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Sri Lanka’s development dilemmas

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by Uditha Devapriya

On May 18, the grace period for a USD 78 million coupon payment expired in Sri Lanka. For the first time in its post-independence history, the island nation defaulted on its foreign debt. The Governor of the Central Bank, Dr Nandalal Weerasinghe, then announced that it would take six months for it to start repaying its creditors. An agreement with the IMF is in the pipeline now, but such an agreement will take another month or two.From a global perspective, of course, there is nothing unique about Sri Lanka’s crisis. For the country’s 22 million plus population, however, its scale has been unprecedented. While horror stories of Sri Lanka turning into another Lebanon or Zimbabwe have been recycled relentlessly in the press, since 2020, in recent months such comparisons have been made more frequently. Inflation, which began peaking last year, hit 30 percent in April and 40 percent in May. While nowhere near Lebanon or Zimbabwe, estimates by certain observers and analysts put Sri Lanka at the top of global inflation indices.All this has given rise to certain perceptions about the country’s problems. Western and Indian media, in particular, ascribe the crisis to the convulsions of domestic politics. Very few commentators have noted that these problems have been decades in the making, that the government’s ineptitude is more a symptom than a cause, and that external factors have had a say in such issues. The President’s bungling has contributed to these problems, to be sure, but that only shows how complex they are in the first place.

Neoliberal prescriptions

Just how complex, though? To answer that, it is necessary to address the structural causes that neoliberal economists and commentators note as having led to the crisis. These groups underline four factors: the government’s indulgence of unorthodox economic theories, its drive towards organic agriculture, its refusal to go to the IMF, and its insistence on diverting foreign reserves to defending the currency and repaying bondholders.It must be noted that all these problems are linked to the structural weaknesses of the economy. While there is a consensus on those weaknesses, though, economists and political analysts are divided over what, or who, is to blame for them.

Sri Lanka’s economy has been paraded, even by some radical commentators, as “export-dependent.” Yet it has been running trade deficits for the last 50 years. Its exports include primary commodities like tea, textiles, and tourism. It also earns remittances from migrant workers, many of whom effectively subsidise West Asian economies.These sectors took a hit from the COVID-19 pandemic. While tourism was on its way up in February, most arrivals were from countries like Russia and Ukraine. Russia’s invasion of Ukraine thus, effectively, dealt a blow to hopes of a long-term revival.

Neoliberal economists, especially those linked to Colombo’s well-funded and well-oiled think-tanks, attribute the country’s problems to excessive money printing and government spending. They see the country’s public sector as bloated, politicised.To an extent, the latter view is correct. Sri Lanka’s bureaucracy has long been a preferred destination for unemployed graduates and the politically connected. While Gotabaya Rajapaksa came to power implying he would end such a culture, he reversed course two years later and hired 65,000 graduates to the state sector. Ironically enough, it is their peers who are occupying the frontlines of anti-government protests today.

The heterodox view: Industrialisation and local production

Heterodox economists see things differently. According to them, Sri Lanka’s problems have had to do with its failure to industrialise and shift to manufacture.One of Gotabaya Rajapaksa’s first decisions, after coming to power in 2019, was to appoint Dr W. D. Lakshman, a proponent of industrialisation, as the Governor of the Central Bank. Economic analyst Shiran Illanperuma describes Dr Lakshman’s appointment as having been “poorly received by comprador capitalists and economists.” Lakshman earned the wrath of this crowd heavily after he began enacting policies aimed, ostensibly, at stimulating growth, including a series of tax cuts which have now been reversed.

Another of the country’s biggest advocates of industrialisation is Dr Howard Nicholas. A Senior Lecturer in Economics at the International Institute of Social Studies at the Erasmus University of Rotterdam, the Netherlands, Dr Nicholas helped set up the Institute of Policy Studies (IPS), a think-tank that advocated industrialisation, in the late 1980s.In its first few years, the IPS promoted alternative development strategies. Its advocacy of these strategies was received positively by then president, Ranasinghe Premadasa; based on its recommendations, he spearheaded an ambitious Garment Factory Programme which provided jobs to the rural sector while stimulating growth. This was around the same time Vietnam embarked on export-led industrialisation via its apparel sector.

