Features
Significance of Ceylon-China Trade Agreement of 1952
by Dr. J. B. Kelegama
Excerpts from the keynote address at the 50 th anniversary celebrations of the historic “Rubber-Rice Pact” between Sri Lanka and China at the BMICH on December 20, 2002
I am honoured by the invitation of the Sri Lanka-China Business Cooperation Council and the Sri Lanka-China Society to deliver today the keynote address on the occasion of the golden jubilee celebrations of the historic Rubber-Rice Pact between Sri Lanka and China signed in December 1952.
I accepted this invitation with alacrity and pleasure, firstly because I have conducted negotiations with China and actually implemented the Agreement over a period of about 12 years in my capacity as a senior government official, secondly, because I have visited China seven or eight times both as a government official and a UN consultant and thirdly, because I have been a student of China’s economic development for many years and written and published several articles on China’s economic and trade issues, under my own name as well as under pen-names.
Further, I had the privilege of speaking on this subject at the death anniversary of Mr. R. G. Senanayake some years back, on the invitation of no less a person than Mrs. R. G. Senanayake herself.
The Ceylon-China Trade Agreement of 1952 was undoubtedly the most useful trade agreement negotiated by Sri Lanka and one of the most successful and durable trade agreements in the world, having been in operation for 30 years. It is therefore useful to assess the significance of the agreement and to refresh our memory regarding the circumstances that led to it and the person who played the key role in bringing it about – R. G. Senanayake.
Rice shortage
1952 was a very bad year for Sri Lanka. Premier D. S. Senanayake had died and Dudley Senanayake had just formed a new government when the country had to face a world shortage of rice.
The Government was committed at that time to provide every adult person with two measures of rice per week at a subsidised price, but rice was not available from the traditional suppliers – Burma, Thailand and Indo-China – and the world market price of rice had risen by 38 per cent between 1951 and 1952.
Sri Lanka was therefore compelled to buy 60,000 tons of rice from the USA and 10,000 tons from Ecuador at high prices, although this variety of rice was not suitable to the Sri Lankan palate. She was however not in a position to buy all the rice she needed at this high price as her foreign exchange resources were limited; besides, distribution of this rice would have pushed the food subsidy bill to intolerable levels.
The country was also facing a foreign exchange crisis in 1952 caused by a dramatic fall in her export prices brought about by the quick end of the Korean War boom. The end of the Korean War and the drastic reduction of commodity purchases by the West – in particular, of natural rubber by the United States – led to a collapse of Sri Lanka’s export prices by 23 per cent between 1951 and 1952.
The price of natural rubber declined by 36 per cent, of tea by 10 per cent, and of coconut oil by 40 per cent. Import prices increased by 8 per cent and terms-of-trade fell by 28 per cent. The trade surplus of Rs. 345 million in 1951 turned into a trade deficit of Rs. 200 million in 1952 and external assets fell by 30 per cent. In this critical situation Sri Lanka attempted to negotiate with the USA for a loan of US$50 million and for favourable prices for rubber exports and rice imports, but failed. The country was facing an unprecedented crisis: she could not find enough rice to feed her people and she had no prospect of a favourable market for her rubber exports.
It was in this grim setting that R. G. Senanayake, the then Minister of Commerce, played his master stroke. He found out that China was prepared to sell rice to Sri Lanka in exchange for rubber. At that time China was unable to obtain rubber as a result of prohibition of rubber exports from Malaya following a UN resolution preventing the sale of rubber to China. Thus China wanted rubber as badly as Sri Lanka wanted rice. R. G. Senanayake was quick to realise the mutual benefits of trade with China, and negotiated the Ceylon-China Trade Agreement or the Rubber-Rice Pact in Beijing towards the end of 1952. He stated in Parliament.
“We waited for foreign aid, foreign assistance. As you know Sir, over and over again, we made appeals for Point Four aid, we waited four long years. We have got in the form of assistance only a cook for the Kundasale Girls’ School. Therefore in these circumstances, it was necessary that we should go where it was possible to get our requirements.”
