By Garvin Karunaratne, PhD Michigan States University
Introduction
The Central Bank Governor’s statement: The New Economic Model deviates from notorious Structural Adjustment “(Sunday Times: 20/12/2020) marks a watershed in the economic policies of Sri Lanka. He has added that ” Sri Lanka will move away from an import oriented market economy towards a production-oriented strategy”. It is also stated that working within a market economy…. the performance of the economic policies introduced in 1977 will be viewed rigorously.”(DailyFT:5/1/2021)
Our Central Bank Governor deserves to be praised and congratulated for deciding to get away from the notorious Structural Adjustment Programme of the IMF, which has in the last few decades taken many Third World countries that had self-reliant economies and were not in debt, to their grave. Sri Lanka happens to be one of them.
What
is Structural Adjustment?
Structural
Adjustment, include rapid price and trade liberalization, accompanied by a
determined stabilization programme to restore or maintain price stability.. the
immediate opening of markets to entry by new businesses.”(World Development
Report 1996)
The
World Bank view is that
strong
liberalization stabilization help transition economies correct their inherent
inefficiencies and macro economic inbalances and move to a path of secure and
rapid growth.”(World Development Report: 1996)
Though
stabilization and rapid growth was talked of, in actuality by Structural
Adjustment Programmes an attempt was made by the IMF, to restructure
the economies of countries that were economically self reliant
and did not have a debt, to become indebted. Sri Lanka, that had a self reliant economy, was instructed to
liberalize the use of foreign exchange, get loans and spend, getting into debt.
The administrative infrastructure of development programmes that was being
implemented to enable development was also abolished as instructed by the IMF.
Our
Central Bank then sang hossannahs, misleading the Government. The
Annual Report 1978 states:
’Substantial capital inflows, together with resources from the
IMF went on to create a favourable balance of Sri Lanka payment”.
In my words:
The word ‘favourable’ can be construed to be misleading in the
extreme, to refer to resources (loans) from the IMF as favourable
because IMF finances are loans on interest that
increase the foreign debt of the country. Actually the loans worsened the
economy.”(From How the IMF Ruined Sri Lanka:2006: p47 )
The
IMF loans were provided to Sri Lanka with long grace
periods, to entice our rulers to take the loans as they could enjoy spending
the money, but may not bear the responsibility to repay. In my words, “It
can be considered morally wrong for any
Government that had been elected for a term of 5 years to take any loan with a
grace period beyond their legitimate incumbency because then the burden of
repayment will fall on a future government that did not
contact and obtain the loan.”(How the IMF Ruined Sri Lanka: 2006:p.47) The IMF
stooped so low to entice our decrepit leaders to take
loans and get into debt.
The
Structural Adjustment provisions provided loans and ensured that they
benefitted a class of rich people, who enjoyed luxury imports, who were allowed
foreign exchange to spend abroad, go on expensive holidays,
send off their children to foreign universities all done with the funds
obtained on loans. It was inevitable that the countries would fall into debt as
the funds were not used productively. The foreign exchange that came in as a
loan was also somehow sent bank to the Developed Countries in some form or
other leaving our country saddled with the debt. The other
provisions were to impose a high interest policy- this made local entrepreneurs
find it impossible to make a profit and they gave up enterprises making way for imports. Import controls were
abolished and import taxes were reduced. Public Sector commercial activities-
the development oriented infrastructure to enable development like the
Vegetable & Fruit Marketing Scheme of the Marketing Department, the Canning
Factory which enabled Sri Lanka to be self sufficient in food preparations(jam
etc.) and viable small industries like powerlooms and handlooms were all
abolished and there were to be no subsidies. Foreign
Exchange was to be used freely to import anything. The incoming Foreign
exchange was to be handled by banks and commercial dealers and the Central Bank
only controlled the Rupee. This in a nushell were the main provisions of
Structural Adjustment.
SriLanka,
one of the first countries to follow the Structural Adjustment Programme is perhaps the first country to declare that
the IMF was leading our Third World Countries to become indebted.
