Can we bring about national development? It is difficult but it can be done.
Posted on May 15th, 2013

By Garvin Karunaratne ,Ph.D.

 To me, someone who has struggled hard to bring about development, to create jobs and alleviate poverty for easily over four decades in four countries, I sense that something is radically wrong today. Instead of development and peace what I see is chaos. No less a person than Professor Paul Krugman one of the leading economists today has said that the World is lurching from crisis to crisis.

What went wrong is the mission of this Paper. Can we ever hope for development. What has to be done?

 Far back, in 1955, I belonged to a group of staff officers attached to  government departments in Sri Lanka. We were around four hundred strong, all graduates, mostly from Peradeniya, almost all charged with the motto of serving the people. We worked round the clock. There were us in the Land Development Department building up the colonies, making roads, buildings, greeting the new colonists, looking after their welfare. The Irrigation Engineers had built up the tanks and it was ours to get the people working on agriculture- producing rice. For long my task was to purchase vegetables at producer fairs and get it to Tripoli Market our Head quarters at Colombo to be sold to consumers keeping a low margin of 10 to 15%. We confronted the trader mafia at the Fairs and competed forcing them to offer higher prices to producers if they were to be in business.  Once I was in charge of Triploi Market fixing the purchase prices for purchasing vegetables all over the island. Never were tomatoes thrown away like at Hanguranketa. I would have ordered a fleet of lorries to purchase the entire stock  and turn it to tomatoe sauce at our Cannery. I did such tasks and my day was full of quick decisions. It was we- about a dozen  Assistant Commissioners of Agricultural Marketing that controlled the prices of vegetables and fruits in the entire island and kept the wolf of inflation out of the way. We did more- we purchased any amount of pineapple, red pumpkin.  ash pumpkin and tomatoes and manufactured juice and jam and made Sri Lanka self sufficient creating jobs as well as saving foreign exchange. That was the Marketing Department at work.. I remember an incident when I was Assistant Commissioner for Development of Agricultural Marketing at Anuradhapura. It was reported that people who had settled down in Padaviya were being fleeced by traders. Within a few days we established a shop that sold all essential foods at Padaviya. The trader mafia had to eat humble pie. Today the Marketing Department is no more as the UNP Government of the Seventies had to abolish it under the advice of the IMF. Today there is no definite method to ensure fair prices. My colleagues in the Local Government Service built small roads, saw to it that democratic management existed all over the island. One of us was threatened- his car waylaid- a tree trunk placed across the road and his Peugeot 203, was up to the task of going over the tree trunk and luckily his Assistant had a gun, with which they had to shoot their  way to safety. Today everyone talks of accountability. No one knows who set up the thugs to kill  that Assistant Commissioner. One can only suspect the contractors who could not play out funds. That was all suspicion. Two of my colleagues suffered for years and died- possibly poisoned. That was all surmise. But it is  a fact that they died with strange suffering at the prime of their life. We had to be doubly careful.  Our motto was work despite odds and the people moved forward.

 The plans and policies for development were laid down by our political masters. We were responsible  for carrying out the tasks. We were never kept in a district for over two years lest we build up  associations. But for some of us who were lucky, two years of hard work  and we ended up in politics, to Parliament,  eventually serving  as Ministers. Some of us fell foul of local Ministers in implementing Ministry policies. At times we were transferred immediately to please that Minister and eventually given a kick upstairs for the exemplary work.

 Third World countries were making progress with self sufficiency, self reliance, creation of employment, setting up industries to make everything we needed as the aim. On my own, without any Ministry approval, officers at Matara katcheri under my direction using the science laboratory at Rahula College found how to make crayons and we set up Coop Crayons in Morawaka where Sumanapala Dahanayake the Member of Parliament for Deniyaya worked round the clock with youths making crayons for a tenth of our requirements. That was an industry set up within three months, which proves beyond doubt that our country can forge ahead in producing all we need.. In the Seventies under the Divisional Development Councils Programme of Sirimavo  we administrators and politicians did create wonders.

 The Western Superpowers could not sell their manufactures- their countries had stagflation and unemployment. Then comes the bogeyman- the IMF and the World Bank with its Structural Adjustment Programme with which they strangled our countries in the guise of helping us.. The method was to advise the countries to spend, spend, spend and when the resources(foreign exchange) was not sufficient to depend on loans. Countries that were thus strangled had their currencies devalued, bringing benefits to the manufacturers in Developed Countries because with devaluation raw materials were discounted to the extent of the devaluation. Countries also became indebted in this process and to service the loans they were compelled to raise further loans.

