Thread by @ChayuDamsinghe

At the end of SL's economically hardest single year since probably the 1930s, thought I'd take a look back at the changes we've had and what factors I'm looking at for 2023.

#SriLankaEconomicCrisis #EconomicCrisisLK #lka #SriLanka

2/ I'll limit the lookback so as not to repeat and focus on how I personally think of 2023. As always, all of this is just personal opinion, especially in context of the absolutely massive uncertainty we continue to be in.

3/ My biggest takeaway from 2022's economic journey is how much I see as achieved for the country. To be very clear, this is not a statement on the current administration, but on a view on change I see on the overall system.

4/ Despite a system geared towards and by corruption, despite bad actors at all stages, despite everything against Sri Lanka's people and its future, the fact that we have seen SOME improvement from the lows is really positive for me.

5/The fact that a lot of the worst mistakes have been turned around, that there is a realistic pathway towards things like SOE reform (just love reading Facebook comments on the CEB unions comments), and there might even be SOME (🤞) progress on land and labour reform?

6/ I think these are monumental first steps of progress.

However, they remain first steps alone so far. There's far more to be done IMO, both in terms of policy but crucially, in terms of rebuilding trust and confidence.

7/ For me, that's where we end the year - out of a terrible place, taking the first shaky steps to a better future.

But the fact remains that Sri Lanka's current economic situation isn't great. For me, rather than "stability", I like to think of it as "fragile consistency".

8/ That's where we move into 2023.

A year where everything that has happened in 2022 could either be undone or taken to an incredibly powerful launching pad for Sri Lanka's future.

9/ I think we all know that all the broad policy measures (though we may disagree on the specifics) that have already been taken are broadly necessary and need to be taken to completion without dragging or reversing. The question then, is on the rest.

10/ On the rest, I see 3 main risks in 2023. I'll get the pessimism out of the way first before ending up with the hope.

11/ The first risk is that the government doesn't go for a mutually agreeable give-and-take on reforms. What I mean by this, is that I feel the government must not only take "unpopular" measures but must also take "popular" measures as well.

12/ By this I mean things that show that the government is not only putting the pain onto the people but taking measures on themselves too.

These might not be so beneficial on the numbers directly, but there needs to be a lot more done on rebuilding trust in the system.

13/ This is a risk that is 100% within the control of the government.

Cutting Parliamentary and Cabinet privileges, showing credible steps towards expenditure management, setting up credible processes on anti-corruption are all critical steps I feel to rebuild confidence.

14/ Government must also IMO, take complex steps to improve the business environment - especially in the context of the country going through a harsh recession.

Yes, relief packages aren't possible in this fiscal env but regulatory reform could really soften the blow IMO.

15/ This is where cutting red tape, taking measures on land reform, having more reasonable labour regs including things like unemployment insurance etc could really make the cost that firms and people are currently paying, including with taxes, really worth it IMO.

16/ This is especially important in the context of the absolute fragility of the economy. The government really needs the goodwill of the people right now, in a context where the economy is still so fragile a whisper could send it crashing down again.

17/
The second risk is on the energy sector - an insanely convoluted mess we've gotten ourselves in. Too complex for this thread, will talk about it later.

The third risk is on global factors - we're in a tough global environment, again too complex for this thread, more later.

18/ But despite these risks, I still see hope for Sri Lanka.

Firstly, the fact is that most countries that have gotten into this sort of debt crisis has come out of it quite well. Slowly at first, but methodically, until 10 years later, they're in a much better place.

19/ Secondly, I do feel there's a groundswell of support for overall governance reforms as well.

It's clear in the more Colombo-centric crowd, but looking at how SLPP politicians (including those that are "in opposition") are treated on Facebook implies a shift in priorities.

20/ This may be temporary, but the fact that there is STILL so much "anti-Rajapaksa" sentiment, mostly centered around corruption, to me is quite hopeful that there will be at least SOME voters who vote on this in the future.

21/ Finally, I'm hopeful because of the resilience of the people.

Yes, many have left due to the lack of confidence they have in the country - but most of the country have stayed. Some for inability to leave, but enough because they believe in the future of the country still.

22/ We all know and believe that Sri Lankans are a resilient people, and we've heard it every time some crisis hits us.

But the fact that we've had to say that so many times, and we're still able to say it, proves to me that it's true - the people are resilient and bounce back

23/ Whatever pain and tragedy comes our way, I think this year has shown that many of us will stand strong and face the storm. It will be hard, we may often felt betrayed by our leaders, and our progress may be slow. No fight worth fighting is easy, after all.

24/ But we've looked ahead in the end.

That's what 2023 will be for me - a year we look ahead to a better future.

That future might not be immediate, but it will be there one day. Until then, we must then do all we can to get there. I'm confident that we eventually will.

Expanded upon this in a piece - medium.com/@chayu.damsing…

Along with a summarized image of some points and recommendations within it