Review of Economic Policies in Mahinda Rajapaksa’s Election Manifesto

Blueprint for the future: Is it attainable?

Last week this column discussed the practicality and ramifications of economic aspects contained in Sarath Fonseka’s election manifesto. We will focus on the economic policies of Mahinda Rajapaksa’s election manifesto this week.
The first impression one would get from Mahinda Rajapaksa’s election manifesto in contrast to that of Sarath Fonseka’s is its comprehensiveness. For example, issues such as infrastructure development, environment, foreign policy, arts and culture etc. that were absent in Fonseka’s election manifesto are addressed in the Rajapaksa manifesto. The focus of this commentary however, will be limited to a discussion of key aspects of economic policy.

Competitive advantage

Be it an individual, business, or a country in order to become successful, one must identify its competitive advantage and build core competencies around it. Focusing on the areas where one has a competitive edge over its rivals will increase the chances of success at the outset. Building capabilities around those areas will ensure the long- term sustainability of competitive edge.
Rajapaksa’s election manifesto identifies three major areas of international competitive advantage:
1. International transportation and tourism
2. Energy
3. Knowledge (IT, science and technology)
The manifesto discusses measures that are being taken and will be taken in order to build competencies in those areas, both in terms of infrastructure and human resource development. In this sense, it is reasonable to agree that Rajapaksa manifesto presents a basic blueprint for the economic development of Sri Lanka.

International transportation and tourism

In the view of the author, international transpiration and tourism holds the greatest promise for Sri Lanka. Given the ongoing international political and economic trends, Sri Lanka’s positioning as a major landmark in East-West trade routes gives it a massive opportunity to develop as a major trading hub in the world. Sri Lanka stands to immensely benefit from the re-emergence of Asian economies, as world powers provided the opportunity that is well exploited.
Sri Lanka has always been an attractive travel destination for the Europeans. With the armed conflict over, tourism industry could be turned in to a major foreign exchange earner. Emergence of a prosperous middle class in India and China will increase our potential tourist base dramatically.
Rajapaksa’s election manifesto identifies these opportunities commendably.

Energy and knowledge

This manifesto also proposes the development of Sri Lanka as an energy hub. Given the well developed energy markets in the Middle East, it is unlikely that Sri Lanka will possess international competitive advantage in this area. Even if substantial amounts of crude oil to be found in Sri Lanka (this is by no means a foregone conclusion), the promise of converting it to a regional energy hub seems overly optimistic. I believe that we should strive to build sustainability to make the energy sector efficient, as a support sector to our industries and businesses.
Rajapaksa’s election manifesto also proposes educational reforms and focus on IT literacy to develop Sri Lanka as an international knowledge hub. Given our high literacy rates and historical exposure to English language, it is reasonable to view competitive advantage in this area. However, one should note that neighboring Indian states such Karnataka, Tamil Nadu, and Andhra Pradesh have aggressively pounced upon the opportunities created by the IT sector, and we are currently lagging behind. Catching up will be a tall order. Perhaps, greatest opportunities lie in promoting Sri Lanka as an alternative to global clients who wish to diversify a part of their service supplies out of India. Moreover, urgent reforms are required in the area of higher education if we are to be successful as a knowledge hub. While some of the less controversial reforms are addressed in this manifesto, one needs to keep in mind that some others can end up being quite controversial and unpopular.

Development focus

A strong focus on development, with added emphasis on infrastructure development is present throughout the manifesto. As the incumbent president, Rajapaksa is able to add credibility to his plans with tangible work accomplished during the past four years. (For example, electricity coverage has been already expanded from 3 million households to 4.2 million. A complete coverage of 4.7 million households is promised by the end of 2012. 5,101 kilometers of roads were already developed or under construction. Further 4,000 kilometers of road development is promised over the next 6 years)
This is not to say that this manifesto is devoid of any populist promises that lack substance on a long-term economic perspective. However, unlike Fonseka’s election manifesto, the main focus stays within broader developmental goals as opposed to rosy promises.

Missing elements

If one is to compare the election manifestos of two main candidates, clearly that of Rajapaksa’s comes out as more comprehensive, better thought out, and consistent within a broader strategy. However, I believe that Rajapaksa manifesto too is silent or ambiguous in certain important elements that would lead to better governance and equitable distribution of economic resources.
For example, while this manifesto proposes a number of concessions to the public sector employees, no concrete proposals are presented on improving the efficiency of this sector. Given this administration’s greater reliance on public sector, it is imperative that its efficiency is substantially improved. Otherwise, a large and inefficient public sector can end up being a heavy bureaucratic and fiscal burden on the march towards economic progress.
It is also natural to question the potential effectiveness of measures proposed to combat corruption and waste. The manifesto is silent on the size of future cabinet; an issue that has become a symbol of wasteful expenditure. I believe that securing the right to easily access government information can go a long way reducing waste and corruption.

Do voters care?

In conclusion, it is important to step back and question the level of importance a potential voter will give to an election manifesto. Presenting a superior election manifesto might end up irrelevant on two accounts. Firstly, if voters do not have much faith in an elected government’s ability to follow up on its election manifesto, this document may not carry much weight. Secondly, if voters base their decision purely along party affiliations, and personality traits, they may altogether disregard policies outlined in election manifestos and their implications.
It was the French diplomat and philosopher Joseph de Maistre who said that, “Every country has the government it deserves”. Come January 27th, we will know for sure what Sri Lanka deserves...

Tharindra is currently reading for his PhD at Bauer College of Business, University of Houston, USA. tharindrar@gmail.com