Features

Sri Lanka’s economy in the first 10 years

Published

4 years ago

2022/02/12

By Uditha Devapriya

Assessments of Sri Lanka’s history often depict the period from 1947 to 1956 as an Eden before the Fall. Partly, this was owing to how independence had been secured. Freedom was seen as being granted, not won; unlike the multiclass bloc that had prevailed against British dominion in India, in Ceylon independence had amounted to a transition from the colonial bureaucracy to a comprador elite. Independence became a top-down affair, led by those who emphasised cooperation with rather than resistance to Britain.

Moreover, unlike in India, where ethnic tensions led to the partition of the country into Hindu and Muslim sections, in Sri Lanka similar tensions between the Sinhala and Tamil communities did not erupt until a decade later. Until they did, a belief sprang up that the country had secured independence without “dropping a shed of blood.”

Though these sentiments bolstered optimism over the direction the colonial bourgeoisie intended to take Ceylon, they also symbolised the bourgeoisie’s failure to consolidate a multi-class identity. Multiethnic though the composition of the leadership may have been, this was not reflected in the country’s population, which bifurcated between an English speaking elite and a Sinhala and Tamil speaking majority. The elite’s failure to address these concerns eventually led to previous calls for the replacement of English by two languages being replaced by calls to enthrone one, Sinhala.

Yet writers, politicians, even historians depict the first 10 years of Sri Lanka’s independent statehood as one of high prosperity. Two reasons are cited: the elite’s consolidation of a multiethnic identity, and favourable economic conditions which, had the UNP-allied elite continued in power, would have taken Sri Lanka ahead. I have addressed the first of these assumptions above. The second requires more scrutiny and examination.

Commentators who note that we could have done better contend that the colonial office handed over a highly developing country to local elites, and that the latter, particularly those elected after 1956, squandered the opportunity. Implicit in this assumption is the belief that the Ceylonese economy had fared well under British rule.

It goes without saying that this was far from the case. The claims of these commentators, that the country possessed the best road network, railway service, and harbour in Asia, in addition to being “second only to Japan in terms of per capita income”, under British rule, are hence suspect: “The fact of the matter,” Avocado Collective notes, “is that nobody has calculated with any degree of accuracy Sri Lanka’s per capita income in 1948.”

The UN’s, World Bank’s, and IMF’s estimates for Ceylon’s per capita figures in 1950 stood respectively at 311, 326, and 331. As the Avocado Collective writers correctly observe, these numbers could not have been different a mere two years earlier.

The situation was thus more complex, and less rosy, than what these commentators would have one believe. Sri Lanka’s first five years of independent statehood were dominated by problems of rampant poverty, widespread landlessness, inflationary pressures, trade and budget deficits, and declining terms of trade. These reflected the limits of an economy that had been catered to commodity extraction to the exclusion of industrial and productive activity. They eventually came to constrain the country’s potential.

Contrary to those who think otherwise, the country’s plantation sector did not do much to improve the situation. In 1950 the Indian economist B. Das Gupta pointed out that with a per capita monthly aggregate national income of Rs. 30, the development of tea and rubber sectors had “not necessarily meant general economic development of the country.” Simply put, the country remained “extremely underdeveloped.” To top these problems, “only some 10 percent of the population” earned monthly incomes in excess of Rs. 50, no better than the situation in the 1920s. That in turn had opened up a huge savings deficit.

Trade prospects were even worse. The balance of payments fell from a surplus of Rs. 314 million in 1945 to a deficit of Rs. 196 million two years later. The recession in the US had been partly to blame – US imports made up around 45 percent of the total in the country – but so too had Ceylon’s forever precarious terms of trade situation.

Sri Lanka’s terms of trade had risen from 103 to 138 between 1938 and 1947. By 1949 they had come down to 131. Fluctuations in commodity prices contributed to these declines: a decrease in rubber prices from 60 cents a pound in 1948 to 54 cents a pound a year later, for instance, contributed to decreases in the terms of trade of around five percent and in the balance of payments of more than Rs. 52 million.

