Afghanistan: A Country devastated by armed invasions & Sri Lanka devastated by following the IMF Advice
Posted on November 2nd, 2021

By Garvin Karunaratne

There are two methods of subjugating a country. One is by direct armed intervention. The other is by making a country indebted. Direct intervention is obvious, an  invasion, while making a country indebted is done covertly and a gradual process. The Pauperization of Sri Lanka took four decades. The people were taken unawares. Our leaders were fooled and taken for a ride.

Two invasions- first  by  Soviet Russia and then by the USA has left Afghanistan torn and tattered.

Garvin, When you have finished your doctorate and I have finished mine, do come to Afghanistan for a month. Be my guest and I will take you everywhere in Afghanistan in my car when I go on circuit.”

These words ring in my ears again and again.. That was Rohith from Afghanistan,  a Director in their Adult Education Department, who studied with me, reading for  the Ph.D. at Ericson Hall, Michigan State University. That was in 1978. He was a scholar sent by the country to be trained to serve the country.

I have lost touch and I know not where he is. 

Once not long ago Afghanistan was a live country just like Sri Lanka in the days of Premiers Dudley and DS.  Poring over a few books in my small library I came across the FAO Production Book and the FAO Trade Year Book for 1990. In 1988  as much as . 2.6 million hectares were cultivated with cereals and the production was 3.5 million metric tons. Comparatively Sri Lanka cultivated  cereals only on  865,000 hectares and the production was 2.5 million  metric tons.  Afghanistan held a population of 15.3 million. In 1988, exports of raisins amounted to 48,000 metric tons while exports of sugar  amounted to 221,000 metric tons. .Agricultural statistics do speak of a highly developed country.

Over to education, 12,000 high school graduates competed for  3000 places at Kabul University in 1977. . . The secondary schools had an enrollment of 628,000 pupils including 212,000 girls. In  2002, there were  3.3 million students in schools.

Scholars were sent off for further studies at international universities, just in the manner that we administrators were sent off for study at Manchester and Cambridge Universities by the Sri Lankan Government.  and Rohith was one of them.

Today Afghanistan is totally destabilized.   Two invasions by Superpowers over three decades eroded down a country that was self reliant, not in debt and a people  vibrant with  life.

Over to Sri Lanka , we have had  attempts to destablize our country. .

 Many of us do not know and have forgotten that the 1971 JVP Rebellion was an invasion. The JVP struck on 5 th April and the government forces controlled only the main city areas. The rest of the country was in the hands of the JVP for a few weeks. If not for the fact that at seven in the morning of 5 th April, Radio Ceylon announced that Wellawaya and Moneragala Police Stations were attacked enabling our patriotic armed forces to expect the worst, things could have been far worse.  In Matara where I was the G.A we controlled only the coastal towns. Even Akuressa  a mere ten miles away was in the hands of the JVP. The first contingent by our armed forces to recapture  Akuressa was attacked  before it reached  Akuressa and two of the fourteen jeeps in our convoy  were set ablaze and had to be abandoned. The commmnder Major Wettasinghe   and several others were injured and had to retreat.

There are unconfirmed reports of foreign vessels been seen in Colombo waters in April 1971. However at Matara, on a day immediately after 5 th April,  a massive ship appeared. Sri Lanka never had so large a ship. I quote from my Paper:  How the JVP Ruined Sri Lanka (Lanka Web: 18/07/2020):

  It is of interest to note that the first insurrection in 1971,was entirely orchestrated by North Korea. Implicating evidence was found and the North Korea Embassy was immediately closed down and the diplomats banished from Sri Lanka It may be of interest to note that in the days immediately after April 5, 1971, when we were holding onto the coastal towns at Matara, a very large ship appeared on the coast and came very close to Dondra. Sri Lanka did not have a ship of that size then. Watching  through binoculars from the Army camp I saw a number of boats being lowered to the sea and things being put into them. Major Wettasinghe had his Light machine gun loaded but said that the boats were beyond its range. 