How Sri Lanka was trapped
Sri
Lanka was not having a foreign debt in 1977 when President Jayawardena
commenced following the advice of the IMF.
In 1975 Sri Lanka’s foreign debt was negligible in the
early Seventies. Then the foreign debt-. only $ 743 million, and at
$ 750 million in 1977- were all incurred on projects and not on consumption. In
my words, “Following the Structural Adjustment Programme of the IMF from
1978, our foreign debt increased to $ 1,845 million by
1980 in hardly three years of liberation, to 4,063 million by
1986, to $ 6,723 million by 1993, to $ 9,405million by 1995.”( From How
the IMF Ruined Sri Lanka(2006)
In 2020 the foreign debt
is around $ 56 billion.
In
fact, Chandra Maliyadde one of our former Permanent Secretaries, queried how,
while “at the end of 1976 the foreign debt of Sri Lanka was
only $ 75 million, how the external debt liability had increased by
more than 500 times in 35years”.(The Island:23/06/2013).
What
happened was that President Jayawardena of the United National Party when he
came into power in 1977, requested financial help
from the IMF. There was no need for him to seek any help from
the IMF because Prime Minister Sirimavo, who ruled from 1970 to mid 1977 had
managed to avoid getting into debt even though the Oil Producing countries had
increased the price of oil fourfold in the early Seventies and she had also to
pay in foreign currency for the take over of Estates over 50 acres when the UK
insisted that the companies should be paid immediately. The
Superpowers, resenting the socialist policies that were followed, even resorted to subject Sri Lanka to sanctions
like not providing us flour at reduced rates, as was normally done, which
resulted in bread queues. This reduced our reserves yet the country was managed
without falling into foreign debt. The balance of payments i.e. the amount
of money created in foreign exchange by way of net inflows received from
exports and other services, less the cost of imports and services and payments made in foreign exchange, recorded
a net . $ 58 million in 1976 and $ 117 million in 1977, while after 1977 there
was a negative figure of $ 75 million in 1978, increasing every year to as much
as $ 507 million in 1980. (From How the IMF Ruined Sri Lanka(2006,
p.48)
It is
important to note that 1976 and 1977 were the last two years when we had a
favourable balance of payments. Since 1977
the balance of payments have grown negatively. Today, the balance of payments
is negative in the region of over four billion dollars, all due to following
the Structural Adjustment of the IMF.
What really did happen is best
expressed by the South Asian Commission (SAARC) on Poverty Alleviation:
the
industrial countries are for the first time since World War II in need of
markets for their products.. So they have put into effect the Structural
Adjustment Programme… the industrial countries are pressurizing the
receipients of Structural Adjustment loans to unilaterally
open their economies to goods from them.”(Meeting the Challenge:1992)
I have
happened to be in the forefront against the IMF’s Structural Adjustment
Programme(SAP).
In
1990 I commenced a series of courses on Third World Studies at
Westminster Institute of Adult Education in London, These lectures subjected
the IMF’s Structural Adjustment to critical evaluation. These lectures were
attended by students of the University
of London. The University professors yet taught traditional
economics- to them the Third World economies were not falling apart under the
IMF’s Structural Adjustment Programme. On the other hand, my Lectures exposed
the detrimental effects of the SAP. Our former
Ambassador Mr Sarath Wijesinghe, the President of the South Asian Forum of the
University of London, in 1992 invited me to speak about the economy of Sri Lanka at a meeting of
the South Asian Forum in the University of London. Minister Nimal Siripala de Silva was also invited from
Sri Lanka and spoke on the political
situation.
