Building up our economy to bring employment and incomes to our youth
Posted on November 3rd, 2015
By Garvin Karunaratne, Ph.D.
Since the days of President Jayawardena we have got used to look for foreign goods and following the IMF model of allowing imports without any control, spending our foreign exchange for luxury purposes even when we did not have sufficient funds, we have become an indebted country. The IMF advice was intended to make us subservient and make us a colony once again where our countries had to obtain all goods from developed countries; our countries can only continue to produce and sell the raw material. The IMF Model also imposed a high interest policy where our entrepreneurs had to get loans at high interest as much as 24% while in Developed Countries entrepreneurs can get loans at 2 to 4 %. That caused the closure of our industries. This caused unemployment and poverty.
The youth of our country have had to migrate to work in developed and rich countries performing menial and third grade jobs and send a few dollars to their loved ones. Today we have many Departments that encourage sending our youth abroad and The Governments keep counting the money they send, thinking of it as a great achievement. Sadly we have forgotten how to build up our industries, train and find employment for our youth in a respectable manner.
It is in this context that my own experience in handling the employment creation programme- The Divisional Development Councils Programme(DDCP) in the days of Premier Sirimavo comes to the forefront. The DDCP was a crash programme to create employment. As Dr N.M. Perera, the Minister of Finance said it was to enable the youth to get on their feet as trained entrepreneurs. The DDCP was aimed at breathing life into the youth- an attempt to make them active contributors to the country.
I served as the Government Agent of the Matara District and we were told to go ahead full steam. The earlier Government of Premier Dudley was emphasizing paddy cultivation; the Sirimavo Government instead emphasized employment creation.
The Government Agents were instructed to lead this Programme and a staff of a Planning Officer and a few Development Assistants were appointed overnight. To add to this we identified the best staff in all the Departments we controlled and enlisted their services to further the DDCP. It was an all out attempt and the boss, the Permanent Secretary to the Ministry of Plan Implementation, Professor HAdeS Gunasekera was even allowed to travel by helicopter to get the Programme going. He worked directly under the Prime Minister.
Under the DDCP there were to be employment creation projects in all divisions. Each Division was in charge of a senior officer in the Administrative Service, formerly called the Divisional Revenue Officer, the highest ranking local officer in the days of the Colonial Raj. Later this officer was called the Assistant Government Agent(AGA). In each Division a Council was established comprising all government officers in the area, the chair persons of local institutions and the Member of Parliament. At the outset this council was chaired by the AGA while later this Council was chaired by the Member of Parliament. This Council was to get all expertise available in the government departments and come up with proposals to create employment opportunities and the Ministry of Plan Implementation provided funds to establish the projects. The projects were in agriculture where new land was cleared and brought under cultivation by youths working as a group. At times neglected estate land was obtained for this purpose. These agricultural farms were a great success. In Matara the youths got good incomes from crops like Ginger. Another aspect was to create small industries in the village areas. This could be in crafts and sewing industries of all types sprang up where youth worked together learning the art of making something for sale, making batik dresses or lace making. In this section we worked duplicating the work of the Small Industries Department which had already made inroads into the village areas with its small industries and handloom projects,. The Councils worked well in submitting various projects.
In all Districts many craft-sewing and agricultural projects were established involving hundreds of youths.
Earlier I had worked a year as the Deputy Director in charge of small industrial units of the Department like woodworking and pottery and was also supervising private small industries for purposes of registering them and giving them grants of foreign exchange to enable them to import the ingredients that had to be imported for their industries. I had a sound knowledge of small industry.
I decided that we should make a breakthrough in making something new, something that was not done earlier, i.e. something that is being imported. The Councils under my direction did feasibility studies and submitted proposals for Dairy Farming, Making Water Colours, Making sago out of manioc, Making iron farm implements , making Sea worthy Fishing Boats. This was import substitution, making an item that is being imported which will enable employment opportunities for local youth and also reduce the foreign exchange that was used for imports. Feasibility studies were done at the District level and officers of other Departments who were patriotic to devote time in addition to their duties joined us. The staff of one Planning Officer and a dozen Development Assistants- all graduates were assisted in this regard by Chandra Silva an able District Land Officer, Ranjith Wimalaratne the Head Quarters Assistant Government Agent and many others.
