Industrialize or Perish
Posted on April 30th, 2023

Sugath Kulatunga

This is a continuation of the article titled Export and Prosper published on LBN on the website https://www.lankaweb.com/news/items/2023/02/28/industrialize-and-prosper-part-i/

Historically SL had been an entrepot trade center. It can be assumed that there were also industrial goods produced locally in this trade. There is evidence that steelmaking was prevalent in many parts of the county where iron smelting was done in wind tunnels. The cutting and sculpturing of granite, remains of which are abundant could not have been done without hard steel instruments. It is unimaginable that a nation which is credited with a superior hydraulic civilization did not make a few industrial products. The manual skill of the labor is evident in the intricate wooden and metal craft and other forms of handicrafts. The innate skills of handling complex machinery without prior experience were displayed by the local workers employed in the Gal Oya scheme.

Many reports have been written on the potential of Sri Lanka to industrialize but rarely have they been followed up as investment projects. The former concept of comparable advantage has now been refined to competitive advantage. Despite recommendation of the Washington Consensus to South Korea to desist from venturing into heavy industries as the country did not have a comparative advantage, South Korea dived into the deep end and came out with remarkable success. World Bank refused to fund the Posco steel mill in Korea as they lacked the raw material but today admits that Posco as the most efficient steel mill in the world. https://documents1.worldbank.org/curated/en/441571468753249695/pdf/multi0page.pdf

Most mentioned comparative advantage of the island for a manufacturing hub is the strategic location straddling the busy sea route between the Far East the middle East and Europe. The newly added bounty is the 200-mile marine economic zone. A bonus is the deep-sea natural harbor and the oil tank farm in Trincomalee. In the modern era the literate trainable human resource has become a prime potential for an industrial base. This turns out to be more relevant for high tech service industries.

SL is also gifted with sources of inexpensive and clean solar energy with the tropical sun shining over the island almost 12 hours of the day on every day of the year. The prospective for wind energy is also high.

It is with industrialization that the country can earn foreign exchange and move towards productive high employment with better wages. With all these advantages the country can gain from industrialization and all those incomparable blessings of nature we have had a high prospective for industrialization, but these blessings were pearls cast before swine. This paper attempts to identify opportunities to industrialize in the following wide areas. These are random and broad-brush postulations which need further investigation. Most of the details on the potential have been culled from EDB publications. In very broad terms they can be considered under:

  1. Value Addition in existing industries.
  2. Import substitution and
  3. New Physical resource-based industries.
  4. New Human resource-based industries.

1.VALUE ADDITION

SL has not tapped the full potential to add value to the major commodities of Tea, rubber, and coconuts. In Tea we can produce more organic teas for niche markets. The market for tea in bags has grown very rapidly. But there was some reluctance of the tea traders to shift out of the bulk tea market. SL should follow the Dilmah example of branded tea in tea bags. It is sad that we have not still produced a tea beverage or an instant tea.  In tea we should form a cartel with other major producers and bargain for better price.

In rubber we should focus on latex products which give more added value. The international system of grading of RSS is an unfair device to lower the price of RSS to the producer. Smoked sheets are downgraded on color, reefer marks or air bubbles. These standards have no relevance in the manufacturing process where dirt (carbon black) is added to the compound.

In coconut while more value addition is there when converted to desiccated coconut, coconut oil could be used for manufacture of cosmetics. Out of the 400,000 ha of land under coconut at least 200,000 ha could be intercropped with cash crops like pineapple, pepper, banana, ginger, papaya, groundnut, manioc etc. An informative website is: https://goodhands.lk/intercropping-under-coconut-in-sri-lanka/

Spices have a tremendous potential for value addition. Our spices are very high in quality and could fetch high prices as value added products. Value-added products accredited globally are black pepper powder, pepper oleoresin, cardamom oil, curcumin, turmeric oleoresin, bleached ginger, and cinnamon oil. A branded curry powder pack of SL spices could be introduced to the export market. India already has a few branded products in the market, but SL should be able to compete on superior quality. Every part of a coconut has room for value addition. Some examples are given in the following article from FAO. https://www.fao.org/fileadmin/templates/rap/files/meetings/2013/131030-value.pdf

Fruits and vegetables can be further processed with canning, dehydration and fermenting. That will also reduce waste in seasons of glut. Fruits can be canned and made into juices and bottled. Many sweet fruits can made into wines. Wine industry must be made legal.

