REINTRODUCING THE SIX YEARS PROGRAM OF INVESTMENT (1955-1960)
Posted on August 11th, 2022

BY EDWARD THEOPHILUS

I read content in many publications that Sri Lanka has an economic crisis (2022) that is unimaginable to the government’s economic advisors what should do to get out of the problem. If the government economic advisors knew about this situation before 2022, why didn’t they educate the policymaking process of the country?  

Sri Lanka had various economic plans and the most successful plan that contained the best policies was the Six Years Program of Investments (1954-1960) by the Planning Secretariat of the government of Mr Sir John Katalawela. This program was not implemented as a result of electing a socialist government in 1956 and I believe that the most successful development policy program was the plan, the Six Years Program of Investment. The main purpose of the program was economic diversification, import substitution and mobilization of domestic savings. The policy direction of the Six Year Program of Investment considered three main criteria when approving economic projects in the country.

  • Use of Human and National Resources. This policy direction was a broader expectation as the national resources of the country was limited and human resources had good control, the total population was less than 12 million and the government was in a situation to employ all members in the public and private sectors.
  • Considering the economic feasibility of a particular venture, which was a broader area
  • Policy design to help the private sector. The government had not developed policies for this purpose and the government would have been concerned about the behaviour of trade unions

The third criterion is designed to promote more private own economic entities to compose economic dynamism in the country.

What was the reason to ignore this investment program? Nobody can give a successful answer, but if this program had been implemented, Sri Lanka would have been promoted to a developed nation at the end of 1960 and my honest feeling is the program must reintroduce and economic recovery should achieve through this investment program.

The Six Years Program of Investments anticipated implementing the following effective additional policy actions to broaden the ownership of public and private investments.

  • Establishment of government-sponsored corporations under act 19 of 1955. In terms of this act, many public corporations have been established with low capital and they became white elephants by mismanagement.
  • The transfer of Government enterprises to the private sector in three stages (a) the government business undertakings will be transferred to the corporation with capital provided by the government. (b) the sale of government shares to private sectors and finally the government holds less than 20% of share capital (c) establishment of public companies under the company law act.

The vision of the Six Years Investment program focused on the privatization of economic activities management by giving stimulus for new private investments and selling more than 20% of shares in government business enterprises to the public. It could be called public offerings as implemented in the 1990 decade in Western countries. 

The reintroduction of the Six Years Investment program requires to get economic recovery than conducting an unproductive ARAGALAYA.

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