From the Editor: Siddharth Sehgal

The economic chaos that is unfolding in Sri Lanka right now should be a cause of concern for us, it’s not that we are not taking a note of what’s happening in our neighborhood but somehow it seems we are not in a mood to learn from the situation.

Even though we are extending a helping hand to our Sri Lankan cousins in form of credit, food, and other essential supplies but we should also look into what got our Southern neighbour into this economic hot water. Sri Lankan economy is heavily dependent on Tourism which was nearly wiped out by the Covid pandemic, moreover their own financial mismanagement and whimsical policies such as trying to convert the country’s agriculture from a chemical-based system to an organic one overnight and massive tax cuts that dried up the revenue stream. But the debt, especially the Chinese debt became the proverbial nail in the coffin.

 The tendency to base government policies on getting more votes is one primary reason that comes out to be the root cause of this financial debacle. Rather than creating job and growth-oriented policies, governments in this part of the world tend to focus on populist measures that grab eyeballs.

 In India, during the initial days of the pandemic, the government blindly imposed a blanket lockdown which resulted in a huge number of people losing jobs and getting displaced, the ill-planned covid response left a massive dent in the country’s financial coffers. Now, we are trying to fill that revenue gap by increasing petrol prices which will, in turn, affect the purchasing power and financial wellbeing of those who depend on daily wages for sustenance.

We have to think rationally rather than making policies on the go, rather than worrying about the next elections we have to think from a long-term perspective. Given our energy needs and dependency on foreign oil, we cannot simply go on extracting the cost of oil from the ordinary populace. If we are to avoid Sri Lanka-like situation in the future, it is necessary to have an independent, clear approach that is less reliant on foreign friends or, for that matter, foes.