Opposition
The Agreement was negotiated in the teeth of opposition from some of his own colleagues in the Cabinet. Indeed, the opposition of J. R. Jayewardene, the Minister of Finance, was well known. The Cabinet was advised by the newly created Central Bank under an American Governor. Opposition also came from R. G. Senanayake’s predecessor in the ministerial post, from the American Government, and from some of the local newspapers which carried on a virulent press campaign against any dealings with Communist China. S. P. Amarasingham’s informative book “Rice and Rubber: The Story of China-Ceylon Trade” provides a detailed account of the strong opposition R. G. Senanayake had to face in negotiating the Agreement.
The American Government invoked the Battle Act which prevented it from giving aid to countries selling strategic materials to Communist countries and cut off aid to Sri Lanka. In addition, she stopped selling sulphur needed by Sri Lanka’s rubber plantations. This was the price that had to be paid for trading with China.
Prime Minister, Dudley Senanayake, however, fully backed his Minister of Commerce and was prepared to pay this price; he realised that the benefits to Sri Lanka from the agreement far outweighed losses consequent to the cutting-off of American aid. He argued:
“Ceylon’s old trade pattern has been knocked out by changes in the world market and we have to seek new markets for our needs of essential foodstuffs and for our exports.”
Rebutting the charges that the Trade Agreement was opening the door to communist influences in Sri Lanka, he pointed out:
“Communism thrives in many places not through an understanding of that particular ideology but through poverty and want. I am confident that our Trade Agreement with China will instead of opening doors to communism help us to stand firmer against it.”
It is a tribute to the two Senanayakes that they displayed remarkable pragmatism and courage in negotiating the Trade Agreement. They did not allow their prejudices or ideological considerations to stand in the way of deciding what was in the best interests of the Country; nor were they intimidated by threats of big powers.
R. G. Senanayake stated:
“I have always held the view that political ideologies should not stand in the ways of countries trading with each other if that trade is to their mutual advantage.”
He foresaw as far back as 1952, the emergence of China as a world power. He stated in a speech: “Talking of China in particular, it would be unrealistic to ignore a nation of 500 million in our continent with a united and cohesive government for the first time in many centuries. She is bound to be a major factor in world trade.”
As he foresaw, China has now become the seventh largest exporter in the world and the largest trader among developing countries whose purchases and sales influence the world markets. In 2000 for instance, her exports were US$249 billion and imports US$225 billion. If we include Hong Kong’s trade with China (as the greater part of Hong Kong’s trade is entrepot trade with China) then China becomes the fourth largest exporter in the world after the USA, Germany and Japan, its exports amounting to $452 billion.
The Agreement
The Trade Agreement signed in 1952 was for five years and renewable; there was, however, an annual Trade Protocol specifying the quantities of commodities to be exchanged in the ensuing year, which had to be negotiated every year. The trade was based on barter – exports and imports to balance every year; only the outstanding balance at the end-of-the-year was to be settled in foreign exchange.
Trade however was rarely balanced in the following years but the outstanding balance was generally carried forward to the next year without settlement in foreign exchange.
In the first part of the agreement there were specific commitments by Sri Lanka to purchase rice, and for China to buy rubber; the values were to balance. Thus in 1953, Sri Lanka agreed to buy 270,000 tons of rice from China which in turn agreed to purchase 50,000 tons of rubber; these quantities were exchanged on the basis of world market prices and were equal in value. In addition, China agreed to pay a premium price for rubber over the world market (Singapore) price and further, handling charges for rubber exports in Colombo.
Thus in 1953, China paid for Sri Lanka rubber Rs. 1.74 per lb. whereas the average world market price was Rs. 1.05 per lb. This premium varied with every five-year agreement. The handling charge which was fixed at five cents per lb. too varied in subsequent years. China also agreed to supply rice to Sri Lanka below market prices – at 54 pounds or Rs. 720 per ton in 1953.
