Opinion

Import substitution in Covid-infested Neoliberal World

Published

4 years ago

2020/11/30

Covid-19, which has taught many a lesson to the rich and the mighty, is causing unparalleled turmoil in the neoliberal economies of the world. It has made governments and economists think of alternatives to the market driven dependent economies that most poor countries practice or are forced to practice. Sri Lanka too is trying its hand with options like export control, import substitution, taxation, protective tariffs, etc. Most countries are forced into it due to the disruption of several aspects of the system, such as foreign exchange earning capacity, international transport, and local export oriented industry. Sri Lanka is faced with considerable decline in its main sources of foreign exchange, such as foreign employment, tourism and garments. The foreign exchange thus earned are, in the main, spent to import food items, textile, medicines, fertilizer, etc., that could be locally produced. Is there any logic in advocating the continuation of this policy – Covid or no Covid?

Yet there are people including parliamentary bigwigs, who criticize the present government policy of controlling imports and attempting import substitution. They say such policy would antagonize Western countries who buy our products, like tea and rubber. Yes, it would make them angry but then that is how they pursue and perpetuate the practice of neoliberalism and exploitation of our resources. They say Western countries would stop extending preferential treatment and favourable terms to us in trade. Yes, they may do that but we must know that these are only tools they use to trap us into their system of neocolonialist exploitation. These people who talk like this in parliament must be tools of the neocolonialists.

It may be worthwhile to look at other countries which had adopted import substitution, in the past as well as recently and see how they have fared in their effort. This concept and policy could be traced back to the 18th Century German economist Friedrich List who proposed a “National System” of political economy where tariffs were to be imposed on imported goods while free trade would operate for local products. Later in the 1950s and 60s the Global South, particularly Latin America, adopted this policy and came to be known as Import Substitution Industrialization (ISI). ISI is based on the premise that a country should attempt to reduce its foreign dependency through local production. It envisaged industrialization of production for greater efficiency and mass production. Most of the Latin American countries, like Brazil, Mexico, Argentina, Ecuador, Honduras employed this system, the larger countries with big populations were benefited to a greater degree than smaller countries.

African Socialism, which started about the same time with leaders like Kwome Nkrumah of Ghana and Julius Nyerere of Tanzania giving it leadership, took up ISI as its economic policy. These movements were socialist and nationalist and naturally anti-west and the Western powers did not view these developments kindly. In the 1980s with the fall of the Soviet Union, and the IMF and the World Bank gaining immense ground, the Global South abandoned ISI policy and turned to the West and again became the servant of neoliberalism.

However, there is a country which recently adopted these ISI measures with great success. Russia has managed to save several billions of Dollars by vigorously following ISI policies in the industrial sector, mostly in the areas of agriculture, automotive, chemical, pharmaceutical, aviation, etc. In 1914, their cost of food imports was 60 billion dollars, it was brought down to 20 Bn by 2018, in 2012 the pharmaceutical industry was negligible and by 2017 it has developed into a 50 Bn industry. These achievements were mainly due to subsidization of vital industries, import restriction by heavy taxation and other protective trade policies.

There may be lessons for Sri Lanka from what has taken place in the above mentioned countries. First and foremost the essential food items that could be produced here should not be imported and everything required for this endevour such as land, water, seeds, fertilizer, machinery should be made available. Every effort should be made to manufacture locally these things necessary to achieve self-sufficiency in food. If we are self sufficient in food, medicine, clothes and housing we need not be afraid of economic warfare that imperialists resort to when they want us to do their bidding. We must get assistance from friendly countries like China and Russia to achieve self-sufficiency in essential items and not for mammoth projects that politicians think would enhance their image.

As mentioned above, ISI policies employed for heavy industrial development had succeeded in large countries like Brazil, Mexico and Argentina but in smaller countries like Ecuador and Honduras such attempts at industrialization had failed. This was the experience in Africa too. Development of one industry at the expense of others or one crop like tea for instance could also lead to failure.

