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Sri Lanka President appoints task force on Coronavirus economic revival and poverty

CURFEW BREAK: A road in a Colombo suburb of Battaramulla full of unusual traffic as people try to stock up on food on Monday Mar 24.

ECONOMYNEXT – Sri Lanka’s President Gotabaya Rajapaksa has appointed a task force on economic revival and poverty eradication as state controls against Coronavirus has crippled distribution and normal economic activities and more state interventions are planned.

“The Task Force is responsible for reviving the economy and eradication of poverty while paying special attention to the challenges posed and opportunities emerged in Sri Lanka in the wake of COVID – 19 outbreak,” a statement from the President’s office said.

“Based on the vision of the “SaubhagyayeDekma”, policy statement, the Task Force should steer the relevant institutes to create a production economy through the formulation of a unique economic structure based on novel initiatives.”

“It has also been tasked with the responsibility of taking measures to distribute products in liaising with all the institutes while paying attention to the activities undertaken by the health and education task forces to maintain normalcy in the civilian life.

“The Task Force is required to inform the President of all instances where any public official, Ministry, State Department, State Corporation or any other similar institute which delays or fails to perform duties and responsibilities assigned by it.

Classical economists have pointed out that crises provide opportunities to control and cripple economic activities and then rapidly escalate state interventions with new laws and agencies to solve the resulting problems or unintended effects of the original interventions.

However the Presidnet’s office said existing task force already appointed would be abolished with the new one.

A task forces appointed on January 24, 2020 and March 24 on Poverty Alleviation and Livelihood Development and another Presidential Task Force appointed on March 23, 2020 on administration of essential services to continue civilian life in high risk zones in the face of COVID- 19 spread will be abolished with the establishment of the new Task Force.

US President Franklin Roosevelt’s New Deal interventions and new agencies and laws delayed the final recovery and led to a collapse of the first recovery, economists have pointed out.

The rapidly escalating state interventions and spending and laws are called the ‘ratchet effect’ which can do lasting damage to a country and the poor.

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Ad hoc, impractical and coercive and changing rules of the game including price controls confuses economic market participants, which is known as ‘Regime Uncertainty’.

Both Sri Lanka’s National Medical Devices Authority and Consumer Affairs Authority had slapped price controls and export bans using the current crisis.

Some of them have since been taken off, but price controls on tinned fish and dhall had made the goods disappear off the shelves. (Colombo/Apr23/2020)