Working without a budget: Can this be done?
Posted on July 7th, 2020

By Garvin Karunaratne, Ph.D. Michigan State University

Our President Gotabhaya has cleared finance for banks  by ordering the Central Bank to relax. This has been done. Can the availability of finance by banks in itself bring about development- create production, create employment and achieve the goal of poverty alleviation. Import controls that  have been imposed to save foreign exchange, will inevitably cause a shortage of goods.

The responsibility of immediately approving small industrial units to spring up to create the lost production within our country falls on our new Government. This is a situation that has to be faced and won.

My mind travels in nostaglia to two world class development programmes which commenced without a budget.   I speak not from hearsay  or reference, but from sheer experience as I happened to be  a major player in both programmes.

 One is the Divisional Development Councils Programme, the flagship programme of the Sirimavo Government of 1970-1977. This Programme created employment for 33,270 youths.

The other is the Youth Self Employment Programme of Bangladesh. a programme that was solely designed and established by me within nineteen months, which, being implemented later by officers trained by me,  is today the premier employment creation programme the world has known, a programme that has by now guided some three million youths to become self employed.

I would kindly request our leaders to read through this Paper which details – how we did implement major programmes without a budget.

The Divisional Development Councils Programme was implemented with great hopes- to create 100,000 jobs. The leading economist in the island, Professor HAdeS Gunasekera was hand picked and appointed as the Secretary of a new Ministry- the Ministry for Plan Implementation. One senior SLAS Officer was his assistant and a staff of a dozen clerical officers were detailed. This Ministry was housed in a section of the Central Bank. I do not actually know how they were paid. However it would not amount to any major deal.

In implementation, the Programme was thrust on the Government Agents and the Divisional Secretaries. They were not given any additional payment, not even a traveling allowance. The Programme was given great prominence and to enable immediate implementation, even a helicopter was placed for  Professor Gunasekera’s travel. At the District level, in the earlier Government of Premier Dudley Senanayake, prominence was given to agriculture. What happened was that the Government Agents decamped from attending to agriculture and concentrated on this new programme. 

The Government Agent of a District is in charge of a  a dozen or more departments and in Matara I selected the ablest staff officers to attend to this programme in addition to their duties. In my eighteen years’ experience I have always found  a core of able patriotic officers who are prepared to do additional work without any additional pay, provided they are convinced of the worth of the programme.

The DDCP was commenced by the Government Agents through the Divisional Secretaries. There was no budgetary provision but conferences and training workshops were held, work was apportioned, development projects were sought, feasibility studies were done, all without any budgetary expenditure. It took a few months for Graduate Assistants to be selected and that required budgetary provision. Around fifteen Graduate Assistants were posted to the District and they worked with the staff officers who were already on the job. It was later that Planning Officers were appointed- one per district.

The Development Councils made suggestions and feasibility studies were done by staff officers in the katcheri. The Graduate Assistants joined the service for the first time and they were actually being trained by the katcheri staff officers and the Divisional Secretaries. The task of development fell on katcheri staff that were not paid any additional pay.

Feasibility Studies were done for the establishment of  industries aimed at the creation of employment for the unemployed youth and also to make something that was imported  and after submission some of these were funded by the Ministry of Plan Implementation. A Mechanized Boatyard was approved and this was established in Matara within two months. We worked very fast to get a large workshop built. I yet remember how the purchase of machinery was shortcircuited- it would have taken months to call for tenders. Instead I selected staff officers of the katcheri, officers who could be trusted fully, accompanied by the Executive Engineer to proceed inspect the machinery, negotiate and purchase the machinery. This was done within two days and the machjnery was installed fast. This Boatyard made seaworthy boats and made around 30 boats a year which were issued to cooperatives. Ran Ariyadasa, the Divisional Secretary took the brunt of implementing this Boatyard with one Development Assistant

This experience tells me that our Government could make a decision to establish a dozen boatyards immediately and the boats  put on the seas can make our country self sufficient in fish. It is nonsense to import fish to an island country, where the seas abound in fish. Let us call it a day and decide to get going with building boats straightaway.  The cost of the machinery can easily be recouped within the first years’ savings on imports.

The Ministry of Plan Implementation was frightened of making decisions to establish new industries. The Ministry wanted me to concentrate on small scale smithys, sewing units, the type that was already done by the Department of Small Indiustry. My idea of creating new industries was effectively silenced.

Finally I decided to make a move. 

 It was my idea to find the art of making crayons and establish an industry on our own as the Ministry of Plan Implementation. I thought of establishing a major industry and   I with the Planning Officer, a chemistry graduate and other interested staff officers  were  at the science lab of Rahula College which we had requisitioned every night for our experiments.  It took three months of experiments locked up in the Rahula school science lab,  when we unearthed the art of making crayons.

Later on when I finally decided to establish the Coop Crayon factory and I decided that it be done in two weeks, the Planning Officer, and other katcheri staff officers broke rest for two weeks- it was a 24 hour a day operation. Finally, Coop Crayon, the work of many an unpaid worker won the day to be the flagship industry of the DDCP.  That was also the hard work put in by Sumanapala Dahanayake the Member of Parliament for Deniyaya, in his capacity as the President of the Morawak Korale Cooperative Union. He was enthusiastic and his patriotism knew no bounds as long as the task was developmental.