Therefore Sri Lanka must not go for heavy industries. First it must achieve self sufficiency in food and other essentials. Later it could start small machinery like power looms, electrical and electronic items. Industrialization should be at the manageable level of agriculture, clothes and such items and perhaps not heavy industries like automobiles, etc. The threat posed by Covid-19 must be converted into an opportunity and made full use of to make the country’s economy and politics independent of external factors.

N. A. de S. Amaratunga

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Opinion

Resolution of grief, not retribution

Published

16 hours ago

2025/03/20

Sahan Weerasooriya

Ahamed Kathrada, friend and advisor to Nelson Mandela said of Robben Island, where Mandela was imprisoned for close to 30 years, that “While we will not forget the brutality of apartheid, we will not want Robben Island to be a monument to our hardship and suffering.”

Similarly, we do not want our beloved country to be a monument to our suffering. As Kathrada said, we want our country to be a symbol of the triumph of the human spirit against the forces of evil, a triumph of courage and determination over human frailty and weakness. Managing the painful history of this country should be focused on achieving this objective.

Emotions, such as sadness, worry, anger and in some cases, hatred, festering in our society over the past forty years appear now to be reaching boiling point.

Considering my professional background and knowledge of the mind, I am not surprised by that.

Violence is wrong no matter which side it comes from and regardless of its source. However, the bitter truth that emerges when examining the history of the past forty years, even when looking at it from the best possible angle, is that the foundation of the immoral, illegal and violent politics established took root in Sri Lanka, after 1977.

Actions and counteractions of the negative political culture including violence then established, brought nothing but destruction to Sri Lanka.

The bitter truth is that our collective conscience, sensitivities and actions as a nation, are shaped and coloured by this ongoing aggression and violence that equally affected both the South and the North.

The specific period of terror of 1987 – 1989 was focused mainly in the South. Accepting the fact that the majority of those who suffered during this period were Sinhala Buddhists is merely stating the reality; it is not approaching the problem from a narrow, racist or religious perspective.

It should also be added that I myself was a victim of that terror.

The Sinhala Buddhist culture has a distinctive tradition process for alleviating the grief due to a death by holding awake: sharing the pain of loss with those closest to you, and engaging in religious activities specifically in remembrance of the dead person, a sequence of events including offering alms, that provides time to heal.

It is this cultural heritage of managing loss and grief that was taken away from those who lost their lives and their loved ones in 1987- 89. It is only those who have faced such unfortunate experiences who know the compulsion and pain left by that void, where there was no time to process loss and grief. It is time for introspection – for genuine reflection.

With this background as our legacy over multiple generations, we need to pay greater attention to guarding ourselves against the potential response of “identification with the aggressor.” Identification with the aggressor is an involuntary or sub-conscious psychological defence mechanism and a reaction to trauma where the victim who underwent the trauma identifies with and mimics the behaviour of the person who carries out the violence, as a psychological coping mechanism.

Such responses can be seen in, for example, children undergoing abuse, or young people undergoing ragging. The usual reaction one would expect is for the victim to refrain from abuse or ragging. However, contrary to that expectation, research has revealed that the victim displays behaviour similar to that of the person who abused or ragged him/her.

A clear understanding of how is this concept likely to impact the current political climate is critical at this juncture.

Wielding immense political power, politically less experienced and matured social strata may unknowingly become prone to treating their opponents in the same way that the oppressors of the past victimised them. Therefore, the leadership should be sensitive to the potential of former victims almost unknowingly impose past sufferings on current opponents. It is the responsibility of politically enlightened social strata to identify and prevent that situation in advance. It is a moral obligation of all political parties not just the ruling party.

I would like to share a personal experience in this context. Assistant superintended Senaka de Silva was the man who brutally tortured me at the torture camp at Chitra Road, Gampaha, run alongside the Batalanda torture camp.

After my release, I was working as the Head of the Emergency Treatment Unit at the Sri Jayewardenepura Hospital, when the former ASP de Silva brought his niece there for treatment, unaware that I worked there. He was disconcerted to see me and immediately turned back and walked away. I sent the security officer to bring that child back, admitted her to the hospital and did my best to treat her. The thought process and action that I followed that day is what I adhere to date as well. At the time I was only a specialist in family medicine, today, as a professor of psychiatry, I see these events from a much broader point of view.

