Daily News Editorial

Economic struggle ahead

Even as the Government and the medical authorities grapple with the multiple logistical problems of managing a national economy amid a pandemic not yet under control, the continued experience of a life-threatening contagion has Sri Lankans torn between their instincts for immediate collective survival and their long-term livelihood needs.

The vast majority of citizens applaud the President and the Government for their management of the health crisis, and the degree of public compliance with the strict social hygiene requirements has risen. Unlike in many of the ‘advanced industrialised’ nations, the Sri Lankan public very quickly adapted to the tight social and economic activity restrictions despite the hardships.

The social pressures have focused on the livelihood difficulties of the low-income groups and business difficulties all-round rather than on loss on social entertainment and sharply curtailed sports and leisure activities.

In the first two months of the epidemic in Sri Lanka, the spread of infections emanated from foreign returnees. But despite stringent measures taken by health authorities and the efficiency of all active institutions in implementing the epidemic counter-measures amid the constraints of a developing economy, the contagion has slowly taken root on the island. The total number of infected persons has quickly increased within the pace of two weeks to 471 as at yesterday evening, although the number of fatalities remains at seven.

The health authorities have candidly acknowledged the lack of resources and all indications are of initiatives under way to speedily acquire sufficient volumes of equipment and other resources to enable a more comprehensive coverage of all aspects of the epidemic, from detection to treatment to prevention.

However, the Government is under huge pressure to address the serious ongoing economic dimensions of the pandemic. What is at stake is the bread and butter (or, rice and curry) issues.

The struggle to slow down the contagion, however successful so far, still cannot alleviate the emerging economic repercussions of the lockdown so wisely implemented at a relatively early stage. As an increasingly expanding part of the world halted economic activities and mass transit of people both locally and internationally, Sri Lanka’s economy began to suffer along with the rest of the world.

The hope is that the contagion will still be brought under control within the next few months as a result of the counter-measures now in force. In the meantime, however, some risks must be taken to begin expanding economic activity from the bare minimum that has so far been allowed to function, mainly in the rural areas.

After a month and more of lockdown of urban industry and services, the national economy needs some element of revival if the damage is not to get worse and recovery time and costs not to balloon.

This is why the Government has authorised a lifting of the curfew in the urban regions from Tuesday and a restricted system of public participation in economic activity. The President’s Office has, once again, issued a detailed programme of ‘Regulations to maintain normalcy in civilian life during curfew period’ to enable a carefully phased opening up of public life, especially in employment and livelihoods.

The public must carefully read and absorb these new requirements in public movement and behaviour and, in engagement in livelihood. The news media is circulating this and other governmental announcements to ensure public awareness and compliance.

After experiencing the epidemic first hand and observing the efforts and failures and their frightening outcomes in other countries, the citizenry should be under no illusion that everything is now ‘OK’ or even beginning to be ‘OK’. Rather, the challenge to the nation is to begin to lead a new life in a high-risk environment with much extra effort required to work under tightly restrictive conditions that will neither bring immediate relief nor a full guarantee of safety.

Fortunately, unlike the comfy affluent societies that today are wallowing in the morass of their complacence, Sri Lankans have the advantage of much experience of poverty, lack of luxuries, and most importantly, the experience of major national crises of war, social violence and immense natural disasters. The nation has toiled toward development goals during decades of war and social conflict. We have survived and recovered from massive tsunami disasters and sudden acts of terrorism.

With the strength of such experience, we will know the degree to which we must yet again bear burdens and toil amid numerous pressures. What we need is the assurance of sound political leadership that can mobilise and deploy our national energies in the right direction while ensuring that the toilers are adequately looked after.

The private sector has already stepped forward in both innovative collaborations and generous philanthropic contributions. The public also seeks the assurance that the political class will respond with diligence and self-sacrifice rather than laxity and corruption. The Presidential leadership demonstrated so far no doubt gives confidence that the politics will also be managed in a manner that is conducive for post-pandemic recovery.

The Island Editorial

Virus and wolf

A steep rise in the number of the Covid-19 infections, here, is proof that the situation is taking a turn for the worse. It looks as if Sri Lanka had considered itself the winner, prematurely, after the first round of the fight against the elusive virus; the government decided to ease lockdowns and curfews in all districts, only to realise its mistake and exclude the red zones immediately afterwards.

What we are witnessing, at present, may be the second wave of infections. It is unfortunate that so many security forces personnel have contracted Covid-19. We cannot batten down the hatches and wait for the crisis to pass; everything possible has to be done to curb the spread of the virus. The World Health Organisation (WHO) has warned that the worst is yet to come. Some of the ongoing preventive measures, however, cannot go on indefinitely, given the economic and social costs they entail.

The sooner the lockdowns and curfews are eased, the better it is for the economy and the public. Even countries such as the US and some EU member states are mulling over reopening their economies. Sri Lanka will have to do likewise, but if the viral infections get out of hand, lockdowns and curfews will have to be extended indefinitely. An early economic recovery will be well-nigh impossible, in such an eventuality, and many people won’t be able to keep the wolf from the door.