Sad to say we did not get any support for the new import substitution type of industries that we submitted. The Dairy Farming Project was rejected because we were not having new land to build pastures. Our idea of using fallow land as temporary grazing land for cattle and feeding cattle on existing land which could be developed as pastures and our concept of building up family farms making each inch of land productive involving family members, where income will be developed by selling milk, vegetables etc .and also building up a creamery to make cheese was rejected. The production of milk on estates in Deniyaya by itself could have sustained a small creamery but then I did not know that most creameries in Switzerland are small. I was then not a specialist in economics and my arguments never carried any weight. Paper economists, who had never done anything tangible by way of setting up any industry or project in their lives always had their day. My suggestion to make Water Colours was rejected as we did not have a single ingredient that went into that manufacture. My submission that if Japan could take cotton all the way from Egypt, make cloth and sell it back to the Egyptians and build up a vast textile industry we should also be able to import ingredients and make what we need, creating local employment did not find favour with the Ministry.
I fought a long battle with the Ministry of Plan Implementation and the Ministry of Fisheries to get approval to establish a mechanized boatyard. I clashed with the two Ministries and their specialists many a day, got locked up in arguments till the Ministry approved my establishing a Boatyard at Matara. Once the green light was issued we got going, built up a boatyard at the edge of Nilwala River, purchased the machinery, installed the machinery and built boats- 45 feet long, with inboard motors. This was done within three months and it was a state of the art boatmaking industry that made boats and sold them to cooperatives. The Assistant Government Agent Ran Ariyadasa and the Development Assistant Kumarasiri proved to be able workers in this novel venture. Though the new Government of President Jayawardena got this industry closed down it was a great industry. The new Government wanted to discredit the outgoing government. Today I can easily spot a lone carpenter making a boat on the side of the coastal roads. That proves that we can make all the boats we need to be self sufficient in fish. But unfortunately we think that buying the fish from as far as Chile on the other side of the world is viable. All this while youngsters from our fishing villages either go to do menial work abroad or linger unemployed. The plight of the fishing villages is expressed in my novel: Landa Liyange Sihina Atare at Godages. It is my chance now to write of their plight. I did help them once by establishing the boatyard but now it is no more all due to political vengeance.
The agricultural farms and the craft and sewing industries were a success, but that was all. The Ministry of Plan Implementation comprised officers who were frightened to march into new areas like creating import substitution type of industries. They were more like cats playing with a ball of wool, completely entangled not knowing what to do. The staff of the District was very keen and we had a chemistry graduate as our Planning Officer. One day I summoned Vetus Fernando our Planning Officer and convinced him that we should try to make crayons. I explained everything I knew about small industrial units that made water colours which I had inspected earlier in my days in Small Industries. Daya Paliakkara, our District Development Assistant was also keen and we decided to commence experiments to find how to make crayons. Vetus put his heart and soul into it reliving all the experiments he had done at the chemistry lab in the University at Colombo where he graduated a year earlier. He was ably assisted by Science Teachers of the District. We started experiments in the evening after work in a room in my residency at Matara. The ingredients were purchased out of our pockets and we conducted experiments till late in the night until we found that the few implements that were available at home were insufficient. I then approached Mr Ariyawansa, the Principal of Rahula College and he readily gave us permission to use the school lab after school closes for our experiments. After work at the katcheri, Vetus moved his headquarters to the School lab at Rahula and ably assisted by Chandra Silva, the DLO of the District who was full of ideas, and the Science Teachers of the District conducted a myriad of experiments. It took around a month to finalise a crayon, but we were not yet satisfied with the texture and strength. That task defied Vetus and our team. Finally Vetus decided that he could get help from the dons in the University in Colombo. I authorized him to go to Colombo and be there at State expense for this purpose. In about a week Vetus returned a broken down, disheartened man. He said that none of his lecturers and professors even gave him a hearing as they were neck deep involved in their normal duties of lecturing and conducting tutorials. The rejection that Vetus got at the University propelled us into action. That night itself we all met at the Rahula School lab and I was present for hours joining my team. Vetus rejuvenated himself and we were all determined to succeed. There was no way that we were going to call it a day and accept defeat. I can remember joining them almost everyday after work and being there to support the scientists at work. Finally in about a month we did achieve the impossible, and the crayons that we made were of real good quality as good as the Crayola crayons on the market today.
