Half a Million Jobs Lost?-Motor Trade. Is there a way out?
Posted on March 14th, 2021

By Garvin Karunaratne 

500,000 jobs lost-Local Vehicle Industry(The Island 13/3/21)  sends my mind to many instances in my experience that offer an immediate solution.  

Near my home on Old Kesbewa Road  Gangodawila Nugegoda there is  a man making oil filters. He  has been making those since the Sixties  and selling them some where. In the UK  and US where I have happened to have lived for years there are local makers of oil filters. It is very rare for a manufacturer’s oil filter to be obtained from as far as  France for a Peugeot or Germany for a BMW. Instead there are local oil filters, silencers,  radiators and many other car parts.  

Once long ago in Bangladesh  in 1983 I decided on a motor trip from Dhaka to Khatmandu in Nepal. It was a four thousand mile trip in an old Toyota Publica and the travelers were my wife and two of my sons. It was a forbidding trip and many told me not to.  We set off and in two hundred miles at Jessore there was a big bang. I got out to find my silencer torn to bits. I was near Jessore where I stayed at the Circuit Bungalow. The next morning I  went to a local garage and waited till they opened the doors.  The owner entrusted the task to a welder. The car was jacked up. Out came the silencer in pieces. The welder made a note of the pieces and took measurements. He brought a sheet of metal and I saw him carefully measuring and cutting it to pieces. He commenced welding and in less than two hours emerged a silencer in looks very close to what was taken out. It was fixed in minutes and in two hours I was on the road with a bang. The beat of the engine was perfect and it was sound even for my full 4000 mile trip and also for another two years use till I sold my car. 

Back in Colombo in 1997 when the silencer of my Peugeot 307 packed in it was Pathma Silencers that made a silencer .It took eight hours of stay at the garage and it was not a patch on the two hours work at Jessore. 

My next instance travels back to when I was a Deputy Director of Small Industry. Kariyawasam the Member of Parliament for Elpitiya saw me with a strapper lad who brought a number of side mirrors of cars that he had made and wanted an  allocation of foreign exchange  to import mirrors. The side mirrors were of the correct shape and looked good. I sent an inspector to see his factory and report. In a few days time the inspector reported that it was a sham- the youth had no work place and could only produce a bag of tools. It was a firm rejection.. I phoned Kariawasam and gave him a piece of my mind for pulling my leg. No, that youth is not a sham, he is a good worker, he was adamant.. I told him to inform the youth that I will be at Elpitiya the next morning. He informed the youth. I was told to meet him at the Cooperative Society garage. I was there in time and the youth came in with a large heavy  bag full of tools and metal rods. I asked him where he made the side mirrors. He pointed out the garage where lorries were to be parked. He said he has to wait till a lorry comes in to obtain the lorry jack. I understood why my inspector rejected him. The youth did not have a semblance of a  factory. The manner the youth spoke was very convincing. He showed me his tools and he had many of different types and he showed me rods with bolts at each end  and he implored me to wait. We waited. In came a lorry and he borrowed the jack. He sat in a corner and within minutes  assembled the rods to make a jig. He placed the jack at the bottom, put in cut pieces of metal- cut by him in my presence and got them turned into various shapes. I carefully looked at it and some were close –exact replicas that matched the side mirrors of different makes of cars. I gave him a foreign exchange allocation on the spot. I thanked Kariyawasam.

What these three instances tell me is that our salesmen and our motor car sales people should embark on making all parts of cars. 

We have to actively get going with industries to make motor spares. 

Instead of import licences for importing car spares, the import allocations should be to import metal sheets and welding equipment. 

It wont take long for our welders to make car spares.  I have seen many of them  at work in my eighteen years’ ramblings all over the island.   

But there is a big but.  

In Sri Lanka- the Governments have been hard on the private sector. Once the Government took away all estates over 50 acres and this ruined our plantation agriculture. One of my uncles died because of this take over that deprived his life’s savings- an estate of some 400 acres at Hayes- a loss he could not bear.. The rent laws that restrict rents and also forbid owners to get their rented properties back  forbid building homes. Naturally the rich get used to find avenues overseas to use their wealth.  

The answer is simple- waiting for the Private Sector to take charge is wishful thinking. The FDI-Foreign Direct Investment which the IMF holds for us to follow  and which  Minister Cabral, our one and only economic specialist even now believes will happen is never going to be a reality.  

The Government has to act  fast like in the NM-Sirimavo days when they created a seperate Ministry under the Prime Minister herself and head hunted the most eminent economist in the island Professor HAdeS Gunasekera and established a new programme to bring about employment to the youth. That was the DDCP- the Divisional Development  Councils Programme.  

 In Kotmale the Divisional Secretary  created a Paper Making Industry with waste paper collected from the Nuwara Eliya katcheri within months- the equal of which we have yet failed to establish. Since the Eighties the President Jayawardena industry was to collect waste paper and export to India –some 30,000 tons a month to earn a few coppers and to import paper paying for it in dollars.  We have yet failed to  understand the ‘economics’ of selling waste paper and buying paper. We are perhaps the only country that does not use waste paper to make paper. Find a consultant to get that done – give a call to the Ministry of Youth in Bangladesh and ask them to send one of my youths who collect wastepaper and make paper. There are a few of them.  We need to have our heads examined.  

