New Initiatives in the Economic Field: A Progressive Move
Posted on January 27th, 2018

By Garvin Karunaratne

The formation of a National Economic Council(NEC) to attend to national planning, the establishment of the Grama Shakti Programme to combat  poverty alleviation and the rebuilding of Irrigation Tanks on a massive scale, is a development to be heralded. It is essentially a move in the right direction.

It was way back, four decades ago, that we disbanded National Planning and allowed the Private Sector to be the Engine of Growth. We stopped national planning and allowed it to slide based on the whims and fancies of importers and multinationals, allowed them to import anything which caused the closure of our industries and brought about unemployment.. We   abolished the development infrastructure  we had build up to control the foreign exchange we earn, disbanded the infrastructure we had to en able development and control poverty alleviation. As a result  our country has had its economy recasted from a self sufficient, forward looking,  production oriented, economy, which was not in debt, to become an import and consume cum export raw products economy, steeped in debt. All this  happened because the IMF insisted on our following the Structural Adjustment Programme- a shrewd scheme of finally making us an indebted, poverty stricken country. That was the IMF Plan of making our countries ‘colonies’ of the Superpowers once again.  This time it was not with the gun but with its financial missiles.

Today our country is saddled with  a foreign debt of $ 64.8 billion when in 1977, we were in debt only to the extent of $ 750 million. That $750 million was also on  project development  and not used for luxury living and luxury imports.  Of this $ 64 billion only a small percentage can be justified as incurred for the purchase of arms and armaments  to fight the war with the LTTE.  The rest was used to fund luxury imports and luxury spending, which happened because we followed the IMF teachings since 1978. That is the sad story narrated in my book How the IMF Sabotaged Third World Development (Kindle/Godages)

Next came the GramaShakti Programme. I hailed that as a great achievement because it happens to be a progressive poverty alleviation cum production  programme, which type we gave up four decades ago at the behest of the IMF. The last similar progressive poverty alleviation cum production oriented programme was the Divisional Development Council Programme(DDCP) of 1970 to 1977, where I happened to be one of the chief lieutenants as the Government Agent of the Matara District.  This DDC Programme was given up by the Jayawardena Government in 1978. That was a retrogressive step and it heralded the move from progress to dependence.  I can speak out about the development we made in making youths  self employed. This Programme created self employment for 33,000 youths in seven years. This can be contrasted with what happened in the last 40 years when we instead of making employment for our own people and bring about production, did the opposite of importing everything, thereby creating employment for people in other countries and pack off our youth to do menial work abroad and send back earnings. The officials and politicians who functioned as kingpins of that progressive DDC Programme were harassed. My Headquarters AGA who worked on the DDCP had to run away to Canada to save his life. Sumanapala Dahanayake, the Member of Parliament for Deniyaya in his capacity as the President of the Morawak Korale Cooperative Union, who under my direction established the Crayon Factory, which he developed to have island wide sales had a visit by Deputy Commissioner of Cooperative Development  Ariyaratne who was instructed to inspect the industry to find how Sumanapala had mismanaged- to find an irregularity to pin him to jail- something like the role of the Bond Commission of today. Ariyaratne went to Morawaka, spent days in inspections and investigations and found the Crayon Factory a viable and profit making venture and the books kept all in order. In another country Sumanapala would have been the Chief Executive Officer of a major industry with worldwide sales Anyhow the Crayon Factory was closed down. Even today, a full forty years later my blood boils when I see a pack of Crayola Crayons on sale in a Supermarket in Sri Lanka. My blood boils because we katcheri officials burnt the mid night oil for three months in experiments to find the art of making crayons, closeted in the Science lab of Rahula College from six to midnight every day.  Had I summoned business magnate Harischandra and given him the formulae to make crayons there would have been today Harischandra Crayons competing world wide with Crayola. Coop Crayon was equal to the Crayola in quality. That is a political vendetta that is characteristic of the party politics that rule us. The incoming governments always throws the baby with the bathwater.The country suffers.

That was the IMF in action to destroy our industries which we followed from 1978- imports were freely allowed and local entrepreneurs  had to get loans at high interest –. The earlier we understand and call it  day to get out of the IMF clutches the better. To me the creation of the GramaShakti Programme and the creation of the National Economic Council  is a move that denotes progress after forty years of servitude.