Most cereals can be converted into convenient foods like breakfast cereals as well into animal feed and alcoholic beverages. This could also reduce the consumption of the unhealthy Kasippu. Vodka and ethanol can be produced from sweet potatoes.

2. Import Substitution

Present neo liberals are averse to import substitution under any circumstance. The current objection of the IMF is that import substitution under protective trade regimes creates a bias against export promotion and hinders import competition, export diversification, as well as the entry of foreign firms. It must be mentioned that all high performing economies in the Far East resorted to import substitution under trade protection in their early stages of industrialization. A more balanced view of Import Substitution prevailed among economist some time back which indicated that an element of import substitution is necessary, although not a sufficient, condition for expanding domestic markets and help to sustain a satisfactory rate of industrialization. A well-conceived and adequately implemented strategy of import substitution can make a substantial contribution toward higher incomes and help to promote exports. It also can help to speed up the transition from a traditional and agrarian economy into an industrial society sharing in the benefits of international relations and trade”.

0015-1947-article-A005-en-1.pdf  IMF Library

While Sri Lanka under the guidance of the IMF and World Bank followed their free-market policies South Kore according to notably Alice Amsden (1991), deliberately ‘got the prices wrong’—that is, Korea used trade barriers and other measures to ensure that infant industries, notably in the heavy industry sector, were protected from international competition and received prices well above world market prices for those products. While our industrial policy was based on politics the Far Eastern economies made their decisions using economic and technocratic criteria.

In Singapore, import-substitution efforts were strengthened in the early 1960s to shield new firms from foreign competition. Thus, tariffs were raised in both 1962 and 1963, and import quotas were imposed on a variety of products in 1963. By May 1965, some 230 commodities were subject to import licensing and quantitative restrictions. https://www.elibrary.imf.org/display/book/9781557754639/ch003.xml

During World War II SL had established a few import substitution projects such as on paper, plywood, leather, glass, ceramic and steel rolling. Some of them were converted into public corporations and expanded. Some were later privatized. But SL has had no Posco like groundbreaking projects despite the IBRD report 1951 disclosing that there was 6 million tons of iron ore to be exploited nothing was done. Forget about expansion, the Hardware Corporation of SL has not been able to produce a mamoty to match the crocodile brand of Chillington. These agencies require new technology to upgrade themselves.

SL should produce in the country most agricultural tools needed in the country including small tractors. It is noted that the small tiller which is now popular in most Asian countries was the invention of Sri Lankan Ray Wijeywardhana. Sri Lanka could focus on the light engineering sector, which is the backbone of any heavy industry sector. In many industrialized countries the early stage of their industrialization they developed their light engineering sector, which sharpened the skills of the work force and the management. This sector became the incubators for more sophisticated industries.

For the first time, two natural gas discoveries were made in two wells out of the three wells drilled in Block M2 by Cairn in 2011. It took another 10 years to enact Petroleum Resources Act, No. 21 of 2021 to provide for the establishment of the petroleum development authority of SL the formulation of a national policy on upstream petroleum industry and regulation and management structure capturing the maximum economic value of domestic petroleum resources. Government should give the highest priority for the development of the petroleum resources.

3.Physical Resource based manufactures

Minerals- SL has a range of geological deposits from Pre Cambrian to Jurassic. The bulk of the world’s valuable mineral deposits (for example, those of gold, nickel, chromite, copper, and iron) formed during the Precambrian. Sri Lanka has not done a comprehensive survey of the wealth of minerals in the country. A good source of information of the mineral wealth of SL is @ https://www.srilankabusiness.com/blog/mineral-resources-from-sri-lanka.html

