Hopeless scenario

Sri Lanka is an economically potential country. Even during the decades-old domestic conflict with LTTE, the Sri Lankan economy was vibrant and the nation was on the path to economic prosperity. The Singaporean leader, in the process of building the tiny country Singapore, had dreamed about transforming Singapore into a new Sri Lanka. Once, if Sri Lanka will overcome the present economic crisis, it can emerge as a vibrant nation very soon. Nowadays, Nepali economic analysts are claiming that the country is heading toward the Sri Lankan path. Some scholars have argued that two years ago, Sri Lanka was facing a similar situation to Nepal at present. Notably, we have adopted a very expensive political system. In a country having less than 30 million population, we have seven provinces and 753 local bodies with 884 MPs/provincial council members; 77 provincial ministers, 24 federal ministers, one president, seven provincial chiefs, eight speakers, eight deputy speakers, 753 mayors, 753 deputy mayors and above 6024 ward chairs and thousands of ward members. They all enjoy the monthly salary, allowances and other facilities. The country’s total domestic revenue is not enough to meet the expenditure needed to operate the present political system. The Sri Lankan case is a bit different. The political leadership, to win elections, reduced taxes, and invested in huge projects economically not viable. It didn’t hesitate to take the foreign debt with higher interest rates. In the meantime, the country faced a devastating terrorist attack followed by the Covid-19 outbreak, which totally closed down the tourism industry. As result, Sri Lanka’s debt payback schedule failed. The Nepali case is that the government is needed to take foreign debt to function the present system. There left no fund for infrastructural development, therefore, we have to take the loans for the capital expenditure. If such a trend will continue, within two years, Nepal’s foreign debt will incline further and the very problem faced by Sri Lanka can be witnessed in Nepal. The Nepali leaderships are not honest towards the nation. The present leaders in the government, without watching the global economic scenario, have introduced a distribution oriented populist budget just viewing the upcoming provincial and federal elections. The present government is an election government and a new government is going to be constituted after the elections. More likely, by end of this year, we will have a new parliament and a new government as well. But it will be a challenging task for the new government in managing the financial sector of the country. There has not been seen any improvement in the economic indicators, and, there is no sign of improvement shortly as our trade deficit is on the incline, foreign currency reserve is declining and the balance of payments is continuously on the negative path. The general sector expenditure is on the incline and there is no way to reduce this nonproductive expenditure. Perhaps, we don’t need to talk much about the government’s sincerity in improving economic growth by encouraging domestic industries and the agricultural sector as during the rice farming season there is an acute shortage of fertilizer. Fertilizer shortage is not a case witnessed in this season but every year, farmers are suffering from it.