My
address highlighted how the foreign debt increased from a low of $ 743 in 1975
to as much as $ 5101 in 1989, how the Rupee was devalued from
Rs. 15.50 to the pound sterling in 1977 to Rs 34.53
in 1978( a devaluation of over 100%), to Rs. 39.06
by 1981, how the income enjoyed by the richest increased from 28% in 1975 to
35% in 1987 and the incomes of the poorest declined from 19% in 1975 to 16% in
1987, how the people were deprived of the rice ration scheme which provided
rice at low prices by abolition of the Rice Ration Scheme and instead
introducing a Food Stamp Scheme, which in its first three years of
implementation, the per capita calories consumption of the
bottom 20% declined by 8% from an already low of 1490 calories in 1978 to 1368, documents a tremendous
increase in the foreign debt (due to) being
extremely liberal in allowing foreign exchange for foreign
travel, offering students foreign exchange for overseas expenses for stay and
fees at foreign universities, allowing the unrestricted import
of non essential consumer goods, importing built up buses lorries instead of
importing chassis and building them locally, causing loss of employment to
thousands , leading the country to disaster in terms of foreign debt, currency devaluation, high inflation, increased
imports , poverty and unemployment.”
This Address to the
South Asian Forum at the University of London on 18 th October 1992
has been published in my book: How the IMF Ruined Sri Lanka(2006).Pages
43 to 82)
Following
this Structural Adjustment Programme has today
led to Sri Lanka having a foreign debt of around $ 56 billion. Paying back
these loans is impossible. Even to service the loan- not to default, requires
around $ 6. 5 billion annually. The total
foreign exchange earnings is hardly sufficient to meet this commitment. In short, we have to find loans and get
into further debt to service our loans.
The
foreign debt was $ 13 billion in 2005 and $ 18 billion in 2009, which indicates that Sri Lanka did not
get into massive debt to defeat the LTTE. Thus the
foreign debt was entirely created by living beyond our means- by financing the
rich to spend lavishly. The IMF dictated and we followed, like the children
following the Pied Piper of Hamelin.
Abolishing
the administrative infrastructure that Sri Lanka had built up to enable
development Sri
Lanka had since achieving independence in 1947, put together a development
infrastructure to enable the move from a colonial vassal status to a self
reliant situation where a bold peasantry will be well established in
agricultural pursuits and agro industries, making
what is required for the country. By the time the IMF took over the running of
the country by imposing the Structural Adjustment Programme in 1978, the
country had achieved self sufficiency in its staple crop- paddy and industries
were developed making many consumer items. We were making all our textiles. To
achieve this we had developed a Scheme for Vegetable and Fruit Purchase paying
high prices and also having a Canning Factory that made Sri Lanka self
sufficient in all Jam, Fruit Juice and Sauce.
Sri Lanka, had developed a Paddy Purchasing Scheme paying a premium price to
producers and also established rice mills. The Vegetable Purchasing Scheme, the
Paddy Purchasing Scheme were stopped and the Rice Mills abandoned and left to
rot, following the IMF advice. Handlooms and Powerlooms that turned out
textiles were all closed down and the infrastructure
of Velona the research institute that helped textile manufacture was closed
down. The Small Industries Department that handled the development of small
industry in both the public and private sector was crippled. According to the IMF the Public Sector should
not attend to any commercial activity. The IMF concept was the Private Sector as the Engine of Growth. It
was forgotten that the private sector had as its aim making profit and service
to the nation was not in their books. In industries we had developed small
industry- made mechanized boats, crayons on a cooperative framework, made tools
etc and all this had to be abandoned on the IMF advice. Thus the IMF’s advice to abolish the development infrastructure was
very detrimental for the development of the country.
Sri Lanka did not subject the IMF teachings to
critical evaluation
Our Central Bank sang
hossannahs in praise of neoliberal economics that underlay Structural
Adjustment.
Our University professors the
erudite economists of the country ignored what was happening to our economy.
Our Universities teach only traditional and historical economics and never even
touch the neoliberal economics of Milton Friedman of the Chicago School of
Economics which propounded the Structural Adjustment Programme of the IMF.