 To sum it up in Professor Jeffery Sachs’ words, ” The IMF and the World Bank virtually ran the economic policies of the debt ridden continent(Africa)” That is from “The End of Poverty” published in 2005. Sri Lanka’s  economy was strangled from 1977 and in the following  decades it was so indebted that servicing the loans needed more loans or to raise funds through bonds. Today many criticize the loans taken  for the new Hambantota Port or for highways.  But here at least the Port and the Highways are there, but from 1977 we took loans to enable luxury imports, luxury travel, luxury foreign education and the foreign funds that came in as loans on interest found its way back to the donors in some form or other, but  it also left our country further indebted. We do that even today.

 Senior Minister DEW Gunasekera has stated that our revenue base is very low. He suggests that our tax charge of 20%,  a low rate, lower than both US and the UK should be increased to 40%.  To my mind the crisis needs the steel of a Mahatir Muhammed to bring in import controls, to control the issue of foreign exchange. When Mahatir did that in 2008, students studying in the UK had to pack their bags and go home or had to work as waiters in restaurants to fund their studies. He brought the finances of Malaysia around in double quick time. Once Mahatir when questioned in Sri Lanka said that if a country does not control its foreign exchange it is not fit to rule. It also needs a Rafffael Corea, the President of Ecuador,  who decided ” to default on its loans by claiming the loans as illegitimate and odious”¦ the debt tainted by corruption, immoral and a betrayal of the country”(From my book, “Papers on the Economic Development of Sri lanka”, Godages). The donors themselves are responsible for providing loans liberally. In addition to bring Sri lanka around  we need a massive production campaign to make all we need.

 The day is not lost  though the IMF is at the doors of the Petroleum Corporation, the Electricity Board and the Airlines- institutions that incur a loss. We have come to that plight because we yet do not control the economy. The IMF gave the countries the wrong advise to do away with National Planning, hand over the management of foreign exchange to the banks and the open market- both well known for their manipulation and enthrone the Private Sector as the engine of growth and confine the Public Sector to the barracks. The Private Sector fattened themselves with fanciful salaries in the hundreds of thousands while the average garment factory worker can hardly get twelve thousand. 

 Now in the World Development Report 2013, the World Bank plays a different tune- that “Jobs are critical for reducing poverty.” Little do the World Bank and the IMF realize that they themselves stifled job creation by selling the high interest policy to us and forcing us to reduce or abolish import controls and dismantle the development infrastructure that countries had painfully built up to control inflation, create employment and bring about production.   We have to deviate from the Structural Adjustment policies of the IMF and countries like India and Bangladesh that avoided the IMF have maintained their currencies without devaluation and have also avoided overly indebtedmness. In the early eighties the value of the Sri Lankan Rupee was higher than the value of the India Rupee, but today the value of the Indian Rupee is 2.3 times the value of the Sri Lankan Rupee.  India did not accept the IMF teachings with open arms.

 Let us go through the list of successes and failures in development to find our way through this maze.

 Pandit Nehru, the first Prime Minister of India had the vision of developing India and came up with the Community Development Programme, the largest development programme ever implemented in a democratic country. The people were organised into panchayats to  attend to development tasks- social development- literacy etc. Their participation was sought for development tasks in the village. A major mistake was not to involve agriculture and livestock into the programme. It all fizzelled out because the officialdom forgot the essence of community development to build up the abilities and capacities of people and instead ordered them on earth work contributions to build roads and halls for the people to gather.

 Some programmes do end up as failures. It is ours to move ahead, undeterred. We have to learn from failures.

 Pakistan too had its own ideas of development and in 1960 obtained the services of professors at Michigan State University to find the quickest method of bringing about development. It was headed by Dr Akhter Hameed Khan. They selected the Kotwali Thana, a division and concentrated on integrating the administration, building up cooperatives to elicit the participation of the people in development and building up people’s abilities and capacities as they worked on agriculture, industry and livestock. This was a great success, achieving full employment for everyone and doubling the yield of paddy all in under a decade of effort- a target yet to be achieved anywhere. That was achieved by planning on a per plot basis by farmers who were organized in cooperatives. I came to know of this in 1978 during my studies at Michigan State University where Akhter Hammed Khan was one of the professors under whom I studied. Though this was a great US achievement the IMF sidetracked this in their Structural Adjustment Programme.

