The then Premier Chandrika Bandaranaike Kumaratunga, soon after she was elected to power at the August 1994 Parliamentary Poll by trouncing the capitalist United National Party (UNP) which had been in power for 17 years, summoned the private sector for a meeting.
This was before the November 1994 Presidential Election, where she consolidated her position by winning that poll too, convincingly.
Nonetheless, with her not so surprising win at the August 1994 Parliamentary Poll, there was trepidation among the private sector as to what sort of economic policies she and her party, the then Sri Lanka Freedom Party-led coalition known as the People’s Alliance would follow.
It was only 17 years earlier her bête noire J.R. Jayewardene changed the landscape of this country by introducing the open economy and giving the private sector a greater role to play.
Whereas, in the case of Kumaratunga, beginning with the election of her father S.W.R.D. Bandaranaike to office in 1956 and ending up with the booting out of her mother Sirimavo from office by Jayewardene 21 years later in 1977, in the interim, Sri Lanka had practised a closed economy founded by her father, where the factors of production were virtually in the hands of the State.
What there was of the private sector in 1977 was primarily led by her mother’s stooges. The rest had, in the meantime, been taken over by the State.
It’s in this backdrop that the private sector looked at Kumaratunga’s election to power at the August 1994 Parliamentary Poll with fear.
‘Will she reverse the economy and go back to the closed economy practised by her father and mother, replete with the taking over and the nationalization of private businesses,’ would have been upper-most in their mind.
But Kumaratunga at that meeting assured the private sector by quoting the slogan, ‘The private sector is the engine of growth,’ laying to rest any fears that she had plans to reverse the country’s economic landscape once more, from being capitalist-driven, a trend started by the UNP in 1977, back again to be State-driven.
And that has been so since the economy was liberalized 40 years ago.
Yesterday, the lead story of this newspaper reinforced the thinking of the present Government that the private sector was the engine of growth of the economy. Quoting Premier Ranil Wickremesinghe, a nephew of Jayewardene’s, it said, ‘… we focused on a development based on tradeable goods, rather than developing on non-tradeable goods….’
His was a statement underlying the importance of the private sector, which forces are driven by the market, on the basis of supply and demand, rather than by any other force, imputing that economic and not any other considerations were foremost in the State’s economic policies which he unveiled at Parliament on Friday.
With his emphasis on the Government’s huge debt burden, the Premier’s unwritten script was that there was no rule in the economy for the Government.
If Kumaratunga’s catch phrase to the private sector in 1994 was that it’s the ‘engine of growth,’ Wickremesinghe, after he first led his Party the UNP to power at the December 2001 Parliamentary Election, his Government’s view was that the ‘State would be a facilitator and not a player in business.’
But by adopting this philosophy and with employment avenues virtually closed in the public sector for non-tradeable graduates from the Arts and Humanities streams passed out annually from State universities, Wickremesinghe lost the Parliamentary Poll to Kumaratunga in April 2004 on the promise by the latter that these non-tradeable graduates would be provided with public sector jobs, despite adding on to the country’s debt burden.
Therefore, for Wickremesinghe to make this economy a dealer in tradeable goods while at the same time ensuring that he won’t lose the elections once more, could be achieved by changing the status quo of State universities to produce tradeable graduates, very much in demand by the market, without having to be subsidized by the taxpayer.
Otherwise, statements such as ‘…development based on tradeable goods…’, ‘ State is a facilitator and not a player in business’ and ‘the private sector is the engine of growth,’ are restricted to being mere clichés only.