In 1996 as
a Visiting Lecturer in the Faculty of Economics at the University of
Peradeniya, my first assignment was to lecture on any subject I liked to the
faculty. I selected the IMF’s Structural Adjustment, which was forced on Sri Lanka by the IMF. in 1978. I
detailed how the implementation of the Structural Adjustment Programme caused
poverty and deprivation in our country and ruined the economy. I detailed how through the development of
microenterprises, we can yet bring about development. .None of the erudite
faculty who listened to a two hour’s lecture , raised a single question, but my
lecture also sealed the fate of my being a visiting
lecturer. My critique of the IMF was anathema
to the thinking of the erudite dons who perhaps thought I would indoctrinate
their students.
This
presentation was published by Sarasavi Publishers in 1997 and this
book: Microenterprise Development: A Strategy for Poverty Alleviation and
Employment Creation in the Third World: The Way Out of the World Bank and IMF
Strangehold,(69 pages) happens to be the first book critically
evaluating the IMF’s Structural Adjustment Programme and also
providing a detailed new paradigm for the Third World countries to save
themselves from the IMF’s Structural Adjustment trap. In my words:
As far as economic development and productive growth is
concerned Structural Adjustment provisions spelled death for the
economies of the Third World…. The provisions of the Structural Adjustment
Program are so binding on the Third World countries that they have
no power to plan their economies. The countries have to accommodate to the
dictates of foreign investors and foreign financiers coming to them
directly and covertly in the name of the WB and IMF.(From: The Way Out
of the IMF and World Bank Stranglehold:1997)
Professor
Sirimal Vithane in evaluating this book states:
The author is successful in providing a critical picture of the
inherent features of the World Bank and the IMF’s policies and their
implications for rural development in the Third World and suggesting a
reasonably powerful alternative or sustainable economic development
at the community level. It is a valuable addition to the literature on
Development Economics.”
The United
Nations woke up only in 1996, making a petty statement in its Human
Development Report 1996:
The stabilization measures of the IMF aimed at
reducing both budget deficits usually involved cutting public
spending and increasing interest rates… Although these policies reduced
deficits in some countries they often did so at the cost of inducing recession
In short, they often balanced budgets by unbalancing peoples lives”.
That
was all the United Nations did. The United
Nations ignored the detrimental effects of countries following the
Structural Adjustment Programme, while the Third World countries bled to death.
Two
celebrated professors who have now come out against the IMF’s Structural
Adjustment are Noble laureate Joseph Stiglitz and Jeffery
Sachs. Both were working for the IMF, the World Bank or
affiliated institutions and for years were furthering the interests of the
IMF. In the case of Indonesia, Stiglitz had the audacity to advise
the IMF: I suggested that the excessively contractionary
monetary and fiscal programme could lead to political and social turmoil in
Indonesia. If the people we entrust to manage the global economy in the
IMF don’t begin a dialogue and take their criticisms to heart,
things will continue to go very wrong.”(The Insider, The New
Republic:17/4 2000) Stiglitz was given a standing sack.
That
was after he had served as the Chief Economist and Vice President of the World
Bank from 1997 to 2000, furthering the Structural Adjustment
Programmes.
Professor Jeffery Sachs came up
with a major criticism of IMF policies in his The End of Poverty(2005)
Western Governments enforced draconian budget policies
in Africa during the 1980s and 1990s. The IMF and the World Bank virtually ran
the economic policies of the debt ridden continent, recommending
regimes of budgetary belt tightening, known technically as
Structural Adjustment Programs. These Programs 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 he IMF and the World Bank
had first arrived on the scene with disease, population growth and
environmental degradation spiraling out of control. IMF led austerity
frequently led to riots, coups, and the collapse of public
services.”