Daily wage earners have been crying out for help, unable to eke out a living; the government has given them some relief, but such welfare measures won’t be sustainable in the long run. Worryingly, in some urban areas, it is mostly the low income groups that act irresponsibly, as evident from the increasing number of coronavirus infections among the people, in the poor quarters of the Colombo City. They move about, without heeding health guidelines, according to the police. Somebody must tell them, in no uncertain terms, that the current relief programmes will come to an end soon, and they will have to starve unless the country is reopened.

Middle class people are also among those who do not follow the health guidelines and violate curfew, as can be seen from the arrests being made. They make a contribution to the spread of the virus and are a nuisance to those who are struggling to control infections. They ought to realise that prevention is the only way the virus can be tackled, and unless the national health emergency is overcome and lockdowns and curfews are eased fast, the economy will be further weakened; many businesses are bound to go belly up, causing more job losses.

The International Labour Organisation (ILO) has said the Covid-19 pandemic will have a catastrophic effect on working hours and earnings, globally. It has warned that the crisis is expected to wipe out 6.7 per cent of working hours, around the world, in the second quarter of 2020 –– equivalent to 195 million full-time workers. Large reductions are foreseen in the Arab States, (8.1 per cent, equivalent to 5 million full-time workers), Europe, (7.8 per cent, or 12 million full-time workers) and Asia and the Pacific (7.2 per cent, 125 million full-time workers).

Further losses to the state coffers, due to the Covid-19, will inevitably lead to the retrenchment of the welfare state to a considerable extent. If what is feared comes to pass, vital sectors such as health, education and social welfare will be adversely affected. Those who are acting irresponsibly, facilitating the spread of the virus, albeit unwittingly, don’t seem to have realised the gravity of the situation. It s time some sense was knocked into them.

Daily Mirror Editorial

Can we avoid a situation of queues and scarcities?

On April 22, cabinet spokesperson, Minister Bandula Gunawardana announced that the government would be taking steps to limit imported goods into the country. He added this action had become necessary to stabilise the local currency.

The reason for the import ban - which took many by surprise - was that the country did not have sufficient reserves of foreign exchange. The falling value of the rupee vis-a-vis the dollar, was also a reason forcing the government to ban the import of particular goods which ‘could be produced locally and those it felt were ‘nonessential.’ Among the banned items were fruits and vegetables which could be produced locally, including pepper and orid.

The Government had also decided to ban the import of vehicles, refrigerators and a variety of unspecified ‘luxury goods’. Cabinet spokesperson was quick to assure all small, medium and large-scale industrialists that import raw material needed to keep their factories operational would be unhidered and there would be no shortage of raw materials required for industrial production.

In an effort to attract foreign remittances, the government is to commence special bank accounts offering interest rates of 2% points higher than regular interest rates for deposits for over six months and in this way stablise the falling value of the rupee bringing back memories of the pre-1977 era, when due to an acute shortage of foreign exchange, general imports were limited or banned.

All imported articles were subject to a ‘quota system’. We witnessed what was called a ‘paan polima’ (bread queue) where people stood from early morning and sometimes came back empty-handed. It was also a time when bakers did not have sufficient stocks of wheat flour to meet the daily requirement of bread. A time bakers had to produce their products out of flour made from manioc flour - which was to put it mildly, quite unpalatable. 

It was also a time of the ‘haal polla’ where police manned road blocks to prevent citizens transporting rice/paddy from one part of the country to another. It was an era when on particular days of the week, restaurants and eateries were prohibited from serving rice to customers.

The then government too, assured industrialists that exchange needed to import raw materials needed for industrial production would be readily available. But there was a catch, the amount of exchange was determined by Ministry officials. Invariably the exchange allocated was totally inadequate as recalled by Elmo de Silva, the then Senior Deputy Controller Imports and Exports (DCIE).

Locally manufactured products turned out by state corporations, produced low quality products. For instance mammoties for farmers were not capable of cutting the soil! Government loyalists were granted permits to set up local industries; for instance, razor blades produced by local industrialists were so bad the blade only cut the skin of the user and not the follicles.

Government also set up an Import Restriction Committee which believed all imported items could be manufactured locally. Unfortunately, these fly-by-night industrialists enjoying monopoly status, produced extremely low quality products. One of the best examples was the ban on the import of margarine. One local firm had a monopoly of manufacturing the product, which was described as tasting like solidified coconut oil!

Essentials like cloth needed for clothing were rationed, and the ‘masses’ were obliged to run from pillar to post filling numerous forms before they could ultimately stand for hours in long queues to purchase requirements. The material sold was of low quality, but people had no choice but to procure it. The shortages resulting from the ban on imports and dependence on bureaucrats to get the tiniest job done, gave rise to rampant bribery and corruption. Palms had to be oiled to get the tiniest job done.

Today’s context is worse, many workers in the private sector have lost their jobs, many others are on less than half-pay. Persons dependent on a daily wage have no way to feed their families except through petty crime. In these days of coronavirus, one cannot even beg on the street for fear of being arrested. For the government, the pandemic could not have come at a worse time. It’s election year, shortages, scarcities, unemployment, shortage of medicament are making life for a majority of people impossible.

At the elections of 1977, the then government was kicked out by the ‘suffering masses’. Unless the present regime can avoid repeating the mistakes of the pre-77 regime, they are likely to face the same fate, come the general election of June 2020.