Another area of concern is the fact that GramaShakti will usher in a renaissance in rural areas. This is very important when we now find that the major cities in the country- Colombo and Kandy etc are all overpopulated. Pollution is building up in Colombo and this requires immediate attention. The only remedy is the development of rural areas-establishing industries in rural area to create employment so that people do not have to leave their hearth and home and come to cities in search of employment. In the Sixties this was achieved by the development of handloom and powerloom industries and later  under the Divisional Development Programme there were industries- paper making in Kotmale, toolmaking in many Districts,  Boatmaking in Matara and Crayon Making in Morawaka, to mention a few.  With the disbandment of the DDC Programme these industries were closed down. President Premadasa had a plan to establish garment industries in rural areas which died down with his assasination.  The rural areas have to get industries and Grama Shakti can attend to that. It will benefit Colombo and Kandy immensely by reducing the population and  there will be less pollution. It is hoped that the GramaShakti will take on this mantle of rural  development, a long felt need.

Now we have our Army following the US Army in doing national development tasks. That is what the US Army is famous for. It was the US Army that built the dykes(bunds) that keep the Atlantic Ocean away from New Orleans. On my roamings in the USA I have seen these dykes keeping the waters of the Atlantic Ocean at bay. The Army maintains the bunds in proper order even today. It was the US Army that built the hydro power schemes and many structures on the Columbia River in the USA, a achievement that could never have been made otherwise. In my travels in Western USA I have spent days mesmerized at the massive structures the US Army has made and maintains even today. It was the US Army that restored order in Yellowstone National Park when brigands took over and to this day it is run by an affiliated Army Unit.. The use of the Army in the USA for peacetime development tasks is to be admired.

I am particularly interested in the development of the irrigation tanks in the Dry Zone because I myself implemented a programme to rebuild the irrigation tanks in 1962 to 1964. This was when we implemented the Paddy Lands Act and took over the minor irrigation functions that had been done by the Government Agent.  The irrigation tank system was the life blood of the people. The first blow at the irrigation tanks came from the Colebrook Commission of 1829, which abolished rajakariya. Under rajakariya, every person had to perform two weeks labour to repair the infrastructure of the village and in the Dry Zone it included dredging the tank annually, building up eroded sections of the bund and clearing the canals that took water to the fields. When Rajakariya was abolished there was no one to attend to this task and gradually the rot set in.  However the tank administration came under the Government Agent of the District who was in the colonial days a powerful authority. He selected a Vel Vidane to attend to the administration of the irrigation tanks. The task of the Vel Vidane was to hold a Kanna Meeting of all shareholders under the tank to decide the dates to start cultivation, clearing the canals, the dates for ploughing, harvesting etc etc.  Those who failed to perform the tasks decided were charged in the Village Tribunal Courts and punished. When the minor irrigation work was taken over from the Government Agent by the Agrarian Services Department, the Vel Vidanes service was abolished and the tanks were administered by the Cultivation Committees elected under the Paddy lands Act. In Anuradhapura District where I was working in charge, the irrigation functions were done meticulously well. However after the Jayawardena Government repealed the Paddy Lands Act, no alternative system to administer the tanks was enforced and in many areas island wide no Kanna Meetings are held and due to the lack of effective clearing and cleaning the tanks  fell into disrepair. Today in the entire island there is no systematic paddy cultivation, in keeping with the rainfall pattern which has caused a downfall in production. Synchronizing cultivation with the rains is mandatory because the major part of the paddy is rainfed and the tanks too have to fill with the rains to enable cultivation. It is necessary acreage is that the Kanna Meetings have to be held and this needs someone in authority to summon the farmers and make decisions with their participation. The earlier this lacuna in agricultural administration is attended to will enable orderly paddy cultivation.

A further loss is the fact that since the days of President Premadasa there is no cadre of trained agricultural officer at the village level. This was because President Premadasa promoted all Agricultural Overseers as Grama Niladharis and no trained official has yet been appointed. The Niyamakas who cover this work have no training in agriculture.

Another task that has to be done is to repair the tanks. This is an important task that has to be done. As already pointed out the tanks are silted up and the bunds overgrown. On my travels I have found that even the famous  Jaya Ganga that takes water from the Kalaweva to a round a hundred tanks towards Anuradhapura itself is silted up and overgrown. This Jaya Ganga is the master piece canal where the gradient is less that six inches in a mile, a gradient that baffles all engineers today. The irrigation tanks are also silted up and hold little water.  This is where the deployment of the Army comes into significance.

In my recent travels I have found to my amazement that earth is brought from a distance to build the bunds of tanks when there is plenty of earth in the tank bed that has silted up. In my days the tank bunds were repaired with the earth inside the tank. This increased the capacity of water that the tank can hold. I can recall what I wrote earlier:

“It is essential to understand the ancient system and the lay out of the irrigation works- the tanks in NuwaraKalaviya because the moving of earth from outside the tank and raising the bunds indicate that today’s engineers have failed to grasp the fundamentals of the ancient irrigation system. The rain waters are held in a tank by a bund built across a stream and the overflow of water from this tank  is held by another tank a few hundred yards  below and the overflow of the second tank is yet held below in a third tank and so on.  It can be called a cascade system. In this all the tanks belong to a single system and when a tank bund is raised there are  severe limitations to the extent of water that can be held in the tank, because if the water level of the tank is increased it will inundate the paddy fields  of the tank in the higher reaches. This is all the more reason why the tankbed has to be used to take earth to build the tank bund”.(How the IMF Ruined Sri Lanka & Alternative Programmes of Success:Godages)

In my days I had even authorized making bricks on the tank beds, in order to deepen the tanks. Making bricks on the tanks in the dry season  can be developed into a major industry and this can bring about  savings in foreign exchange because building blocks are made of cement which is imported.

