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U-turns to dead ends

28 Sep 2021

In a stunning reversal of a decision that was taken with the stated aim of combatting a “rice mill mafia”, the Cabinet of Ministers decided to revoke the gazette notification issued earlier this month to set maximum retail prices for rice, and at the same time, to import 100,000 metric tonnes of rice to prevent a shortage in the domestic market. Subsequently, rice mill owners yesterday (28) announced plans to hike rice prices, inciting fresh concerns among consumers. Setting aside the people’s complaints about rice prices, this issue has served to highlight two key points – that setting price controls on a free market is neither advisable, nor sustainable, with very few exceptions; and that inconsistency on such matters only leads to further ramifications. On the first point, setting price controls and thus restricting producers and importers will either lead to a drop in quality, or even worse, a drop in production, thus setting the stage for the very scarcity that the Government stated it was trying to prevent with this move. On the other, such a back-and-forth stance only highlights inconsistency on the Government’s part, which sends a bad signal to market forces and stakeholders. Unfortunately, the controls on rice have not been the only front on which the Government has displayed policy inconsistency; the same has been observed with the decision to switch to 100% organic agriculture to save foreign reserves, as well as some of the import restrictions, and even the implementation of Covid-related travel restrictions. This is not a mere case of indecisiveness. What leads to this indecisiveness is incompetence, and sometimes selfishness, on the part of the Government. If the decision makers take into account all pertinent facts before making a decision and conduct an unbiased study to forecast the results of those decisions, such abrupt reversals of decisions can be curtailed. If the Government has to go back on their decisions even before they can come into effect, it only shows that the so-called decision makers were only interested in keeping up appearances, rather than actually implementing such for effective results. That is not to say that Sri Lanka does not have competent professionals or experts; there are experts. But the issue is that almost all the experts who can be trusted to make unbiased recommendations to facilitate the decision-making process in the public sector are either being subjected to political pressures or sidelined by politicians, who are the ultimate decision-makers. The unfortunate reality is that the quality of these recommendations or decisions made by experts in the public sector does not matter, because the final stage of the decision making process is dominated by politicians, who assign more weight to the interests of themselves and their political parties as opposed to those of the nation. That is the main reason Sri Lanka keeps making unsustainable, impractical decisions, and the resignation of health experts from the Health Ministry’s expert committee on Covid-19 management, and of the Chairman of the Paddy Marketing Board, who implied that their decisions and recommendations were not valued by those at upper levels of their decision-making processes, are just a handful of examples. The worst part is that these U-turns affect not only the consumers, but also businesses, including the self-employed. Unlike the Government, these businesses make business decisions and plans based on the country’s economic and social situation, and their plans are long term. They do not have the ability to change their plans every time the Government changes its word as soon as it realises the impracticality or the lack of longevity of its decisions. At a time when the revival of the country’s business sector plays a major role in uplifting the country’s national economy, this is a massive drawback. Needless to say, when businesses get affected, it is again the consumers who must pay the price. To rid the country of this lack of policy consistency, which is taking its toll on the country’s economy, businesses, and the people, regardless of whichever ruling party, Sri Lanka needs national policies that do not change every time a new government comes to power, or even worse, within the tenure of an existing government, and that requires a major attitudinal change in the country’s decision-making process.


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