by Garvin Karunaratne

The various countries in the World, both in the Developed and Under-developed areas are in utter chaos, with citizens moving en masse from the under developed countries to the developed world -North America and the European countries. One route is via North Africa and Italy to the European countries and Italy is finding it difficult to cope with the vast numbers of immigrants. The immigrants do not wait in Italy for long, they move on to the European countries. The fact that borders of European countries are unmanned helps them to move easily. Britain is finding itself unable to cope with the influx of refugees coming in from France, as of today(07/9/25) as much as over a thousand have somehow come in. The UK Prime Minister is lost in a quandry. All developed European countries like France, Germany are finding it difficult to cope with large numbers that somehow or other flock in.

Across the Atlantic ocean is another move from the southern countries to enter the United States of America via Mexico. This is a move mainly via Texas. President Trump has declared war with immigrants and is working on a plan to deport them en masse. President Trump is fairly unaware that the agricultural economy of his States like California and Texas depend on these illicit immigrants- it was they that did the task of plucking and packing the fruit and veg for years. The legitimate incumbents fight shy of attending to these menial tasks.

When and why did all this happen. This did not happen today.

The seventeenth and eighteenth centuries saw colonial empires, when the colonies produced the raw materials and industries all sprang up in the mother Developed countries. Living as a child in colonial Ceylon, everything we needed was made in Great Britain. .

Since becoming independent, the Third World countries mustered their resources and were helped in development – agriculture and industries. Universities, the depositaries of excellence in education played a major role. American and European countries came to the forefront to bring about development. Michigan State University provided the expertise to develop Bangladesh via the Comilla Programme which successfully created employment and doubled yields in Kotwali Thana, the experiment area.

The countries India, Sri Lanka, and African countries like Ghana, Nigeria and Tanzania were all making a sheer attempt at development- in agriculture and industry. In India President Jawahar lal Nehru with the active support of excellence in North American Universities spearheaded the Community Development Programme . In Sri Lanka and other countries, even in African countries like Kenya the Rural Development Programmes were carefully concentrated on. The aim was to bring about development. In this effort the countries were immensely helped by the United Nations organizations the FAO, UNIDO etc.

The countries were almost all democratic and they were fast developing. Countries like Sri Lanka and India managed to even feed themselves. The countries were , opening up land, establishing industries bringing employment to the people and also producing what the people required. Sri Lanka by 1970 even managed to be self sufficient in all food. Leaders like Nyerre in Tanzania, Nehru in India, Mahatir Muhammed in Malaysia and the Senanayakes and Bandaranayakes in Sri Lanka did wonders. I was an essential part and parcel of this development from 1955 to 1973 in Sri Lanka and speak from real experience.

The countries were fast developing. The World Bank did help the countries.

In the early Nineteen Seventies the Middle Eastern countries increased their oil prices threefold and Third World countries looked to the World Bank and the IMF for financial assistance. The United States then came up with the Structural Adjustment Programme when the countries requested assistance.

Countries were given funds provided they agreed to implement the provisions laid down in the Structural Adjustment Programme, the brain child of Milton Friedman of the Chicago School of Economics, intended to bring the Third World countries back under them- to be ‘colonies’ once again.

Instead of the gun, this time it was to enforce an economic model that caused the countries to become indebted, and submissive.

What were the provisions of the Structural Adjustment Programme?

the Structural Adjustment Programme liberalized the use of foreign exchange. The IMF prescribed that the countries should allow anyone any amount of foreign exchange for anything- for luxury travel, for importing anything, for foreign studies and advised the countries to raise funds by privatizing State assets and also by borrowing foreign exchange. The countries were required to give up all development programmes. The Private Sector was to be the engine of growth. (From How the IMF Ruined Sri Lanka.(2006)

Earlier the countries had to manage with their earnings through exports and had to impose severe restrictions on the use of foreign exchange. I was a part and parcel, working as a Deputy Director of Small Industries in Sri Lanka attending to the development of small industries and also in charge of allocating foreign exchange to industrialists to import small machinery and also inputs for their manufactures. .

All this changed with the IMF enforcing the Structural Adjustment Programme on the countries that sought aid.

Professor Jeffery Sachs tells of what happened with this move in Africa:

Western Governments enforced draconian budget policies in Africa during the 1980s and 1990s. The IMF and the World Bank virtually ran the economic policies the debt ridden continent recommending regimes of budgetary belt tightening known technically as Structural Adjustment Programmes. These programmes had little scientific merit and produced even fewer results. By the start of the Twentyfirst century Africa was poorer than in the late 1960s when the IMF and the World Bank had first arrived on the scene, with disease, population growth and environmental degradation spiralling out of control. IMF led austerity had frequently led to riots, coups and the collapse of public services.(from Sachs: End of Poverty,2005)

Tanzania was also targetted. As stated by Cheryl Payer:

The IMF in routine consultations advised Tanzanian leaders that their reserves(of foreign exchange) were embarassingly large and might lead the country’s aid donors to reduce their contribution . A poor country, the IMF argued should not hold its reserves but spend them in order to develop more rapidly. They persuaded the Government to abolish the foreign exchange budgetary system, lift the controls on imports and consequently by the end of 1978 Tanzania had only reserves for ten days of imports. Then the IMF imposed its Structural Adjustment reforms. Tanzania which had a stable economy was broken down and brought to its knees.(From Cheryl Payer, Lent and Lost.)

My motherland Sri Lanka too had no foreign debt in 1976, when President Jayawardena went to the IMF for financial help. By 1994, when Jayawardena’s United National Party lost, the foreign debt was $ 6 billion. During the United National Party rule i.e. since 1977, the economy had been totally changed from a producer and sell economy , where all expenses had to be met with incomes, to a neoliberal import and live economy , where loans were freely obtained and the leaders never thought of repayment.(From: How the IMF’s Structural Adjustment Destroyed Sri Lanka(2021) by Garvin Karunaratne)

In this process the countries inevitably became indebted and could be controlled; they became ‘colonies’ once again.

So this is a long story of how many Third World countries were weaned to live on loans by the IMF imposing its Structural Adjustment Programme that created poverty resulting in a loss of jobs in the countries, making their people poor and not having incomes, with the result that they have to somehow bow down and submit to countries of affluence. This poverty, loss of incomes and employment in the Third World countries cause people to migrate to the affluent countries in search of a life of employment and incomes.

The only method of stopping this march of thousands from the Third World countries to the affluent countries lies is disbanding the Structural Adjustment Programme in total and finding in its place a programme that will enable positive development- employment creation in the process of creating what the country requires in agriculture and industry. This is a difficult task as the countries are saddled with a debt they cannot sustain with their earnings, but this is the only way ahead..

It is hoped that the eyes of the leaders of affluent countries will see what really did happen and make changes in development policy. This is a task that has to be done immediately before things do explode.

Garvin Karunaratne.Ph.D.(Michigan State University).M.Phil(Edinburgh) M.Ed.(Manchester)

Author of

How the IMF Ruined Sri Lanka & Alternative Programmes of Success, (2006)

How the IMF’s Structural Adjustment Destroyed Sri Lanka(2021)

garvin_karunaratne@hotmail.com 13/9/2025