It is interesting to note that till 2005 Jeffery Sachs was a
proponent of free market economics and served as the Advisor to the Governments
of Bolivia in 1985, to Poland in 1989 and Russia in 1991. In all of these
positions he was advising his ‘Shock Therapy’’ how to be a success in following the
market economy through open trade, privatization of State Assets,
elimination of price controls and subsidies- the core tenets of Structural
Adjustment. This was done through obtaining more loans actually
making the countries more indebted… His shock treatment was
furthering the structural adjustment policies. He has been
criticized for his shock treatment in that it had produced
misery and death for an untold number of working people”
.(internalist.org.JefferySachsachsows1110html)
In fact I have had to comment on Jeffery Sachs:
Jeffery Sachs in the Eighties and Nineties when working to
further the Structural Adjustment Programme did not have the foresight to
understand that the very policies he implemented would not only push
the countries more towards bankruptcy and debt., but also leave the
people impoverished and poorer.”(From: How the IMF Sabotaged Third
World Development, (2017)
The Left Busines Observer states:
Poland looks like a success to some but with the transition came
high unemployment, falling real wages. Russia though was a thorough disaster,
one of the worst collapses in human history. Living standards fell and the
population shrank, an almost unprecendent event in a country not at
war.”(The Long Strange Career of Jeffery Sachs: Left Business
Observer, 11/8/2005)
What happened to Tanzania illustrates how the countries were
trapped:
The IMF in routine consultations advised Tanzanian
leaders that their reserves were embarrassingly large and
might lead the country’s aid donors to reduce their contribution. A
poor country, the IMF argued should not hoard its reserves but spend
them in order to develop more rapidly. They persuaded the Government , to
abolish the foreign exchange budgetary system… lift controls on imports and
consequently by the end of 1978 Tanzania had only reserves for ten days worth
of imports. Then the IMF imposed its Structural Adjustment reforms. Tanzania
which had a stable, self reliant economy was broken down and brought
to its knees.(From Lent and Lost by Cheryl Payer )
The foreign debt of Tanzania which was nil in the Seventies
increased to $ 2.4 billion by 2011 and $ t4 billion by October 2020.
What did happen to Sub Saharan African countries is an eye opener:
After more than a decade of acrimonious debates and
tonnes of evaluation reports there is an increasing
convergence of views that Structural Adjustment Programmes have not
worked and that as designed they are grossly defective as
a policy package for addressing the endemic poverty and pervasive
under development of the region.” :(Our Continent: Our
Future: African Perspectives on Structural Adjustment by Thandika
Mkandawire & Charles Soludo(Africa World Press Inc.1998)
Under the tutelage of the IMF the Third World countries that had a
negligible foreign debt before the IMF came on the scene have piled up debt,
with poverty and deprivation out of control.
Making the countries to pile up a foreign debt has been the method
the IMF used to make the countries become ‘colonies’ of the Developed Countries
once again.
My book: How the IMF Ruined Sri Lanka and
Alternative Programmes of Success was published in 2006.
Assistant Dean George Axinn of Michigan State University in
his Introduction to he book commented:
A valuable and timely book that will enable international
organizations to arrest the trend of failures. It provides a comprehensive
approach which includes policies for employment creation, poverty alleviation,
import substitution and self reliance as well as community development and non
formal education the educational strategies that can usher in development.”
This book details how the IMF ruined Sri
Lanka in its 480 pages..
In 2017, my book: How the IMF Sabotaged Third World
Development was published by Godages/ Kindle.(136 pages)
Universities keep away from
teaching the economics of Structural Adjustment
While
many countries were falling a prey by following the IMF’s Structural Adjustment
policies forced on the Third World since the late Seventies, is it
not sad that there is no university in the world that teaches and critically
evaluates the neoliberal economics that underlie the Structural Adjustment
Programme. All Universities confine
their teaching to traditional and historical economics and ignore how
Structural Adjustment economics is currently ruining the Third World
countries.
It is my humble request that one of our Universities should
immediately commence research and studies on the neoliberal economics of the
Structural Adjustment Programme. This will be a great success,
will attract students worldwide and will be a great service to Third World
economies.
I
have detailed how Sri Lanka fell into debt and now that the Central Bank has
decided that this was caused by following the IMF’s
notorious Structural Adjustment, it is necessary to carve out what
has to be done to bring Sri Lanka to Prosperity and
Splendour, the avowed aim of President Gotabhaya.
