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Integrating Economies


At the heart of the crisis in Sri Lanka, as everybody knows, is the long-time mismanagement of the economy – exacerbated by the Covid pandemic – as well as the self-serving policies of the ruling families. Today, President Gotabaya Rajapaska’s official residence has become a picnic spot for all and sundry, while the home of Prime Minister Ranil Wickremesinghe has been set ablaze by protestors. All the might of the state has been unable to hold off the overwhelming disenchantment of the people with the ruling dispensation. In fact, even as problems persisted for a long time, requiring resolution, the establishment was so dug in that it continued to return in one shape or form, despite the calls for change.

It is something like the French Revolution except not so bloody. It opens up the nation to the rise of an ‘outsider’ like Napoleon, but it would not necessarily be the right alternative. The Chief of Defence Staff has made the first intervention in the bid to stabilise the situation and could play a further role in the coming days. Another major factor is the Buddhist Clergy, which has great influence among the Sinhalese. However, solutions are greatly dependent on amelioration of the economic challenge, particularly in the global perspective. It is not Ukraine alone that Vladimir Putin has jeopardised with his adventurism.

The lesson to be learned is that the best insurance against such meltdowns is the coming together of regional economies in mutually beneficial relationships. The smaller countries in South Asia, for instance, should be integrated with the Indian economy in the manner of Bangladesh and Nepal. On the other hand, politics and Chinese chicanery have ensured that Sri Lanka and Pakistan stay aloof, thereby failing to benefit from the cushion the much larger Indian economy provides. The fear of the ‘big brother’ should not extend to the point that it leads to self-defeating policy.

It is not a coincidence that all nations that have flirted with the Chinese have found themselves in an economic mess. However, as experts have pointed out, the decision has been the result of long term bad economic policy, which has sought a short-cut remedy by incurring Chinese debt. India and the global community can help Sri Lanka tide over the present crisis, but serious long term reforms will be needed for the country to achieve even some sort of normalcy.