By Garvin Karunaratne

The IMF was the international organization which the United Nations at its inception was intended to organize the economies of the World .This did really happen till 1977 when the Washington Consensus the ideas of World Bank chief McNamara, and President Ronald Regan took over world development and altered the course of both the IMF and the World Bank to bring the countries under the control of the USA.

This was done in the most dubious manner by making the vibrant and self reliant countries to fall into debt. At independence none of the countries were in debt. They were all having vibrant economies and managing their economies with great care, collecting carefully every dollar that was earned mainly by exports and managing all foreign expenses with great care. All countries were run with the locally printed funds. As a senior member of the Sri Lanka Administrative Service I was in charge of a minor section of this massive task. I was in 1970 in charge of providing foreign exchange to local small industrialists. The economy was run entirely controlled and there were no foreign exchange offered to anyone travelling abroad for education or fun and jaunts.

When the oil shieks increased the price of oil threefold in the early Seventies and countries went hat in hand to the IMF asking for funds to meet their foreign expenses the USA insisted that the countries had to agree to certain conditions:

The policies that were imposed comprised liberalizing the use of foreign exchange(earlier, foreign exchange was very carefully handled-controlled used only for essential supplies), taking the control of foreign exchange out of the hands of the Government; instead it was to function as decided by the Market forces of supply and demand- the banks deciding the exchange rate as opposed to the Government deciding the exchange rate. This led to the devaluation of the local currency. The use of foreign exchange was liberalized allowing anyone to use for any purpose. The Public Sector was not allowed to handle any commercial activities and the commercial infrastructure that brought about development was closed down through abolition or privatization. Imports were liberalized to help the country to obtain imports. Subsidies so far offered to bring about developement were abolished.

(From: How the IMF Sabotaged Third World Development)

These conditions were imposed on Sri Lanka in August 1977 and have continued to be imposed gradually but firmly till today,

As a result the value of the local rupee has fallen from Rs 12.00 per US $ in 1997 to as much as Rs 300.00 today.

The result., a country that did not owe a dime to anyone when Premier Sirimavo handed over the country to President Jayawardena has today been reduced to have a foreign debt of $ 91 billion. When Presidet Gotabhaya was forced out of office barely two year ago the foreign debt was only $ 56 billion. Under President Ranil, in less than two years our foreign debt has increased from $ 56 billion to $ 91 billion today.

Despite this calamity of the massive increase in the foreign debt President Ranil claims that he  was able to make up the economy witb the assistance of the IMF:(Daily Mirror:22/3).

In fact the economy of Sri Lanka has been ruined, with a massive increase in the foreign debt from $ 56 billion when President Gotabhaya handed over , to as much as $91 billion today!

As Harim Peiris rightly highlights in the Island of 20/2,

The Ranil Wickremasinghe administration and the business and political elites who support it would argue the primacy of the economic recovery efforts. But this has already occurred. It was also not rocket science but plain common sense of basically importing fuel with some help from India and renegotiating with our creditors, including getting China to the table. But rebuilding our nation and her political economy requires deeper reforms. While the Wickremasinghe Administration has taken the emergency measures to stabilize the economy it is seemingly unwilling, unable and even in denial of the need for any reforms of the Sri Lankan State, public governance or economic management”.

Perhaps as an administrator who has once tackled the economy and has made it work in the interest of the people, bringing training, employment and incomes to them, and also involving them by training etc to make what the Nation needs most today- to make items that are imported, I could state that what is required today is a massive effort of the Government to train people and get them into the production mode and for the country to enable less imports. This will also save foreign exchange.

Then, in 1970-1977 the Divisional Secretary at Kotmale collected all the waste paper from Government Offices, rolled up his sleeves and with the youth in Kotmale established a paper and Cardboard Making Center, It was a great success.

In Matara as the Government Agent I directed this Programme. We established a Boat making factory that made seagoing fishing boats. It was acclaimed a success. Then on my own I established Coop Crayon- making crayons. The art of making crayons was unearthed by no other than my Planning Officer Vetus Fernando, locked up within the four walls of the science lab at Rahula College Matara for three months every evening. He and Development Assistant Dayananda Paliakkara and the member of parliament for Deniyaya Sumanapala Dahanayake, in his capacity as the President of the Morawaka Cooperatives established CoopCrayon which made fine crayons which were sold islandwide by the Morawaka Cooperatives.

I have written again and again about what we did achieve in the Divisional Development Councils Programme of the Sirimavo days, The leader Professor HAdeS Gunasekera is not among us today. Sumanapala Dahanayake has also left us.

However stalvarts Vetus Fernando, and Daya Paliakkara are among us. Instead of getting into a learned discourse of writing it may be worth for our Government to round up Vetus Fernando and Daya Paliakkara and others who may yet be alive and request them to immediately organize and implement a development programme to make what we import.

They belong to the last group of officials who actually brought about development. 

That is just the way ahead.

Garvin Karunaratne 22/03/2024, garvin_karunaratne @ hotmail.com

FORMER Government Agent, Matara 1971-1973.

LATER Commonwealth Fund Advisor to the Government of Bangladesh, where I designed and established the Youth Self Employment Programme which is yet going strong having so far created over three million youth entrepreneurs., now being implemented by members of the elite Bangladesh Civil Service