By Garvin Karunaratne

In presenting the budget of 1978, the Finance Minister, Ronnie de Mel wrote:

We cannot go round the world begging for Aid like international beggars for ever. We must get out of this vicious circle of no growth, stagnation and mounting international and external debt.”

Then, in 1978, Sri Lanka had a foreign debt of only $ 750 million and that was on projects where at the end there would be an income that would be more than what was borrowed. Sri Lanka never begged before President Jayawardena and Ronnie de Mel came to be our leaders. Then what we did was to carefully collect the inflow of every single dollar through exports etc. and managed our foreign expenses with those dollars. The entire country- all development work etc was run on local currency.

Ronniede Mel and President Jayawardena followed the IMF blindfolded and accepted the IMF teaching of neoliberal economics- the economics of living on borrowed funds. The IMF told us to allow anyone to spend dollars that came in on loans. The dollars were spent abroad- spent on foreign education, on luxury holidays , on luxury imports- in 2020 we even imported Norwegian salmon etc for sale in Colombo supermarkets and the dollars so spent ended in the Developed countries. The IMF’s process was to give us dollar loans and to get us to spend so that the dollars went back to the Developed Countries- to their banks. It went back with profits. It is this process that had gone on leading to our foreign debt of some $55 billion today, which has now strangled Sri Lanka’s economy.

It is a fact that the IMF even gave grace periods to President Jayawardena not to pay the yearly dues on the loans given for five to ten years in order to entice President Jayawardena and Finance Minister De Mel to follow neoliberal economics. It will be good for the IMF team of today to note how the IMF in 1978 enticed – rather bribed our leaders to follow the Structural Adjustment Programme.

It is by following the dictates of the IMF from 1978 to today that Sri Lanka got into the present abyss.

Today we are begging for dollars. We have become international beggars. Not a days passes without a Minister scrambling oversease to beg for dollars and the latest is to Saudi Arabia for $ 6 billion!

I happen to be a live partner handling senior administrative positions, managing Sri Lanka without falling into debt and can quote real instances of how we did it.

As the Additional Government Agent in Kegalla in 1968 and 1969 and as the GA at Matara in 1971-1973 I was in charge of some five powerlooms in each District which turned out textiles out of imported yarn. Yarn was imported dirt cheap -Sri Lanka had a major textile factory at Tulhiriya also working on imported yarn and we manufactured all our textiles. Then the suiting done by the Hakmana powerloom was in high demand even in London. The Tulhiriya Factory was privatized to Kabool of Pakistan who made hay while the sun shines, made money and decamped leaving unpaid loans to local banks. That was how privatization ruined our country. Despitre the fact that privatization ruined out economy our present leaders are thinking of privatization our assets today!

In 1970 to 1977 we had a special programme- the Divisional Development Councils Programme – the idea of Finance Minister NM Perera to fulfill the aspirations of thousands of young men and women for whom life will lose all meaning unless they can find a useful place in our society”(From; Karunaratne:Papers on the Economic Development of Sri Lanka:Godages). True to his word 33, 290 jobs were created. The Sirimavo Government head hunted the foremost economist of the day Professor HAdeS Gunasekera and he commenced work in days in a portion of the Central Bank. Let us look at some of the achievements. The Divisional Secretary at Kotmale made paper out of waste paper. It was a great success. Do we have a single unit making paper out of waste paper today. No. We instead collect the waste paper and sell to India and collect a few coppers and thereafter buy glazed paper paying full dollars. Do we not need to have our heads examined! We can have a few units making paper out of waste paper in weeks .Yet we are lingering in the dark like lost kitten not knowing what to do!

Take what the Divisional Secretary Wilson Perera at Baddegama did: He found a neglected farm and got hold of sixty youths- trained them to be farmers- and the result- 12 acres of neglected rubber rehabilitated, 40 acres of neglected tea rehabilitated, 20 acres planted with coconut, 50 acres of neglected paddy land brought under cultivation. At the end there were 60 scientifically trained farmers. Such work was done in many districts.

In Matara we fought battles with the Ministry of Plan Implementation and the Director of Fisheries and wrested approval to establish a mechanized boatyard making some 40 seaworthy boats a year. It was a great success. Then because the Ministry refused any more new industries, to teach the Ministry a lesson we found the art of making crayons by experimenting every night for three long months at the Science lab of Rahula College Matara and established a Crayon Factory in two weeks- a 24 hour operation. – a cooperative at Deniyaya, established by Sumanapala Dahanayake, the Member of Parliament. The work done by Sumanapala is an eye opener to our present days Ministers and Members of Parliament. Sumanapala developed Coop Crayon to have island wide sales. President Jayawardena wanted to send Sumanapala to the gallows at Welikada and sent a special squad led by a Deputy Director of Cooperatives AT Ariyaratne to find fault. They raked the files for days and had to report that the Crayon Factory was a great success and a national asset. But what did President Jayawardena do. He ordered it closed. Visiting Sri Lanka today my blood boils when I see Crayola Crayons on sale in Sri Lanka. Coop Crayon could have been developed to find employment and incomes for thousands of our youths. Coop Cryon was equal in quality to the Reeves Crayons of that time and to the Crayola Crayons of today. This encapsulated how our economy lost and how our country became poor.

In 1970 I was the Deputy Director of Small Industries that inspected all small industries and gave them dollars they needed to obtain essential ingredients to enable them to manufacture items. We supervised small industries goaded them to make what was required for the country and what could be exported.

Over to our present leaders. We have been pussy footing doing no work other than sending Ministers begging. Why not we commence immediately a programme to make everything we imported -all done with local rupees- in the manner we worked before 1977. If allowed to bat we can easily score- a programme making over 50,000 employed making everything we imported within a year. What we can make range from step ladders to motor spares to crayons, to paper and all our fruit drinks. Let us not forget that the Marketing Department Cannery made Sri Lanka self sufficient in all jam and fruit juice within the three years 1955 to 1958. We import over ninety percent of our step ladders- something which we can easily make. On my motor trip from Dhaka in Bangladesh to Khatmandu in Nepal my silencer broke down at Jessore on the Indian border. A local garage made a superb silencer within two hours. Today the UK and the USA make silencers for all foreign makes of cars and find employment and incomes for their people. We can make motorspares- silencers- radiators, oil filters- small factories can be set up within two to three weeks.

Such an employment creation programme is the need of the hour.

Garvin Karunaratne, Ph.D. former GA Matara 1971-73, Later in 1983, the Commonwealth Consultant to the Ministry of Labour and Manpower in Bangladesh when he designed and established the Youth Self Employment Programme of Bangladesh which has by now guided over three million youths to become commercially viable entrepreneurs- the premier employment creation programme the world has known.

13 th September 2022