 I recall an incident  when I was the Government Agent at Matara.  I attended the Government Agent’s Conference in 1982, presided over by The Hon Prime Minister, Sirimavo Bandaranayake. The progress of the agricultural programme was taken up and at the end of the deliberations, the Chair called for suggestions to better the agricultural development programme. None spoke. There was an embarrassing  pin drop silence for a while with the Prime Minister and the Minister for Agriculture gazing at the Government Agents who preferred to be silent. I got up and suggested that we should have per plot planning for paddy cultivation. I explained that all we did was for the village level agricultural overseer to come up with a figure based on the area cultivated and the average yield, calculated forward for a slight increase which gets submitted to the Agricultural Instructor and to the District Agricultural Officer and finally to be accepted at Ministry level. My suggestion was for the Cultivation Committee and the Agricultural Overseer to enforce a per plot target at the grass root level and thereby build up a systematic plan and targets. . I was stopped by the Hon Prime Minister, who spoke to the Secretary to the Ministry, There  was some mumbling between the Secretary and the Minster which we did not hear. Finally the Prime Minister asked me,”Does this mean that the agricultural programme in Matara District is not functioning properly?” None of them had understood my suggestion. I was perturbed at this turn of affairs and stood up to explain. Someone from behind me held my shoulder firmly and pushed me to my seat. He spoke.”I am the Director of Agriculture and I have gone through all the reports for every District and the Matara District has performed best.” I was thankful for his saving me, but I got up again to explain that what I had suggested was a per plot planning for better results. I was signalled to sit down and with that till today there is no plot planning.

What I failed to contribute in Sri Lanka at Matara, I managed somehow in Bangladesh.

In 1982, I was confronted with justifying the continuance of the Youth Development Ministry in Bangladesh . General Ershard had just taken over the country in a coup and waged war with the Ministry of Youth Development for having misled the youths. I was the General Advisor from the Commonwealth Fund at that time and was given a stern task by the Hon Minister for Labour and Manpower, Hon Aminul Islam. “What can you contribute for Bangladesh?” .Foreign Advisors were treated with contempt.   I picked up the vocational training that the youth were given- 30,000 of them a year and pointed out that the world was full of vocational training programmes that graduated the trainee youths with pomp and pageantry and dropped them to find employment- a task where they generally are not equipped to face and they miserably failed-continuing  to be unemployed. I told that it was a total wasted effort to train them and leave them alone. I recommended that the Youth Ministry be authorized to develop a self employment programme for the youths- where we would guide them to become employed so that instead of remaining consumers they would be contributors to the economy. . In the three earlier years the ILO had miserably failed in a similar attempt and I had to face a barrage of questions for over two hours. There were repeated googly balls to face and I reckon I batted well for the Hon Minister to immediately authorize me to establish a self employment programme.

 The rest is history today- the Ministry of Youth Development is creating self employment in the tens of thousands- 160,000 every year and by February 2011, it had guided two million youths to become self employed. My task was to design and establish the programme and also train Bangladeshi Administrators to continue it, Our closest comparison is 33,300 youths  on the Divisional Development Programme of 1970-1977! The Youth Self Employment Programme is  a non subsidy programme, where Youth Workers trained in creation of entrepreneurs, are motivating the drop outs of schools through extension work to become entrepreneurs. It is  easily the largest such programme in the world today. It forte was to expand the vocational training programmes with guidance to become an entrepreneur.

 The Youth Self Employment Programme of Bangladesh did not have a special vote. It was merely an appendage onto vocational training, where we used existing funds and used the services of  existing officials by expanding their duties. Full details of the Youth Self Employment Programme and the Comilla Programme are available in my books: “Success in Development” and “How the IMF Ruined Sri lanka”¦”at Godages.

 In a world full of unemployment and underemployment with poverty bursting at the seams, there is yet hope, if only we have the will to go ahead.

 Garvin Karunaratne

Former SLAS Officer

15 th May 2013

8 Responses to “Can we bring about national development? It is difficult but it can be done.”

  1. aloy Says:

    Dr Garvin,
    You are describing a situation that existed in a country that came out of colonialism some 60 years ego. It was trying to develop the country with the system left over by the colonial master to satisfy its needs. The difference in countries that developed fast (such as Korea, Thaiwan and even China and Vietnam) is that they had administrators who were not tuned to that system and overloaded the people. I can see this even in your write up: that you ordered these people and the other. I am not blaming you as you were part of that system. What we really need is innovation. As an arts graduate you seem to have tried that by creating that Creon bussiness. Almost all others including scientist and engineers in our country have been doing the same without trying anything new useful to him or the country. I see this situation changing as there is no more room for such people in our country. I see many industrial products with electronic controls manufactured by our people coming out to the market. However I find that they have to struggle as the same thing manufactured in China or Malaysia is somewhat cheaper. It is the practice in our country to give permission to a non-nationals to import any thing under the sun if he can satisfy the need of the man at the top. Often his needs are the building of the dream house or sending his child to overseas university by whatever means while he is at the top. This is what we need to change for fast development.
    Probably the present goverment is following Mahathir Mohamed model where some room was given for corruption. I would like them to follow the the Lee Kwan Yu model instead.

