A Planning Commission is a prime necessity for Sri Lanka
Posted on December 9th, 2012

By Garvin Karunaratne Former Government Agent Matara

 These days the city of Colombo is totally blocked with traffic. Go anywhere, one has to sit in a car for hours. Every morning, from all rural areas people and children converge on the City in droves. Cars and vans are parked during the day and the exodus from the City starts  in the afternoon.  Something has gone wrong somewhere.

The Western Province has it all. As much as 51% of the national production comes from the Western Province.

Sri Lanka did have planning intact till 1977, when the IMF interfered and since then we do not plan development.   It is only the  Ministry of Economic Development that tries to bring about some development.  The rest is piecemeal- a foreign investor coming with dollars, foreign exchange that will help us to put off the final death knell date of being in debt, the legacy of the IMF to Sri Lanka, and the investment is accommodated  wherever the investor decides. The Private Sector , the  IMF’s Engine of Growth is more keen on opening Supermarkets because they can make  a profit within six months. Their motive is import and sell. The earlier motto of produce is lost mostly due to the high interest rate- a bank loan is at 24%  interest and a credit crunch imposed by the Central Bank is at work putting off local investors and entrepreneurs.  In my 2006 book: “How the IMF Ruined Sri  Lanka’, I queried:

“The IMF and the World Bank  advised us to follow high interest rates. Very high interest rates are advised in the ruse of increasing savings. It has meant that producers and manufacturers have to get loans at  24% to 30%. Can they ever compete  with manufacturers in Developed Countries that can get loans at 1% to 4%?. The intention of the IMF and the World Bank is clear. It is engineered to ensure that local production and manufacturing is very costly and thereby the raw material gets exported without any local processing.”(pg.33)

Our leaders sadly don’t realize what is happening under their very feet.

Till 1977 the Government did have many development programmes in rural areas. In the Fifties just after independence, it was the Rural Development and Cottage Industries and later Cottage Industries became Small Industries and further later a Small Industries Department emerged.  Every cluster of villages had a industrial unit headed b y a Textile Demonstrator who also knew cottage industries. People in the rural areas were provided with free training and  many small entrepreneurs emerged.  Many were the textile handloomers  that had textile handlooms in their homes. Their work was supervised by the Textile Demonstrators.  The sale of the handloom sarees and textiles was handled by the Laksala, the commercial wing of the Small Industries Department and also by the Cooperative Unions at the Divisional and the District Level.  In 1977 the UNP as per instructions from the IMF crippled the handloom industry and over 100,000 handloomers lost jobs. They migrated to the City in search of employment. Go to any Supermarket today and one will find handloom textiles, sarongs etc all imported from India. We killed our handlooms and now  we import handloom textiles. Earlier it cost us only the yarn in foreign exchange. Now it costs us the cost of yarn plus the cost of handlooming plus a profit for the Indian entrepreneur. . We have shot ourselves in the foot!

After the small industries were developed the Government with Chinese Aid established Powerlooms in rural areas.  The Government Agents of the Districts were put in charge of the Powerlooms. Generally each Powerloom  was run by a committee headed by the Divisional Revenue Officer. These were excellent units and produced textiles of superb  quality. In fact the Hakmana Powerloom produced suiting which was of very high quality and it was in high demand even for people that had migrated to the UK.  The Small Industries had a specialist research and training unit called Velona at Moratuwa to provide guidance  to the Powerlooms.

Under the Divisional Development Councils Programme rural industries got a boost. This Programme was meant to create employment for youths and youths were engaged in various industries all in rural areas. There was a Mechanised Boat Building Factory at Matara which was initiated by me where 40 ft seaworthy fishing boats were built.  Coop Crayon was an import substitution type of industry which did supply a tenth of Sri Lanka’s requirements of crayons during 1970 to 1977, till it was axed by the UNP rule that came in 1977. That was the flagship industry of the Sirimavo Government  and I am proud to have been the officer that directed it. The  art of making crayons was developed by my Planning Officer at the science lab at Rahula College.  That indicates the strength of our schools to create employment in rural areas. They are dormant now! The UNP wanted to bury everything that the Sirimavo Government achieved and thus the baby was thrown out with the bath water. Many such industries emerged in the rural areas.

