The Economic Setbacks Of Yahapālanaya Government

By Udara Soysa –

The Yahapalanaya government, which came into power in Sri Lanka with promises of transparency and good governance, faced significant economic challenges during its tenure. A series of missteps and unfulfilled commitments left a lasting impact on the country’s economic landscape.

One of the notable issues was the delay in the Port City project by a year. This delay not only incurred opportunity costs but also resulted in the relinquishment of additional land to China. The economic implications of this setback were substantial, affecting the potential growth and development of the region.

Another unfulfilled promise was the failure to restructure or privatize SriLankan Airlines, a move that could have streamlined operations and mitigated financial burdens. Similarly, the lack of restructuring in the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB) led to increased USD borrowing, exacerbating the country’s economic challenges.

Despite assurances, the economic growth under the Yahapalanaya government remained below 3% annually. This sluggish growth was attributed to the government’s failure to implement policies swiftly, hindering progress and stifling economic momentum.

The decision to increase government servant salaries by 10,000 LKR further strained the economy, raising concerns about fiscal responsibility and the sustainability of such measures. Concurrently, the Central Bank of Sri Lanka (CBSL) bond scam cast a shadow over the economic landscape, as a friend rather than a career central banker was appointed, leading to a breach of trust and financial irregularities.

Foreign Direct Investments (FDIs) failed to meet expectations during the Yahapalanaya era, signaling a lack of effort in removing bottlenecks that hindered foreign investment. The government’s focus appeared to be more on political maneuvering to remain in power, causing a neglect of essential economic matters.

Key projects, such as the Grand Hyatt, Hilton Colombo, and Grand Oriental, faced corruption charges, yet no decisive action was taken to commence these projects. The lack of progress reflected poorly on the government’s commitment to combat corruption and promote economic development.

Sri Lanka Railways remained untouched by privatization efforts, missing an opportunity to enhance efficiency and reduce financial burdens on the state. The appointment of friends to the economic council, instead of independent experts, raised concerns about decision-making integrity.

The Kandy Expressway project faced prolonged delays due to corruption issues, taking five years to complete the first phase. This not only reflected poorly on project management but also contributed to missed opportunities for economic growth and infrastructure development.

The Yahapalanaya government’s poor digital strategy further compounded its economic woes, as no significant initiatives were taken within the cabinet ministry to address the evolving digital landscape. This failure to adapt hindered the country’s progress in an increasingly technology-driven world.

In conclusion, the Yahapalanaya government’s tenure in Sri Lanka witnessed a myriad of economic challenges stemming from delayed projects, unmet promises, corruption issues, and a lack of strategic focus. The consequences of these setbacks lingered on, leaving a mark on the country’s economic trajectory.

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