Impeccable Character & Economic Wisdom Of Naganada Kodituwakku
Hema Senanayake
Mr. Nagananda Kodituwakku has announced his candidacy for 2020 presidential election. He claims that he has an impeccable character. At least this means that he will not lie to the people of Sri Lanka. I like it the most. In other words which are familiar to him, he will tell the truth, the whole truth and nothing but the truth. This is the very reason that he must be careful in submitting his election manifesto. What is troubling me right now is that he unknowingly, assuming that he doesn’t lie, has declared some of his economic views which would be found false when come to actual governance of the country.
However, certain reforms he proposes have well resonated with me and I guess so should be with many. This parliament with having 225 parliamentarians are too big for the country. Nagananda proposes to reduce it to 125 members that is 100 parliamentarians less than now. It reduces the chances of fielding and getting elected politicians with lack of integrity. I like it. If he really proposes to stipulate to have certain education qualifications for those who are allowed to contest in parliamentary elections, that would be a bonus benefit. The country needs politicians with high integrity. Also, he proposes to establish the supremacy of law, I would say over corrupt politicians of all kind. If elected, he has the vision and vigor to do it and he would do it better than any other prospective candidates. I like it too. But I have a problem with his economic wisdom or how he approaches the issue of economic governance.
When come to the subject of handing the economy, he seems to be in the same fantasy world in which many UNP leaders had been living in prior to the presidential election of 2015. By profession Nagananda is a lawyer and might have no knowledge of economics specially as to how extremely complex system of economy works in Sri Lanka and elsewhere. Therefore, I think he should not suggest any conclusive propositions at this time, in regard to economics other than expressing his commonsense economic vision. But I noticed that he made some mistakes which would be tantamount to political lying. Let me be specific.
Nagananda proposes to declare one-month amnesty for corrupt politicians and high-level government officials if they agree to pay all monies earned from corruptions. This is one method of finding money to pay huge government debt. Just one week prior to the 2015 presidential election, UNP’s best team had similar illusions in regard to economic governance which is one of the most important subjects, then and now. For an example, at the historic debate held on December 31st night of 2014 at the Independence Square, when the incumbent President Mahinda’s team questioned as to how they (UNP) proposed to find money to finance the proposed salary increment of Rs. 10,000 for each government employee and for other projects, Ravi Karunanayake and others have insisted that they can find money just by stopping corruptions. They have presented nice calculations to prove not only that they would have enough money but also they would save a considerable amount of money by stopping corruption. By that night I realized that they would make a big mess in regard to economic governance but as I openly said in my prior articles, I casted my vote to the common candidate in January 2015.
However, the next day after the said debate, that is on January 01st, 2015, I wrote an article explaining how the economic system works. On that day I wrote that, “…you may win an election on corruption charges, but you can’t run an economic system by just being not corrupt. This means stopping corruption would not give you any new money to finance the salary increases etc. This truth will be found out soon by the new government… Stopping corruptions might reduce the cost of doing government business. But systemic arrangement of the economy is such that it does not necessarily bring in new money to increase welfare payments. Unfortunately, sometimes corruptions bring in new money into the system… I am writing this not to absolve the government from the culpability of corruption. But I want to enlighten the general public and the civil society organization activists who happened to be the vanguard of the current movement of the opposition in order to make them intellectually ready in economic governance. Then they can be a true force acting outside the new government. They need to be mindful that powerful anti-corruption charges/allegations would have limited and minute impact once the new government sworn in. Perhaps subsequent litigations against corrupt politicians or officials might help to recover and bring in a few millions to government coffers. It cannot be huge, I guess.” (Another Dimension of Corruption, Jan. 01, 2015, Colombo Telegraph).
Mr. Nagananda, I request you to read the above said article again and again because as I pointed, I never know any large physical system than ECONOMY that truly depends upon a hypothetical system created by human imagination –And that hypothetical system is being the monetary system. The monetary system is not real or physical phenomenon.
Then the other method of reliving debt burden is to request debt forgiveness from foreign debtors and Nagananda pointed out that Russia did cancel debt for many African countries. Those countries might be lucky. But any prospective presidential candidate should not keep hopes on foreign debt forgiveness. The country must be ready to honor their debt obligations, especially foreign debt, if the country has a slightest hope of maintaining a reasonably stable currency. Without a reasonably stable currency our all economic hopes will be shattered as is happening now due to inefficient monetary policy management.
Thirdly, Nagananda, rejected to deal or negotiate with the World Bank and International Monetary Fund (IMF). This is sheer ignorance. The UNP had and still has the totally opposing view to Nagananda’s; they totally rely on IMF’s policy interventions. This is sheer ignorance too. Any country that uses some other country’s credit based domestic currency as its reserve currency, has to negotiate with IMF, period. Sri Lanka is one such country. Not only those countries, even the powerful European Union had to seek IMF intervention during the Great Recession of 2008-09, as the European Central Bank could not create money as easily as the Federal Reserve of the United States for the use novel policy tool call “Quantitative Easing.”
