{"id":96715,"date":"2019-12-21T15:50:01","date_gmt":"2019-12-21T22:50:01","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=96715"},"modified":"2019-12-21T15:50:01","modified_gmt":"2019-12-21T22:50:01","slug":"import-substitution-is-the-way-to-rejuvenate-our-economy","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2019\/12\/21\/import-substitution-is-the-way-to-rejuvenate-our-economy\/","title":{"rendered":"Import Substitution is the way to rejuvenate our economy"},"content":{"rendered":"

By Garvin Karunaratne<\/em><\/span><\/h2>\n\n\n

It \nis heartening to note that our new Government is taking action to stop the \nimport of items that we can easily make. This has commenced with kites, wesak \nlanterns, jos sticks and palm oil.<\/p>\n\n\n\n

This Import Substitution is \nto my thinking the only certain method of rejuvenating our economy. If we make \nour own items then by stopping imports we can definitely gain by saving  the foreign exchange that we use for imports \nand also be certain of finding employment for our own people. This means income- \npoverty alleviation. <\/p>\n\n\n\n

Today, \nimport substitution is the only development method available to the \nGovernment.  Tourism, touted to bring \nincomes only helps employment creation. Tourism does not bring in foreign \nexchange as most tourists cash dollars at private dealers and the intake  of dollars does not get into Government \ncoffers. Only bank intakes get into Government coffers. Further hotel \nbookings  are mainly done through the \ninternet where the hotelier is paid in Rupees but has to pay at least 15% and \nthis goes out through a bank in our foreign exchange.  Under FDI(foreign direct investment) too we \nincurr a loss of foreign exchange as they(Pizza Hut, Uber etc) trade in Rupees \nbut repatriate their profits in our foreign exchange. Then there are the \ninvestors in water, power etc. who trade in Rupees by providing power, water \netc. but take away profits in our foreign exchange. All this leaves Import \nSubstitution as the only method to rejuvenate Sri Lanka. <\/p>\n\n\n\n

Five \ndecades ago, when I as the Government Agent at Matara,   established the Crayon Factory at Morawaka., \nHarry Guneratne the Controller of Imports was  \nhappy to give us some foreign exchange to import dyes, the only item in \nthe ingredients that went into the making of crayons, and he slashed the import \nof crayons. Coop Crayon  established \nunder my direction by Sumanapala Dahanayake, the Member of Parliament for \nDeniyaya in his capacity as the President of the Morawaka Coop Union, was able \nto have islandwide sales.  Our country \nsaved foreign exchange as well as found employment for over a hundred youths \nfrom Morawaka. That was instead of our providing employment for workers in \nforeign countries and profits for foreign multinationals. <\/p>\n\n\n\n

It \nwould behove our new Government to consider  \nthe creation of a major programme of import substitution in the coming \nThrone Speech. The last such major programme was the Divisional Development \nCouncils Programme of Premier Sirimavo as far back as 1970. After that it was \nall welfare grants. We failed to teach people to fish. Instead we were providing \nfish. <\/p>\n\n\n\n

Import \nSubstitution is nothing new to us. Coop Crayon was equal in quality to the \nCrayola crayons of today. Five decades ago it was Reeves and when fine tuning \nthe Coop Crayon to get it equal to Reeves crayons  I was beside Vetus Fernando, my Planning \nOfficer  the chemistry grad who unearthed \nthe method of making it at the Rahula College Science Lab at Matara. It was the \nculmination of a myriad of attempts at making the crayon for three  long months every working day from six to \nmidnight. <\/p>\n\n\n\n

Let \nme tell anyone that if we can make crayons there is absolutely nothing that we \nimport that we cannot make ourselves. Let our chemistry grads (They are today on \nthe roads agitating for employment) and science teachers  do that task. I am told that the science lab \nat Anuradhapura Central is far more equipped than at Rahula College.  That tells me of what our science teachers \ncan achieve if put to that task. They need leaders to give them the GO AHEAD for \nthat task. <\/p>\n\n\n\n

