Gagging the Motherland by Privatization   Can we ever win?
Posted on November 2nd, 2018

By Garvin Karunaratne

The Chinese Company- the China Merchants Port Holdings to whom the Hambantota Port and its 1235 acres of land was leased, insisting on as much as Rupees 23 million as Ground Rent for the miniscule bit of land where the five Wind Turbines are sited is a fore runner of what is in store for my Motherland.

The Five Turbines are sited on a very small section of the seashore that can even be claimed to belong to the sea.

The five Wind Turbines, the first  built in Sri Lanka in 1999 are outmoded and hardly turn out electricity that will warrant such a demanding amount. Generally a Ground Rent is a very small amount and it is used more to signify who is the owner. Evidently, the Chinese Company has decided to hold a sovereign country to ransom..

The Lesson is what is in store from this Shylock. To me it indicates that the country will be ruined and. to my thinking the earlier we get back this Port and its land the better.

We have a long history dating from 1977 when under the IMF dictate the Jayawardena Government made us privatize many commercial undertakings that the earlier Governments of leaders DS Senanayake and Sirimavo had established for the sake of the people. These Systems and Departments were very efficiently run by our administrators. We became self sufficient in rice production, in vegetables, eggs and fruit and fruit processing, in small industrial goods  and in producing textiles through PowerLooms and Handlooms.

I can write books on this aspect because I was one of the administrative officers who implemented the programmes. Our great leaders D.S.Senanayake and Sirimavo built up the infrastructure that helped the people, provided incentives for them to get into producing what the country needed. From 1977 when we accepted the dictate of the IMF we were compelled to close down all commercial undertakings and privatize them because otherwise the IMF would not give us assistance in the form of loans. The IMF and World Bank through giving us loans saw to it that we ruined the already developed production so that we had to have everything imported.. Our funds end in their countries to enrich them

In my words,

By the privatization of the Paddy Marketing Board and the Marketing Department Sri Lanka has dismantled the infrastructure for development established by the Government of D.S.Senanayake and had been built up over decades. It was this infrastructure that enabled the Government to implement the guaranteed and floor price scheme  for rice, other cereals, vegetables and fruits. Now the producers are at the mercy of the  traders and farmers are not interested in producing for the market because they cannot get a reasonable price. It is in the interests of Multinationals and Developed Countries  for our agricultural production to be sacrificed. This is a ploy to sell their wheat, other agricultural products and processed foods to the Third World countries.”

Privatization was the chief agenda of the Jayawardena Government.. Privatization- selling national assets to foreigners to get some cash has also been the policy of the Ranil Wickremasinghe Government.

The privatization of the Lanka Loha saw to it that small implements like spoons and knives had to be imported. Last year I saw knives made in Brazil and Mexico for sale in Colombo supermarkets. When I wanted  to buy a step ladder- a basic item that we can easily produce I could not find one made in Sri Lanka. At Matara I established a Factory making Crayons. My Planning Officer, a basic chemistry graduate found the art of making crayons at the Rahula College Science Lab and a Factory was established under Sumanapala Dahanayake, the Member of Parliament for Deniyaya in his capacity as President of the Cooperative Union. It was a grand success with island wide sales till the Jayawardena’s Open Economy killed it.  If we could have produced crayons of high quality there is nothing- absolutely nothing we cannot produce.

Today our Supermarkets are full of jam, fruit juice etc made in Australia and the USA. Before 1977 we were self sufficient in all Jam and Fruit Juice. That programme also meant that our producers mainly Chena farmers got high incomes for tomatoes, oranges, red pumpkin, ash pumpkin, melon  and many other vegetables and fruits. I was once in charge of the Tripoli Market the headquarters of the vegetable and fruit marketing scheme. It was I that was held responsible for studying the availability of vegetable produce all over the island, planning the purchase and sale throughout the country. We commanded a staff over  a thousand men and over a hundred lorries. We were  covering every producer fair in the country, to ensure that we purchased produce in competition with the traders, by offering a higher price than what the trader offered. Then we transported the goods to Colombo overnight and sold it in small sales outlets- there were around a hundred of our in Colombo- at rock bottom prices compelling the retailers to sell at low prices if they were to be in business. . This was the mechanism by which we controlled inflation.  The Department kept a margin of only 15% to cover transport costs and wastage in handling whereas the traders kept around a hundred percent- shared between the trader who purchased at the Fairs, the transport costs, the wholesaler in Colombo and the retailer.  I fixed the prices to purchase goods all over the island and the Department had large cold stores and a Canning Factory to produce processed food like Jam, Fruit Juice and Tomatoe Sauce.  Our canning factory worked 24 hours a day and our Assistant Commissioner Oswald Tillekeratne even built up overseas sales for our pineapples. That was a time when our producers got high incomes all due to the working of the Marketing Department. All Gone today- the result: poverty to our farmers and our dependance on imports- riches to foreign producers!

Every month the profit that we made was gone into in detail by our Commissioner BLW Fernando  and if we had incurred either a loss or a profit of over 10% we had to do  a lot of explaining. That was indeed a difficult task.

We Assistant Commissioners were always on the run, controlling purchases and supervising our shops.. It was aiding the farmer by purchasing produce. We purchased around 10 % of the crop, but we controlled the prices offered by the traders because they too had to increase their prices. That was the time when there were Van Sales of fruits and vegetables functioning till late at night on the streets in Colombo.

