Inflated prices and deflated pay: Don’t pass the buck

Inflation is at its highest level and none dare dispute it. We all know what is driving the cost of living higher. It is due to both internal and external factors. It is the responsibility of the Government to ensure domestic policies are effective to ward off any serious impact from external factors. There is growing consensus that, heavy Government borrowing or the fact that it is living beyond its means is not helping to control rising inflation. Spikes in oil and imported food and commodity prices have made the challenge difficult. It is in this context that, the Government must be sincere in its efforts to tackle inflation and also provide relief to the people, especially, the poor.

While some measures have been taken to address the crisis, a lot more could be done to effectively curb inflation, ease off the burden on the people and stimulate the economy. It appears that those in power take comfort from rosy, yet questionable forecast from the Central Bank and other government economists. A proper assessment of the ground situation will expose this fallacy and trigger a more concerted effort and aggressive measures. Failure will only result in the Government having to deal with a bigger crisis in the next few months.

Despite the public being taxed extensively to finance the war, the people have less in their hands to spend. Whilst the public at large are fully behind the Government’s resolve to wipe out terrorism, their support and patience is running out because, individually, people are fighting their own mini battle of survival from the flames of high inflation.

Therefore tackling inflation and stimulating the economy too, should be on a war footing, and not solely defeating the LTTE. Wasteful expenditure and tamashas are abound, whilst the country doesn’t see greater austerity measures from the Government and Ministers.

Media Minister Laxman Yapa Abeyawardena on Monday said monthly monetary allocations to all Ministries will be reduced by 50% as an austerity drive but the budgetary allocations for the year 2008 will remain intact. All Ministers have been asked to limit foreign travel. This is commendable but implementation is key.

The public are continuously told to tighten the belt beyond they could physically, whilst the Government and politicians get fatter. Political rhetoric must stop. Those who are sympathetic towards public plight must show their sincerity by deeds.

Today, in the opposite page, we feature some thought provoking comments from Ven. Professor Bellanwila Wimalarathana Nayaka Thera. His responses to current issues must be taken note of by all.

The growing impatience is the underline reason for the chorus for pay hike, in both the public and private sector. The quantum of the pay hike, Rs. 5,000, demanded by the public sector, tells the true story of the plight of the people. If war is a damper on investor and business sentiment, then the looming threat of nationwide strikes by trade unions will worsen the overall status quo.

The private sector has been equally impacted by rising inflation, high interest rates and exorbitant cost structure with domestic and global situations denting sales and competitiveness. Nevertheless, the private sector cannot be deaf and dumb to cries for pay hikes too. We see a growing fad of corporate citizenship and it is pertinent to remind that Corporate Social Responsibility should be evident within and first, with how they respond to needs of employees – their core human capital.

If economic or business situations aren’t conducive to grant a wage hike, then it is up to the private sector, as the engine of growth, collectively tell the Government to effectively and efficiently address the contributory factors. The private sector cannot, by default, remain silent but rather, owe employees and customers the responsibility of voicing their concerns to the powers that are. The once vibrant Joint Business Forum (JBIZ) is silent or perhaps, disintegrated. The individual chambers of commerce, which collectively represent business sectors or companies or entrepreneurs, haven’t been aggressive either. We are not advocating a trade union-type activism on the part of chambers of commerce, but to be expressive and effective in their positions with regard to issues affecting their very survival and growth. There is a fear in some quarters that, even chambers expressing their voice could draw the wrath of the Government or officials. If so, how independent or strong is the private sector of the country. How sincere is the Government in responding to the concerns and suggestions of their partner in development, the biggest tax payer and the biggest employer.

A greater degree of trust and responsiveness between the Government and the private sector could only be achieved, if there is respect and recognition of uniting to effectively deal with inflation that is burning the people and economic activity. Passing of the buck must stop and, both the Government and the private sector must take their own initiatives, collectively and individually, to resolve what is weakening their core – the human capital. It is only through such a course Sri Lanka can keep its spirit alive to face future shocks – both global and national, fight many more battles as a country and as a corporate, and forge ahead.

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