Now I had to make a decision as to what to do. There was no point in seeking any approval from the Ministry of Plan Implementation purely because I was dead certain that they will not approve my establishing any industry. If I reported that we were successful in making crayons and if they refused to allow me to make crayons I would not be able to do anything. I would have to abide by their decision. We finally decided that we will establish a cooperative industry on our own. But how were we to do it. As the Government Agent I had no remit to establish an industry. In any case I did not have a Vote out of which I could take funds for such a purpose. We decided that we could entrust this task to one of our Multi Purpose Cooperative Societies. The Multipurpose Cooperatives had Unions in each division and this Coop Union did have funds. Finally we selected the best coop union in the District- the Morawak Korale Coop Union. The President of that Union happened to be Sumanapala Dahanayake the Member of Parliament of Deniyaya, a person who could be trusted and who was someone who would not chicken out half way through. He had impressed me as a person who had leadership qualities. I summoned Sumanapala, showed him the crayon and he was surprised at its quality and pleaded of us to allow him to make it. I wanted it to be done officially and therefore told him that I would officially approve it. Though there was an Assistant Commissioner of Cooperatives at the District level he had no business to establish industries. It so happened that during the days of Premier Dudley in order to bring about coordination among the three departments- Agriculture, Agrarian Services and Cooperative Development the Government Agents of the Districts were gazetted as Deputy Directors. I summoned the Assistant Commissioner of Cooperative Development and told him that I was authorizing the Morawak Korale Coop Union to use their funds and purchase the implements required and get going with the expenses required to establish a crayon making industry. I told him not to inform the Commissioner of Cooperative Development because I knew him so well that if he comes to know of my decision he will object and with that the venture will have to stop. Finally I signed a letter addressed to the President of the Coop Union, Sumanapala authorizing him to spend funds from the Coop Union and establish a Crayon Factory. Everything was wrapped up in total secrecy as my remit as the Government Agent was not to establish an industry without Ministry approval
Sumanapala was up to the task. I told him that crayons have to be made, cartons printed and that two rooms had to be filled with crayons in two weeks time. He took off to Morawaka, where he recruited twenty youths, found premises and purchased all the implements and also the raw materials necessary for making crayons. Vetus, Chandra Silva and Daya Paliakkara moved to Morawaka where they took turns and worked day and night with Sumanapala and the youths. They were all supervising the use of materials and Vetus was a task master in judgng the quality. The work continued round the clock- a full 24 hours a day for two weeks till crayons of all colours was made. In the meantime elegant packets were printed to pack Coop Crayons. I was more at Morawaka than at Matara that two weeks. The Crayon Factory was established and we decided that we would get the Minister of Industries to open sales. This was our ploy to get legitimacy for our industry. Sumanapala and I went to meet Mr T.B.Subasinghe the Minister for Industries. I knew him well because it was he that was instrumental in posting me as a Deputy Director of Small Industries a few years earlier when I was sojourning reading novels in the celebrated pool of unwanted administrators. Dr N.M had heard from someone that I read a novel a day seated somewhere in the Ministry of Public Admin and had told him to give me a job. Sumanapala knew him as a parliamentarian. We met Mr Subasinghe and produced the crayons and he could not believe that we made them. He readily agreed to come for an opening ceremony where we would open sales. A date was agreed in haste and the industry was declared open.
This gave legitimacy for the project. It is entertaining to realize that this rogue industry established entirely on my own in order to teach the Ministry of Plan Implementation a lesson, finally became the flagship industry of the DDCP.
The crayon factory was established using raw materials purchased in the open market. Things in the open market were costly. The Small Industries Department made allocations of foreign exchange to small industrialists to import raw materials. Coop Crayon was denied this because the Ministry of Industries argued that their funds were not meant for cooperatives. I argued with the Permanent Secretary but he was not prepared to bend the rules. Finally after some thought I approached Harry Guneratne the Controller of Imports. He had set apart an allocation of foreign exchange for the import of crayons. In a crayon the content of dyes was very low as low as 10% and though he flatly refused he had to agree to my argument that by allocating foreign exchange for coop crayon he could reduce his allocation for imports. However he wanted me to get the approval of his Minister, Mr T.B. Illangaratne. Sumanapala and I met Mr Ilangaratne and showed him the crayons we made and discussed his granting approval for an allocation from the funds meant for imports to be spent on production. He not only approved the cross allocation but also insisted that we establish a coop crayon in Kolonnawa, his electorate. We agreed but said that it will be done later once our Coop Crayon is fully viably established. The foreign exchange allocation gave a great boost to our profits. It was great to work with Harry Guneratne and T.B. Illangaratne, personages who were not frightened to bend the rules when it came to work for the cause of development.
Sumanapala directed the Crayon Factory and it grew to have island wide sales and by the time the ruling party lost at the election in 1977, this industry was well established.