Thus Sri Lanka benefited both ways from the agreement. The second part of the agreement covered trade in other commodities – those Sri Lanka and China wanted to buy and sell – but without specific commitments; the total value of exports and imports however were expected to balance every year. In view of the substantial mutual benefits, the Trade Agreement was renewed every five years by R. G. Senanayake’s successors in his ministerial post – in 1958, 1962, 1967, 1972 and 1977 – and was wound up, in the sense that the barter element was given up, in 1982 when it was found that the barter of rice and rubber was no longer in mutual interest. Sri Lanka had almost reached self-sufficiency in rice and needed only very small quantities from abroad while China was able to purchase rubber from several rubber producing countries without restriction and without paying a premium.
R. G. Senanayake paid an important tribute to China after negotiating the Trade Agreement, when he concluded his Cabinet paper on the subject in the following words:
“We noted on the Chinese side the absence of the spirit of bargaining and haggling on comparatively small points. On the other hand, they gave us the impression of being large-minded and forthright in their dealings.”
I can confirm this as I conducted trade negotiations with China over a dozen times. Benefits
The significance of the Ceylon-China Trade Agreement lies in the positive benefits Ceylon received during the thirty years of its duration. Those benefits exceeded expectation as China expressed her gratitude to Sri Lanka for supplying her rubber when other rubber producers were not prepared to do so and in spite of the opposition and denial of aid by the US Government. These benefits are discussed in detail below.
(1) The premium over world market price for rubber was estimated between Rs. 68 and Rs. 95 million in 1953 alone. It was about 56 per cent more than the world market price in that year. No estimates are available for successive years, but the premium was substantial, for even a ten cents premium meant Rs. 200 per metric ton and Rs. 10 million for 50,000 tons.
(2) The handling charge of 5 cents per lb., in 1953 was equal to Rs. 100 per metric ton or Rs. 5 million for 50,000 metric tons of rubber. As the charge and quantity varied from year-to-year the total sum too changed, but it was significant.
(3) The sale of rice by China to Sri Lanka at prices below the world market resulted in a net benefit of about Rs. 92 million in 1953 alone. Although there was a net benefit in the following years, no estimates have been made. China agreed to sell rice at the same price Burma sold rice to Sri Lanka with certain adjustments for differences in quality and transport costs. China never tried to exploit the rice market to her advantage.
Even when she did not have an exportable surplus, she supplied Sri Lanka with rice direct from Burma under a triangular trade arrangement, but charged us only the price she paid Burma – not a cent more – even when she had reason to charge something more.
(4) As a result of the agreement a grant of about Rs. 125 million was extended by China during the ten-year period 1958-68 to meet part of the costs of rubber replanting. Thousands of acres of uneconomic rubber land were replanted thereby revitalizing our rubber industry.
(5) China continued to purchase Sri Lanka’s rubber at a premium even when other markets were prepared to sell her rubber at lower prices.
(6) Sri Lanka found an assured market for her rubber and an assured source of supply for her rice and insured herself to a great extent against vagaries in the world market. She also diversified her export and import markets.
(7) The Trade Agreement benefitted the Ceylonese traders as against non-national traders by creating a new market for them. In spite of the opposition from non-national trading establishments – particularly British managing agency houses – R.G. Senanayake reserved the export of rubber to China for the Ceylonese traders. He also reserved China for the Ceylonese importer under his policy of Ceylonizing the external trade of the country.
(8) The Trade Agreement laid the foundation for expanding trade between Sri Lanka and China even after the barter agreement ceased to operate. In 2001 for instance China and Hong Kong (which mainly re-exports China’s products) constituted the largest supplier of imports valued at Rs. 64 billion to Sri Lanka.
(9) Economic co-operation between Sri Lanka and China began with the Trade Agreement. It was expanded by leaps and bounds with establishment of diplomatic relations with China by S.W.R.D. Bandaranaike and closer relations under Sirimavo Bandaranaike as symbolised by the Bandaranaike Memorial International Conference Hall (BMICH), textile mills at Veyangoda and Pugoda, other grants and interest-free loans. Economic co-operation thereafter is demonstrated by the superior courts complex, Gin ganga scheme and assistance to restore Abayagiri dagaba.
