People could, of course, eloquently talk of sound monetary policies; effective fiscal policies; well structured private/public partnerships; super regulatory institutions; vibrant markets; skilled managers; technical capabilities; clean environments; safe living conditions; developed infrastructure; speedy justice; transparent systems; stable governments; corruption – free societies; free media; lower crime; balanced development; trickle down effects; equal opportunities; equitable distribution of wealth; good living standards and a whole host of similar outcomes. But, mere talk of such conditions would not lead us to achieve those goals or achieve high sustainable growth. If we are to realize all those outcomes, the continuous implementation and close monitoring and evaluation of all our programmes and policy actions is essential. That then, is the key. Let us remember that it is better to implement one action than write 100 reports that no one takes notice of. It is better to deliver one outcome than deliver 100 speeches that no one listens to. It is better to improve one life than organize 100 workshops that no one finds useful. It is better to light one candle than curse the darkness! This then, my dear friends, is the challenge that is before us. Very often, we encounter prophets of gloom and doom who attempt to demoralize us by showing off the magnitude of the problem or by continuously criticizing, or by telling us that we can’t. We should not fall prey to such distractions or falter in the implementation of our policy actions.
In this background, we cannot realistically expect oil prices to reduce in the near future and therefore we would have to consciously brace ourselves to deal with the harmful effects of this highly destructive attack on future growth, if we are to maintain our growth momentum. As if the of oil shock was not enough, the international commodity prices too, have been rising sharply during the past year or so. This outcome possibly displays how tightly linked the prices of commodities are, to each other. As a result of these increases, which resulted in the global food price index recording a 54% increase over the past year, many countries are now facing their highest recorded inflation figures in the new millennium. China’s inflation in January 2008 was at its highest in 11 years. In Singapore, it was their highest in 25 years. Australia recorded their highest figure in 16 years. We, in Sri Lanka also recorded our highest rate in 18 years while we know Pakistan too is struggling with its inflation, amidst high food prices. In this volatile scenario, the challenge before the emerging countries is how to maintain price stability, without hampering the growth momentum. Unfortunately, in the backdrop of high international oil and commodity prices, there does not appear to be an easy escape route or a quick fix. Worse still, many experts are now proffering the view that the current increases in oil and commodity prices may be a “structural adjustment” rather than just another “supply shock”.