A Message for our Leaders
Posted on July 30th, 2022

By Garvin Karunaratne

If President Gotabhaya had taken action on the suggestions in my  Paper: The Way Out of the Economic Abyss besetting Sri Lanka published in the Lanka Web on 11 th March 2022, he would not be in the present plight. Our country would also have been saved from its present disastrous situation.

It is up to our present Leaders our President  and Prime Minister to take immediate action to bring about the production of all items that we imported and in that process create employment and incomes to our people and also aim at exports to earn dollars.  We have done it earlier and we have the men and also the funds to attend to it.  Our Divisional Development Programme was entirely financed with Rupees and Cents. The Youth Self Employment Programme of Bangladesh which I designed and established which has by now guided over three million to be commercially viably self employed, making things for sale in Bangladesh was entirely done with locally printed Taka.  It is wrong to state that printing money causes inflation. All Third World countries ordained their devcelopment with local currency till the IMF took over their development.  Having destroyed the countries and devalued their currencies enabling them to import all  our products at a discount( discounted to the extent of the devaliuation) they are laughing to the bank. 

The IMF and the World Bank are vacillating giving frivolous reasons. It is actually by following the IMF’s Structural Adjustment Programme provisions to the very letter from  1978 that we have come to this state of anarchy.

 Let me hope and pray that our present leaders will not make the mistake that President Gotabhaya did.

The Way Out of the economic abyss besetting Sri Lanka

Posted on March 11th, 2022

by Dr Garvin Karunaratne

A depleted treasury- living on loans like a beggar on the streets, endless food queues-, is unfortunately Sri Lanka today. Today it is reported that the dollar has fetched over Rs 260  and unless one can imagine the cost of imports. A New Programme to make everything we import is mandatory and I hope our leaders understand this fact. 

Till 1977 Sri Lanka managed its economy without any foreign debt.

The IMF’s Structural Adjustment Programme imposed on Sri Lanka in 1977 ruled that the Public Sector should not do any commercial activities. Consequently all progressive programmes that brought production and poverty alleviation that had been implemented had to be abandoned. Though Departments could be abolished or abandoned, the personnel continued confined to the  barracks.

How can the administrators who manned these great programmes be brought back to man the ship?

My mind traverses back to two successful programmes . How these two programmes achieved success and who administered them may offer us ideas as to how we can proceed. 

The First is the Green Revolution in Sri lanka. When I joined the service of the Government in 1955 the battle for the use of high yielding paddy varieties was attended to by the Department of Agriculture and I being an Assistant Commissioner in the Department for the Development of Agricultural Marketing joined in. This Programme got a shot in the arm when the Paddy Lands Act was passed in1958 by Minister Philip Gunawardena. A new Department of Agrarian Services was formed overnight. The man behind the scene for the Paddy Lands Act and the creation of the Department was Dr. GVS de Silva, the Minister’s Private Secretary, a lecturer in Economics at the University of Peradeniya. The Department that was created overnight was the Department of Agrarian Services- MS Perera of the CCS was appointed the Commissioner. Instead of recruiting new hands GVS and MS Perera handpicked administrators whom they thought were efficient. I, Ediriweera and Mano Handy from the Marketing Department, GLDP Senaratne, Wickrema Gunasekara from the DROs, LNT Mendis, TG Peris  from Land Development and many more. This Department was entrusted with the task of implementing the Paddy Lands Act. I was entrusted with implementing the PLAct in Matara. Before long there was chaos in Parliament and Minister Philip Gunawardena was forced out by the forces of the right. However his socialist mission did not die. It was carried on by us. I implemented the Paddy Lands Act in Kegalla and later in 1963 and 1964 in Anuradhapura. What was special with the Paddy lands Act was the formation of cultivation committees which planned paddy cultivation. For the first time a vibrant people’s organization attended to paddy cultivation. 

The next stage came with the victory of the United National Party under Dudley Senanayake in 1965. He willingly took on the mantle of the Green Revolution headon. He never found fault with what had been done by the earlier government. If it was progressive, he furthered it. He made many changes. In the Districts the administrative head was the Government Agents who had hitherto nothing to do with paddy cultivation. However the GA was the key figure in any District. He brought in the GA to be in charge of the Green Revolution. The GA had a host of departments under him and to enable the GA to devote his sole attention to the Green Revolution he created a post of Additional GA in every district. .At Kegalla as the Additional GA, I was entrusted with all the work hitherto done by the GA. In addition I also assisted him in paddy cultivation work. The GA was also gazetteed as Deputy Director of Agrarian Services, of Agriculture and Cooperatives and his only task was furthering paddy cultivation. The GA was given an official vehicle for his use. And the progress of the programme was monitored closely by the Prime Minister personally. The GA Conference concentrated entirely on the progress of paddy cultivation. Once at this conference a GA said that there was only one jeep for a District and suggested that an additional jeep should be given to enable the paddy programme to succeed. . The Prime Minister immediately made an order that three jeeps should be given to each district. Then the yield of paddy was reported by the agricultural officers in each District. The Prime Minister wanted to be certain of the veracity and ordered that yields should also be checked by crop cutting surveys attended to by staff officers of other Departments. This was done. I had the task of being with the Prime Minister every Saturday and Sunday for the entire day for two full years, when he came to his electorate. I was at the Warakapola Rest House by nine in the morning to greet him and accompany him to a host of meetings, some organized by me and many organized by his supporters. Accompanying him meant I had to answer all his questions about the progress in paddy cultivation and he was never short of prying questions..