According to Dr Nicholas, Sri Lanka’s prospects were bright in the 1990s. It even had the potential to surpass Vietnam. Yet with the assassination of Premadasa and the election in 1994 of a regime that modelled itself on Clintonian Third Way Centrist lines, industrialisation was abandoned in favour of outright privatisation and deregulation.The new strategy filled the government coffers – for a while. But with the escalation of the civil war and, paradoxically, the elevation of the country to middle-income status in the 2000s, Sri Lanka found it hard to access traditional aid programmes. It was at that juncture that it started moving into international bond markets.

While Western media and think-tanks propagate Chinese debt trap narratives, it has been Sri Lanka’s reliance on bond markets, which constitute a greater proportion of its external debt than does China, that finally brought its economy to its knees.To be sure, over the years several groups have highlighted these concerns. Yet, they differ as to the strategies and tactics needed to chart a way out of the crisis.

Neoliberal commentators argue that the private sector should take the lead. But Sri Lanka’s private sector is dominated by rentiers. Moreover, the country’s exports are limited to commodities and tourism, along with sectors such as IT. These themselves are dependent heavily on imported raw materials and intermediate capital goods.According to Harvard University’s Atlas of Economic Complexity, Sri Lanka’s largest exports are in “moderate and low complexity products”, like textiles. This contrasts with Vietnam, where textiles are more highly complex. Sri Lanka is also seeing “a static pattern of export growth.” In other words, while in 1990 it could boast of much potential in garments, by the early 2000s the sector’s prospects had considerably reduced.

To resolve the economic crisis, heterodox economists and analysts thus contend that the government must oversee a radical, socialist strategy, centring on import-substitution and local production: a dreary, dismal prospect for Colombo’s neoliberal coterie.

Leaderless protests and lack of alternatives

Sadly, the protests themselves seem little concerned by these imperatives. As has been pointed out by Rathindra Kuruwita in The Diplomat, they remain leaderless and rudderless. This has exposed them considerably to the risk of manipulation.Thus, while the protesters have called for Rajapaksa’s resignation and coupled it with demands for the resignation of all parliamentarians, they have also claimed that the latter demand, which delegitimises the country’s legislature and empowers the Executive, was incorporated into the protests by government supporters. Moreover, many of them fault the government for not going to the IMF earlier, failing to realise that the IMF’s track record in the Global South, during the COVID-19 pandemic, has been questionable.

More seriously, none of the protesters seem aware of what led to the crisis in the first place. To quote Dr Asoka Bandarage of the California Institute of Integral Studies, they “have not been able to put forward an alternative leadership or a viable road map for the future” and seem “unaware of the global dynamics” of the crisis.

Gotagogama, the site of the protests at Galle Face Green, has played host to several radical activists and artists, many of them linked to Marxist, anarchist, and other anti-government parties and alliances. Yet even these groups have failed to call attention to the wider issues. Those that have, like workers’ collectives and leftist commentators, have been marginalised by neoliberal discourses and populist demands for resignations.

The failures of governance and the road ahead

On the other hand, unfortunate as it has been for advocates of alternative development, the government has failed to appreciate the importance of their recommendations. A combination of corruption, ineptitude, and an eagerness to capitulate has thus put alternative development, and industrialisation, on the backburner.Milco is a case in point. Sri Lanka’s state-owned milk manufacturer, Milco recorded profits after a while last year. Yet a year or so after this milestone in the island’s public sector, the government replaced its chairman rather inexplicably. Such actions, multiplied many times over, have only distanced capable individuals from the State.

At one level, all this fits in with South Asia’s legacy of dynastic politics. From India to Bangladesh, the subcontinent is hardly a stranger to family rule. The Rajapaksas are no exception there: despite the recent spurt in anti-government protests, members of the family continue to hold important positions in the country.However, at another level, the Rajapaksa family has gone well beyond the regional model. As the country’s leading political analyst Dr Dayan Jayatilleka has observed, “this is not the Asian phenomenon of familial succession in politics, which is serial and sequential. The contemporary Sri Lankan phenomenon and process is both sequential and simultaneous, vertical and horizontal.” In other words, while family rule in the rest of Asia has served to sustain the political system, in Sri Lanka it has led to its very dismantlement. This includes the Rajapaksas’ deployment of the military, and allegations of militarisation in the north and east of the country: regions which bore the brunt of a 30-year civil war.