  1. Graphite- SL is known to have the purest deposits of graphite. The mineral is still exported in the raw form. Elsewhere in this note it has been mentioned Sri Lanka can earne over USD 10 billion revenue with higher value addition in (Graphene, Conductive Graphite, Graphite Nanotubes, super Lubricants etc.
    1. Gems and Jewelry- There is considerable scope for improvements in this sector on cutting and setting in jewelry. Most of our gems ends up in Thailand of which the export of gems and jewelry was $6.16 billion in 2022. It is reported that bulk of Thai exports consist of SL gems.
    1. Ceramics-The Island is endowed with raw materials used in the ceramic industry such as kaolin, ball clay, feldspar, silica quartz and dolomite. The excellent quality and purity of these materials which is available in abundance contribute to the high standards of the products. SL already has a number of firms in this sector. There is more scope for small scale production in ornamental ceramics.
    1. Glass –The country offers the entire moulded range of glass bottles for food and beverages, pharmaceuticals, cosmetics and perfume industries. In the future with the elimination of plastic bottles there will be a strong demand for glass bottles. There is opportunity for small scale glassblowing.
    1.  Fertilizer- Our rare asset of the Eppawala phosphate deposits can be converted into superphosphate. The Nano Urea could be expanded. Organic fertilizers in refined form should be expanded. The conversion of garbage into compost should be given priority.
    1. Inland Fisheries It is reported that the extent of inland waters in major rivers is 375 thousand hectares and the area covered by man-made water bodies exceeds 170,000 ha. in about 10,000 tanks. All these water bodies can be used for inland fisheries. One wonders why catfish which is so abundant in countries like Vietnam and Thailand and is the most consumed freshwater fish in USA is not cultivated in Sri Lanka. Catfish is a hardy fast breeding fish which can survive when water bodies dry up could be bred in mud ponds.
    1. Ornamental fish- There is scope for the expansion of this industry.
    1. Salt based products. – It is used to produce caustic soda and chlorine; it is also used in the manufacturing processes of polyvinyl chloride, plastics, paper pulp and many other products.
  2. New ventures
    1. Electrical & electronics -with a comparatively large talent pool of highly skilled middle tier workers and substantially large numbers of local Engineering Professionals, catering to many world-renowned brands in Automobile, Telecommunication, Consumer Electronics, Industrial Automation and Medical sectors, Sri Lanka’s Electrical and Electronic exports have shown sustained growth over the past two decades.
    1. Nano technology Sri Lanka has taken the first and the most important steps in developing and encouraging nanotechnology-based industries in the country. The formation of SLINTEC; the Sri Lanka Institute of Nanotechnology has been particularly instrumental in this regard. With the major universities and research facilities engaged in innovative and futuristic R&D, the future of nanotechnology-based industries in Sri Lanka seems to be quite promising. Use of nano technology in solar panels would be a promising field for investment. https://www.srilankabusiness.com/blog/nanotechnology-based-industries-sri-lanka.html
    1.        Tourism. There is so much of information on the development of tourism. The opportunities for Medical and Health Care tourism, and Buddhist tourism should be explored. If the Maldives with very much less to offer earned USD 3 billion from tourism in 20022 there is no reason why SL cannot aim at an annual income from tourism of !0 billion USD.
    1. Boats and ships SL possesses the capabilities required to build quality boats Sri Lanka produces ships and boats that navigate global oceanic channels as well as inland waterways, with a wide range of manufacturers and shipyards delivering various boat and shipbuilding and dry dock services.
    1. Alternate Energy. To start with the 4000MW of alternate energy projects which the Minister of Power and Energy claims as already approved but the CEB has not entered into power purchase agreements should be operationalized. Roof top solar should me more encouraged. It is suggested the exploration of using blow holes in the coastline as a new source of power generation.
    1. Textiles & garments. SL continues to import the bulk of the fabrics used in the industry. There is scope for the production of grey fabric, denim, polyester yarn, and specialized fabric used for lingerie and sportswear. Modernization of the handloom industry with better looms and computerization could produce more employment. The handloom industry should also go into the production of high value products like pashmina shawls which could fetch over 500 USD for a piece.
    1. Mariculture-  SL has a coastline of around 1,340 km (832.6 mi) where ideal spots would be available to practice mariculture which is popular in many countries. In addition to fish and crustaceans SL could take to cultivation of sea weeds.

4. Industries based on Human Resources

  • BPM. (Business Process Management) Sri Lanka is one of the best destination for providing off-shore services for ICT and services in Finance and Accounting, Legal, Insurance, Banking, Telecommunication, etc. Many global service providers such as HSBC, WNS, Accenture, Dialog Axiata, Copal Amba, Medigain, E&Y, RR Donnelley have selected Sri Lanka to set up their businesses.
    • Logistics The country’s close proximity to emerging markets, and it’s already developed air and seaports in Colombo and Hambantota makes it an important logistics hub in the region providing entrepot and transhipment services to leading shipping lines and exporters.
    • ICT SL is blessed with a literate and trainable human resource base. This has given them the advantage in foreign employment in a wide range of skills. revolutionary structural changes are called for in education curricula, vocational training and technical education to prepare the work force to be able to cope with coming information and communication technology (ICT) developments.” More @ https://unctad.org/system/files/official-document/BRI-Project_RP15_en.pdf
    • Among high tech ventures which SL should consider in the long term are artificial intelligence (AI), augmented reality (AR), blockchain, drones, Internet of Things (IoT), robotics, 3D printing and virtual reality (VR), Biometrics, Nuclear Energy and Genomics.