It so happened as happens today while I pen these thoughts that an incoming government always wants to fling mud at the earlier government. President Jayawadena’s Government sent a special officer to look into the working of the Crayon Factory particularly the work of Sumanapala Dahanayake. N.T Ariyaratne was the Deputy Director sent with this task. One day later Ariyaratne told me how he was sent with instructions to find fault with the Crayon Factory and particularly to nail Sumanapala , but he found it to be well established as a paying and viable industry.
However with the IMF controlled Jayawardena Government which flooded the country with imported crayon, Coop Crayon too had to close.
Instead of handing over the art of making crayons to a cooperative, if I had summoned Harischandra, a leading private entrepreneur in Matara and gave him the art of making crayons perhaps there would today be a Harischandra Crayon in the market. We made one mistake. I did not advise Sumanapala to get his Coop Union to apply for a patent.
The manner in which we have ruined our well established industries is something that has to be remembered and avoided.
What I have said is no exaggeration. Every word in this statement is the truth. In fact today four decades after the days of Coop Crayon, my blood boils when I see any Crayola Crayons on sale in Sri Lanka. My mind rages with the amount of riches, employment for our youths that we have lost. We could have easily alleviated the poverty of a hundred families..
With the success of Coop Crayon one lesson is that there is no industry we cannot develop and excel. Vetus was a raw graduate who had no experience whatsoever. One of the Rahula Science teachers had earlier worked at Anuradhapura Central and told me that the Anuradhapura Central School science lab is far more equipped than the science lab at Rahula. Making an item like a crayon is an art in itself and the recipe for making Crayola Crayons must be a million dollar guarded patent. What Vetus’s success tells me is that we can make anything and everything we need. This can create employment for thousands and millions if only we want it to be.
It is sad that we do not want even to follow how other countries create employment. Take the UK, over half the silencers replaced on motor vehicles are made locally and cost a fraction of the imported silencers. Once when my car silencer broke down at Jessore, Bangladesh, a local garage made a silencer for me in three hours and it lasted a three thousand mile trip to India and Nepal and for a year more. Similarly a host of items like scissor jacks can be easily manufactured. It is far easier to establish these industries than to establish a crayon factory.
The role played by Sumanapala Dahanayake was admirable. He was daring and a maverick and if development of any sought had to be done he was there to contribute his mite. Politicians have to admire the role he played.
It is necessary to control imports if any local industry is to be established. We should not be frightened to control imports. In fact Hersheys Chocolates in California has got the import of chocolates that compete with their brands to the USA totally banned. Last year a newspaper wrote about the work of a school in Gampaha that attends to restore discarded motor cycles. Is it not sad that we do not yet have a single factory making cycles. That is a far simpler task than making crayons.
If we can get our science graduates and science teachers going we can find the art of making everything we need. There is no question about that fact.
In my never ending visits to my mother country I love, I have run into many officials. Some of the Grama Niladharis I met have impressed me with their intention to work. In my days as Additional Government Agent at Kegalla, we went ahead with voluntary work projects involving hundreds and in these projects the Grama Niladharis at Kitulgala and Warakapola were great workers and they organized massive projects. I have met a graduate trained in food processing working as a clerical officer due to the fact that there are no openings in food processing. Once I wrote that we can become self sufficient in making all fruit juice and fruit jam etc. in one year if only we want to. The raw produce is melon, mangoes, pineapple where around half the crop is wasted today for the lack of sales. I suggested three or four food processing factories at Anuradhapura, Tissamaharama, and Matale and if the green light is given today the machinery can be set up in time for the Chena crop in March next year and Sri Lanka can be self sufficient in all fruit juice by June next year. I can vouch for the fact that this is a task that can be done. I worked for years in the Marketing Department that ran the Canning Factory. The cost of buildings for the factories, and the cost of the machinery will be less than half of what we spend in one year to import fruit juice and jam.