(10) The Ceylon-China Trade Agreement with its price concessions for both Sri Lanka’s exports and imports and assistance to rubber replanting by China was perhaps the first instance of a developing country giving economic assistance to another developing country. In other words, it was the first time where economic co-operation among developing countries or South-South co-operation took place.
(11) Finally, Ceylon-China Trade Agreement and closer commercial and economic relations laid the foundations for a firm friendship between Sri Lanka and China, which was strengthened, expanded, and cemented by the Bandaranaike governments. China’s friendship for Sri Lanka has been demonstrated not only in trade and economic co-operation but also in times of national crisis. There was only China to warn other countries to ‘keep their hands off Sri Lanka’ at the height of the Indo-Lanka crisis in June-July 1987. This friendship was demonstrated again thereafter by the visit of Prime Minister of China and his offer of Rs. 375 million in economic assistance.
Features
Sri Lanka’s rice conundrum: Time to stop managing crises and start fixing the system
Prof. Ranjith Senaratne,
Emeritus Professor in Crop Science and former Vice-Chancellor,
University of Ruhuna and General President of the Sri Lanka Association for the Advancement of Science (2023) and
Prof. Prasad Jayaweera,
Dean, Faculty of Computing, University of Sri Jayawardenapura
Rice is not merely another crop in Sri Lanka. It is our staple food, an integral part of our history and culture, and a foundation of the civilisation that flourished around our ancient hydraulic systems. Revered as Buddha Bhogaya, the Buddha’s crop, rice has sustained our people for more than two millennia. Yet, remarkably, a country with such a profound relationship with rice continues to lurch from one rice crisis to another.
At one time, we have a surplus. At another, we face shortages. Prices rise sharply, consumers complain, farmers struggle to obtain remunerative prices, millers and traders become the focus of public attention, imports are hurriedly arranged, and governments announce yet another set of measures to contain the crisis. Then, after the immediate problem subsides, the matter recedes from the national agenda, until the next crisis arrives.
Why does this keep happening despite decades of agricultural research, policy interventions, expert committees and public debate?
Perhaps because we have been asking the wrong question. The fundamental problem is not simply how to produce more rice. Nor is it merely a question of prices, imports, fertiliser, farmers, millers or markets. The rice conundrum is a complex national systems problem.
We cannot solve a system by fixing its parts in isolation
Sri Lanka’s rice sector is an intricate web of interconnected systems involving agriculture, land, water, climate, technology, finance, energy, transport, markets, trade, governance, institutions and consumer behaviour. A decision made in one part of this system can have consequences, sometimes unintended, in another.
A change in fertiliser policy, for example, can affect productivity and production costs, which in turn influence farmer profitability, market prices and the need for imports. Irrigation decisions affect not only production, but also water availability, energy use and environmental sustainability. Guaranteed prices influence farmers’ cropping decisions, while import policies can simultaneously protect consumers and weaken incentives for domestic production. Likewise, market concentration can affect both the price received by farmers and the price paid by consumers. This is precisely why isolated interventions so often produce disappointing results. We keep treating symptoms while leaving the underlying system largely untouched.
For decades, we have generated valuable scientific knowledge on individual aspects of rice production and marketing. But knowledge generated within disciplinary and institutional silos does not automatically translate into solutions to complex real-world problems. What is needed now is a fundamentally different way of thinking.
From a “rice crop” to a “rice system”
The first step is to stop looking at rice simply as something that is grown in a paddy field.
The rice system begins with land, water, seed, inputs, technology and finance. It extends through cultivation, harvesting, drying, milling, storage, transport, wholesale and retail marketing, and finally to the consumer’s table. At every stage, there are different interests, incentives, constraints and actors: farmers, farmer organisations, input suppliers, machinery operators, millers, traders, wholesalers, retailers, financial institutions, government agencies, researchers and consumers.
And hovering over the entire system are climate change, changing consumer preferences, technological transformation and national economic conditions. A weakness anywhere in this chain can compromise the performance of the whole system.
