Opinion

Learning to get our economy back on track

Published

3 years ago

2022/02/8

By GARVIN KARUNARATNE Ph.D.

The editorial of The Island on Sri Lanka’s Independence Day says it all: “The challenge before us is to retrace our steps, figure out where we took wrong turns, and forge ahead in the right direction, as many other nations have already done. Easier said than done, but there seems to be no other way.”

The problem is that even to retrace our footsteps, there is no consensus among the learned. Addressing the 10 th annual conference of the Sri Lanka Forum of University economists, on 27 January, 2022, Professor Premachandra Atukorale has said that “it is impossible to heavily rely on import and exchange controls, without compromising on a massive economic collapse and social upheaval.”

Perhaps, it may be useful to recall how Sri Lanka managed its economy, in deciding how we can retrace our footsteps to the days when we did not have food queues and social upheaval, all the while handling development very successfully.

In February, 1968, I was posted as the Additional Government Agent of Kegalle District. I worked there for two years. I knew of no queues for any essential food during that period. In fact, I was in charge of providing essential food – as the Deputy Food Controller for the District. At that time every area was covered with a cooperative society, and, in each division, there were Cooperative Unions that were equipped with stores and lorries; and on a clockwork basis all essential food was distributed through the cooperatives. This included a measure of rice per person per week, entirely free, under the Rice Ration Scheme, which was done away by President Jayawardena, in 1978.

Then there was a major Department at work – the Food Commissioner’s Department, managed at the helm by a senior civil servant, a department that had very large stores full of rice and flour, and also attended to imports, when necessary. At the district level, there was an Assistant Food Controller who worked directly under me, and it was our duty to see that food was always available, without any interruption. Importing essentials, like dhal, chillies, etc., was handled by the CWE, because depending on the private sector has proved unreliable – the private sector has profit as its aim, service to the people comes next.

Kegalle District included the electorates of Prime Minister Dudley Senanayake, Minister NH Karunaratne, Deputy Ministers Imbulana, Vimala Kannangara, Beligammana and Dr NM Perera of the Opposition. There was never a delay in providing essential food – and that included rice, lentils, chillies and other curry stuff. I had the unenviable task of meeting the Prime Minister every Saturday and Sunday morning, at around nine, at the Warakapola Rest House, and to accompany him to a host of meetings in his electorate, ending in the late evenings, and there was never a person that had a complaint. The Divisional Secretaries had to work hard. There were a few bad eggs that I had to get rid of. Had there been any interruption in food supplies, the ministers would have complained to the Prime Minister or Dr NM would have raised the matter in Parliament.

This was also the situation in Matara, where I was the Government Agent from, 1971 to 1973. There were no ministers in any electorates, and only one Deputy Minister B. Y. Tudawe. There were no shortages, except during the JVP insurrection of April 1971.

There was no foreign exchange problem, because there were effective controls over the little foreign exchange that came in through exports and other sources. There were no currency dealers who handled foreign exchange like today, and the intake of foreign currency was a guarded property used first for importing essentials, and small allocations were made to import useful items such as automobiles and refrigerators. This was the situation even when we had ample funds – when we financed the Gal Oya Development Project – a massive project building a tank three times the size of Parakrama Samudra, Polonnaruwa, bringing 60,000 hectares under cultivation and creating many industries, all done with foreign funds we had.

In 1970, I worked as the Deputy Director of Small Industries, and one of my tasks was to ensure that every small industrialist had an allocation of foreign exchange, to import any particular item they required for their manufactures. I can state that every application was inquired into by my inspectors of industry – I had some 20 of them and assessed by me, every genuine small industry received an allocation. Then no foreign funds were allowed for foreign study, but an exception was made to provide foreign funds to Sunethra and Chandrika Bandaranaike, and I had the occasion to ask the Prime Minister why he had done so, and he replied, “That is the only request I had from my predecessor and I felt like obliging.”

Foreign exchange was then effectively controlled. When I left the Administrative Service and moved abroad in April 1973, I did not get a single penny. My wife and three children were given only three pounds and five shillings.

It is sad that university dons, the most learned in our country, have failed to grasp how the country was run those days. Professor Atukorale has said, “It is impossible to rely heavily on import and exchange controls without compromising on a massive economic collapse and social upheaval.” It was by effectively controlling import and foreign exchange that all Third World countries managed their economies, without any economic collapse. The economic might of India itself is indicative of an economy that did not follow the IMF, and used funds borrowed from the IMF to bring about development by controlling the economy.