Then in Matara as the Government Agent when the Ministry of Plan Implementation was very happy with the Boat yard I established within 3 months and refused to approve any more industries , I took charge and did three months of experiments every night, locked up  at the Rahula College science lab  and unearthed the art of making crayons. The king pin scientist was my Planning Officer a chemistry grad from Colombo, helped by the science teachers. Then Sumanapala Dahanayake the Member of Parliament for Deniyaya in his capacity as the President of the Morawak Korale Coop Union took charge of establishing the factory- he did it working day and night in three weeks. In the third week when we had filled two large rooms of crayons,  Sumanapala and I took off to meet our Minister of  Industries Mr Subasinghe and he was surprised at the quality and he opened sales in the fourth week and Sumanapala developed the industry to have island wide sales. When we were refused a small allocation of forex to import dyes, by the Ministry of Industries we were lost. We then found that the Ministry of Imports was about to import crayons and we moved to Harry Guneratne the Controller of Imports. It did not take long to convince him that by giving us a small allocation of forex to import dyes from the funds earmarked for imports of   crayons,  he can make large saving in forex. This had never been done earlier. Minister Illangaratne was quick to approve it and  ordered the stoppage of all imports of crayons.  

Can all this be done within the three more years of our President. The answer is Yes. It is a firm Yes. It can be done. I can speak with authority because I created the Youth Self Employment Programme in Bangladesh within eighteen months and trained the youth officers to carry it on and  thus was born the largest and most successful employment creation programme the world has known- a programme that has guided over three million to be self employed.  within three decades.  The ILO had failed in a similar task at Tangail, Bangladesh which increased my stature in Bangladesh.  

I commenced the Youth Self Employment Programme in Bangladesh in April 1982. We did work fast. My  Youth Workers and Deputy Directors of Youth trained by me in economics and methods of guiding youths,  were training guiding some two thousand youths on a day to day basis goading and building up the abilities of youths, the drop out of the education system to establish  enterprises and in some eighteen months the youths built up farms and ventures of their own. Some even came to enter the taxing bracket. Of the  479 youths who commenced their enterprises in the first few months,  55 earned a net income over 1000Tk a month and 144 earned over 500 Tk a month, all achieved within  eighteen months. At that time Tk 500 was the income of a clerical officer in the public service. We were training 2000 youths and now(2021) we train 160,000 a year. By now(2021) this Programme has guided over 3 million youths to be self employed. It is easily the largest and most successful employment creation programme ever. 

I met the Hon Minister for Labour and Manpower, Hon Aminul Islam, the third in command of the military junta only twice- the first was the day I had a two hours argument where I had to prove that I could establish the self employment programme in the face of the dismal failure of the ILO attempt to create such a programme,  when he approved my establishing the programme and on the last day I worked in Bangladesh, when I requested him to make an order that the youths on my programme who had earnings sufficient to be taxed   should be given a reprieve not to be taxed for a few years. He kindly agreed.  

We have stopped all non food imports. Now through devious methods importers have cashed in. In Cargills I have seen for sale  Lorenz Natural Salted Potatoe Chips all the way from Germany mind you a packet of 500grams at Rs 520. We can easily make potatoes chips and banana chips at less than half that price.. This industry can easily be set up  in a week and we can look forward to three industries making potatoe crisps at Boralanda and two banana crisp factories at Rambukkana and Godakawela. My Divisional Secretary at Rambukkana Sarath Indatissa would have established a banana crisp factory in  two to three days. He would work for 48 hours non stop,  He was that smart and very fast. In those Premier Dudley days we were not authorized to establish new industries. That was also how we established the Crayon Factory at Morawaka when all of us broke rest for three weeks- a 24 hour a day operation. Mind you Sumanapala Dahanayake developed it to have islandwide sales. It was President Jayawardena that ordered the stoppage of all three industries; Paper, Boat Making and Crayon Making to please the IMF  in 1978.  

That was not all.  Deputy Commissioner NT Ariyaratne.disclosed to me that President Jayawardena instructed him to proceed to Morawaka and inspect the Crayon Cooperative Factory and  to find something to hang Sumanapala Dahanayake.. Ariyaratne after three days of investigation, including – a forensic audit  had to report that the Cooperative Crayon Factory was in good health and its finances were in proper order. That was the FCID of the Jayawardena  days in action.  

Then I also came across in Cargills,  Soyafresh Soya Milk- a litre pack made in Malaysia, sold at Rs. 660. . Kotmale or Ambewela could have easily done this without incurring any foreign exchange, at half this cost..   

Our importers have hoodwinked our Government.  

We have to get back to the pre 1977 days when all imports have to be vetted and approved only if we cannot make it. I was one of the sleuths that controlled small industry and unless this is done we will continue to waste our hard earned foreign exchange.

We have to open up two major industries a Metal Hardware Industry and a Woodwork Industry, which will make anything in metal or wood, liaise with the Private Sector and make everything that the Private Sector does not make. If there is anything that Sri Lanka cannot make, which the country requires  these two organizations will make or if they cannot make recommend an import. allocation.

 These details are provided to prove that we can work fast and we have the ability to tackle the problems of unemployment and poverty if only our President will give the green light for import substitution type of industry to be commenced and set up the infrastructure to guide small industry.   

This is nothing new. Once in 1970-1977 we did establish industries and created employment. The SUCCESS achieved in  Paper Making at Kotmale and the Boat Building and Crayon Making in Matara prove to the hilt that it will be a success. There are no FDIs- Foreignb Direct Investors  coming to help us. Creating employment and poverty alleviation  is a task that can be done by us. It is far easier to achieve this than defeating the Monster LTTE. I look forward to the days when the Gotabhaya-Mahinda juggernaut will actually get going in Sri Lanka. To my thinking that day is not far away. Let me live in hope.  

Garvin Karunaratne, Ph D. Michigan State University 

Former SLAS, G.A. Matara 

Author of  How the IMF Ruined Sri Lanka & Alternative Programmes of Success, Godages, 2006 

How the IMF Sabotaged Third World Development, Kindle/Godages, 2017 

16/3/2001

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