Consider post-harvest losses. If significant quantities of rice are lost because of inadequate drying, storage or processing facilities, increasing production alone cannot solve the problem. Similarly, if farmers produce efficiently but face weak markets and poor bargaining power, productivity gains may not translate into improved livelihoods.
The question, therefore, should not be “How much rice can we produce?” but “How can we make the entire rice system work better?”
That requires us to see the connections.
The missing ingredient: reliable, real-time information
There is another fundamental weakness that deserves urgent attention: we still lack a comprehensive, integrated, interoperable and reliable national information system for rice. Information is scattered among different institutions, often collected using different methodologies and not necessarily available when decisions need to be made.
How much rice will actually be produced? How much is in storage? What is the likely demand? Where are the emerging production shortfalls? What are the stocks held by different actors? How are prices moving along the value chain? What are the likely consequences of climate conditions? Without timely and reliable answers to such questions, policymakers are forced to make critical decisions with incomplete information. This is not merely an administrative inconvenience. It is a national food-security vulnerability.
Sri Lanka should therefore seriously consider establishing a National Rice Intelligence and Decision Support System (NRIDSS), an integrated digital platform that brings together relevant real-time information from agriculture, meteorology, irrigation, markets, trade, statistics and other institutions. Such a system could support production forecasting, market monitoring, import decisions, early warning and evidence-based policy formulation. In an increasingly uncertain climate and volatile global economy, this should no longer be regarded as a luxury. It is becoming an essential component of national food-system governance.
The deeper problems cannot be ignored
A systems approach would also force us to confront some uncomfortable structural realities. Why does productivity remain relatively low despite decades of research? Why are so many holdings too small to achieve economies of scale? Why are modern technologies and precision agriculture not being adopted more rapidly? Why do farmers often have limited bargaining power? Why do substantial losses occur after harvesting? Why can market power become concentrated in a relatively small number of actors? Why are guaranteed prices sometimes announced too late to influence farmers’ production decisions? Why are policy interventions so often reactive rather than proactive? And how will droughts, floods, temperature extremes, changing rainfall patterns and emerging pests affect the stability of rice production in the years ahead? These are not separate questions. They are parts of the same system.
From crisis management to systems governance
Sri Lanka does not need another isolated discussion about rice. What is needed is a national policy dialogue and action forum that brings all relevant actors together, not merely to exchange speeches, but to develop a shared understanding of the system and agree on what needs to be done. Such collaboration must go beyond consultation or the exchange of views. The different parties need to work together from problem definition through to implementation, bringing their diverse knowledge, perspectives, interests and practical experience into a common process.
Farmers bring contextual and experiential knowledge; industry actors understand market realities and operational constraints; scientists contribute evidence and analytical capabilities; policymakers bring institutional and regulatory perspectives; while technology and data specialists can provide new tools for understanding and managing the system. When these different perspectives are brought together systematically, they can reveal interdependencies, challenge assumptions, identify feasible interventions and generate solutions that are evidence-based, practically implementable and socially acceptable.
This is the essence of a transdisciplinary systems approach: not simply working across disciplines, but bringing together multiple stakeholders and multiple forms of knowledge to co-create solutions and share responsibility for outcomes. The process should therefore go beyond presentations and speeches. It should involve systems mapping, causal analysis, stakeholder dialogue, scenario planning and the participatory identification of the critical bottlenecks and leverage points in the rice system. Most importantly, it should distinguish between what is urgent and what is important, and between interventions that merely alleviate symptoms and those capable of changing the underlying behaviour of the system itself.
We need an implementation roadmap, not another report
There is, however, one important caveat. Sri Lanka has no shortage of reports, recommendations and policy documents. What we often lack is sustained implementation. Any national initiative on the rice conundrum must therefore end not with another set of broad recommendations but with a prioritised national action roadmap. It should identify short-, medium- and long-term actions, assign institutional responsibilities, establish timelines and define measurable indicators of progress. The ultimate objective should be to move Sri Lanka from reactive crisis management to proactive systems governance.