It
is absolutely necessary that we control every dollar that comes in. Sadly
now we do not control our incoming foreign exchange. The foreign exchange that
comes in is in charge of the banks and private money
changers to make a profit. This has been happening for long but what
happened in January 2001 reveals the stark fact that our country is not in
charge of the foreign exchange that comes in.
On
25-1-2001, when the two State banks, the Bank of
Ceylon and the Peoples Bank did not have sufficient dollars to pay a
large oil bill, and approached a private bank in Sri
Lanka, that foreign commercial bank that had collected
our incoming foreign exchange, increased the price of it to Rs 106 per $ when
the current rate was Rs 85.00. Our two banks were forced to buy the dollars at
the higher rate and this effectively devalued our rupee by over 15%
immediately. Our Central Bank then admitted that it controlled
only the Rupee and not the incoming foreign currency”. (The Island:
17/2/2001)
Further, our banks are allowed
to purchase foreign currency and sell the foreign currency making a profit.-
This came to light on 25/1/2001 as quoted earlier.
Thus
today the incoming foreign exchange does not get into the
Government’s Treasury. In fact the other
private banks have for long grabbed foreign funds coming into the NRFC accounts
of banks. For details see my
book: How the IMF Ruined Sri Lanka, pages 98 –100, which tells
how a foreign bank in Sri Lanka grabbed the pounds sterling that came to my own
NRFC account at the Bank of Ceylon. .
It is absolutely necessary that
our Central Bank takes charge of all foreign exchange that comes in and also
decide the exchange rate. Today the banks and private exchange dealers fix
their own rates. Controlling the incoming foreign exchange is the key to the
development of a country and as former Prime Minister of Malaysia, Mahatir
Muhammed states
Any
country at all which says it cannot control its banks and
its banking system… they are not fit to be Governments and they should either
resign or be overthrown.”(Daily News: 1/2/1999)
Can Development Programmes be
implemented without a budget
Finally,
while I have made a strong case to enable a bankrupt country to get back to
become self reliant, a question that emerges is as to how any development can
be brought about without funds. This is very critical for our country
today.
The
answer to this key question comes from the Youth Self Employment
Programme of Bangladesh,. I was the Commonwealth Fund Advisor on
Youth Development to the Ministry of Labour and Manpower in Bangladesh in
1982, At a Conference held by the Hon Minister Air Vice Marshall
Aminul Islam, I locked horns with the Secretary to the Treasury, the highest
officer in the land, when he contested my request that I should be allowed to
establish a self employment programme. He quoted the failure of the ILO to
establish such a self employment programme in the earlier three years in
Bangladesh, causing a major loss. Intensive arguments between me and
the Secretary to the Treasury continued for over two hours, when the
Hon Minister stopped us and immediately approved my establishing a self
employment programme. The Secretary to the Treasury, stumped stating
that the Treasury will not provide any funds. I said that I did not require a
budget. I sought approval to find savings in approved budgets and
use them to do extension work in creating self employment and requested
authority to redeploy officers, changing their remits. For the first four years
this Programme was worked entirely from savings. Finally the Treasury had to
eat its words and document the progress of this Self Employment Programme by
devoting eight full pages in the Fifth Five Year Plan1997-2002. This
Programme that was commenced in 1982 has by now guided over three million
youths to become commercially viable entrepreneurs. It is today the premier
employment creation the world has known.
I may also mention that
in the case of the Divisional Development Councils Programme of
1970-1977, the largest programme of poverty alleviation and employment creation
Sri Lanka has known, easily eighty percent of the personnel were obtained from
the Sri Lanka Administrative Service without any payment as they did perform in
addition to their normal duties.
Sri
Lanka has already clamped import controls on non essential imports. In a
country where even tomatoe sauce and all fruit juices and jam has been imported
since 1978, there is bound to be shortages of many consumer items. The
Government has to immediately initiate small industries to make small
industrial goods. Prior to 1977 Sri Lanka was full of small
industries- we had handlooms and powerlooms which enabled Sri Lanka to become
self sufficient in all textiles. The Small Industries Department was very
active prior to 1977 when it offered help to small
industrialists This was by a Research and Advice Centre at
Velona, Moratuwa, which was closed down on IMF advice.