Sri Lanka managed its foreign exchange effectively, till President Jayewardene was fooled by the IMF to follow the Structural Adjustment Programme, which advised him to allow the rich to spend foreign exchange, as much as they wanted, for endless foreign travel to educate their children abroad, import all luxury items; and the IMF provide loans for this purpose and mind you to entice the leaders, even provided grace periods when the service and interest charges were not to be paid. The then leaders enjoyed and the rich played with the funds, leaving the future leaders to bear the brunt of repayment. That is the process that led us to the present abyss.

Then there were two budgets: a local rupee budget for handling all work in the country, including major development tasks, funded with printed money, and a foreign exchange budget to handle the foreign exchange that was collected. Recently the Central Bank Governor Cabraal had decided that all foreigners staying at hotels should be charged in foreign currency. This is a decision that should have been taken long ago. Other countries, like India and Thailand, took similar action over decades ago. We, unfortunately, do not collect even 50 percent of the foreign exchange that comes in today, and it is time that we put a dragnet like in the period before 1977.

Of the period 1948 to 1977, an exception is the period 1974 to 1977, when there were shortages due to the Government de-emphasising agricultural development in order to have their own Divisional Development Councils Programme, and embarking on land reform which stifled development and caused foreign sanctions. Even Prime Minister Sirimavo Bandaranaike managed to make all demanded payments and managed without falling into foreign debt. 1976 and 1977 happen to be the last years when our country was run without a deficit. Since then annually our foreign debt has increased and is at $ 56 billion today.

Thus, the manner in which we handled the economy in the pre-1977 period is a tried and tested blueprint that worked successfully for nearly two decades, and this is the only way we could get out of the present mire.

Dr. Karunaratne is the author of Author of How the IMF Ruined Sri Lanka and Alternative Programmes of Success: Godage, 2006 and How the IMF Sabotaged Third World Development: Kindle/Godage, 2017.

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Opinion

Learning from global models to address flooding and water shortage in Sri Lanka

Published

1 day ago

2025/03/27

Sahan Weerasooriya

by Sudharman Siripala

Sri Lanka is grappling with the increasing threat of climate change, which has led to unpredictable weather patterns. The country faces a dangerous combination of flooding in some regions and water shortages in others, a situation exacerbated by shifting rainfall patterns. Rivers originating in the Central Hills, such as the Mahaweli, Kalu, and Kelani, flow through much of the country, but these water sources are not being distributed evenly. Districts like Monaragala and Hambantota, located in the dry zone, are experiencing severe water shortages. To address this challenge, experts suggest the development of an interconnected river system to harness excess water during floods and redirect it to drier areas, ensuring a year-round water supply for agriculture and daily use.

Global Case Studies in River Management

Several countries facing similar water-related challenges have implemented successful water management systems that Sri Lanka could adapt to its unique circumstances:

The Netherlands – Room for the River Programme

The Netherlands, a country prone to flooding, widened its rivers and relocated dikes to create floodplains. This approach allows rivers to overflow without damaging urban areas, while preserving water flow and natural habitats. Sri Lanka could apply this concept by designating specific riverbank areas for temporary flood storage.

China – South-North Water Transfer Project

China’s massive project channels excess water from the flood-prone Yangtze River to drier northern regions. This system of canals and reservoirs could inspire Sri Lanka to divert water from rivers in the Central Hills to drier areas in the south and east.

Bangladesh – River Interlinking Projects

Bangladesh has implemented river interlinking projects to redistribute water from flood-prone rivers, such as the Brahmaputra, to drier regions. Sri Lanka could link its major rivers like the Mahaweli and Kelani to smaller rivers in water-scarce districts to balance water distribution.

India – National River Linking Project

India’s National River Linking Project connects major rivers to manage both floods and droughts. Sri Lanka could use similar strategies, connecting rivers around the 500-foot contour line in the Central Hills to help distribute water more effectively.

United States – Mississippi River and Tributaries Project

The Mississippi River system combines levees, floodways, and diversion channels to manage flooding. Sri Lanka could adopt similar flood-control measures in vulnerable river basins such as the Kelani and Kalu.

Japan – Underground Reservoirs and Flood Channels

Japan’s G-Cans Project in Tokyo channels excess water into underground reservoirs to prevent urban flooding. A similar underground system could be implemented in Colombo and other flood-prone cities in Sri Lanka.

Singapore – Marina Barrage

Singapore’s Marina Barrage serves as both a flood control measure and a water supply resource. Sri Lanka could develop similar systems to control flooding in urban areas and ensure water availability during dry spells.

Thailand – Chao Phraya River Basin Management

Thailand uses diversion channels in the Chao Phraya River Basin to prevent flooding in Bangkok and direct water to agricultural areas. Sri Lanka could replicate this by creating diversion channels to supply water to its agricultural zones.