In 1977 the IMF declared that the Private Sector was henceforth the Engine of Growth and countries that accepted its Structural Adjustment Programme had to follow all the policies and that included dismantling Public Sector Programmes that helped the people.  The Powerlooms were done away with. At its heyday the power looms worked 24 hours a day for seven days of the week and provided the country will textiles of high quality. I am personally aware of this because I had to get it done for a full four years..  The Powerlooms were run by cooperatives and with the handlooms were industries established in rural areas.

!977 is a watershed in our development where the Public Sector was closed down and shown the barracks and the Private Sector was anointed with the task of establishing industries, and making money. Earlier there was a method of establishing  industries in rural areas.  From 1977,  powerlooms were closed down, the rice mills were closed down and there were no enterprises in the rural areas. The people flocked to the city of Colombo in search of work. Velona was disbanded and its high tec equipment sold for a song.

There are also some really mad mad things happening. Recently a Newspaper article highlighted the  fact that under the Mahaweli   coconut  saplings were planted with drip irrigation and this drip irrigation was found too costly. They gave it up after a costly  experiment.  Coconuts can’t thrive in the Dry Zone unless near the tank bunds. This should have been known to our pundits.  Our coconut area is the Western Province and the North Central Province.

There is also an attempt to plant rubber in Polonnaruwa. The specialist who tells this does not know the Dry Zone. This will be another mad costly experiment.

Why are we living in Cloud Cukoo Land?

Let us see the evils of not having planning.

Every now and then the farmers in Kekirawa and Hanguranketa reported that they cannot sell their tomatoes.  Kekirawa buried them. Hanguranketa made a pandal to get their plight into the limelight. Then look at the Supermarkets in Colombo. All of them  have Tomatoes Sauce from the USA for sale. The one Canning Factory that made Sri Lanka self sufficient in tomatoe sauce was privatized and now it is not interested in making our country self sufficient.  The missing link is a Cannery for the Public Sector to make tomatoe sauce. In my days at Nuwara Eliya, during the tomatoe season a car load of tomatoes was purchased by me at Hanguranketa. My home became a make shift canning factory  for a number days to make sauce that  lasted me over six months.

Take the cost of Living. Vegetables are expensive. In  the good old days we had a Department called the Marketing Department which had a vegetable and fruit marketing scheme. The Department competed with traders and bought

vegetables at the main Producer fairs transported the produce overnight to Colombo and distributed it for sale through many small retail units in the City. For this task the Department kept a margin of 10% to 15% for cost of handling. The result was that consumers in the City got vegetables at low rates. The retail private trade had to also reduce their sale rates because otherwise their goods will not be sold. Under the maxim that the Government should not attend to commercial undertakings the Marketing Department was axed by the IMF. Today the traders rule the day and charge fanciful prices. We cannot re establish the Marketing Department because we will have to face the wrath of  the IMF.  However we are trying to do something and we established an Economic Center at Dambulla. Our pundits failed to understand that in creating the Dambulla Center we have created anoither middleman.  Even imports of some items go  out from the Port of Colombo to Dambulla and then it gets back to the Colombo wholesale. All this go to show that we do not have any planning.

It is hoped that the Divineguma Programme which is likely to get approved on 8 th December will usher  jobs in rural areas.

That will be the day when there will be less buses and less traffic on the Colombo roads.

All this- the fact that rural areas are neglected today and everything is happening in the City of Colombo, the mad experiments of trying to grow coconuts in the Dry Zoned under Mahaweli and Rubber in Polonnaruwa, the uncontrolled cost of living.  all tell me that we need a Planning Commission to approve plans and to project what has to be done to create jobs and to use our assets  in the national interest.

Garvin Karunaratne

Former Government Agent Matara


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