Dondra was more or less under the JVP control at that time except for the police station and the adjacent areas and there was no possibility of conducting checks in the area. We morse cvoded Army Headquarters and one of our planes came, hovered around the ship and we heard machine gun fire for around fifteen minutes. The ship vanished just afterwards and this is an episode known only to me and the Army on duty at that time.. 

The 1971 insurrection was essentially an attempt by the communist bloc, especially North Korea to take control of Sri Lanka.” 

Sri Lanka luckily survived the attempt thanks to our police and army.  

Another such move to destroy our sovereignty was the move by the MCC Compact- the USA desperately tried to impose on SriLanka in 2018 and 2019. It is even reported that the MCC had an office at Temple Trees, the office of our Prime Minister. Sarojini Dutt in her paper: Sri Lankan Cabinet  Surrenders  the Country for the Americans” in Lanka Web(6/11/2019) details this attempt.  The MCCCompact Agreement included the grant of a land mass- a 200 mile corridor from Colombo to Trincomalle- a third of our Motherland to the USA for a period of 200 years, in return for a grant of a mere $ 480 million to be spent on roads and surveys. The conditions were  detailed by MCC Team Leader Steve Dobrolovic, at a meeting at Temple Trees on 25/11/2018. My paper: The MCC Compact Method oif Creating More Poverty: The USA Can definitely do better’(Lanka Web:26/10/220) details this surrender of our country for 200 years. Mind you, the British ruled our country only for less than 150 years! In the General Election in 2019, the UNP declared that if it won they would ink this MCC agreement the very next day! 

The next invasion is of a different type. We are today stuck in the throes of this invasion..  Our Motherland’s economy is in dire straits unable to finance even the basic necessities of  life for its citizens. The situation today in Professor Srrimevan Colambage’s words are: 

Externally, the country’s foreign reserves have fallen to less than $ 3 billion, as against the debt commitments of over $ 6 billion to be settled within the next 12 months, apart from having to meet day-to-day import outlays. The banking sector is running short of foreign exchange. As a result, the US dollar is traded at around Rs. 230 within the banking circles, despite the Central Bank’s insistence to keep it at Rs. 200 per dollar. The black-market rate is reported to be high as much as Rs. 260 per dollar.”  

It needs to be emphatically stated that the economic situation in Sri Lanka today  is not due to the current Government of President Gotabhaya.  

How did we come to this plight?  In the early Fifties we had funds to construct the Gal Oya Development Project, a massive project that built up the Amparai Distrcit with a major tank. Sri Lanka  was not in debt in 1976.  On the other hand today we are in debt to the tune of $ 56 billion. We have had to restrict imports. Even in the early Fifties the country restricted imports. Then there was a limited allocation to import cars. Buyers had to wait in turn. In 1958 I waited for over a month in turn to buy my new Peugeot 203.  Money was not allowed for foreign travel and no money was released for studies abroad. Every dollar that came in was carefully  taken in by the State and there were no foreign money changers, collecting dollars and selling dollars as they wish.  In 1970, I was myself in charge of giving grants of foreign exchange allocations to small industrialists to import machinery or other requirements and we were extremely strict. We had effective price controls and methods of enabling the people to obtain supplies at reasonable prices. There was a Rice Ration Scheme till 1979..  

 Even when the oil sheiks increased the price of oil four fold in the early Seventies Premier Sirimavo had foreign exchange  to buyfuel. When the UK insisted that foreign estates taken over under Land Reform had to be immediately paid in foreign funds, Sirimavo met it.  We did not have to raise foreign loans to meet these commitment.  

