It is no secret that the government is desperate in facing the economic issues the country is faced with. Also it is no secret that government has no solutions to any of the current economic woes the people are faced with, as the steps taken by it are failing one by one. Meanwhile some ministers and officials are aggravating the situation by infuriating the frustrated masses with their irresponsible and ludicrous statements such as the one that money printing would not add to the existing inflation.
Authorities issued several gazettes imposing control prices for rice and sugar in order to arrest the steep rise in prices, but traders openly ignored them, challenging a government with an all powerful executive president and two thirds of Parliament power. President Gotabaya Rajapaksa declared emergency regulations and a proclamation on August 30 declaring so many services as essential services while appointing a high ranking army officer as the Commissioner General of Essential Services for the same purpose.
The situation further aggravated with the rice mill owners refusing to sell rice at the control prices specified by the government. Finally the government backed down and let the emergency regulations lapsed and withdrew control prices on all items. Now, the market is being totally controlled by the heartless traders who have a field day.
When the prices of rice and sugar rose ignoring the control prices and exceeding Rs. 200, SATHOSA was instructed to sell those items at control prices, but the State-owned outlets issued only a small quantity of each item to each customer, presumably to prevent unscrupulous traders from purchasing them in bulk. However, the purpose was lost as the SATHOSA failed to fulfill the requirements of the large majority of customers who were compelled to turn back to the private traders who sold those items at exorbitant prices.
Then the SATHOSA authorities imposed a condition on the customers to buy five more items when buying the essential food items such as sugar and flour, Trade Minister Bandula Gunawardena, who is said to be an economist justified the move by saying that customers are benefitting with that condition as the prices at SATHOSA outlets are lesser than those in the market dominated by the private sector. That showed the cognizance of the politicians on the customer behaviour and purchasing power of the ordinary customers who are languishing in long queues in front of SATHOSA outlets. If a customer can afford to buy things just because the prices are lesser than the prices in other places, he doesn’t need a minister to get advice to do so. However, the authorities announced on November 6 that the condition was withdrawn by SATHOSA.
In an apparent move to control the shooting up the price of rice, by way of competition, the government on November 4 reduced the duty on rice imports from Rs. 50/ 60 to 25 cents for a kg, reminding us a similar action taken by the authorities in November last year. They reduced the duty on Sugar imports from Rs. 50 to 25 cents and stipulated a control price which was Rs. 85 a kg. It led to a massive plunder of public funds by the traders who pocketed the duty reduction while further increasing the sugar prices up to Rs. 220. The Opposition parties accused that this was one of the biggest corruption in the country’s history. What is the assurance the government leaders have that the same would not occur in respect of rice? How would they re-impose the previous duty on rice imports to support the cash-strapped treasury, if the plan failed?
We are on the brink of a food crisis due to the sudden ban on chemical fertilizer and other agro-chemicals in May. Government leaders are so ignorant about the situation on the ground that they accuse the Opposition parties for the countrywide demonstrations by the farmers who have been demanding fertilizer for the past few months. No farmers would keep away from cultivation for political reasons, since it was their source of revenue with which they feed their family, educate their children, build their houses and maintain their social status as well as their relationship with their relatives and friends. In short, it is their life. It is very clear that the government banned fertilizer imports due to foreign exchange crisis it has faced with. The ban is somewhat similar to drinking seawater to quench the thirst. The food crisis which is imminent due to the ban would demand more dollars to import food in a few months.
What is worrying is that no political party – including the Opposition parties criticizing the government for the economic situation in the country – seems to have immediate solution to the current problems. The leaders must have the political will to seek the expertise of the independent economists in the country – but not the political stooges – and prepare short-term and long-term plans to face the reality, without blaming the masses and the Opposition or attempting to divert the attention of the people through various committees and task-forces.
Disclaimer: Seek experts’ views to solve the burning issues - Views expressed by writers in this section are their own and do not necessarily reflect Latheefarook.com point-of-view