.<\/p>\n\n\n\n

Let \nus look at other things that we did achieve ourselves. At Matara after a fierce \nbattle with both the Ministry of Plan Implementation and the Director of \nFisheries who were objecting to my establishing a Boat Making Cooperative at \nMatara, I won the day, and  established a \nBoatyard making 30 foot long seaworthy fishing boats. We made 30 to 40 boats a \nyear and provided them to Fishery Cooperatives. That was  a feather in the cap of the Divisional \nDevelopment Councils Programme of 1971-1977. Now that Boatyard is no more, \nclosed down by the Jayawardena Government under the instruction of the IMF and \nwe continue to import fish.<\/p>\n\n\n\n

At \nMatara we established a smithy making tools . That smithy is yet there, worked \nby people who find it hard to find the scrap metal. In the meantime I have seen \nknives made as far as Mexico for sale in our Supermarkets. We do sell our scrap \nmetal to India. We have to develop our Smithys. Today if one wants a fine knife \none has to get it from the Smithy at Kotmale.  \nIs it not sad that we sell our scrap metal to India instead of developing \nour own Smithys. <\/p>\n\n\n\n

Once \nfour decades ago we made paper out of straw at Valachenai.  The machinery was intended to make paper out \nof illuk and when the stock of illuk ran out it was our scientists that found \nthe art of making paper out of straw. Then with success we established a second \npaper factory at Embilipitiya. The Tigers ate the Valachenai Factory and \nmismanagement ate  Embilipitiya.  In its hey day the farmers at Hingurakgoda \nand Polonnaruwa made money by selling their straw to Valachenai.  I used the Paper Factory Circuit Bungalow for \nmy stay on circuit and became familiar with the paper making process. Under the \nDivisional Development Councils Programme a Paper Factory was established in \nKotmale.  That was also a real success, \nThere paper was made from waste paper.. Many countries recycle waste paper into \npaper but not Sri Lanka. When I addressed hundreds of youths in Bangladesh on my \nnever ending seminars  to goad them to \ncommence self employment ventures, we provided them with lunch and the paper \ncartons that contained their lunch was carefully collected by youths who had \npaper making small factories. We do sell our used Cardboard to India-some \nseventy tons a month and buy back cardboard from them. It is sad that we do not \nmake any paper now. China and India make paper from straw. They copied the art \nof using straw to make paper from our Valachenai scientists. <\/p>\n\n\n\n

Let \nme wish the new Government luck in import substitution. The way ahead to my \nthinking  lies in the establishment of a \nMinistry for Employment Creation through industries and agro industries under \nthe Hon Prime Minister, because the activities cuts across several ministries \nand the task will not be successful due to the fact that Ministries will not \ncooperate. My experience is that Ministries want to shine themselves and never \ncooperate. . Minister Philip Gunawardena established our  Industrial Development Board, staffed with \nable scientists, which should take the initiative but in 1971 they were never \ncooperative with my initiatives- they always blocked my path to establish \nindustries which made me go entirely solo helped only  by my Planning Officer and the Science \nTeachers at Rahula in the making of Coop Crayon. They were the only scientists I \nhad.<\/p>\n\n\n\n

Let \nus take textiles. The Small Industries Department(once I worked there as a \nDeputy Director) imported yarn and distributed it to textile factories, to the \npowerlooms and handloomers. By 1970 we were self sufficient in textiles. At \nMatara as the GA I managed five powerlooms, run as cooperatives and the \nDivisional Secretaries were in charge. These were very successfully run and my \nHakmana Powerloom made suiting that was in high demand even in London. <\/p>\n\n\n\n

. Our country does not need \nmassive factories that take years to establish and they devour the raw material \nwithin a few years. That is the history of the Plywood Factory at Avissawella \nand the Sugar Factories at Kantalai and many more.<\/p>\n\n\n\n

It \nis adviseable to go for small scale machinery that can be established in a \nDivisional Secretaries area. There are plenty of small scale paper factories in \nIndia and China. Similarly there are many small scale food processing factories. \nWe do have plenty of fruits to make juice and jam. The administrators who can \nestablish these units till they are on their feet  are today  \nwasting their time in SLAS jobs and the scientists are in limbo as \nscience teachers. They can be enlisted within a flash like what I did at Coop \nCrayon. <\/p>\n\n\n\n

