July 04, 2010 (LBO) – Sri Lanka’s main opposition poked fun at a budget for 2010 which had less ‘grasping government’ elements in it and was more affordable to the poor, by throwing the ruling coalition’s own slogans of yesteryear, back at it. In 2006, Sri Lanka’s Mahinda Chinthana platform justified a spending spree saying that ‘cutting the budget deficits per se’ was not good economic management, United National Party lawmaker and economist Harsha de Silva said.
The platform took its cue from an earlier Rata Perata framework of 2004, which was strongly backed by Sri Lanka’s Janatha Vimukthi Peramuna (JVP) a Marxist-nationalist party, which is now in opposition.
At the time Sri Lanka jettisoned a deal with the International Monetary Fund aimed at fiscal prudence and went on a state-expansionist spending spree. A government minister then said cutting deficits was ‘old fashioned’.
The spenders got a fresh boost in 2009 when developed nations expanded deficits to ‘stimulate’ their economies. Sri Lanka’s spenders gleefully claimed that the so-called ‘Washington consensus’ of prudent monetary and fiscal policies was dead.
But high spending developed economies are now running in t