Making matters worse, by independence the population had been locked into consumption patterns which favoured imports. One economist estimated the country’s propensity to consume in 1956 to have been 0.8493, with a constant of Rs. 20.03. Marginal propensity to import, on the other hand, stood at 0.2516, with a constant of 11.74.

Six years earlier, H. A. de S. Gunasekara had pointed out that three-fourths of total national expenditure was being spent on imports. Very little was diverted to gross capital formation: while the figure stood at seven percent in most developing countries, in Sri Lanka it stood at a paltry four percent, even in 1948. This meant that the country lacked investment capacity, without which growth could simply not be sustained.

Industrialisation was the only feasible and viable answer, and that obviously required heavy State intervention, as was happening in South-East Asia. But all three UNP regimes from 1947 to 1956 dismissed such an idea. The first Finance Minister, J. R. Jayewardene, had been entranced by Keynesian prescriptions, but his high regard for Keynes blinded him to the fact that aggregate demand policies were, as H. A. de S. Gunasekara noted in a critique of the government’s policies, relevant to industrialised countries suffering from excess capacity. In Sri Lanka, by contrast, the problem wasn’t an excess of capacity, but a lack of it.

To give the first two UNP regimes credit, though, they differed from the laissez-faire, non-interventionist position that Jayewardene’s successor, Oliver Goonetilleke, would adopt. Moreover, right until the withdrawal of food subsidies in 1953, which sparked the Hartal, the government continued the social welfare policies it had inherited at independence. The latter, in particular, became a sine qua non of democratic governance in Sri Lanka, a legacy of the Donoughmore reforms: thus, while expenditure on welfare had absorbed 16 percent in the 1920s, by 1947 it was absorbing a more impressive 56 percent.

Generous as these schemes would have been, however, the government’s economic plans were seen as less than stellar, in need of much improvement.

In a critique of the 1950 Budget, G. V. S. de Silva accused the UNP of transferring wealth to the rich even while expanding welfare measures. The government’s attitude to the question of local industry, which had by then become a priority across South-East Asia, also came for criticism: according to one observer, the tariff structure privileged the filling up of coffers “at the cost of irrational treatment for home industries.” The situation was such that while tariffs on areca nuts stood at 100 percent, those on brushes and rat traps did not exceed 50 percent, though the latter items could be manufactured locally.

Historians like K. M. de Silva dismiss the Opposition’s regard for industrialisation as a much-exaggerated panacea for all ills. Yet, it was industrialisation, led by the State in conjunction with private players, which had spurred growth in South-East Asia. Regrettably enough, Sri Lanka’s elites did not pursue such a strategy, even in the long term.

Instead the first three UNP governments prioritised full employment, which meant focusing on aggregate demand. On the one hand, they oversaw huge land resettlement schemes, which Tamil politicians alleged were a cover for mass Sinhalese colonisation. On the other hand, they embarked on large-scale projects like the Gal Oya scheme, which the Left lucidly critiqued: S. A. Wickramasinghe, for instance, described Gal Oya as a white elephant that benefitted American experts and local elites rather than the people.

The government’s focus on demand policies distracted it from other considerations. It also compelled it to promote if not entrench unproductive sectors, rather than urging reforms on them by way of taxation or nationalisation. Indeed, as H. A. de S. Gunasekara correctly observed, demand policies could not work in a context where land and labour were being channelled for such sectors, prime among them the estates. As S. B. D. de Silva noted in The Political Economy of Underdevelopment, for over a century these sectors had been driven by neither science nor technology, but rather by labour exploitation, profit repatriation, and absentee landlordism. This was hardly a productive combination.