A national opportunity
The rice conundrum may, in fact, provide Sri Lanka with an opportunity that extends well beyond rice to deal with other important crops. If we can demonstrate that a complex national problem can be addressed by bringing together science, policy, stakeholder knowledge, real-time information and systems thinking, the approach could become a model for addressing other persistent challenges, from climate resilience and water security to energy, food systems and disaster risk.
The choice before us is therefore quite stark. We can continue responding to each rice crisis as it emerges, adjusting prices, arranging imports, appealing to millers, reassuring consumers and supporting farmers, only to repeat the cycle later. Or we can step back and ask a more fundamental question:
What is it about the way our rice system is structured and governed that continually produces these crises?
That is the question that needs to be answered. Sri Lanka has the scientific expertise, institutional capacity and stakeholder knowledge required to do so. What is needed now is the willingness to bring these fragmented sources of knowledge together and examine the rice sector as one interconnected system.
Our ancient civilisation understood the importance of interconnectedness: land, water, agriculture and society were organised as parts of a larger whole. Perhaps, in confronting the modern rice conundrum, we need to rediscover that systems wisdom, this time supported by modern science, technology, real-time data and transdisciplinary thinking. The time has come to stop merely managing the rice crisis. It is time to fix the system that keeps producing it.
It is against this backdrop that the Sri Lanka Association for the Advancement of Science (SLAAS) proposes to convene shortly a “National Policy Dialogue and Action Forum on the Rice Conundrum in Sri Lanka”, bringing together the key stakeholders across the rice system. The Forum is intended to provide a platform for moving beyond piecemeal and reactive interventions towards a coordinated, evidence-based and transdisciplinary systems approach, one capable of generating lasting and pragmatic solutions to what has become an “island-shaking national issue”.
Features
This curse of partisan politics in Sri Lanka
78 Years of Demagoguery, Not Democracy
by Brigadier Ranjan de Silva
rpcdesilva@gmail.com
On the 4th of February every year, we raise the lion flag and speak of democracy. We speak of 78 years of “self-rule.” But honesty demands we ask: what kind of rule have we actually had? It was not democracy. Democracy is government for the common good, constrained by law, informed by reason, and accountable to truth.
What Sri Lanka has had for 78 years is demagoguery — government by manipulation, by party, and by passion.
Defining the Curse:
The dictionary defines demagoguery as “political activity that seeks support by appealing to the desires and prejudices of ordinary people rather than by rational argument.” Its tools are simple: divide the people, promise the impossible, demonize the opponent, and govern for the next election, not the next generation. That is the political culture we inherited in 1948 and perfected since.
78 Years of Evidence:
The record is not ambiguous. Policy by Pendulum – 1948–2024. Instead of a national development plan, we got a partisan wrecking ball. 1956: The “Sinhala Only Act” was passed not after linguistic study, but as an election mobilization tool. 1970-77: The SLFP nationalized private enterprise and imposed import controls. 1977: The UNP reversed course with an open economy overnight. 2005-2014: Mega infrastructure was built on Chinese loans with no feasibility transparency. 2015-2019: Those same projects were called “white elephants” and stalled. 2020-2021: The organic fertilizer ban was announced as a populist “green” policy, reversed 6 months later after it collapsed agriculture and food prices. The Colombo Port City, Hambantota Port, and the Central Expressway all followed the same pattern: started, stopped, rebranded. The country pays twice. The party takes credit once. Economics as Election Candy. Demagoguery is expensive. 1960s: Subsidized rice to win rural votes, leading to the 1971 food crisis.
2005-2014:
Fuel subsidies and public sector hiring sprees that doubled the wage bill. 2019:
Unfunded tax cuts that removed Rs. 500 billion in annual revenue with no offset. By April 2022, external debt hit $51 Billion and we defaulted for the first time. The party that cut taxes was not in power to manage the IMF program. The party that inherited it was blamed for the austerity. This is the cycle. Institutions captured. A democracy needs referees. We turned them into party cadres. The 17th Amendment 2001 created independent commissions. The 18th Amendment 2010 abolished them. The 19th 2015 restored them. The 20th 2020 gutted them again. Police transfers, university vice-chancellors, and state bank chairmen have all been decided by party headquarters, not merit.
