Friday, February 13, 2009

Book Review: Economic Policy in Sri Lanka | Issues and Debates

Edited by Saman Kelegama
Institute of Policy Studies of Sri Lanka,
Colombo / Sage
2004
Pages: 520
Price: Rs 995
ISBN 076193278X
Hardcover

Decades of civil war, a massive left wing uprising in the 1980s, and now the tsunami -- the Sri Lankan economy couldn't have asked for more trouble.

Even though the $18 billion economy began to shift away from a socialist orientation in 1977, the pace of economic diversification and liberalisation has been extremely slow compared to other developing nations.

What ails Serendib's economy?

It is perhaps this that the reader would have wanted to know in a nutshell from the introductory chapter of Economic Policies in Sri Lanka: Issues and Debates by Dr Saman Kalegama. But more than the economy, it talks about the economist Gamani Corea. And the introduction is a plain repetition of Corea's career graph at the end of the book!

Even in regard to Dr Corea, the emphasis is on his role in UN organisations and not in Sri Lanka!

Minus this flaw, the book is a ready reckoner for all those interested in Sri Lanka's economic policies.

The book brings together contributions by 23 economists and social scientists, who discuss the evolution of Sri Lanka's economic policies over the years, the ideology governing the evolution, the debates on policy, and key economic issues in contemporary Sri Lanka.

Edited by Saman Kelegama, Executive Director, Institute of Policy Studies in Colombo, the book stands as a good reference material for other developing countries as well. For instance, most of the developing nations blame the public sector units for spoiling the economic broth!

Author JB Kelegama in his article, The Importance of the Public Sector in Economic Development, aptly reasons out why the PSU is a white elephant.

"...It is true that several state-owned corporations are running at a loss; this is not because of state ownership but bad management, for all state-owned firms in East Asia operate at a profit. The fact is that we have politicised public corporations by appointing all officers from the chairman to the labourer for political loyalty than for competence…when they (PSUs) are making loss we call them inefficient and call for privatisation. Virtually all public corporations can be run efficiently if they are allowed to operate as commercial enterprises freed from political interference".

The writer makes a good comparison between the public sector in developed and East Asian countries and what developing nations can learn from them.

However, the book should have had a chapter on Sri Lanka vis-à-vis other developing economies like India and Pakistan. That will have clearly brought out the economic problem in Sri Lanka and where all it needs improvement.

For instance, in the article, Lessons in National Planning, author Godfrey Gunatillake has made a good attempt by comparing the situation in Sri Lanka and India on national planning at the time of independence.

"…From this ambiguity regarding planning that we find among the political leaders at the time of independence, it is clear that the issue of national planning itself would be subordinated to the more critical political issue of the choice of political and economic systems. On this count, the situation in Sri Lanka was very different from that of India at the time of independence. In India, the commitment to planning and a mixed economy with a socialist bias was unequivocal. Even so, there were some important elements in the discourse regarding development that took place in Sri Lanka on the eve of independence that provided an ideological framework and long-term direction."

As for the language of the book, it is reader-friendly. It is a well researched and a finely organised piece of work. Even a lay reader can pick-and-choose his subjects of interest.

And every time he is stuck, he doesn't have to run a Google search. The book saves that effort too!

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