Nevertheless, despite all this, it goes without saying that what protesters consider as the government’s failures have been symptoms, rather than causes, of the structural faults underpinning the economy. The government must share the blame for this: in particular, its tendency to surround itself with yes-men and henchmen.Yet beyond this narrative, there is a far more compelling problem: a failure to resolve pressing issues like the island’s dependence on imports and sovereign debt. That in itself is linked to the sprawling global debt crisis, which has extended to other countries. While not all protesters are oblivious to these priorities, many of them are yet to address them fully. So long as debates over the crisis remain dominated by narratives of corruption and political personalities, such problems will go unnoticed and unresolved.

(The writer is an international relations analyst, researcher, and columnist based in Sri Lanka who can be reached at udakdev1@gmail.com. A shorter version of this article appeared in Global South Development Magazine.)



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Opinion

Demystifying Buddhism: Need of the hour?

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by Dr Upul Wijayawardhana

Mystification is undoubtedly one of the most effective techniques adopted by all religions to ensure that their followers toe the line. After all, who wants to go against religion and face eternal damnation? However, the world has moved on since the inception of all religions and now even scientists agree that there is nothing permanent; not even the universe! By the way, impermanence as a key concept was introduced by the Buddha more than two and half millennia ago. At the moment there is global concern over yet another creation of the human mind: Artificial Intelligence!

Some industry leaders are warning that AI would wipe out humanity, joining nuclear war and pandemics which are the leading contenders to do the same. Geoffrey Hinton, so-called ‘Godfather of AI’ resigned from his job at Google stating that the tools he helped create may be used to end civilisation. AI language tools such as ChatGPT are already being used by students to cheat but would someone go a step further and use similar tools to weaponise ‘fake news’ or develop deadly chemical weapons? One can argue that religion can play an important moderating role in preventing such things happening but, on the other hand, it could be questioned whether they can do so if religions are removed from reality by mysticism?

Perhaps, all religions need demystification but I shall confine myself to Buddhism as it is the only religion I know a bit about. Further, I fear any criticism of other religions may earn me the reputation of someone attempting to promote religious discord. We live in a world, which is becoming increasingly intolerant of free speech whilst clamouring for the same! Oxford Union, once the bastion of free speech, nearly stopped Philosophy professor Kathleen Stock from expressing her view that trans women were not women.

Having failed to cancel the event, transgender activists attempted to sabotage her presentation. Interestingly, they did not attempt to challenge her views instead, perhaps because they are bereft of facts! Though we Buddhists do not do so often, the Buddha gave us the freedom of thought and promulgated the Dhamma by means of discussion. The Buddha was in search of the nature of reality and it perplexes me why and how the religion built around those teachings is full of mysticism. Though it may have served some purpose in the past, my contention is that the time is ripe for demystification.

The month of Poson is of special significance to us, Sri Lankan Buddhists, as according to ancient chronicles Buddhism was formally introduced, on the full moon day of this month 2270 years ago by Arahant Mahinda who was the son and emissary of Mauryan Emperor Ashoka. Though it is very likely that Buddhism spread to Sri Lanka from India much earlier, Arahant Mahinda’s visit resulted in the embracing of Buddhism by King Devanampiyatissa and Sri Lanka becoming a Buddhist country, officially. Arahant Mahinda established Bhikkhu Sasana and as there was a clamour to establish Bhikkhuni Sasana, his sister Sanghamitta followed six months later, carrying with her a sapling of the Bodhi tree, under which the Buddha attained enlightenment. The famous writer H G Wells in the chapter, “The Rise and Spread of Buddhism” in his 1920 book “The Outline of History” refers to this as follows:

“In Ceylon there grows to this day a tree, the oldest historical tree in the world, which we know certainly to have been planted as a cutting from the Bodhi-Tree in the year 245 BC. From that time to this it has been carefully tended and watered.”