The Agrarian Services  could repair only  a few tanks and the fact that the Army is taking over 500 tanks is to be heralded as a task that will breathe new life to the Dry Zone.

It is always said that our Government has no funds for new programmes.  All governments have a plethora of development programmes that are regularly funded. There are ample savings within every programme and the unspent funds get back to our Treasury.

In the Sixties every district got a small allocation for rural development works on a self help basis, where the community members also cooperate and ;provide labour. At the end of the year the unspent funds get shunted back from the districts. In my two years at Kegalla, I made a special trip to the Director of Rural Development in Colombo, to collect a cheque allocating funds unspent by other districts. I get back in time to bank that cheque and make payments for rural works that are being done and release the cheques after the work is completed within a week or two. I complete my allocation well in time and plan other work that can be done in a week or two. I work closely with the Director of Rural Development, my friend, Mr Ratnawira, who has over the telephone found out the savings in other districts and makes me the allocation. This happened in the days when mobile phones were non existent and cheques had to be banked to get credit.

In my consultancy in Bangladesh, when I won the day after a gruelling battle with the Secretary to the Treasury who insisted that I can never establish a self employment programme purely because the ILO failed in that task in the earlier three years, the Secretary to the Treasury said that there are no funds. I gave an assurance to the Minister for Labour and Manpower that I will find savings within  the approved budgets to establish a new self employment programme. This was approved.  The Youth Self Employment Programme of Bangladesh which is today the premier employment creation programme the world has known was thus established by me using savings within voted budgets and redeploying officers.

The Divisional Development Councils Programme of 1970-1977 was also mainly based on savings because the implementation  was taken on by the katcheri officers who were already working in different departments and the divisional secretaries. The Government Agents made arrangements to release officers.  . It is my estimate that an easy 75% of the work load was accomplished by katcheri staff and engineers of other departments. It was not difficult to find officers who did yeoman work in addition to their duties for the cause of national development.

When the Crayon Factory was established under the DDC Programme, we wanted a foreign exchange allocation to import dyes, which was the only item that was imported.  When the Ministry of Industries that had a foreign exchange allocation for imports of essentials by small industrialists refused an allocation for Coop Crayon, I approached  Harry Gunaratne the Controller of Imports who had an allocation for the import of crayons.  I told him that by allowing us a small allocation of foreign exchange for the import of dyes, he can cut the allocation of foreign exchange due to be given for the import of Crayons. He readily agreed because the import content in the manufacture of crayons was less than 10%. By giving us an allocation he could cut the allocation for import of crayons by 80 to 90%. Minister Illangaratne readily approved this arrangement. This proves that the imports of raw materials and even  small scale machinery for new industries can be easily found from within the foreign exchange allocations for the imports of goods in that industry.

There  are ample funds within savings for any new programme of import substitution..

Thus with the establishment of the National Economic Council to attend to National Planning, the GramaShakti for poverty alleviation and the Army to repair and restore the irrigation tanks, the economy is bound to benefit. Let us hope that these programmes will spurt into action immediately.

Garvin Karunaratne

Former Government Agent, Matara

Ph.D. Michigan State University

27 nd January 2018

2 Responses to “New Initiatives in the Economic Field: A Progressive Move”

  1. Christie Says:

    Listen, Hear, get brain washed: A National Economic Council and a Plan by who?

    I do not think the damage done to the Sinhalese people by Bandas (SWRD, Sirima and Chandrika) JRJ and Sirisena who are all Indian suckers can reversed.

    You can blame the West, IMF and the world bank etc etc and be jolly.

  2. Dilrook Says:

    I agree.

    Sirisena must take credit for this. Although he is two years too late, it is better late than never. This was done in September 2017 but not much has seen from it.

    However, the bigger problem is our politicised people may not constructively work with it saying it was appointed by Sirisena, Ranil is in it, etc. This is not a time to bring petty politics into it. It is also good that the Council has not engaged in political activities in the LG election.

    Prof Lalith Samarakoon is a fitting General Secretary of the National Economic Council.

    The Council will takeover key decisions previously taken by a single person. This type of Councils are found in many countries.

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