Despite
this predicament of the economy being bankrupt today, we can hark back to many
developmental tasks done successfully before the 1977 IMF intervention. In the
three years 1955 to1957, Sri Lanka became self sufficient in all jam, juice and
food preparations. This was done by the Marketing Department
Cannery.
We
can also talk of the Divisional Development Councils Programme(DDCP) which in
the period 1970 to 1977 created employment for as much as 33,000 youths and
established many successful industries, creating employment for the youth and
also providing consumer goods that otherwise had to be imported. The viable
Small Industries established under this DDCP included a Mechanized
Boatyard, established by the author which was in full action
within three months, where youths were trained and made around 30 –35 , 40 ft
long seaworthy boats a year. This Boatyard was closed down on the orders of the
IMF. Instead if such boatyards are established Sri Lanka could have been self
sufficient in all fish supplies today, creating employment for hundreds in
making the boats and in fishing on the high seas. .
The
Divisional Secretary at Kotmale established a unit making paper and cardbord
from waste paper. Is it not sad that Sri Lanka does not have a plant to turn
waste paper into cardboard, which is there in most countries. Among the youth
entrepreneurs in the Youth Self Employment Programme I established in
Bangladesh, there were a few youths who collected waste paper and made paper
and cardboard out of it.
The
author was also instrumental in finding the art of making
crayons done at the Rahula College Science lab and establishing a
Cooperative Crayon Factory at Morawaka where our youths not only made crayons
but sold them islandwide saving foreign exchange on imports. Under IMF advise
this Crayon Factory was stopped. In fact today walking through the Supermarkets
in Sri Lanka my blood boils when I see Crayola Crayons on sale in Sri Lanka. My
mind travels in nostalgia to the days when our youths did make crayons, equal
in quality to Crayola of today and marketed them islandwide. Sumanapala Dahanayake,
the Member of Parliament for Deniyaya undertook to establish Coop Crayon and
did perform a yeoman service in his capacity as the President of the Morawak
Korale Cooperative Union. This Coop Crayon was the most successful small
industry and finally was the flagship industry of the Divisional Development
Councils Programme of 1970-1977.
Finally,
We old hands, are here to tell the tale of development, of what we
did achieve prior to the IMF taking charge of our economy in 1978, to our
President who is now humbly requested to take the lead. This sir, is
the only path to achieve your avowed aim of Vistas of Splendour
and Prosperity
My humble request to our
President,
- To take action to direct the Central Bank to control the foreign exchange that comes into the country. This involves collecting every dollar that comes into Sri Lanka and fixing the exchange rate as was done before 1977.
- To immediately establish a programme to establish small industries, especially agro-industries to make items that were imported which can be made in Sri Lanka(import substitution). We hold the expertise to make many items that we imported and these industries can be established within three months and the total outlay can be covered within a year or two at most. This includes making paper and cardboard out of waste paper, illuk grass and straw, making all food preparations- jam, juice etc, by establishing a few canneries, making all textiles visa handlooms, power looms. . These were done earlier and there is no doubt whatsoever about success.
- To consider directing any of our Universities to commence teaching
and research in the neoliberal economics of Structural Adjustment.
This will enable the development of a new paradigm for development.
Garvin Karunaratne, Ph.D. Michigan State University
Former SLAS, G.A. Matara 1971-1973
Author of: Microenterprise Development: A Strategy for Poverty Alleviation and Employment Creation in the Third World: The Way Out of the World Bank & IMF Straglehold, Sarasavi Publishers, 1997 How the IMF Ruined Sri Lanka & Alternative Programmes of Success, Godages, 2006 How the IMF Sabotaged Third World Development, Kindle/Godages,2017
16/10/2021