Whilst Sanghamitta story tells us that she travelled by land and sea, landing in Jaffna, Arhant Mahinda, who came to Sri Lanka with seven others, including two close relatives; Sumana Samanera, the son of Sanghamitta and Bhanduka Upasaka, the son of his maternal aunt’s daughter, is supposed to have arrived by supernatural means. Is this another instance of mystification! Even if one assumes that Arahants had developed the supernatural power of teleportation, it does not explain how a samanera and upasaka travelled, as an Arahant is not likely to have the ability tag along another person in teleportation.

In fact, Arahant Mahinda’s visit was a much-planned visit and was postponed till the death of King Mutasiva as it was felt that the aging king would not be able to grasp the complex concepts of Buddhism. This makes it very likely that the dramatic meeting described in ancient texts is nothing but a mystification. Anyway, how Arahant Mahinda arrived with others does not matter. What is important is that there is plenty of archaeological evidence to prove that both Arahants Mahinda and Sanghamitta lived in Sri Lanka till their deaths, serving our ancestors. Therefore, they deserved to be remembered on Poson and Unduvap Poya Days, respectively.

The Buddha showed us the way to overcome the sense of dissatisfaction that pervades all aspects of life and also the power of the mind. He showed us the way we could develop our mind and introduced the concept of mindfulness. He showed the path for ultimate detachment. What happened subsequently was converting this Dhamma to a religion by enveloping it in rituals and mysticisms; very practices denounced by the Buddha.

Instead of accepting the Buddha as a normal human being but with an exceptional intellect, he was made supernatural by mystifying his life. He walked immediately after his birth and said it was his last birth. This is mysticism mixed with predetermination but what follows is the truth. In spite of all the luxuries, with increasing dissatisfaction with life, Prince Siddhartha leaves lay life in search of the underlying cause of dissatisfaction. He experiments with extreme torture to the body, a method very popular among sages at the time, which he finds of no use and discovers the Middle Path, the Four Noble Truths and the Noble Eightfold Path.

The Buddha walked the length and breadth of India barefoot, washing his feet himself, when he entered a house. This message of simple living dedicated to the service of others is distorted and some of the Sangha today live in the lap of luxury and indulge in every activity the Buddha advised them against.

The Buddha’s Dhamma explains a path to tread on, and studying how he explored the mind to arrive at this itself gives so much academic satisfaction. Teaching this would ennoble our youth but what is often heard in Bana preachings or lectures are mystical stories or gross distortions, the best example being Dana: giving is a means to getting rid of attachment but is portrayed as a means of guaranteed returns thus increasing greed. I can go on and on.

If Buddhism is to survive, we need to understand and practise what the Buddha taught. The first step in this process is demystifying it so that we may understand the true nature of things.

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Opinion

Artificial intelligence and reality of life

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by Dr D. Chandraratna

Ever since President Ranil Wickremesinghe announced his desire to use Artificial intelligence (AI) to develop all sectors, from banking to agriculture, in Sri Lanka several correspondents have enthusiastically endorsed those sentiments in the print media. There is no gainsaying that technology has already made huge inroads into our lives, the latest paradigm adopted and articulated by the developed countries is thrust upon all mankind as the harbinger of a beautiful new world. Just as in an earlier time when the liberative potential of science created an understandable anguish about its misuse, similar forebodings are felt about the future curated by the super machines. Though unlike in the earlier debates where the misuse was calculated in terms of unlikely human catastrophes the current anguish is more about its ever -present transformative potential of the human world.

Most of the developed countries in the Western world, and Australia have launched statutory guidelines in the ethical use of AI. The Chat GPT, it has been cautioned in some quarters, poses such a risk to humanity that it must be subject to stringent regulation as nuclear power. Open AI founder Sam Altman has said that within a decade AI system would be capable of exceeding human expert skill levels in every domain. Given its possibility to be powerful than all other technologies experts predict that AI poses an existential risk like nuclear energy and synthetic biology. Silicon Valley experts are talking the need for a global regulatory body like the international Atomic Energy Agency (IAEA).

In the field of education, it risks accuracy and reliability of knowledge, the sources of information, academic integrity, student learning capabilities ending up with a humanity’s self-perception. Six months after Open AI launched ChatGPT, Australian University teachers have stated that they are unable to prove students who cheat with AI because still there is no regulatory body. At a conference held in Sydney last week Senior academics have railed against AI as ‘a tool in education’ because of ethical concerns, built in biases, fake knowledge and hate speech. AI is also generating enormous wealth through education in the hands of a few white male billionaires who are living off surplus value created mostly by brown and black workers.