When the institution serves the party, the citizen gets leftovers.
Identity over Ideas: From 1956 to 1983 to 2009 to 2022, our elections have been won on fear, not spreadsheets. “They will erase your language.” “They will sell the country.” “Only we can protect Buddhism/the minorities/the nation.”
Rational debate on debt, productivity, or climate adaptation never wins a rally. Prejudice does. That is demagoguery by definition.
Party Interest subverted the National Interest. The core damage of 78 years of partisan politics is this: the nation became secondary to the party. Need power sector reform? Impossible, because our unions will strike. Need to cut 300,000 ghost employees? Impossible, because our voters will defect. Need a 20-year education and export plan? Impossible, because it won’t show results before the next election. So, we borrowed. We patched. We lied. The result: a railway system that still runs on 1950s engines, hospitals without paracetamol in 2022, and a brain drain of 300,000+ skilled workers since the crisis. The parties rotated. The country declined.
The Opposition’s Original Sin and here, all parties share guilt equally. In opposition, the job is not to govern. It is to destroy. The UNP in the 60s called the SLFP “communist.” The SLFP in the 70s called the UNP “imperialist.” The JVP called both “traitors.” The SJB, SLPP, and NPP today use the same script with new logos. Every tax is “anti-people.” Every reform is “a sell-out.” Every crisis is proof the other side is evil and must be removed at any cost. Then they win. And implement 80% of what they opposed. Because demagoguery has no principles, only positions. 78 years of unmerciful, bad-faith criticism has not produced accountability. It has produced cynicism. The public now believes all politicians are the same — because for 78 years, they have behaved the same.
Breaking the Curse:
Changing the party in power will not end this. We must change the incentives that reward demagoguery. Three reforms are non-negotiable: Bind future Parliaments to national policy. Pass 10-year frameworks for energy, education, and public debt with 2/3 majority protection. Infrastructure and fiscal rules should outlast one government, as they do in Chile and New Zealand. Depoliticize the state. Independent commissions for police, elections, public service, and bribery must have constitutional budgets and appointment panels that exclude MPs. No more 18th/20th Amendment style rollbacks. Demand better from voters We must stop rewarding the best slogan and start demanding the best spreadsheet. Town halls over rallies. Costings over promises. A 5-year plan over a 5-minute speech.
In 1948, we did not inherit democracy. We inherited an election. For 78 years we have used that election to choose our favourite demagogue. The prize has been debt, division, and decay. The curse of partisan politics will only end when citizens and leaders agree on one principle: Party second. Country first. Until then, February 4th will remain a ceremony, not a celebration.
Features
Developing markets for fruits, vegetables and flowers in the Gulf
Export diversification – Missing the wood for the trees – Part II
by Gomi Senadhira
Sri Lanka established its diplomatic presence in the Gulf region only in the early 1980s. First, a small embassy was opened in Abu Dhabi, covering the UAE. Then in 1982, embassies were opened in Jeddah and Kuwait. The embassy in Jeddah covered Saudi Arabia while Kuwait was responsible for Kuwait, Oman, Qatar and Bahrain. Commercial Diplomats were also assigned to these two embassies. A senior private sector executive, with experience in marketing, was posted to Jedda as the commercial counsellor. I was posted to Kuwait as a second secretary (Commercial). Our instructions were very clear. Focus not only on traditional exports. Product diversification was a priority.
Developing Markets for Agricultural Products
At that time, Minister Lalith Athulathmudali had just launched his Export Production Villages (EPV) programme. He believed that the EPVs working closely with the exporters would provide an ideal opportunity for rural households to directly benefit from the government’s new open trade policy. Agricultural products, particularly fruits and vegetables, were a key component of this approach and the ministry thought that the Gulf countries, with large Sri Lankan communities, would have a ready-made market for these items. Thus, from day one we were compelled to explore the market for nontraditional exports; fruits and vegetables (F&Vs) were on the top of our priority list.
