I traveled half the world on the Trans Siberian Railway and entered China through Mongolia. I was amazed at the development that was taking place apace. The land was barren and desert, with a trace of water at the bottom low lands like the land we had passed through in Mongolia north of China, but the Chinese were at development in all its aspects. There were endless homes being built for the masses, the ordinary people.
Farmers and construction workers were all at work everywhere, tree planting had been done all over, the terrain had been graded to avoid denudation, peasants were at work seeding and weeding the fields. There were vast scale plant nurseries, the land was being prepared by tractors as well as by ponies dragging ploughs. Canals were taking water and being maintained. There were also major factories at work. The cities are full of high rise flats-apartments for the people, mainly private. The roads are a marvel to see.
Let me hark back to my own administrative experience. In 1955, when I joined the service of the Government of Sri Lanka, the major thrust was on Rural Development. A Rural Development Society was established in every village area and its remit included literacy work, small scale infrastructure projects useful to the people, tree planting, etc to be done with popular participation and small industries, handlooms in the homes. Cutting roads bringing villages into civilization, opening up of schools, tree planting all went apace.
That was the time when we built the Gal Oya Project, a massive irrigation tank and a colonization scheme, all with funds belonging to us. Then we were not an indebted country.
Then came 1956, the Premier SWRD Bandaranaike, and Minister Philip Gunawardena with his emphasis on agrarian reform were in power. It was thought that the village level administration should be made progressive. Out went the Village Headmen. Their place was taken over by a Grama Sevaka, a O Level qualified officer on a transferable basis. He knew very little of the village he worked in.
In 1965, in came the United National Party which had ruled the country before 1956. The emphasis changed back to Rural Development. Infrastructure Development Projects with people’s participation became the order of the day. Paddy cultivation was concentrated on and Sri Lanka became self-sufficient in rice, while implementing a rice ration scheme that gave rice almost free to the needy. That was a really great achievement.
Then came a change in the 1970 election where Mrs Bandaranaike became the ruler. The emphasis changed again. Instead of increasing production in agriculture, the emphasis was on land reform, acquisition of large estates, and youth employment, The emphasis was on establishing small cooperative industries, small agricultural farms. It was a crash program to bring about employment to the youth. We established a crayon industry entirely on our own and then Member of Parliament Sumanapala Dahanayake took over in his capacity as the President of the Morawak
Korale Multipurpose Cooperative Society Union to manufacture crayons. From 1973 to 1978 Coop Crayon was sold island-wide.
Then came the United National Party into power again in 1977. Down went the flagship program of the earlier government – the Divisional Development Councils Program. It’s showpiece industry, Coop Crayon that had island-wide sales. Anyhow with the onslaught of imports and the apathy of the new government, Coop Crayon died a natural death. Though handmade the crayons were of very high quality and my blood boils even today when I see any Crayola Crayons on sale in Colombo. It was a great loss to the nation.
The 1977 Government of President Jayewardena instead of having a development program of its own embraced the Free Market and Liberalization Economic Model advocated by the International Monetary Fund (IMF) which advised Sri Lanka to do away with capital controls, import controls and to allow every citizen to use any amount of foreign exchange for any purpose and to flood our country with imports and when the amount of foreign exchange that we had and could obtain through our exports and Mid Eastern maids was insufficient told us to get loans.
To help us on this path the IMF and its sister organization the World Bank offered our country loans with long grace periods, where for years and years we need not pay either the interest or the repayments, but the interest got added to the capital and we had to ultimately pay up. Our leaders finding that they did not have the responsibility to pay up liked this scheme because they will not be in charge when it comes to pay up, snatched the funds. The IMF dictated what to do – open up for imports, flood the place with luxury imports sending back the loaned money with profits to the Superpowers. In that process, Sri Lanka became an indebted country where we had to get further loans to pay up the interest and the repayments.
That was the Structural Adjustment Program of the IMF in action and almost every country is now indebted so that the country has to abide by the dictates of the IMF to keep its economy open for imports, allow the free use of foreign exchange, get more loans and when we cannot get loans raise Bonds to finance the spending spree. I can see more luxury cars in Colombo than in
Today, our effort is not to bring about development but to raise capital through raising Bonds and to lick behind foreigners to come in with some foreign exchange as investors on tax holidays to invest, develop our resources and take away the profits. We forget that we are the net loser.
The only exception of an achievement is the Mahaweli Development Project which is nothing other than a major colonization scheme.
Under the tutelage of the IMF the development infrastructure that the country had developed was either privatized or abolished. The Marketing Department that purchased vegetables and fruits in producer areas at higher prices than what was offered by traders and sold the produce in the cities at lower prices than the private sector was abolished. This Department also had a canning factory that offered a floor price for fruits like red pumpkin, ash pumpkin and pineapples, which were turned into jam. It not only achieved self-sufficiency in all jam and fruit juice but also built up an export trade in pineapple. Today we import all our jam and fruit juice.
In the pre-1977 days Sri Lanka produced all its buses and rail carriages. These units were abolished and privatized. Now we import buses and rail carriages. Following the Structural Adjustment Program has ruined the economy. Yet most economists fail to understand what has happened.
Our Third World Countries have to develop a new algorithm for development away from the clutches of the Structural Adjustment Program. China does not follow the SAP.
Development in terms of incomes to the people is the development of our agriculture. Our industries, our people being put to shoulder the wheel is all lost. Now Sri Lanka as well as the majority of Third World countries has to concentrate not on development but on paying up our foreign debt. Our foreign debt was caused by our following the IMF’s prescriptions and the IMF is therefore guilty of providing us with the wrong advice. They have therefore to bear the brunt of the foreign debt which they themselves made us create.
To get back to what I saw in China, what I saw was everything we have done earlier, being done simultaneously. China’s is a vast program of irrigation construction and colonization, agricultural development, rural development, small industry and large industry, everything all aspects done all done together with a massive unstoppable force. We do have the expertise at hand in administrators as well as politicians. It is only the political will that is today mired in internal warfare. This is also the ploy of the Superpowers. They do not want any Third World Nation to succeed.
The question also arises as to from where can we find the funds to bring about development.
The answer to this comes from my own work in Bangladesh, where I undertook to establish a Self-Employment Program without any funds. I was the Commonwealth Fund Advisor to the Ministry. It was denied funds because the ILO had tried to establish a self-employment program earlier and failed miserably. It was the Youth Development Ministry which ran a large program of youth training – we trained 40.000 youths a year in skills. The Ministry Secretary was authorized to use the funds already available for youth development to establish a self-employment program side by side with skills development.
I with a core of officials addressed the youths in training and motivated them to commence small employment ventures in their homes, with their parents and brothers and sisters. We guided the functioning of each enterprise however small. Today, the Ministry of Youth Development spends over 90% of its time on creating employment. It has by February 2011, guided over two million youths to become self-employed. The program guides 160,000 youths to become self-employed annually. All this was achieved by redeploying existing officialdom.
China in its massive development effort and the achievement of the Self Employment Program of Bangladesh, the largest employment creation program the world had known, shows us the way ahead.
In the manner we are fighting amongst ourselves today, being the pawns of the Superpowers and their protégé the IMF, I am reminded of the words I read today in the Forbidden City in Beijing (25/5/2015) from The Book of Rites, “When we handle matters properly, harmonically, without leaning to either side, all things on earth will flourish”.