One Deakin University academic has said it is only a data exchange service and an academic from Macquarie University said that ChatGPT app could easily be used by weak students to obtain enough marks to pass examination. Teachers may have to use open assessments and other examination methods to evaluate students. Students may be tempted to undermine their own desire to acquire knowledge in preference to the attraction of credentials to further their career prospects. Given the fact there is in the developed world a phenomenon of ‘degree inflation’ the quality and value of higher education will diminish. If cheating with the help of AI increases one’s chances of gaining the credentials thereby reducing the lure of understanding many students will not scruple to do so.

It is also the case that AI has the potential to make many employment opportunities ‘surplus to requirements’ in the knowledge economy for AI is efficient and cost cutting. Data analytic employment in multiple industry sectors will vanish overnight. Because of the fears of ChatGPT share prices of many education organisations have plummeted overnight. With the announcement of the ChatGPT, US company Chegg, which produces homework study guides, lost heavily on the stock market with more than half its workforce facing retrenchment.

There are other dangers. The value of education as character building, knowing yourself, examining one’s life, becoming wise, which are the wider objectives of education lose their appeal. Education is reduced to a process of credentialising to make us employable. AI is driven by a few mega corporations whose commercial motives are not aligned with the wider purposes of education beyond the why and the how. Education in the AI era will be concentrating on skills for employability. It can change the current paradigm of education. AI has the potential to cultivate a narcissistic and misguided anti-intellectualism which can shut out reasoned debate on public issues.

This existential threat to our sense of personal autonomy and human agency cannot be ignored. We must legislate to protect those aspects of humanity that are exclusively human and vitally important to the functioning of democratic communities. We should be alert to the fact that AI cannot replace nuance. It is soulless, cannot feel pain or loss, has no heart and no intuition. AI like all replacements to the original will disappoint us at the crucial hour for it cannot replace years of experience, innate ability, and intuitive wisdom.

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Opinion

Palm oil growers await green light for sustainable production

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A young oil palm plantation having a thick legume cover crop

By Emeritus Prof. Asoka Nugawela

Palm oil is a versatile commodity. It is used in numerous products world over. The global usage in 2022/23 is estimated as 76 million metric tons. Accordingly, the average global per capita usage is in the range of 10 kg per annum. Sri Lanka too recorded similar usage during 2018/2019 period, prior to economic downturn in the country. Palm oil usage is very much higher than the usage of other vegetable oils such as coconut, soya, canola, sunflower, rape seed and olive. One major reason for the relatively high per capita usage of palm oil is the affordability to purchase and its availability. Per unit land area, the oil production is four times greater in oil palm when compared with coconut. When comparing with other crops grown for vegetable oil production it is about tenfold higher. Further, oil palm, coconut and olive are perennial crops whereas soya, sunflower, canola and rape seed are short term crops. With short term crops the capital cost component is relatively high with yearly land clearing, land preparation and planting activities to be undertaken. Oil palm with a high oil yield and having a 30-year economic life cycle has the ability to provide a relatively cheaper vegetable oil than from other crops. With perennial crops the disturbance to the soil properties and biodiversity is less than in annuals and is a positive attribute as far as sustainability is concerned.

One other reason for palm oil to be the preferred vegetable oil is because it contains both saturated and unsaturated fatty acids in almost equal proportions. Thus, it is different from coconut and other vegetable oils which contain a relatively high percentage of unsaturated fatty acids, around 90%. Palm oil with its 1:1 balance of saturated and unsaturated fatty acids is the preferred choice for many applications in the food industry.

Both the type and the number of fatty acids of fat in our diets are known to influence health and wellbeing. The present global advice is to increase the consumption of unsaturated fatty acids at the expense of saturated oils and fats. For optimal health we require a mixture of fatty acids to be present in our diet. In this context among the sources of dietary oils and fats palm oil could be viewed as a relatively better option for its ‘mixed’ fatty acid profile (saturated, mono and polyunsaturated fatty acids).