This is not an exhaustive list. I have depended on the excellent guidelines of the EDB for the brief introductions to each opportunity. A look at any product catalogue from China could identify hundreds of new possibilities. This is best done by our representatives abroad. They should be given targets to identify trade and investment opportunities at least one in each category every year. Sri Lankans domiciled abroad should also be encouraged to identify trade and investment opportunities.

BOI spends a great deal of funds and energy to promote investments abroad. But when investors arrive in the country, they are sent from pillar to post. One stop shop suggestion has been there for a long time. But implementation of that has been disrupted due to Ministries resisting the abandoning of their powers. One way to resolve the problem is to establish a panel of local experts to work with the investor to go through the maze. They can be paid a token fee for their support. If there was such a panel, we would not have missed the Samsung investment. We have to graduate from country promotion which was appropriate in the late 70 s and early 80s. Now it is fruitless to promote a failed state. It is time we focus on project promotion. A list of websites where model projects are advertised in India and Pakistan are given in following section on Projects for Investment.

PROJECTS FOR INVESTMENT

In their website https://www.srilankabusiness.com/exporters/sri-lanka-export-products/ EDB gives a range of export products now exported from SL such as  Ceylon Tea, Rubber & Rubber Based Products, Coconut & Coconut based Products

Apparel & Textiles, Spices, Essential Oils & Oleoresins, Food, Feed & Beverages

Diamonds, Gems & Jewellery, Boat and Ship Building, ICT & BPM

Wellness Tourism , Logistics, Electrical & Electronics .

There is a tremendous potential to expand their production.

In their website https://investsrilanka.com/ BOI gives a wide range of investment opportunities under two main categories of manufacturing and services. While these comprehensive lists of opportunities are useful it is necessary to develop at least pre-feasibility studies of them.

In India and Pakistan there are project reports on such products readily available. A sample list of projects is given at https://smeda.org/index.php/business-facilitation/smeda-downloads/pre-feasibility-studies and at https://www.agriexam.com/nabard-bankable-project.

https://www.entrepreneurindia.co/project-and-profile
https://www.niir.org/project-reports/

These agencies not only provide project reports but provide consultancy services. Export Development Board had developed a group of staff in a separate Division to evaluate projects from the private sector and Public Private partnership projects, and also help in the formulation of projects. A former Chairman of the EDB who had a predetermined notion that EDB should confine itself to only export promotion and not development disbanded this Project Division. It is important that the government establishes a unit in the EDB, BOi or in a major state Bank to develop an extensive portfolio of projects or feasibility studies to be made available to prospective investors.  Such project reports would be of immense benefit to the SMI sector. Model projects of the Project Management Institute would be useful on high-tech projects. https://www.pmi.org/most-influential-projects-2021/

Now that there is a new dynamic professional as the Chairman of the EDB my appeal to him is to restore the venture capital facility and the Project development function of the EDB and undertake the formulation of feasibility reports/ project reports on the investment opportunities with export potential. For this, and to strengthen its financial capacity the EDB should ensure the restoration of the legal right of the EDB to the full amount of the EDB cess on imports. EDB could obtain technical assistance from India to operationalize the restored Projects Division on the model of the Indian agencies. China would also be another source for assistance in this field.

It is essential that more funds be allocated for R&D on new products. After the technical feasibility of a new product, funds must be made available for the commercialization of the research by the state or through venture capital. This again could come under the purview of the EDB.

The prospects in introducing new technology and value addition on a single product of graphite as indicated by an investor already in the product is impressive If 50 graphite mines could be activated and made operational, Sri Lanka can earne over USD 10 billion revenue with higher value addition in (Graphene, Conductive Graphite, Graphite Nanotubes, super Lubricants etc.) making it the biggest export earner of the country” said owner of graphite mines in Ragedara, Chairman, Sakura Graphite Kurunegala, Keerthi Wickramaratne.” Daily News-January 28, 2023.