Based on my experience in \nindustry in Sri Lanka I can make a firm statement that we can easily succeed in \nestablishing the following industries to ward off imports and also create \nemployment<\/p>\n\n\n\n

1. Paper Making. Import a \nfew paper making small scale factories from India and have them installed in the \ncolony areas where there is plenty of straw., I can venture to state that a few \nPaper Making Factories can be established within three months and these can \nrecoup the foreign exchange incurred to import the machines within a year or \ntwo.<\/p>\n\n\n\n

2. Fruit Juice and Jam \nMaking can be successfully established. Once the Marketing Department(MD) had a \nCannery which was privatized. I worked in MD for over five years. When the MD \nran this Cannery we purchased all the Red Pumpkin, Ash Pumpkin, Pineapple, \nTomatoes  and Melon we could find and \nmade them into Jam and Juice. Producers, mainly chena cultivators made good \nmoney. Today we import all these items. We can be self sufficient in all our \nJam, Juice and items like Tomatoes Sauce within two years and this will offer \nemployment for hundreds and also save foreign exchange. <\/p>\n\n\n\n

3. Boatyards can easily be \nestablished within three months and these boats will help us to stop fish \nimports.<\/p>\n\n\n\n

4. Import bus and lorry \nchassis and get going with making buses and lorries.. Today we have a stray \ncarpenter labouring to make a lorry on a chassis.  This is an area where we can easily succeed. \n<\/p>\n\n\n\n

5. Once recently I needed a \nstep ladder and surveyed Nawala to find one made in Sri Lanka.  I found that we make less than   ten percent of our step ladders. . Making \nstep ladders is a far easier task than  \neither Paper or Fruit Juice Making.  \nJudging with the speed we worked at Matara in 1971-1973, we can make all \nour step ladders within three months..<\/p>\n\n\n\n

May these ideas reach the \neyes and ears of our leaders. I have quoted instances of how we did things \nourselves, so there is no danger of going wrong causing a waste of funds. That \nis why I have not included crayons. All what I have suggested is far easier than \nmaking crayons. <\/p>\n\n\n\n

These \nthoughts come to you from a son of Mother Lanka who established the Youth Self \nEmployment Programme in Bangladesh when he worked there as the Commonwealth Fund \nAdvisor to the Ministry of Labour and Manpower in 1981 to 1983, a task where the \nILO had failed in the earlier three years. My task was to design and establish \nthe programme and train the officers to continue it. I had to challenge the ILO \nand the ILO had to eat humble pie when I succeeded. This Programme of employment \ncreation had guided two million youths to become self employed by 2011 and \nguides 160,000 youths a year currently. It is a programme of employment creation \nthat has withstood the sands of time.<\/p>\n\n\n\n

All \nwhat I have said can be achieved. Every idea in this paper has been proved to \nthe hilt. The success of Coop Crayon in 1971-1977 tells anyone that we do have \nwithin us patriotic  politicians, \nadministrators and science teachers that can do that job. In Morawaka we \nestablished the Coop Crayon Factory in a record two weeks time working on a 24 \nhour basis. We do have the ability if called upon to have some industries going \nwithin two to three months.  We did work \nthat fast then. <\/p>\n\n\n\n

It is upto our leaders to go \nahead.<\/p>\n\n\n\n

Garvin Karunaratne,
Ph.D. Michigan State University former GA Matara,20 th December 2019.
<\/p>\n","protected":false},"excerpt":{"rendered":"

By Garvin Karunaratne It is heartening to note that our new Government is taking action to stop the import of items that we can easily make. This has commenced with kites, wesak lanterns, jos sticks and palm oil. This Import Substitution is to my thinking the only certain method of rejuvenating our economy. If we […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":["post-96715","post","type-post","status-publish","format-standard","hentry","category-by-garvin-karunaratne"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/96715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=96715"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/96715\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=96715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=96715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=96715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}