The relative advantage in the return on investment the oil palm crop is having over other plantations crops also drives the investments towards this crop. This is true for both plantation and smallholder sectors in major palm oil producing countries in the world. The profitability from different plantation crops grown in Sri Lanka under average management conditions and current agrochemical/material costs & trading conditions are summarised in Table 1. Accordingly, oil palm is by far the most profitable plantation crop in the country. (See table)

The country has a demand for palm oil as a cooking oil and also as a raw material for many other industries. The products made in these industries are essential and widely used. For vigorous growth and high yields oil palm crop should ideally be grown under tropical climatic conditions with more than 2,500 mm of rainfall per annum. The low country wet zone of the country is blessed with such climatic conditions. The return on investment is high with this crop. However, even under such a favorable business environment for this industry, the government of Sri Lanka has taken a decision to ban cultivating this crop in the country. All other palm oil producing countries in the world, i.e., more than 20, are surprised and view this as a wrong decision.

Some repercussions of this decision to ban oil palm cultivation in Sri Lanka are a). dependency on other countries to fulfill our vegetable oil need, b). loss of foreign exchange to the country by importing palm oil, c). loss of income to the potential investors, d). loss of employment opportunities and e). depriving potential smallholders, the opportunity to enhance their livelihood. Prior to the economic crisis in this country, around 200,000 MT of crude palm oil (CPO) had been imported annually. The current global market price of a metric ton of crude palm oil is around 900 US$. Thus, the foreign exchange requirement to import national crude palm oil requirement will be more than 180 million US$ per annum without freight and insurance costs.

In the past, forests have been felled to cultivate oil palm in some major palm oil producing countries. The same approach was adopted for planting other plantation crops as well in the past. Deforestation will invariably lead to further shrinking of already depleted forest cover and loss of environmental services we accrue from natural forests. Natural forests significantly contribute to depleting of greenhouses gases, to the natural water cycle and protects biodiversity, soil, catchment areas, rivers and water bodies. Due to serious negative impacts of deforestation on the environment, a worldwide lobby demanding countries to grow oil palm in a more sustainable manner was initiated. With this lobby changes are now taking place in the manner in which land is selected to grow oil palm. For most crops including oil palm, systems to certify sustainable plantation management have evolved and such certification has become a requirement for marketing of produce from plantations. Basically, issues related to cultivating oil palm had been identified, awareness created amongst parties concerned and interventions for rectification have been put in place. In Sri Lanka however, to start with there was no issue of deforestation associated with oil palm cultivation. The land for cultivating oil palm in Sri Lanka was obtained through crop diversification, a scientifically accepted approach. Even then cultivating of oil palm in Sri Lanka was suddenly banned by the government incurring the investors a loss of more than Rs. 500 million on nursery plants alone. The global lobby was against felling forests to plant oil palm. The reasons for the anti-oil palm lobby in Sri Lanka according to some environmentalists, scientists and politicians are negative impacts to the environment, loss of biodiversity, depleting soil water and threat to the existence of other plantation crops. There is no scientific basis for such allegations. But those who lobby against planting oil palm do not want to understand the difference between ecological impacts when planting oil palm subsequent to felling natural forest cover and as a crop diversification program. Various attempts made had been futile and as the Sinhala saying goes it’s like trying to wake up a person who pretends to be sleeping.

The necessity for a country to produce its own needs is more than evident now with the economic crisis the country is facing currently. With a huge disparity in outflow and inflow of foreign exchange to the country the need to produce our own requirements are very much obvious. As explained earlier in this article Sri Lanka has a conducive business environment for a successful palm oil industry. What is lacking to drive the industry forward in the country is the political will. Politicians may be fearing that a decision to lift the ban on oil palm cultivation will not be a popular decision affecting their vote base. Countries economy is currently shrinking leading significant losses in employment, falling income levels, increased inequality and government borrowings. To recover from such an economic crisis the country should not ignore viable industries that could enhance national production. A reversal to the decision to ban oil palm cultivation will lead to producing national requirement preventing the outflow of millions of dollars each year. Revenue moving out will circulate among all stakeholders of the industry helping to enhance their livelihood and strengthening the economy of the country.

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