  2. Lorenzo Says:

    My honest answer is NO.

    BR said 85% of ALL LOANS from 2009 to 2013 has gone to WASTE (development of the north).
    Why waste? Because it ONLY benefits northern Tamils. 90% of the population is TOTALLY KEPT OUT of north development because they are Sinhalese, Muslims and upcountry Tamils.

    6% of other Tamils are alos kept out because they are NOT Jaffna Tamils!!

    Only 4% of the population benefits from 85% of loans!!

    How can a country develop like this? No chance.

  3. hela patriot Says:

    It is pretty simple. The only development policy is to build infra structure on borrowed money for foreign capital to exploit local labour. The employment policy is to send our women to the middle east. Either way it is slavery. In the process of course the corrupt get richer and the poor are asked to pay the price and the countries debt gets worse by the day.

  4. Sirih Says:

    aloy is correct, we need to change with the markets dynamics and also change the education system since our education system is in a dire trouble.
    One of the biggest issue is SL’s that want to come home is not properly treated by the system. I know one tech Professor that came from UK to work in SL was given a bad treatment re. compensation… All he ask was US$ 2K per month and that took so many hurdles to get it done… He earn 20 times that in UK.
    Other problem is when we give local youngsters international expertise and training they all disappear abroad… I have seen so many in Australia and these are valuable engineers to the country.
    Uneducated crooks gathering massive wealth from the public purse but future technocrats were left behind and ultimately leave the country.

  5. aloy Says:

    Sirih,
    It does not matter even if they leave, if we train them in large numbers. Employers running IT or Engineering businesses will not do that as it will be a strain on their resources and also they tend to joing the competitors at higher salaries. The solution is to train them at uni level especially in the engineering field. I know some senior professionals keep the know how of using certain important CAD progrmmes like WaterCAd, SewerCAD and even AutoCAD (programming) to themselves. At the time I was in SL I could not find consultancies or contractors using integrated design and drafting software. I may be wrong but my inquiries from academics also drew a blank. I even wrote to HE the president (ofcourse with correct spelling) to initiate a programme to obtain important software programes through the cloud and give the facilities to the unis with engineering faculties so that the graduates comming out will be fully coversant with the packges available in the idustry. These packages are very expensive and our local consultants cannot afford and foreign contrazctors do not train our engineers as they lose business if they do. I also wrote that computer programming to be made a comulsory subject for engineers like in some other countries. I thought that is the way we can give a higher level training to our engineers and make them compete successfully with others when they go out to the world.
    I think my effort was in vain.

  6. Fran Diaz Says:

    Re the role of the Politician in the Economic development issue :

    “Economics is the handmaiden of Politics” says the analysts. It would serve the interests of the Politicians (any political party) to have a stable Economic System for Sri Lanka.

    All development has to being at grass roots levels. Otherwise it will not work. A re-vamped modern Education geared to meet the needs of the country, (modernised with computer literacy), and sound organic/green agricultural methods are paramount.

    We are all for bringing back the Marketing Dept. and a really top level SLAS. Both systems work really well for a country such as Sri Lanka.

    Dr Karunaratna’s successful B’desh experience could be copied by Lanka. Thank you Dr Karunaratna.

  7. Christie Says:

    By 1955, Third Eye the Indian intelligence service with the assistance of local Indian colonial parasites has done a lot of things. They divided the Sinhala unity by creating SLFP and by funding SWRD in 1951. By 1951 the UNP government has laid a solid foundation. Settlement of landless Sihalese and Muslims in newly developed irrigation schemes. Central shcools and Peradeniya University. New Hospitals. CSIRO, Railway workshop. New harbour developments.New roads. Newly emerging Sinhala business class to compete with the Indian colonial parasites.
    All that came to an end in 1956.

  8. Fran Diaz Says:

    read as : ” … has to begin at grass roots levels”.

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