Not surprisingly, the UNP endeavoured to appease these interests. Disregarding Marxist demands to nationalise estates, the government went about imposing higher taxes on them. Yet this hardly endeared the UNP to estate owners: Das Gupta noted that the latter began repatriating their assets soon after independence, fearful of the State “lessening their prospect of profit.” Later, Finance Minister J. R. Jayewardene realised, rather dismally, that planters did not necessarily prefer his solution of taxation to the Marxist alternative of outright nationalisation. They dreaded both options, and wanted out. In its own way, that was as much a tribute to the regime’s failures as to its economic ideology, which reflected the elite’s preference to cooperate with, rather than antagonise, British interests.

The writer can be reached at udakdev1@gmail.com

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Features

The Division Bell Mystery

Published

1 day ago

2026/05/29

Thilina Walpola

Tales of Mystery and Suspense 3

The murder, in a private dining room in the house, is of a financier with whom the government was negotiating a loan. When this seemed difficult the Minister of Home Affairs agreed to lead discussions, since he had known Mr Oissel the financier when they were young. Hence the private dinner, but when the Minister stepped out for a vote, Oissel was shot just as the Division Bell rang.

The Brahms and Simon detective novels, the first of which I wrote about last week, were amongst several books by the pair that Robert Scoble gave me when I was in Australia towards the end of last year. Amongst them was another thriller of a very different sort, though that too was written and set between the wars.

Called The Division Bell Mystery, it was set in the House of Commons, the first such book I believe, and was by Ellen Wilkinson, a Labour MP who became Minister of Education in Attlee’s government after the war, having served previously as Parliamentary Private Secretary to several ministers. Her hero Robert West is also a PPS, but a conservative, and his Minister, of Home Affairs, is an old style aristocrat, not much loved by the less orthodox Prime Minister, who nevertheless needs his support on many occasions.

The murder, in a private dining room in the house, is of a financier with whom the government was negotiating a loan. When this seemed difficult the Minister of Home Affairs agreed to lead discussions, since he had known Mr Oissel the financier when they were young. Hence the private dinner, but when the Minister stepped out for a vote, Oissel was shot just as the Division Bell rang.

West was just outside the door when the shot was heard, and when he opened it saw only the dead body with a revolver beside it. The assumption that this was suicide was however challenged by Oissel’s grand-daughter Annette, who was his heir, on the grounds that he would never have killed himself. But her view was given greater credence by the Inspector put in charge of the case who said there were no burn marks on the body which would have been the case had Oissel fired the pistol himself.

Matters are complicated by the fact that Oissel’s flat had been burgled while he was at dinner, and Jenks the policeman allocated to him, who had served the Home Secretary and seemed more acceptable to Oissel than someone from the Security Service, had been killed. Matters get even more complicated when Annette says her grand-father’s notebook in which he wrote his secrets in cipher was missing.

That was found in Jenks’ pocket, and then a photographer came to West to say he had been asked by Jenks to photograph this. More worryingly for West, he finds in the Home Secretary’s drawer a few pages from the notebook with what appears to be an interpretation of the cipher.

Ellen

Overwhelmed by all this he confides in a recently created peer who knows all about the business world, who insists that they leave the house party at which they had met over dinner and discuss the matter with the Prime Minister who promptly summons the Home Secretary.

But the Home Secretary had gone to Scotland to launch a ship over the weekend, so the meeting could take place only on the morning of the Monday, when difficult questions were expected on the adjournment motion. He admits at the meeting that he had got Jenks to take the notebook, and also that he knew the code since it had been created by him and Oissel when they were young.

He thought he should resign, and even contemplated suicide, but the Prime Minister told him that that would be even worse for the government, and that he should go home to bed. The Prime Minister said that he himself would handle the question, which he did with aplomb, insisting that confidentiality was needed until the inquest. What had happened would be made clear then, he declared, leaving West and Inspector Blackit and Lord Dalbeattie what seemed the impossible task of solving the murder.

Dalbeattie had suggested that West ask a female Labour MP who was very fond of him to get what information she could from the staff. That there was some involvement there had become clear when West, going back late one night to collect a briefcase he had left in a dining room, found someone lurking in the dark in the corridor outside the private rooms. Room J, where the murder had happened, was meant to be guarded throughout by a policeman, but he had left the room having felt dizzy, and it seemed that his coffee had been drugged. West’s sudden appearance however had prevented anyone else getting into the room.