It so happened that all Districts had established only small scale agricultural and industial projects like sewing units and smithys. The only medium scale industries established were the Boatyard and the Crayon Factory in the Matara District and the Paper Factory at Kotmale in the Nuwara Eliya District.  The twenty four Government Agents in charge of the Districts, included major figures who later became Secretaries of Ministries. However the major industries established were in only two districts.

Judging from the total work done I am of the opinion that  easily seventy to eighty percent of the work of the DDCP was done by staff officers of the districts without any additional pay or even a traveling allowance, entirely in addition to their normal duties.

This experience tells me that we can easily make a move to establish some import substitution industries without major funds. This is a task that awaits a word from our President to get cracking. The players are cloistered within the Administrative Service. In my forays into administrators whom I have casually met, I have spoken to some administrators who are waiting for a chance to get cracking. The Adminsitrative Service comprises a wealth of experienced personnel who can be utilized, motivated and guided to attend to major tasks. That has been my experience.

The Youth Self Employment Programme of Bangladesh

In 1982, when the military government of General Ershard took over Bangladesh, I was working as the Commonwealth Fund Advisor on Youth to the Ministry of Youth Development. The Military Government was very skeptical and critical about the work done in the Youth Ministry. A Conference was held to evaluate the programmes, when I was ordered to detail what contribution I could make for Bangladesh. I recommended that there should be a programme to guide youths in training to become self employed because most of the 40,000  youths trained each year remained unemployed. The Secretary to the Treasury, the highest ranking officer in the service objected on the grounds that a self employment or employment creation programme was something that can never be achieved. He quoted the miserable failure of an attempt by the International Labour Organization(ILO) to establish a self employment programme in Tangail, Bangladesh in the earlier three years and vehemently insisted that I will never be able to establish a self employment programme. I contested his views and persisted that I had the experience as well as the academic qualifications and could be certain of success. A bitter argument  ensued, my detailing how I will succeed, while he was adamant that I would fail. I had to offer a challenge- that though the ILO of the United Nations with all their funds and world famed experts failed, I will succeed. This battle in  an  intensive and gruelling form went on for over two hours between the two of us  till the Minister had enough of it and ordered both of us to shut up. He then said that he had been listening to both sides and that I had convinced him and ordered that I should establish a self employment programme. There were no Feasibility Reports and conferences. All details were uttered impromptu by me and immediately assessed by the brain of an army commander who was convinced to spur into action.  The Secretary to the Treasury, the officer who held the purse strings stumped stating  that he will not be providing any funds for any such programme as there were no funds to waste. I immediately replied that I needed no new funds, but our Ministry  should be authorised to find savings within the aproved youth training budgets and utilize such savings for establishing the self employment activities. I added that our Ministry  should be authorized to vary the remits of officers working in the Youth Ministry. The Minister approved my suggestion to the chagrin of the Secretary to the Treasury.

I started work the very next day with around a few hundred youth workers, deputy directors of youth, who had hitherto worked only on traditional youth work and  lecturers who were involved in vocational training. They volunteered to guide the trainees to estabblish self employment projects in addition to their work.  I commenced  teaching them elements of economics, national economic priorities-how to identify areas where employment creation will result in increases in production, how the youths should be guided to develop their abilities and capacities as they engaged in activities to establish minor income generating projects.  This was national planning in detail and motivating youths to take on the mantle of  national development. It was a combination of economics and non formal education. We were motivating the youths to utilize the skills they were learning and get into a process of action which will bring them incomes.

 In nineteen months, by the time my assignment ended 2000 youths were being guided to become self employed. By March 1985  6024 youths had established income generating projects.

This Programme which commenced in mid 1982, continued entirely funded from savings from other youth training budgets till 1985 when it was accorded an annual allocation  by the Five Year Plan of the Planning Commission of Bangladesh.

With this allocation the Programme was developed further. Its 3  residential training centers in 1982 was increased to 10 by 1984/65 and to 64 by 1997.

By 2011 the Government of Bangladesh reported to the IFAD(FAO), one of the funders, that two million youths had become self employed. Today it is an ongoing programme where 160,000 youths are guided annually to become self employed.

This YSEP is easily the premier programme of employment creation the World has known that has by now(2020) guided over three million youths to become self employed. The Youth Development Department  that implements this Programme today spends 95% of its time and budget to create self employed youth out of school dropouts. All this was achieved by a programme which was entirely funded from savings in voted budgets for the first four years 1982 to 1985. 

Today, in my eighties,  I am proud to have designed and established this world class programme, with the active support of  Bangladeshi administrators trained by me.

Over to our new leaders: Please consider funding a few projects to be funded from savings. The quoted instances prove that this can be done.  May I suggest for kind consideration that the projects selected be of the import substitution type, where there is an immediate benefit in terms of obviating foreign exchange being used for imports. There are many projects that can be commenced within months, which can be made sustainable within a year.

Our country yearns for any such initiative today.

Garvin Karunaratne

Former G.A. Matara


Author of: How the IMF Ruined Sri Lanka & Alternative Programmes of Success(Godages:2006)

Papers on the Economic Development of Sri Lanka,(Godages: 2010)

How the IMF Sabotaged Third World Development (Kindle/Godages:2017)

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