Journalist and influential 20th century American writer Henry Louise Mencken remarked, “For every complex problem, there is an answer that is clear, simple and wrong.”
Clarity and simplicity are stuff that underline great visions, define the best creative work and cut across outstanding communication. It is even the objective of this opinion piece to be as clear and simple as possible.
However, the world also belongs to people with something to say. And politicians, bent on popular acclaim, waffle their way around important issues, saying what people want to hear rather than what truly benefits them.
To dumb down complex policy and economic challenge responses to a single sound bite requires dangerously simplistic explanations. These aren’t going to be based on new ideas, but on unrealistic ones. World over, nationalists promising popular fixes to complex economic and policy challenges are gaining ground in the polls or winning power. They make the Twitter timeline, the Brexit referendum and become the president of the United States. If all their simple solutions could address challenges, these would have been discovered and tried earlier.
The dangerous simplicity of outsiders – with nothing to lose – isn’t for mainstream politicians to indulge in. Economic challenges are complex and deserve thought-out responses that deal with competing interests. To generate economic growth, boost productivity and create jobs; provide social services and manage budget deficits; implement safety nets and get people to work; and integrate with the outside world while dealing with the effects of globalisation requires, careful planning and informed tradeoffs.
Because so much is at stake and tradeoffs involve complex choices, democracies have come to rely on their civil service or technocrats to counsel, coerce and guide policymaking and implementation. Many senior technocrats are competent, creative and hardworking. Their expertise and skills have helped implement good policy, blunt the negative effects of bad ones and provide wise counsel. By passing power to unelected technocrats (politicians may be highlighting their own incompetence by trying to control technocrats for the veneer of themselves being in control), they undermine the checks and balances built into the system.
It’s a dangerous combination when – like it’s happening now in Sri Lanka – the government attempts simplistic explanations of economic policy, while suppressing technocrats.
Sri Lanka has retreated from the edge of the precipice with freedom no longer under threat. Society is less polarised, public debate lively and people’s opinions seem to matter – all good signs.
However, economic growth normally associated with a free society hasn’t materialised. GDP growth was just 2.7% in the second quarter and 4.1% in the third quarter of 2016. Foreign direct investment is just $300 million in the first three quarters of 2016. As a result, people haven’t seen an appreciable improvement in their economic circumstances. That, together with delivering the promised good governance, defines the task facing the new government.
[pullquote]It’s a dangerous combination when – like it’s happening now in Sri Lanka – the government attempts simplistic explanations of economic policy, while suppressing technocrats[/pullquote]
The government, with four years to the end of its term, can reverse the trend of it declining popularity. However, its influential finance ministry is becoming steadily nastier to technocrats and waffling its way around the economic debate, threatening long-term damage. This may be an overly simplified account of Sri Lanka’s woes. But it underlines an important fact about the state of this administration that came to power promising good governance or ‘Yahapalanaya’.
One of the aftershocks of the now-infamous bond scam has been the government’s threatening the independence of the Central Bank. The minister of finance, in clumsily worded comments, claimed, ‘The Central Bank has failed miserably on many fronts’ because it’s deviating from its responsibilities under the law that allowed it to be politicised. In early January 2017, the minister likened the Central Bank governor to a ‘hospital attendant’ who assisted the previous administration admit the economy to the intensive care unit or ICU. He was apparently irked by the governor’s comments of the Sri Lankan economy’s ill health a day earlier.
This onslaught is dangerous. It is not an attack on the policies, but on its political neutrality and independence.
The Central Bank controlling interest rates prevents politicians from fiddling with them for electoral gain. Not all of the bank’s former governors have exercised this independence, but its highly respected incumbent Indrajit Coomaraswamy has shown intent to do so. Coomaraswamy replaced the controversial Arjuna Mahendran, whose short tenure was shrouded in controversy after a firm controlled by his son-in-law profited from allegedly rigged bond auctions conducted by the Central Bank.
The finance minister’s fury is misplaced.
Indeed, the bank wasn’t neutral when it was headed by Nivard Cabraal, a card-carrying politician, and possibly during Mahendran’s tenure, when its credibility was ruined by its catastrophic failure to professionally manage the debt office.
Instead of spearheading action based on the Central Bank’s own findings, the Auditor General’s office and those of an independent parliamentary committee, the administration and its finance minister are defending questionable conduct, deflecting blame and arguing that the previous administration was worse. A particular baila quality of Sri Lankan politics is on grand display here.
The government and its finance minister grandstanding include crude challenges that serve to undermine the independence of the Auditor General’s office and the parliament’s own permanent committees. Instead of waffling their way around important issues and saying nothing, mainstream politicians should respond to the debate with relevant, detailed and honest answers.
Many of the government’s initiatives to deepen Sri Lanka’s trade, services and investment links with the rest of the world are a case in point for requiring more than the simple explanations being offered to justify them. If these deals are negotiated well and lead to liberalisation, their existence will contribute to prosperity. But compromises are inevitable. There cannot be a meaningful deal and Sri Lanka ‘get everything its own way’ too.
Negotiators are often criticised for weakness of a potential deal, a simplistic response that ignores the nature of negotiation and the cost of intransigence and having no deal at all.
Ideal outcomes only exist in the imaginary worlds of critics.
Globalisation produces more winners than it does losers. However, simplistic politicians who are challenged to explain these choices fail to also address the concerns of losers.
Government critics, who themselves have patchy records, are emboldened by its incompetence. Their fierce criticism taps into people’s widespread biases about globalisation, markets against foreigners for local manufacturing of everything and an inclination towards pessimism about the future.
A simplistic view of economic and policy choices paints a picture of winners and losers, views that journalists propagate. When the media pits one argument against the other and declares winners based on how gutsy the speeches are, it reduces the space for an informed discussion. Due to their multiplicity and ubiquity, media are now more influential than they were just a decade ago. Media strategies of the past may no longer be effective.
The political party leading the current administration has a track record of meaningful reforms that have altered Sri Lanka’s economic trajectory in crucial ways. However, its current leadership is fumbling along – hurt themselves by keeping economic debates simple and by their strong-arming technocrats.