In 1956 some of these issues were taken into account in the government policy formulation process. Panchamaha Balavegaya (five main forces) Buddhist clergy, doctors, teachers, farmers and the labourers were considered as the focal point of governance. Nationalisation program, local language education, establishment of state institutions such as departments and corporations are significant features in the main policy framework. However, socio economic development issues were not given serious consideration. As a result the Sri Lankan economy remained largely stagnated in the world economy.

In 1965 once again the policies of the country changed from inward looking one to somewhat liberal outward looking policies. Once again it attempted to address the colonial interest. However, during 1965-1970 period these policies didn't achieve much economic progress.

In 1970 the economic policy of Sri Lanka turned upside down. Strict State control policy framework was introduced where the State sector became prominent. More socialist ideologies came to be present in every corner of the economy.

During this period two land reform commissions were established. A few nationalisation programs were introduced and a large number of State institutions were set up.

Focus of the economic policy was internal stability to achieve self sufficiency in food, clothing and other human needs. However, at the end, the policy failed and the State became a burden.

In 1977 the Sri Lankan economy was opened to the rest of the world under the consent of the World Bank and IMF. Private sector became the leading sector of the economy. At the end of these outward looking policies Sri Lanka became a trading economy. External stability became a serious concern while state institutions became a burden. Privatisation of state institutions was introduced as a policy alternative.

Poverty, unemployment, inflation, budget deficit, balance of payment became important issues of the economy.

The failure of these policies was witnessed on several occasions. Over 75,000 youth sacrificed their lives in the Southern youth uprising in 1987-89.

Civil conflict from 1983 in the North and East provinces are prime examples for the failure of open economy policy and its inability to cater to the local needs.

In 1994 recognising the limitations of open policies the people's mandate was sought for open economic policies with a human face. However, after the regime changed no serious alteration of policies took place. Open economic policies continued without a human face. Socio economic issues became serious.

As a result again a political move took place and the economic policy shifted to extreme neo-liberal policies under re-gaining Sri Lanka. During this period economic reforms commenced again and privatisation of state institutions, restrictions to recruit to government services continued. As a result of the policies Sri Lankan economy became weaker and less immune to global economic changes.

The political regime was overthrown within three years and the people had realised that Sri Lanka needed a major policy shift that could address these issues. In 2004 Rata Perata policy framework of the United People's Freedom Alliance attempted to address these issues. At the presidential election 2005 the Mahinda Chintana (MC) policy statement of the UPFA candidate Mahinda Rajapaksa was developed with the focus on local requirements and aspirations of the people for the first time in the history.

In a nutshell following are the key concerns that MC proposed for the issues faced by the Sri Lankan society, 57 years after independence; Disciplined society, affectionate family, easing of the family burdens, social welfare programs for the needy, prosperous village, honourable peace, protecting state sector, sustainable development, agricultural renaissance, industrial development, sustainable energy policy, sustainable mobility, harnessing aviation and marine potential, science and technology, healthy nation, enhancing knowledge and virtues, regional development, enrichment of art, culture and sports.

The significance of the MC is that for the first time in the history, a political party manifesto became the major policy framework of the country. By looking back after implementation of MC over the last four years we can see that there are fundamental changes in all sectors of our economy.

Massive development activities have been implemented in all parts of the country. Three major power plants; Norochcholai, Kerawalapitiya and Upper Kotmale were commenced. Kerawalapitiya has already been commissioned. The massive port projects Hambantota, Colombo South port, Galle, KKS and Oluvil have commenced. Under Maga Neguma program 7,600 km of village roads have been constructed.

Mattala International Airport, flyovers at all main access roads to Colombo and other cities, highways, provincial and rural roads, new water supply schemes, tank rehabilitations and fisheries harbours construction or expansion projects are among other ongoing development activities commenced during the last four years.

While implementing these projects social welfare program Samurdhi has been continuing. To ensure food security in the country government provides subsidised fertiliser for the farmers at Rs.350 per bag.The per capita income of Sri Lanka doubled and passed US$ 2000 from 2004-2008 against US$1000 achieved during the 55 years from 1948-2003. The important fact is that the government achieved this while fighting a war against LTTE terrorists. During the last four years poverty level came down by one third and over the next six years poverty level will be reduced below 2%. By 2016 electricity will be supplied to all households in the country and over the last four years electricity coverage increased from 75% to 87% of households. During the last four years 7,978 rural electricity schemes have been implemented.

Water supply projects have been implemented covering 312,300 families in 1,353 GN divisions. During the four years 2,288 minor irrigation projects have been implemented.

The progress in the ICT sector is also significant. To bring ICT to rural villages government has implemented 600 Nenasala rural IT centres and the target is 1000 centres.

The increase in telephone penetration is impressive. The mobile penetration has increased from 2,211,000 in 2004 to 12,658,000 in 2009, an increase of over 10 million. Fixed telephone penetration increased from 991,000 in 2004 to 3,391,400 in 2009. Usage of internet and email remained at 93,400 in 2004 and it increased to 240,000 by June 2009.After the victory of the war opportunities have opened in the economic development. Government has launched massive development programs for the North and East provinces including rehabilitation and reconstruction of the area and infrastructure development needed for the next wave of development.

Under Uthuru Wasanthaya program that targets the North province following projects will be launched soon. The total cost of the road projects to be launched is US$ 683 million and it includes construction of A9 road US$ 166 million and A32 road US$ 100 million. In addition Omanthai Pallai railway construction project (US$185 million), Medawachchiya - Madu railway (US$ 235 million) and Pallai - Kankasanthurai railway (US$ 245 million) are also on the pipeline and these projects are funded by China and India.

The success of MC policies was witnessed on several occasions. During the oil crisis, global food crisis Sri Lanka maintained economic growth as well as economic, social and political stability in the country.

During the global food crisis Sri Lanka was self sufficient in rice.

During the global financial crisis and economic crisis Sri Lankan economy was resilient and the recovery started immediately after the crisis. According to the latest estimate of ADB Sri Lankan economy will achieve 4% economic growth in 2009.

For the next six years government has planned to launch a new wave of development strategies to develop the country on all fronts. Low inflation, low interest rates, low budget deficit, maintaining a high level of foreign reserves and a sound financial system are the macro economic fundamentals that have been targeted.