A Tale of Two Economic Challenges: Sri Lanka in the 1970s and the Gotabaya Rajapakse Era

Sri Lanka has faced its fair share of economic challenges throughout its recent history.

Two distinct periods, the early 1970s under Mrs. Sirima Bandaranaike's austerity plan and the more recent hardships during the tenure of deposed President Gotabaya Rajapakse, stand out as stark reminders of the nation's economic struggles.

Let us explore the similarities and differences between these two periods, shedding light on the underlying causes, policy responses, and their impacts on the people of Sri Lanka.

Economic Challenges in the Early 1970s:

In the early 1970s, Sri Lanka faced severe economic difficulties due to a combination of factors, including caused by the Yom Kippur War and rising global oil prices, a high import bill, and a heavily centralized, state-controlled economy.

To address these issues, Prime Minister Sirima Bandaranaike introduced an austerity plan, which included nationalizing key industries and implementing import substitution policies.

Which had a significant impact on the quality of life for Sri Lankans, with many people experiencing shortages of food, fuel, and other essential goods.

Similarities:

Economic Imbalance: 

Both the 1970s and the Gotabaya Rajapakse era witnessed economic imbalances.

In the 1970s, the imbalance was due to over-reliance on imports, while the Rajapakse era saw mounting debt and fiscal deficits.

State Control: 

Both periods saw the government intervening extensively in the economy. 

While the 1970s featured nationalizations, the Rajapakse era witnessed heavy government spending and borrowing.

Economic Challenges During the Gotabaya Rajapakse Era:

The economic hardships during the Gotabaya Rajapakse era were marked by several factors, including mounting external debt, a high budget deficit, and a struggling currency. 

The government heavily borrowed, leading to increased public debt. 

The COVID-19 pandemic further exacerbated these challenges.

Differences:

Global Factors: 

The Rajapakse era was marked by global economic challenges brought about by the pandemic, while the 1970s were primarily driven by Sri Lanka's internal economic policies.

Borrowing vs. Nationalization: 

The Bandaranaike era relied on nationalization, while the Rajapakse era heavily borrowed to finance economic activities.

Impact on the People:

In both periods, the common people bore the brunt of economic challenges.

During the 1970s, the nationalizations disrupted industries and led to shortages.

In contrast, the Rajapakse era saw rising inflation, a declining standard of living, and job losses.

Both the early 1970s under Mrs. Bandaranaike's austerity plan and the Gotabaya Rajapakse era marked challenging times for Sri Lanka.

Economic imbalances and state intervention were common themes, but the underlying causes and policy responses differed significantly.

In both cases, the people of Sri Lanka suffered the consequences of economic mismanagement.

It is crucial for the nation's leaders to learn from these experiences and develop sustainable economic policies that promote growth, stability, and well-being for all Sri Lankans in the future.

Further, it is important for the people to remember those ears, demand better governance, and send the right people to represent them in the future.

"Forgetting and moving on" is not a sign of resilience but of stupidity, and the same situation can come back to haunt them in the near future if better choices are not made at the next available opportunity.