It was this administrative process headed by the GA that enabled Sri Lanka to achieve self sufficiency in paddy production by 1970, even while giving a ration of 2 kilos of rice per week on the ration free, the only country to do so. .

The key elements that enabled success lies in hand picking officers with proved ability and providing them with full powers to forge ahead.

The second Programme is the Divisional Development Councils Programme of the Sirimavo Government of 1970-1977

Under this DDCP agricultural farms and small industries were established all over the island. I laboured on this Programme in Matara in 1971-1973 and in addition to agricultural farms and small craft industries done in all districts, created a Mechanized Boatyard making seaworthy boats- established in two months. Under my direction my Planning Officer unearthed the art of making crayons and as instructed by me Sumanapala Dahanayake, the Member of Parliament for Deniyaya in his capacity as the President of the Coop Union established a crayon factory done in two weeks working on a 24 hour a day schedule. . It was developed to have islandwide sales. Mine was the only District to have two viable industries, successfully established. 

When President Jayawardena took charge in 1977 the DDCProgramme was abandoned at the instance of the IMF and the administrators consigned to the barracks.

The Government Agents, the king pin that made Sri Lanka self sufficient by 1970 and also implemented the DDCP Programme of 1970-1977 have no job now because his tasks were actually handed over to the Additional Government Agents in 1967. Today the Government Agents- very senior officers lay dormant, getting back some tasks that were earlier handed over to the Additional Government Agent. They have to be brought back and charged with the task of delivering the country out of the present abyss.

 Sri Lanka has all natural resources  sufficient  to be taken out of the present abyss. The Government is kindly requested to take the bull by the horns and   marshall the administrators to work. 

Take Coop Crayon, the art of making crayons equal to the world famous Crayola crayons of today was unearthed by my Planning Officer Vetus Fernando, a chemistry grad of the University of Colombo, who had no experience whatsoever after he left the University, aided by two science teachers of Rahula College, Matara. It took three months of experiments from six to midnight every day locked up in a school lab.  Thereafter crayons were successfully produced in a cooperative union headed by a member of parliament of the area- Sumanapala Dahanayake.  This success proves  that we can make everything we import and therein lies the employment and the production the country requires. Even exports can be aimed at. Sri Lanka became self sufficient in making jam, juice and tomatoe sauce in three years and eight percent of the pineapple products were  exported, done by the Marketing Department, where I worked then as an Assistant Commissioner.. 

Our leaders should act fast to get a programme of making everything we need. The success stories quoted proves that we can be a success.

With my experience and academic knowledge I can put my neck out to make a firm statement that Sri Lanka can even today make all fruit juices, jam and tomatoe products within one year- the mango trees are full of fruit and over half goes waste. We do not have a Cannery. The Kandy Area is ideal to plant vanilla and we spend millions to import it. Get planting vanilla, passion fruit. Once the Kandy area was producing gherkins for export. In my days in charge of the Tripoli Market my Marketing Officers were busy buying produce and the Canning Factory was working twenty four hours a day. Assistant Commissioner Oswald Tillekeratne was a task master and he not only made Sri Lanka self sufficient in jam, juice and tomatoe sauce but also built up an export trade in pineapple. Eight percent of the production was exported. Similar veteran administrators have to be found and put to work. 

Take Paper, President Gotabhaya resurrected the Valachenai Paper Mill and our country is full of paddy straw and illuk to make paper. This is a simple task that can be done within months. Order a few small scale paper making machines from India and install them in the colony areas and within six months Sri Lanka can be self sufficient. That was the speed at which I established the Mechanized Boatyard at Matara.

It is unfortunate to note that since 1977 our country has not had a single employment creation programme. The last was the Divisional Development Councils Programme of 1970-1977. Is it not sad that our Governments since 1977 to date for some four decades has been sleeping. Perhaps the officials of the IMF and our advisors from the IMF are ruling us.  From the late Seventies the IMF reined in the Third World to make it import goods from the Developed Countries so that the loans granted ended with profit back in their banks, leaving the Third World countries with a debt. That was the marvellous task well done by the IMF.  Sad our leaders fail to understand even now. 

No foreign exchange is necessary. The theory that printing money is causing inflation is a nonsensical theory by theoretical economists. Inflation comes when you waste printed money by giving free handouts like Samurdhi and fantastic salaries like a million rupees a month to consultants . .

We  also should follow the blue print that was followed since we achieved independence in 1948 to 1977, It was a country not in debt and our development- opening up land, irrigation work, agriculture etc. all development tasks were  done with local Rupees. Foreign exchange is required only to get down machinery but as I have pointed out  again and again in many industries like canning fruit, in making paper, making perfumes, making hardware items, we can easily re-coup the outlay on machinery within the very first year. We are importing  many items we can easily make like step ladders which can easily be made. Why are we creating work for people in Thailand and Singapore. It is a simple task to make three wheelers- only the engine has to be imported. 

Let me close with the request that our leaders should immediately approve a programme to make every item that we import and marshall our senior administrators who are now confined to the barracks.

. Though our own Divisional Development Councils Programme created only 33.271 employment in six  years- 1971-1977, I can assure employment to over a 50,000  in the very first year if I am involved in any form. We administrators have proved our worth in Sri Lanka as well as overseas and what we need is to be called upon to get active.  It is left to our leaders to take the lead. 

Garvin Karunaratne, Ph.D. Michigan State University,

Author of:

How the IMF Ruined Sri Lanka and Alternative Programmes of Success, (Godages;2006)

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

Selling the Motherland & Ideas for Developing Sri Lanka (Godages: 2022)

How the IMF’s Structural Adjustment Destroyed Sri Lanka(Godages:2022)

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