ECONOMYNEXT – Sri Lanka is mulling the continuation of an autarky or giving back economic freedom stolen from the people during monetary instability in 2020, according to a statement by the island’s state minister for finance Ranjith Siyambalapitiya.
Sri Lanka had to decide whether to rise as nation by limiting imports of items like coconut kernels, vesak lanterns and kites, he had said.
Wracked by monetary instability from a flexible exchange rate or soft-peg – a mongrel monetary regime which is neither a hard peg nor a clean float – economic bureaucrats banned the import of 1645 items as money was printed from 2020 suppress interest rates triggering forex shortages.
Up to now import bans on 795 items had been removed, Minister Siyambalapitiya had said during an event at a Temple in Ruwanwella in his home district.
There were 670 items under trade controls and removing imports were being considered for items that are not manufactured domestically.
“It am requesting whether to allow the unlimited import of coconut kernels, Vesak lanterns, kites, bamboo products, or do we produce them domestically and rise as a nation,” he was quoted as saying.
Sri Lanka’s native rulers began to rob the economic freedoms of the populace from shortly after a money printing central bank started generating monetary instability, driving the country towards autarky.
Each time the central bank created forex shortages, the hands of economic nationalists were strengthened, leading to more state interventionism, planning and spilling over to general nationalism as had happened in other European nations.
Import controls allow businessmen and producers to exploit customers with high prices. Such protected businesses also cannot export as they are un-competitive globally.
Stabilization policies that follow money printing in particular had led to anti-minority nationalism in countries like Germany. The National Socialist party gained ground in Germany in the wake of stabilization policies of the Heinrich Bruning.
In Sri Lanka similar trends were seen in 1956. The German National Socialists were among the most ardent promoters of autarky or self-sufficiency.
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Early Nazi self-sufficiency policies here.
The Hossbach Memorandum where autarky was modified.
In Sri Lanka liberty and freedom is viewed with deep suspicion by the urban intelligentsia in particular and nationalism revered.
“Liberty is not, as the German precursors of Nazism asserted, a negative ideal,” explains economist Ludwig von Mises.
“It aims at free competition and at the sovereignty of the consumers.
” It is the aim of nationalism to promote the well-being of the whole nation or of some groups of its citizens by inflicting harm on foreigners. The outstanding method of modern nationalism is
discrimination against foreigners in the economic sphere.
“Foreign goods are excluded from the domestic market or admitted only after the payment of an import duty.
“Neither is nationalism identical with patriotism. Patriotism is the zeal for one’s own nation’s welfare, flowering, and freedom.
“Nationalism is one of the various methods proposed for the attainment of these ends.
“But the liberals contend that the means recommended by nationalism are inappropriate, and that their application would not only not realize the ends sought but on the contrary must result in disaster for the nation.
“The liberals too are patriots, but their opinions with regard to the right ways toward national
prosperity and greatness radically differ from those of the nationalists.
“They recommend free trade, international division of labor, good will, and peace among the nations, not for the sake of foreigners but for the promotion of the happiness of their own nation.”
After promoting monetary instability through ‘flexible’ policies and the inevitable import restrictions and import substitution or self-sufficiency that comes it its wake, Sri Lankans then wonder why they cannot become a Singapore or Vietnam. (Colombo/Dec25/2022)