That was a System offering high prices to the producer  as well as ensuring  low prices to the consumer, a system that I have not seen in any other country-I have been working in five countries and roaming all over the world since leaving Sri Lanka.

Let me look forward to the day when we will take back the Hambantota Port. It is a national asset that has to be developed. Let me also hope that other privatized ventures like the Marketing Department and the Canning Factory will be re established. That is an essential part of the infrastructure that we require to provide good prices for our farmers and also to produce all our requirements of processed food.

. I have worked long in many districts including Hambantota and can assure anyone that we can produce fruit in the Districts of Hambantota, Matara, Ratnapura and Moneragala that can get processed for export and the Port is an essential part of that infrastructure. On a recent visit to the Lunugamvehera area, there were children with luscious mangoes chasing behind my car to sell them. The mango trees in Lunugamvehera, Tissa, Kataragama are full of mangoes- more than half go to waste.  This is true of other areas like Matale and Anuradhapura too.

The privatization of the Hambantota Port is not in our interest. The Port has to handle our produce for export As of now we have with great difficulty- even becoming indebted- built up a Port and have handed it over for a song  to a foreigner who can use that asset. We are the real loser.

With my experience of handling commercial type of undertakings in the Marketing Department and the Small Industries Department  and my studies in Agricultural Economics at doctoral level at accepted seats of learning- I can assure that all above ventures that have been privatized can be run efficiently and profitably.

The above assurance comes from someone who established the Youth Self Employment Programme of Bangladesh in 1983, which is today the premier programme of employment creation the world has known. It has established a record of guiding millions to become self employed.

Let me live to see that day when we can re establish our  lost development infrastructure and also take back the Port of Hambantota,. This Port will play an essential role in our country’s development.

Garvin Karunaratne,

Ph.D Michigan State University

Author of:How the IMF Ruined Sri Lanka, (Godages )

                 How the IMF Saboitaged Third World Development,(Kindle/Godages)

1 st November 2018

5 Responses to “Gagging the Motherland by Privatization   Can we ever win?”

  1. Sarath W Says:

    Gavin is right. We must develop the Marketing Department, The Paddy Marketing Board and The CWE to control the prices of essential goods and get a better deal to the farmers. The government should look after the farmers. They are the ones who look after the health of the ordinary masses. Without food security the country cannot prosper.

  2. Christie Says:

    Gavin is right about DS but Banda kicked the Sinhalese businesses.

  3. aloy Says:

    I do not agree with Gavin’s advice and take Mrs. B’s economic model to propel Sri Lanka forward. She had no option other than to rely on our agriculture and manufacture simple things like crayon using the rudimentary methods. We know how much we suffered during that time. Also our civil service is corrupt to the core unlike those in Gavin’s era. almost everybody in top posts now seems to be interested in only making maximum amount of money and send their kith and kin overseas for study or to settle down. That is what the former secy to power ministry did and also what prez’s chief of staff was doing in a hotel car park counting money. We must look at how countries like Taiwan, South Korea and Thailand which were behind us came to the current position. South Korea and even Japan were corrupt countries. However they relied on their companies and gave them freedom to develop using technology. They did not reinvented the wheel but got their companies to copy from the west. What do we lack to achieve those heights?. We have all the necessary infrastructure in place. We have a sound education system that produces world class professionals and have captured world market for our software.
    We hear that at least one such company’s turnover is up to a billion of dollars per year. I have heard that there are places in Colombo where there are up to a thousand engineering graduates working in one office handling operations of various industries and businesses around the world. That is because we also have one of the best telecom system in the region. Government should seriously think of making use of these resources to develop the country without relying too much on agriculture. It should give confidence to big investors in this area so that they will start both hardware manufacture and software development. They will have confidence when they know that there is law and order including good governance.

  4. Nimal Says:

    Privatization works as state run enterprises are hopelessly inefficient and even corrupt like CWC.I worked as an engineer in the PO which was utterly inefficient, when privatized the production rose exponently.Hardworking people like us exceled
    while the usual lazy people became deadwood and was made redundant.

  5. aloy Says:

    I must correct the impression I may have created when I wrote that Japan also copied from the west or US. There were few instances when it was the other way around. In early 1970s we did not have electronic calculators but there were mechanical adders which looked like the a laser printer and very heavy with all those levers working inside. The Japanese company called Busicom Corp. in 1971 designed the circuit for the chip (which was fabricated by Intel)that replaced all those mechanical gadgets and made the hand held electronic calculator. So the credit for that should go to Japan but at that time they made the foolish decision to allow Intel to have the right by returning the 60,000 dollars Intel paid for the fabrication and Intel went on to make billions.
    Similarly it was Fujio Masuoka of Toshiba who discovered the trapped negative charges of the transistor gate in 1980 and made the worlds first Solid State Drive that is making a revolution in the way the computer works right now. It was said ” when you are given lemon make lemonade”. He got only 70 odd thousand dollars for the invention but it was Intel which made billions from this invention. Both Intel and Samsung are in a competition these days to give the best SSD to the market. Fujio was supposed to get a Nobel price for this invention, but so far he hasn’t got it.

    The question is when can we make “our Lemonade”?. I think the answer lies with the JVP, Pertugami and the socialist lot who have disrupted our universities thus preventing the students engage in innovations and also creating all sorts of havoc in our economy via strikes, protest etc.

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