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qrcode.29413330We have looked thus far at areas where government has a major role to play. In other areas it must recognize that people should by and large be left to function on their own. Yet in the modern world, given the scale of activity that occurs, there is need of some state intervention. This however should be seen as

 

Facilitation

 

Increasing involvement of government has become necessary for production and trade after the Industrial Revolution and the emergence of the modern economic system. Before that, government had mainly to ensure physical and financial security. But even in early days there were requirements that could be met only by large-scale activity, and governmental involvement was essential for this.

Thus, going back to early Sri Lankan history, we find that the mark of a good ruler was promoting infrastructural development for irrigation purposes. In modern times, apart from irrigation, which is still of vital importance, research to promote productivity and preservation, communications networks to promote distribution, and credit schemes to promote investment, are essential for the support of agriculture.

Industrial development requires even greater infrastructural support, including utilities on a large scale and specialised training. Trade in both agriculture and industry should be facilitated through financial assistance as well as improved international communications, including telecommunications where rapid modernisation is vital.

Some of these areas overlap with those discussed earlier, but these activities are the responsibility of individuals and organisations. Government need not itself engage in such activities. In statist systems, economic activity was undertaken by government, often leading to monopolies. Experience has shown that this may hinder economic development. Without incentives for efficiency or penalties for incompetence, systems tend to collapse. Political interference often leads to overstaffing and indiscipline, which breed corruption and limit productivity.

 

The essential function of government in these areas is facilitation of activity by providing infrastructure and services needed for smooth functioning. In some instances, it could also include subsidies, but this should be carefully monitored lest they contribute to inefficiency. Nurturing a particular sector at times is a vital task of government but such nurturing should be to strengthen it to stand on its own over the course of time. If this is not feasible, continuing with subsidies is inappropriate in view of the wider interests of society.

 

To sum up, the facilitatory functions of government, which need careful planning and the setting of readily identifiable targets, require in a cabinet the following portfolios—minister of agriculture / irrigation, minister of industries and/or trade, minister of transport (including roads, railways, harbours and aviation), minister of communications / telecommunications and minister of power and energy.

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Rajiva Wijesinha

April 2018
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