 It was inspiring to read the groundbreaking innovation of Sri Lankan Dr. Ranga Dias of Rochester University. He describes the innovation on superconducting—without electrical resistance and expulsion of magnetic field at room temperature—is the holy grail” of condensed matter physics. Sought for more than a century, such materials can definitely change the world as we know it,” Dr Dias says it has applications in including:

  • Power grids that transmit electricity without the loss of up to 200 million megawatt hours (MWh) of the energy that now occurs due to resistance in the wires
  • A new way to propel levitated trains and other forms of transportation
  • Medical imaging and scanning techniques such as MRI and magnetocardiography
  • Faster, more efficient electronics for digital logic and memory device technology.

SL President or the Prime minister should invite Dr. Dias to the motherland and should get his advice on R&D on some area of application. If these leaders are not keen at least the OPA should invite him.

 We already have a successful R&D project on Nano Technology. What has been lacking is venture capital to commercialize the innovations.

It is reckoned that similar value additions can be expected from our heavy mineral deposits. If we do not have the technology, we should purchase the technology like what South Korea did. They did not wait for FDI in the early stages of their take off.

We have missed the bus many times. The present opportunities for export-oriented industrialization is not as good as in the 50s or in the 80s when the Asian tigers launched their production drives. There is more competition in the market and already established suppliers have a price advantage. SL is not gifted with an abundance of human and physical resources. At the same time SL has a niche market opportunity. SL has to capitalize on human resources and rare minerals. The space for service industries is still open. Global demand for Professional and skilled services are expanding. The demographic trends in the developed world continue to increase the demand for services. We can be a tourist hot spot.

In industries SL should focus on high-tech industries with technical leapfrogging. those with the most potential include artificial intelligence (AI), augmented reality (AR), blockchain, drones, Internet of Things (IoT), robotics, 3D printing and virtual reality (VR), Biometrics, Alternate energy and Genomics. The new champion industries program of India has identified growth areas which are given production linked incentives. The Indian program provides an abundance of information on potential areas for investment -reference https://www.investindia.gov.in/team-india-blogs/production-linked-incentive-pli-scheme-decoded. The choice of projects for investment has to depend on the physical and technical capability of the country.

A prerequisite for industrialization is the development of a skilled work force. This was highlighted in the IBRD report as far back as 1951. For this there should be radical changes in education policy where technical and vocational education should be given preeminence. In this regard the City University concept and a University of Technology which were mooted by GR regime should be pursued vigorously. We should follow the example of Taiwan which achieved a ratio of 7: 3 between technical and general education by 1980. Education Policy should not be left to the Academics who prefer to wallow in their comfort zone. In an attempt to close the high tech skills gap the Korean government created the Korea Institute of Science and Technology in 1966, a multi-disciplinary research institute mainly in the sciences and engineering. The Korean Advanced Institute of Science (KAIST) was established in 1971 as an educational and research institution, and rapidly rose to be among the highest-status universities in Korea and in international university rankings. Scientific and Industrial research institutions in SL would profit from entering into collaborative projects with such institutions with proven success.

In the present context of IMF intervention and the propensity of President Wickremesinghe on neo liberal policies one wonders at what price the country will benefit from the new policies. According to Stiglitz IMF and Washington Consensus believe in a set of policies which demand that countries should focus on stabilization, liberalization, privatization. It’s based on a rejection of the state’s activist role and the promotion of a minimalist, noninterventionist state. The analysis in the era of Reagan and Thatcher was that government was interfering with the efficiency of the economy through protectionism, government subsidies, and government ownership. Once the government “got out of the way,” private markets would allocate resources efficiently and generate robust growth. Development would simply come. They had a strategy for job destruction. They had no strategy for job creation. Many of the policies the IMF pursued as they were killing off jobs made job creation almost impossible. In the U.S., you couldn’t have job creation with interest rates of 30 or 40 percent. They had a philosophy that said job creation was automatic.” Reaganomics and Thatcherism policies have failed in the long run.

With the devaluation of the rupee wage earners and fixed income earners like pensioners have been forced to a loss of value in their income and savings of at least 40 percent. Traders are having a carnival in increasing prices of goods well beyond the devaluation and exploiting the consumer.