From cane baskets to cardboard boxes
Fortunately, the market for the F&Vs products in the region was at a very early stage of development. That provided an opportunity for Sri Lankan exporters, who were also inexperienced, to work with the importers and grow together. For example, in Kuwait, one of our first customers for F&Vs was a small supermarket where the manager was a Sri Lankan. After the first shipment arrived, he invited me to inspect the shipment. I visited the supermarket and was shocked by what I saw. While produce from other countries was packed nicely in cardboard boxes, our packaging mirrored transport to Manning market, cane baskets! As a result, fresh produce had suffered significant damage. A long report, with photographs, to the trade ministry produced an immediate response. After all, this was a pet project of the Minister. Within weeks, shipments were packed in cardboard boxes. Immediately afterwards, an expert on packaging from the Commonwealth Secretariat was sent to Kuwait with an official from the EDB to study the problem.
By then, we had also managed to develop a friendship with the management of the Salmiya supermarket, a large upmarket supermarket patronised by wealthy Kuwaitis and expats. It was a cooperative and the chairman was a Kuwaiti public servant. I could only meet him after 6 PM when his large office functioned as a diwaniya, a cherished cultural space in Kuwaiti society. Guests moved in and out the room. I had to spend time with them sipping many cups of tea. Though that meant at least two hours on each visit, it helped greatly to develop a close relationship. The general manager was an efficient and friendly Palestinian. After many visits we had succeeded in getting an order for F&Vs. The day after the first shipment arrived, I got an urgent call from the GM to come and inspect it. Once again, I was in for a surprise. Inside the cold room, the consignments from other countries were stacked neatly on top of each other, while vegetable boxes from Sri Lanka had collapsed once placed on top of each other, crushing the produce within.
Fortunately, our packaging experts arrived in Kuwait soon after this incident. They spent two days in the Salmiya Supermarket, studying the packaging from other origins. We were also successful in assuring the GM our packaging would improve. After that, packaging improved and exports moved smoothly. With that, Sri Lanka emerged as a small but reliable supplier to the mainstream market, not just the ethnic segment of the market.
Export of Fresh Vegetables by Sea
Towards the end of my tour, a Sri Lankan businessman requested me to find a buyer for cabbages, which he was prepared to export in large quantities by sea. I introduced him to the largest fruit and vegetable importer in Kuwait. Their regular suppliers of similar vegetables were Jordan, Lebanon and Syria. Luckily, the company was keen to diversify the supply sources. A few weeks later, the first container load of cabbages from Sri Lanka arrived in Kuwait. Immediately after the arrival of the container, I visited the company. They were pleased with the quality and the price and were looking forward to importing more fruits and vegetables. Unfortunately, that turned out to be a one-off event. Later on, when I was back in Sri Lanka, the exporter informed me that he couldn’t continue with it due to the problems with the local supply chains.
Floriculture
During the period I was asked by the EDB to explore the market for floricultural products, more particularly for cut flowers. At that time Kuwait was a relatively large importer of cut flowers and live plants. The main suppliers were the Netherlands and Colombia. Importers were also reluctant to move out of the established supply chain, particularly due to “snob value” associated with the product from Europe. However, after some difficulties, one importer agreed to place a pre-paid trial order. After the arrival of that shipment, he was impressed by the quality of the product and the orders expanded rapidly. As a result, by the end of 1985 Kuwait had become a major buyer of Sri Lanka’s floricultural products.
From village to global markets
As a result of the proactive promotional work undertaken by the EDB and the embassies in the region, by 1985, Sri Lanka had managed to acquire a small but significant share of the F&V and floriculture markets in the GCC countries. We had also identified domestic supply chain issues that hindered exports. All that was done, long before Southeast Asian or African countries even entered into that market. In fact, my Southeast Asian colleagues used to contact me often to reserve “durian” for them at the “Sri Lankan supermarket”.
Most importantly, a substantially large share of produce from Sri Lanka in Kuwaiti supermarkets originated in the EPVs. Of course, that didn’t just happen. The ministry (or the minister) using the carrot and stick approach “encouraged” exporters to buy the produce directly from the newly established EPVs. (The writer can be reached at senadhiragomi@gmail.com)
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