Dalbeattie decides to recreate the scene of the murder and has a dinner party in Room J on the Tuesday night, inviting West and Annette and the society hostess at whose house he had met, and also Patrick Kinnaird, an MP who was engaged to Annette, as well as the Permanent Secretary to the Home Ministry.

After coffee Inspector Blackit comes in with Grace, the Labour MP who had got the confidence of the staff, and a journalist who had also been helpful, and just as they say they think they are on the track the division bell rings. Grace jumps up and tells the Inspector that that provides the solution and they get a ladder, and sure enough find the revolver in the space where the bell is. Directed at the place where Oissel had sat, it had been primed to go off with the ringing of the bell. The waiter who had helped to set things up made clear who the murderer had been.

The reason for the murder and the confused motives of all those involved made for a fascinatingly intricate mix. But also impressive in the book were the descriptions of the isolation possible in the crowded premises of the house, the forceful characterization of the members – Grace based on the writer, the society hostess based on Nancy Astor, the first female MP – and the laid back nature of senior politicians which West realized had to change in the brave new world of high finance.

Features

The challenge of keeping value-based politics alive

Published

2 days ago

2026/05/28

Sahan Weerasooriya

Anti-migrant protests in Durban, South Africa. BBC

The current outbreak of anti-immigrant protests in Durban, South Africa is bound to have taken many a subscriber to value-based politics or political idealism quite by surprise. After all, this is evidence that despite the historic accomplishments of nation-builders of the stature of the late President Nelson Mandela it cannot be taken for granted that identity politics, including racism in its worst forms, is no more in South Africa.

At the time of this writing details are scarce on the substantive root causes of the protests but it could very well be that economic grievances, particularly on the part of the majority community in South Africa, are contributing considerably to the disaffection. Shrinking employment and material prospects are likely to figure majorly among the factors igniting the unrest.

Fortunately, the local authorities in Durban are losing no time in calling for peaceful co-existence among the relevant communities and are pointing to the vital importance of stepping-up national integration processes. Apparently, immigrants in sizable numbers from neighbouring countries are present in Durban. However, international TV footage of the protests quoted some local authorities as saying that the majority of the immigrants in some centres that housed them were not illegal migrants and had the documents that entitle them to be in Durban.

In the Durban protests the world has fresh proof of the socially divisive consequences of the gathering globe-wide economic disaffection, touched off particularly by the continuing crisis in West Asia. Going ahead, the world would need to brace for increasing identity-based unrest of the kind it is just witnessing in South Africa.

Considering that the material lot of ordinary people everywhere could only aggravate progressively, with the US and Iran showing no signs of negotiating an end to their confrontation any time soon, it will be left to the more democratic and progressive sections of the world community to initiate positive measures collectively to bring a measure of relief to the discontented.

The swiftness with which such relief will be provided would depend crucially on the importance those sections taking up these undertakings attach to value-based politics as opposed to Realpolitik of power politics.

Going by these yardsticks, Italy could be considered to be moving in the right direction. Recently Italy came to the fore in initiating the collective named, ‘Rome Coalition for Food Security and Access to Fertilizer’, which has as one of its aims the swift provision of fertilizer to economically weak African countries.

In a recent statement Italian Minister of Foreign Affairs and International Cooperation, Antonio Tajani, said that a principal aim of the project was to ensure that the farmers of Africa gained easy access to fertilizer, considering that food security is a growing concern among some of Africa’s economically vulnerable countries.

The statement went on to mention that some 30 countries hailing from the Mediterranean region, the Middle East, the Balkans as well as the FAO had been invited to join the coalition. The venture is far-seeing in that food security is main among the reasons for social discontent which in turn could degenerate into endemic political turmoil and bloodshed. Separatist violence and geographical fragmentation of countries wouldn’t be too far behind these developments, as Africa itself has often proved.