Actionable Solutions for Sri Lanka

Develop an Interconnected River System

Establish water diversion channels along the 300-500 meter contour lines of the Central Hills to capture excess rainfall during floods and redirect it to drier areas.

Build Reservoirs and Storage Tanks

Construct reservoirs to store diverted water, ensuring a steady supply for agriculture and domestic use. Sri Lanka has around 14,000 ancient tanks out of 30,000 that could be revitalized for this purpose.

Improve Urban Flood Defenses

Drawing inspiration from Japan and Singapore, build underground reservoirs and flood channels in cities like Colombo to mitigate urban flooding.

Strengthen Watershed Management

Restore natural floodplains and create wetlands to absorb excess rainwater, as seen in the Netherlands, helping to reduce flood risks.

Encourage Public-Private Partnerships

Foster collaboration between the public and private sectors to fund large-scale water management infrastructure, leveraging models from China and the United States.

Leverage Technology

Utilise modern forecasting and real-time water management systems, similar to those in Bangladesh and Thailand, to monitor water levels and manage river flows dynamically.

International Collaboration

Form partnerships with countries that have successfully implemented flood control and water management systems to share expertise and technology.

Sri Lanka’s dual challenges of flooding and water scarcity, compounded by climate change, require immediate action. By developing an interconnected river system and learning from successful global water management models, Sri Lanka can mitigate the effects of floods while ensuring a sustainable water supply for agriculture and daily life. It is crucial for the country to act now, as these solutions have the potential to transform Sri Lanka’s water management system for the better.

Sudharman Siripala Managing Director of Geoinformatics Group and a Registered Licensed Surveyor, specializes in geo-spatial applications. He also serves as a freelance value chain consultant for Vivonta Green Tech Consultants (www.vivonta.lk)

Opinion

Doctor’s plight

Published

1 day ago

2025/03/27

Sahan Weerasooriya

Some people have found fault with a female doctor for not coming forward to identify her rapist and help make him pay for his crime.

Do they not realise the emotional toll of facing her rapist again?

There should be a way for survivors to testify directly to the judge without enduring such distressing encounters. Making a victim relive her trauma in this manner is akin to subjecting her to the ordeal all over again.

A Ratnayake

Opinion

Developing attitudes of schoolchildren for development

Published

3 days ago

2025/03/25

Sahan Weerasooriya

Sri Lanka was once at an economically comparable level with some of the world’s most developed countries in the 19th century. However, despite our country’s potential, we are still striving to fully develop. Many people often blame politicians, government officers, or various sectors for the situation. However, I believe the root cause of these issues lies not in any individual or group, but in the lack of good attitudes within our society.

We are investing significant resources into our education system, which is funded by the taxes of hard- working citizens. However, when we examine the outcomes, we realise that the academic achievements of our graduates alone are not enough. There are instances where professionals, despite having the necessary qualifications, fail to uphold ethical standards. In some cases, this even results in malpractice or harmful actions that damage our country’s reputation and progress. This highlights the gap between academic success and real-world responsibilities.

The education system, which is currently focused on competitive exams and rote learning, does not emphasise the development of attitudes and character in students. While our students are academically capable, many lack the qualities required to contribute positively to society. This lack of focus on social values, such as patriotism, selflessness and respect for elders, is holding us back from achieving the level of progress we deserve.

To address these concerns, I wrote to His Excellency, the President of Sri Lanka, on 24th September 2024, proposing education reforms that emphasise not only academic qualifications but also attitudes, ethics, and social responsibility. I suggested a holistic approach to university admissions and government recruitment, incorporating moral integrity, character, and extracurricular involvement, key traits for fostering well- rounded, responsible citizens. More importantly, I strongly recommended introducing a compulsory school subject, with both theory and practical components, focused on attitude development, which would be evaluated in university admissions. Encouraging extracurricular participation alongside academics will help shape ethical and socially responsible individuals.

I am pleased to inform you that the President, recognising the importance of these reforms, has directed the relevant ministries (by a letter dated 24th October 2024) to explore integrating these ideas into the education system. This marks a crucial step in transforming the values and attitudes of our youth for the nation’s benefit.

However, meaningful change requires collective effort. Parents, teachers, students, and citizens all play a role in shaping Sri Lanka’s future. Together, we must instill responsibility, ethics, and patriotism in the next generation. I invite you to share your thoughts and suggestions on further enhancing the values and attitudes of our youth. Your feedback will be invaluable in building a brighter future for Sri Lanka, one driven not just by knowledge, but by integrity and character.

Dr. Mahesh Premarathna

Research Fellow, National Institute of Fundamental Studies, Sri Lanka Email: mahesh.pr@nifs.ac.lk