Imports and the ailing Economy

Therefore, a major problem is the lack of redistribution, leading to massive inequalities.

Next, many of these agricultural households are involved in multiple economic activities, including in rural and urban services, migrant urban work and foreign employment. However, their economic life with such diversified income sources depends on them being able to fall back on agricultural production. A woman working in the exploitative garment sector can only do such work for a decade or less before she burns-out, similarly migrant work in the Middle East is also for a limited period. Therefore, even for our export and foreign exchange earning workers, the agricultural sector remains the important economic base.

For the thick headed economists the rural economy remained insignificant until the drought hit the economy head on. It was when agricultural production contracted that they realized it was crippling their economic growth forecasts. According to the Central Bank, agricultural production during the last quarter of 2016 has declined by 8.4%. Moreover, what is not produced by our agricultural sector due to the drought has to be imported expending valuable foreign exchange, which according to the Central Bank is going to amount to an addition US$ 800 million this year.

If we ignore the ideological pronouncements of the economists and look at the import bill, it looks like this. In 2016, Sri Lanka’s exports were US$ 10.3 billion, but imports were US$ 19.4 billion. Furthermore, of this amount as much as US$ 1.6 billion is for food and beverages, excluding the US$ 250 million in wheat and maize imports. Sri Lanka imports US$ 490 million on paper and paper boards. It begs the question, why are there no efforts to substitute such imports with local production? floods are a given, but what investment is the Government making to guard the vulnerable sections of our society and the rural economy, against such repeated disasters?when state policies continue to neglect the rural and urban poor, from their economic activities to their living conditions, they have no choice but to resort to protests.

In this scenario, can we be dewy-eyed about the new leadership in the Finance Ministry? Will Minister Samaraweera be able to bring about any fundamental shift in policy?

While there finally seems to be recognition of the importance of restricting imports and increasing agricultural production, on the larger policies of trade liberalisation, financialisation and privatisation, there is no shift. Continuing with the neoliberal economic policy trajectory will inevitably result in a deep economic crisis, where state assets accumulated over decades will be sold to pay off foreign loans and the large import bill. But that will only further ruin the economic life of the citizenry as they get ripped off by private services.will the Government at least now rethink its policies?

RE-THINKING POLICIES

Whether it is the drought or the floods, it is the marginal sections of our society that are worst hit by such natural disasters. The structure of our state, society and economy, lead to their continuing travails as they live in the most vulnerable locations. Climate change we know is a reality, and the increasing incidence of droughts and