I speak though sheer experience. I was instrumental in establishing the Youth Self Employment Programme of Bangladesh in my two year stint as Advisor to the Ministry of Manpower. The Military Administration wanted to scale down the activities of youth skills training and I was questioned as to what contribution I could make for Bangladesh. Bangladeshi Administrators and the Military bosses did not like foreign advisors and that questioning was intended to pack me away. I told them that most youths who complete the skills training end up being unemployed. I recommended that the skills training programme the Ministry had training 40,000 youths annually should be supplemented with a self employment programme where the youths in training will be afforded the chance to establish enterprises whilst being in training. I had a hard task arguing with specialists who opined that it has not been done anywhere and that it cannot be done They also added that the ILO tried to establish such a programme at Tangail in Bangladesh and miserably failed. I argued for over two hours with experts and secretaries of Ministries who were of the opinion that it cannot be done till the Minister for Manpower, Air Vice Msarshall Aminul Islam had enough of it. He questioned all who opposed me as to whether they had any programme which did what I suggested- to make entrepreneurs out of the trained. They had to eat humble pie and admit that they had none. The Minister immediately ruled that I should be allowed to prove that such a programme be established. The Treasury immediately vetoed and said that there will be no funds. I immediately said that I needed no funds other than to find a small saving from the training budget for essentials. We started work the very next day, training the staff of youth workers and deputy directors of youth development in employment creation techniques and addressing the youths in skills training. We worked for a full twelve hour day, every day in the year, including weekends., This programme which started with no funds is today the premier programme of employment creation in the entire world and by February 2011 reported to the FAO that it had guided two million youths to become employed. We do not need any money. What is required is to give the authority to utilize funds already approved for training to be used for creating employment. and to redeploy officers.
In the Youth Self Employment Programme in Bangladesh the lecturers of training institutes readily agreed to guide all student trainees when they commenced any enterprise be it rearing a few cows or dress making. All skills training institutes had to keep their doors open till ten in the night to enable the trainees to make something for sale using the machinery. This is something that can be done overnight. Let me hope that our Ministers in charge of skills training will understand the basic fact that by fusing skills training with guidance in enterpreneurship we can achieve wonders without additional staff and new funds.
I have met Divisional Officers who moan that they have little work to do other than attending to paper administration.
The Paper economists of today that lead our research institutions hold no experience whatsoever of bringing about development. The only experience they hold is to make studies of work under the IMF controlled regime of making nothing and importing everything. As much as they advise us let them also enclose in their reports what they have achieved so far.
It is very unfortunate that we have been bought over to the IMF idea of foreign investment. Foreigners do not come to help us.. They come to rob us of our resources and wealth. Noritake came to use our resources and the country could not get taxes from them as they work on a tax haven. Though they do not pay taxes to us every item they make is heavily taxed in Japan and also is taxed again at the foreign sales point be it in the UK or the USA. . Sri lanka is the loser. Give our local entrepreneurs the incentives that we give to foreigners and our Harischandras and Jinasenas will work wonders.
The DCCP concentrated only on the public sector. Instead it is necessary to offer incentives to the private sector. When President Jayawardena wanted to get wheat milled instead of getting local millers he gave that contract to a Singaporean company, Prima. Today Prima imports and sells us the flour. In the Fifties when we wanted to mill our paddy the Government established paddy mills and also encouraged local people to establish rice mills. The Millers responded admirably and I happened to be one of the officers in charge of that project. We have to get our local entrepreneurs going. Then the riches will remain in our country . It is sad that we don’t yet realize that Macdonalds and Pizza Huts takes away profits from our country. In the Fifties the Marketing Department had a Bakery that made excellent pastries. The Marketing Department also had a Canning Factory that made Sri Lanka self sufficient in all fruit juice and jam. The Chena cultivators became rich in that process. The IMF got the Canning Factory closed and the Marketing Department abolished and now we import all fruit preparations.
It is hoped that our leaders will take heed and consider these suggestions. If any clarification is required I am always available. For more details on industries anyone can read my book: Papers on the Economic Development of Sri Lanka at Godages.
Finally let me make a firm statement that we can create employment for five hundred thousand of our youth in four to five years without spending any more funds than we use for development today. However we must be given the opportunity to redeploy staff, re orient the functions of development departments and be granted the right to curtail imports in the national interest. The DDCP of Premier Sirimavo and Dr NM created employment only for some 33,000 in seven years. My suggestion of creating employment for 500,000 is realistic. The achievement of my own Self Employment Programme in Bangladesh, where we have so far guided over two million to become entrepreneurs stands as a real achievement on the sands of time.
Let me request my readers, if they stand convinced, to send copies of this paper to any leader who happens to be known to them. Let me request the media to give publicity as far as possible. Let this paper kindle debate and argument and let there be a Minister like Aminul Islam of Bangladesh who will be maverick enough to direct a massive programme of self employment that will rid our country of poverty and unemployment.
Former SLAS, Government Agent Matara District
3 rdNovember 2015