Todays situation is entirely due to our following the IMF’s  Structural Adjustment Programme of allowing the free use of foreign exchange and meeting it with loans, the advice given by the IMF and our leaders agreeing to it and allowing the rich in the country to live in luxury. The debt mounted gradually to $ 5 billion by 1989, $ 24 billion by 2010, to $ 42.9 billion by the end of 2014 and to $ 56 billion today. This is entirely due to the free use of foreign exchange for use by our rich for luxury holidays, to send off their children for foreign studies and import all luxuries including luxury cars all for the rich. In this process the funds obtained on loans get shunted back to the donor countries while leaving the country saddled with the debt. This was the advice of the IMF which President Jayawardena and Foreign Minister Ronnie de Mel agreed to follow in 1977 in exchange for loans The first loans were given with a grace period where the leaders did not have to bear the responsibility of repayment. This total demise is detailed in my Books: Microenterprise Development: The Way Out of the World Bank & IMF Stranglehold(Sarasavi, 1997) How the IMF Ruined Sri Lanka & Alternative Programmes of Success(2006) and  How the IMF Sabotaged Third World Development( Godages/Kindle:2017)  

We have today to pay for funding this luxury life of the rich. It is necessary that the masses should not get penalized for this extravaganza for which they were not responsible. Instead of de controlling prices we have to get back to the days when the economy was managed during the time of Premier Dudley and earlier. That was by careful collection of the foreign exchange that came in. Banks that took in foreign exchange had to declare it to the Government and it was the Government that allocated funds for essential imports and then made small allocations for the import of fridges, motorcars etc.  

We also had a development infrastructure to enable people to get to work making things that the country required. We never imported buses, coaches or railway carriages. These wre made by our own carpenters. We even made crayons, a sophisticated product equal to the Reeves, the best of that day and sold it islandwide. This was done under my personal direction- a myriad experiments by our Planning Officer, a chemistry grad and the Rahula science teachers, every night from six to midnight for three months at the Rahula College science lab and established   by no less a person than SumanapalaDahanayake, the MP for Deniyaya in his capacity as the President of the Morawak Korale Cooperative Union. He marshaled the Morawaka youths to make crayons. It was done in three weeks working day and night at Morawaka.  Sumanapala developed Coop Crayon to have islandwide sales. That was the showpiece success of the Divisional Development Programme of the Sirimavo days. 

We have to immediately get down to make everything the country needs We have to re establish the Marketing Department with its vegetable purchasing scheme and its Cannery. This Cannery made Sri Lanka self sufficient in all jam  and fruit juice and food preparations within the three years 1955to 1958. It was this Scheme that indirectly controlled prices. We have to reestablish power looms and handooms to enable us to become self sufficient in all textiles. In 1972 suiting from the Hakmana Powerloom found ready sales in London! We made all our fabric in 1976. That was the Department of Small Industries at work. To assure food supplies we had two giant departments- the Food Commissioners Department to buy and ensure that people had a rice and essential food ration and the Agrarian Services Department to purchase paddy, mill paddy to rice and feed the Food Commissioners Department.  These three Departments have to be immediately re established. 

Kiss Goodbye to the IMF- it is because Sri Lanka followed the IMF dictates that we were fooled. The IMF  even gave grace periods of no payment to fool our foolish leaders to follow. The IMF  therefore does not have the right to expect any repayment.  The IMF  enticed our leaders to follow their advice by bribing them!.  

The IMF does not hold any hope. Countries like Ghana.that sought IMF help fell from the frying pan to the fire. Let us have import controls and foreign exchange restrictions in the national interest, collect every dollar that comes in, re establish the development infrastructure that we once had,  re establish industries to make everything we need. Sad to say we are perhaps the only country that does not make a bicycle today. We do not even make our step ladders! We collect waste cardboard and export 8,000 tons a month to India and buy back cardboard from them. We really need to have our heads examined. It is a simple process to make cardboard out of waste paper and the Divisional Secretary at Kotmale did that in the DDC Programme of 1970-1976.  It is entirely following the IMF that pauperized our country.  

New thinking has to emerge and we have to get down to work as fast as we can. Let me hope that this message gets to our leaders.  

Garvin Karunaratne, Ph D Michigan State University 

Former G,A. Matara, 02/11/2021 

Author of Microenterprise Development.. The Way Out of the World Bank and IMF Stranglehold(Sarasavi: 1997). 

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

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

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