Posted on September 29th, 2022

Sugath Kulatunga

Sri Lanka tends to decline the advice of local professionals but accept unreservedly opinions and recommendations of particularly organizations like the World Bank and IMF. But there are instances when even credible and convincing opinions from them have been ignored by our obdurate policy makers. The IBRD report in 1951 had made a few cogent observations, on product diversification and skills development which if we had followed, the country would not be in the present dismal plight and would have progressed to a developed country status. Instead, we concentrated exclusively on paddy cultivation where even after 7 decades we are not self-sufficient in food and depend on the import of wheat flour for food self-sufficiency. Extracts from the report with this writes comments are given below:
• Ceylon is in the vulnerable position of having to import most of its primary necessities while its ability to pay for them rests largely on exports of three agricultural commodities the world supplies and prices of which are subject to considerable fluctuations.
• The report indicates known reserves of about 6 million tons of iron ore are located in the southwest part of the island but are not exploited in the absence of cheap electric power
Comment:(This implied that SL must diversify its supply base which we did not do until the quotas on apparel made us to go into garments. The report indicates exploitation of iron ores as an area we should focus on.) .
• Number ‘of small private industries were established after the war including’the production of pharmaceuticals, tea chests, soap, glass ware,paint and bricks. Like the Government enterprises they have had difficulty competing with imported goods and have been hampered by the lack of technical skills as well as a shortage of venture capital.
•Comment: (Venture Capital:: Government of Sri Lanka had established the National Development Bank for the purpose of promotion of industrial, agricultural, commercial and other development of the economy of Sri Lanka having regard inter alia to the development of the rural sector. One of the objectives of the NDB was to undertake development projects, including pilot projects, in order to achieve the purposes of the Bank. Unfortunately, the NDB acted like any other commercial bank and was finally privatized by CBK who was on a selling spree. It is no more national but continues to call itself national.
• In view of the absence of any other financial institution to provide funds for innovative investments with risk, the EDB Act provided for investments in selected export projects. A special Division was created in the EDB to evaluate projects and participate as a Venture Capital provider in innovative pioneering projects. Through this facility a number of pioneering projects were established. But a subsequent Board of Management not only abandoned the concept of venture capital but disbanded the EDB division with its trained staff.)

. Perhaps the most important limiting factor in Ceylonf s development at present, both in the formulation of a coordinated programn and in its im;plementation, is the shortage of, treained and oualified personnel at all levels – suwerintendents, foremen and srkilled rorkers as well as technical, professional, and higher administrative personnel. This shortege is among the most important reasons for hea,vy losses in existing Govenrnient enterprises and delays in startinz new industrial projects.

•Comment: (Taiwan is an Island smaller than Sri Lanka with a similar population. It was a predominantly an agricultural economy. Today it is a high tech powerhouse leading the world in a number of high tech industries. It has a per capita income of 36, 000 dollars. At the beginning of the 1980s, Taiwan increased the ratio for senior vocational schools and general high school to 7:3. By 2012 there were 155 senior vocational schools, 14 junior colleges, and 77 universities/colleges of science & technology, totaling 246. It is the education system that has sustained the significant development of this small nation. Our education policy must be revamped if we are to progress in technology and expand high valued exports. Far back in 1944, the Kannangara education reforms proposed practical schools (vocational) but this aspect of reform has not been implemented seriously.  Our education system must be revamped if we are to progress in technology and expand into high valued exports and create productive employment. It cannot be left to the University Grants Commission or the FUTA.)

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