By Garvin Karunaratne

The IMF was the international organization by which the United Nations at its inception intended to organize and bring about development of the economies of the World .This did really happen till 1977 when under the Washington Consensus World Bank chief McNamara, and President Ronald Regan took over world development and altered the course of Third World countries tobring them 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. When the countries got 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 . 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. In 1955 to 1967 I was in charge of paddy production. In 1970 I was in charge of providing foreign exchange to local small industrialists. In 1971-1973 as the GA at Matara I wasn charge of all development in a District. The economy was run entirely controlled and there were no foreign exchange offered to anyone travelling abroad for education or fun and jaunts. The economy could not face such fun and frolics. Foreign exchange,carefully collected from exports etc. was spent to import essentials. When I resigned from the Administrative Service and went abroad I was not given a single penny. We were that strict.

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 Authorities 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 anything. Subsidies so far offered to bring about development were abolished.

(From my book: How the IMF Sabotaged Third World Development)

These conditions were imposed on Sri Lanka in August 1977 and have continued to be imposed 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 in 1970 has today been reduced to have a foreign debt of over $ 100 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 the foreign debt is far far higher.

Perhaps as an administrator who has once tackled the economy for seventeen years 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 create employment- incomes for the workers and also save foreign exchange. This is an idea for kind consideration.

Let us get into specific tasks that were achieved

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. Do we have any such programme today? No. Now we burn waste paper and sometmes pay to get rid of it.

In Matara as the Government Agent I directed the DDCProgramme to manufacturing what we have to import. We established a Boat Making factory that made seagoing fishing boats, done in two months. It was acclaimed a success. The Ministry did not want to approve any more.

Then entirely 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, a chemistry grad 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, under my gaze- done within two days- a 24 hour a day process- which made fine crayons which were sold islandwide by the Morawaka Cooperatives. Mind you, we did make crayons that were equal to Reeces Crayons, the best of the day. When Sumanapala and I showed the crayons to Minister Illangaratne he shouted in joy, summoned the Controller for Imports and prohibited the import of crayons.

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 sadly not among us today. Sumanapala Dahanayake has also left us.

However stalvarts Vetus Fernando, and Daya Paliakkara are among us. They are in the last band of stalvarts who established industries as since 1977 we abolished all development tasks- employment creation as ordered by the IMF and confined all administrators to the barracks. Since then, Hundreds of officers are now being paid and they have found some work to attend to.

Instead of getting into a learned discourse of writing it may be worth for our Government to round up officers who did attend to create employment before the IMF took over in 1977. A few of them are Vetus Fernando and Daya Paliakkara of Matara, and other officers who handled the Divisional DevelopmentProgramme in other Districts may also be among the living to initially guide us.. The Divisional Secretary of Pata Hevaheta who had a project of making greeting cards out of Alimana recently and others who may yet be alive may please be found and charged to immediately organize and implement a development programme to make what we import.

That is the only way ahead.

I may also mention what I achieved in the two years I was a the Commonwealth consultant in Bangladesh.

The pilot project for youth self employment implemented by me was adopted as a full fledged programme. The members of the elite Bangladesh elite Civil Service trained by me continued the programme- the 3 Residential Training Centers were increased to 64 and the Bangladesh Five Year Plan of 1997-2002 had a target to train 160,000 youths a year. The Government of Bangladesh reported to the 34 th Session of the IFAD(FAO)( one of the funders) that two million youths have been self employed.

It is my recommendation that we have to get cracking on employment creation programmes and also make what we import. We will alleviate poverty by creating employment and also make what we import. We need very little money as the staff that did attend to development tasks are available doing something they have found to do today.

Garvin Karunaratne 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 trained by me.

18-02-2026

garvin_karunaratne @hotmail.com