- Academic says Sri Lanka’s welfare state has failed to develop people who can generate dollar income
Sri Lanka has been a welfare state since independence, but it has now reached a breaking point, with people increasingly realizing that the government cannot continue to provide things for free or even at subsidized prices.
However, Mahinda Pathirana, a senior lecturer at Sabaragamuwa University, recently asked whether people are really ready to move from a decades-old welfare state to one determined entirely by market forces, where prices of everything is decided based on demand and supply.
He said he doubts this is really what the people, who are engaged in the struggle and others in society, are really asking for, despite calling for a complete reset of the country’s economic and political system, calling the divergence a “great dilemma” in Sri Lankan society and regime.
“Our system is in a big dilemma. Neither the wrestlers nor society demand prices determined by market forces. At some point we ask for a subsidized price. We demand free education; we ask for free health care and so on. said Pathirana in a televised chat.
Left-wing politics in Sri Lanka sees the government playing an outsized role in the economy, including state-sponsored free education, jobs and state-owned enterprises.
However, under a potential bailout backed by the International Monetary Fund (IMF), the country will have to do the opposite while privatizing even existing state-owned enterprises, thereby reducing government and its role in the system.
Market-based pricing of fuel, gas and other utilities in response to the steep depreciation of the rupee has already inflicted enormous pain on household balance sheets, as they have been forced to reduce their consumption to the bare minimum, without a corresponding increase in their income.
Pathirana said that while people ask for free and subsidized products, they also ask for other things to maintain their way of life, which they have become accustomed to, most of which is imported.
“The problem we have is that the man we make healthy through the free healthcare system is not making any money. Instead, what he does 24 hours a day is spend money. For example, from the time it wakes up until the time it goes to bed, it consumes things that we have to bring back in spending dollars,” he said.
“On the other hand, academics and intelligentsia like us, who have benefited from free education, also don’t make money. Universities don’t make money. The only dollars we get come from of those who migrate and repatriate some of their money just enough to support their relatives back home,” he joked.
Therefore, he said, the current crisis offers an excellent inflection point for everyone to assess the path we have taken and decide which path we must follow to achieve sustainable economic well-being for all. .
“In my opinion, I think society now needs to at least engage in self-reflection and self-criticism of the path we’ve been on so far and debate and decide whether we want to have a full liberal market system or the welfare system or a restricted liberal system.