The force of emotions arising due to pain or injustice can be destructive to society, but it is also possible to divert it into a force for good. For example, the lack of any post-election violence at the Presidential elections of 2024 indicated a commendable positive direction in social movements. Similarly, the dialogue arising around the Batalanda torture camp, too, should be constructive and forward thinking, so that we shall never again see such an immoral political culture in Sri Lanka.

This does not mean that we have to essentially follow the South African model of truth commission for reconciliation but we do it in a culturally sensitive way that suits us.

As a Nation we all need to understand that situations arise neither to laugh nor to weep, but to learn from past experience.

(The author of this article became a JVP activist as a student in 1977. He was the Secretary of the Human Rights organisation of Sri Lanka in late 1970s and early 1980s. He was known as the personal physician to the late leader of the JVP Rohana Wijeweera.

He was arrested and imprisoned in 1983, but later released without any charge. He was abducted in broard daylight on the 19 July 1988, held in captivity and tortured. He was released in 1990.

An internationally renowned academic, he is an Emeritus Professor of Global Mental Health at Kings College London and Emeritus Professor Keele University. He is also the Director, Institute for Research and Development in Health and Social care and the Chairman of the National Institute of Fundamental Studies.)

by Professor Athula Sumathipala

Opinion

Haphazard demolition in Nugegoda and deathtraps

Published

2 days ago

2025/03/19

Sahan Weerasooriya

A haphazardly demolished building

The proposed expansion of the Kelani Valley railway line has prompted the squatters to demolish the buildings and the above photograph depicts the ad-hoc manner in which a building in the heart of Nugegoda town (No 39 Poorwarama Road) has been haphazardly demolished posing a risk to the general public. Residents say that the live electric wire has not been disconnected and the half-demolished structure is on the verge of collapse, causing inevitable fatal damages.

Over to the Railway Department, Kotte Municipality Ceylon Electricity Board and the Nugegoda Police.

Athula Ranasinghe,

Nugegoda.

Opinion

Aviation and doctors on Strike

Published

3 days ago

2025/03/18

Sahan Weerasooriya

Crash in Sioux city. Image courtesy Bureau of Aircraft Accident Archies.

On July 19, 1989, United Airlines Flight 232 departed Denver, Colorado for Chicago, Illinois. The forecast weather was fine. Unfortunately, engine no. 2 – the middle engine in the tail of the three-engined McDonnell Douglas DC 10 – suffered an explosive failure of the fan disk, resulting in all three hydraulic system lines to the aircraft’s control surfaces being severed. This rendered the DC-10 uncontrollable except by the highly unorthodox use of differential thrust on the remaining two serviceable engines mounted on the wings.

Consequently, the aircraft was forced to divert to Sioux City, Iowa to attempt an emergency crash landing. But the crew lost control at the last moment and the airplane crashed. Out of a total of 296 passengers and crew, 185 survived.

The National Transportation Safety Board (NTSB) declared after an investigation that besides the skill of the operating crew, one significant factor in the survival rate was that hospitals in proximity to the airport were experiencing a change of shifts and therefore able to co-opt the outgoing and incoming shift workers to take over the additional workload of attending to crash victims.

One wonders what would have happened if an overflying aircraft diverted to MRIA-Mattala, BIA-Colombo, Colombo International Airport Ratmalana (CIAR) or Palaly Airport, KKS during the doctors’ strike in the 24 hours starting March 12, 2025? Would the authorities have been able to cope? International airlines (over a hundred a day) are paying in dollars to overfly and file Sri Lankan airports as en route alternates (diversion airports).

Doctors in hospitals in the vicinity of the above-named international airports cannot be allowed to go on strike, and their services deemed essential. Even scheduled flights to those airports could be involved in an accident, with injured passengers at risk of not receiving prompt medical attention.

The civil aviation regulator in this country seems to be sitting fat, dumb, and happy, as we say in aviation.

Guwan Seeya