IMF is proposing privatization of SOEs using financial jargon as comprehensive strategy to restructure the balance sheets” which could include preparing for a sale, buyout, merger, change in overall goals, or transfer of ownership. Against this ‘government out of the way’ and privatization policies, Singapore followed with remarkable success policies of a ‘developmental state’. Many of its leading advocates refer to the Singapore case as evidence of the possibility of successful development planning (Lin & Vu, 2017; Esteban et al., 2013, pp. 585-589; Coyle & Muhtar, 2021; Rodrik, 2006; Weiss, 2016). The recently published Oxford Handbook of Industrial Policy hails Singapore as a paragon of the mission-oriented” and smart” industrial policy argument by Mariana Mazzucato (Rasiah, 2020). The leading advocate of industrial policy today, Chang (2013, p. 33), considers Singapore’s use of industrial policy to be the most successful” amongst developed countries. So successful and blatant was Singapore’s use of industrial policy that it was an effrontery to all kinds of economics”, mainly, the neoliberal ideas that ChaDevelopmental states make industrial policy front-and-centre in their policy agenda, establish numerous state-owned enterprises, possess high levels of state capacity, and rely on performance legitimacy—as opposed to the democratic legitimacy typical in developed nations—in their effort to remain hegemonic (Haggard, 2018). This school of thought advanced by the developmental state theorists argue that East Asian growth experience succeeded not despite, but because of governments deliberately avoiding neoliberal prescriptions and strategically intervening in markets through industrial policy (Wade, 2005, 2018; Amsden, 1994). While some dismiss the East Asian model as a historical relic, there has been resurgent interest in the ‘developmental state’ model today, under the popular banner of the entrepreneurial state” (Mazzucato, 2018; Wennberg & Sandström, 2022).”

Instead of privatization of existing SOEs Singapore created a holding company of the assets of the SOEs and installed efficient management systems. Assets of this holding company Temasek today is considered to be around 287 billion US dollars which is over 3 times the GDP of Sri Lanka. It is not the ownership but the management that influence the success of SOEs which have been affected by political henchmen appointed to manage them. What could be done is to establish a professional management cadre, similar to the SL Administrative Service to manage the SOEs.

There is a misconception that our business community lacked the knowhow in large scale industries and was not competent to manage complex export industries. The chaebols in South Korea were in trade and lacked the knowhow of undertaking manufactures. It is reported that Hyundai Corporation, for example, was founded in 1947 and specialized in construction work. Samsung the technology giant was a small export company Taegu, selling dried fish and vegetables. Daewoo, however, was not founded until 1967. They were in business, not in starting and operating industrial enterprises. Given the opportunity and incentives our business house which were in plantation management, real estate and finance and later in garments would have succeeded in new manufactures.

At the present moment there is a very high emphasis in the development of the Agricultural sector particularly on paddy cultivation. Massive subsidies are extended to paddy cultivation which suffered due to the precipitate policies of the previous government. The present overcompensation may have a political rationale of winning over the recently traumatized farming community. But it should not be at the expense of industrialization.

There should be no conflict between agriculture development and industrialization. One of the critical problems in agriculture is the fragmentation of land with the increase in farming population. Even in the colonization schemes the second and third generation are affected by the scarcity of land. The only avenue to absorb the surplus population is Industrialization which will also lead to urbanization. This will result in a profitable markets for the products of the farming sector. Industrialization could support the modernization of agriculture creating a demand for new products like micro irrigation, hydroponics, climate control and new fertilizers.

What is needed is an integrated national policy on industrialization, technology and education (skills development). A plan of action should be derived from the national policy. It is imperative that Technology policy precedes education policy. SL should follow the Korean example of selecting for example 10 business leaders who are provided with the incentives and protection to undertake a new industry with advanced technology. Where necessary they should be supported to purchase technology. It would be useful to marry identified University faculties to support them with research. This would be in addition to action discussed under the three broad areas of value addition, import substitution and resource-based industries.

I repeat what I said on LBN in the post titled Industrialize and Prosper on February 28th 2023. Industrialization could have transformed the economy to be more productive and generated more skilled employment and stimulated economic growth. It could have also engendered technological advances and innovation. Overall, industrialization would have vastly improved living standards.

Through innovation, specialization, and wealth creation industrialization would have shifted population from farms and villages to manufacturing centers. This would have developed more urban centers with better living facilities and services like education and health. Industrialization could have resulted in value addition to agricultural products and helped in the diversification of agriculture.

The neglect of industrialization by our policy makers despite having the experience of a number of basic industries like ceramics, paper, plywood, leather and glass established during the days of World War II was inexcusable. This was due to the politicization of economic decisions which continued for the last seventy-five years of independence. The curse of the original sin of ignoring industrialization continues to plague the development of the country. A land with a potential economic miracle and a paradise has been made into a miserable failed nation. Leaders who achieved political independence of the county also made the county economically dependent in continuity.

Sugath Kulatunga

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