It is hoped that more G7 countries would take the cue from Italy and do what they could to ease the hardships of economically distressed countries, particularly of the global South. In these efforts they would need to break rank with the US, which is today brutally indifferent to the consequences of its policy of making ‘America First’, come what may.

Going by current developments, the Trump administration seems to be blithely oblivious to the wider, deleterious effects of its policy course in West Asia. Besides rendering Iran militarily and otherwise impotent nothing else seems to matter to Washington, as regards West Asia. This is policy short-sightedness of an extreme kind. After all, right now West Asia could be said to be sitting on the proverbial powder keg.

On the other hand, Iran is not giving the world the impression that it is doing anything constructive to get out of the policy straitjacket that it wove for itself decades ago. Rather than enter into a policy of ‘live and let live’ in relation to Israel in particular and initiate a process of reconciliation with the latter, it has chosen to operate within policy parameters that continue to damn Israel. This has put Israel always on the ‘defensive’ so to speak and prevented the opening up of space for meaningful dialogue.

That said, Israel is obliged to explore the possibilities of entering into a negotiatory process with the Arab-Islamic world that could lead to a de-escalation of tensions and bloodshed. It cannot continue to look at its neighbours through lenses that distort them as archetypal enemies who should be ‘wiped off completely from the face of the earth.’

In other words, the need is urgent for Realpolitik to give way to value-based politicks. Italy is beginning to prove that the latter approach could be pursued with some success. May be the EU and the UK could throw their weight behind these initiatives as well and establish that international politics could be refashioned on the basis of humane, civilized norms. The UN would need to be fully supportive of these moves and prove an organizational nucleus of the operations that follow.

In fact the time is ripe for people of conscience to collectively stand up on the side of peace and say ‘No’ to war and violence. Organizations such as the ICRC, the WHO and Medicines Sans Frontiers have already taken up this call. Referring to the widespread destruction of health facilities and their dehumanizing results these organizations have said, among other things, that ‘This is not a failure of the law. It is a failure of political will.’

True, ‘failure of political will’ among those powers that matter accounts for the runaway, uncontrollable nature of war and destruction in contemporary times, but more fundamentally it is a failure of the human conscience. It could very well be that the phenomenal levels to which violence and war have been unleashed today have had the effect of deadening consciences. This is a matter for urgent study and wide discussion.

Features

Vesak celebrations … with Cuteefly

Published

2 days ago

2026/05/28

Sahan Weerasooriya

Perfect for celebrations, gifts, and meaningful occasions // Gift pack

I would describe Indunil Kaushalya Dissanayaka as innovative and creative, and she operates under the name of Cuteefly.

Indunil always comes up with something novel to celebrate special occasions, and she does it with candles … and that’s her profession.

She was in the spotlight when she created a happening scene, with candles, for Christmas, Sinhala and Tamil New Year, and Valentine’s Day.

As lanterns light up Sri Lanka for Vesak, the Colombo-based candle maker is quietly turning wax and wick into little pieces of the festival.

Candles reflecting Vesak themes

Her candles reflect Vesak themes – light, peace, remembrance, giving, etc., to enable you to fill your Vesak celebration with devotion and beauty.

Among her Vesak creations is a lotus-shaped soy candle, scented with sandalwood, lavender, etc., meant to burn during this Vesak Poya Day.

Indunil Kaushalya Dissanayaka: Customers
praise her for her creativity

These handcrafted Vesak candles are perfect for offering at the temple, she says.

What makes her creations so novel is that they come in different shapes, scents, themes, and all are handmade.

What’s more, her customers have heaped praise on her for her creativity.

According to Indunil, her creations are perfect as a thoughtful gift … to bring beauty, unity, and light into every moment.

Says Indunil: “Our beautifully handcrafted Unity candles are designed with premium detail and love, making them perfect for celebrations, gifts, and meaningful occasions.”

Cuteefly, says Indunil, is available online.

Readers could contact Indunil on 0778506066 for more details.

He Facebook Page is: Cuteefly.