Book in Sinhala on “Directing the Sri Lankan Economy onto the Correct Path”
View(s):By Lloyd Yapa, veteran economist
I wrote this book in Sinhala to inform the ordinary Sinhala reader, especially the youth who demanded a system change, as to what needs to be done to alleviate poverty and promote exports to earn badly-needed foreign exchange and as some political parties promise to emphasise on lesser objectives if they win at elections. The book is distributed by the Sarasavi Bookshop.
Chapters
The book has 7 chapters– preparation of strategies for directing the Sri Lankan economy onto a correct path, reasons why the Sri Lankan economy has failed, selecting leaders who could achieve prosperity for the nation, the need for a new Constitution to bring prosperity to the nation, the conversion of neo liberalism to social market policies, rescuing the nation’s farming and the fisher folk from poverty and lastly strategies for directing the Sri Lankan economy onto a correct path.
First and Second Chapters
The first chapter deals with an attempt at preparing an economic development plan with strategies using a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis without details after arriving at Goals and Objectives. The second chapter gives details of the SWOT while comparing with situations in the rest of the world.
Third Chapter
The third chapter consists of an analysis of the quality of leadership that Sri Lanka has had whilst comparing with dynamic leaderships that led to the success of Japan, South Korea, Taiwan, Malaysia and Singapore. The South Koreans led by Park Chung Hi wanted to do better than Japan. The other leaders like Mahathir Mohammed also wanted to copy Japan while Lee Kuan Yew wanted Singapore to be the Switzerland of the East. But all of them like true leaders were dedicated to serve their people.
Fourth Chapter
The fourth chapter consists of an analysis of the weaknesses of the Constitution having concluded that the main cause of the failure of the economy of the country is its socio- political instability due to poor governance which prevented the sizeable inflow of foreign direct investments unlike for instance Singapore which had received US$2700 billion by 2022 while Sri Lanka had received a paltry $18 billion (some 200 projects have apparently been closed) by the same year.
The problem with Sri Lanka was that the country did not have sufficient savings to invest, the required technologies and access to international markets to reach a higher growth path. Therefore the only alternative was attracting Foreign Direct Investment (FDI). However, the country at the beginning decided to concentrate on the small internal market, set up state- owned enterprises instead of the more efficient private sector approach. Most of all the country had to deal with an enormous ethnic problem and terrorism, especially after the Sinhala Only Policy of 1956 and the 30 year- war following the killings of 1983. Although the government won the war, no effort was made to deal with underlying problems especially with Constitutional changes for making concessions to the minorities and improving poor governance plus public sector inefficiency/corruption to overcome socio-political instability and the ineffectiveness of the public administration. Thus there was no enabling environment to attract FDI investors who stayed away.
Fifth Chapter
The fifth chapter describes how feudalism gave rise to classical liberalisation where the private sector was confined to business totally while the state was restricted to governing, evolved into the modern ‘private sector plus the state’ social market policies adopted by many countries of the world for managing their economies successfully. Sri Lanka however did not treat the private sector as the supervised ‘engine of growth’ but went on to set up some 520 state-owned enterprises which were not as efficient as those in the private sector and were a burden on the state and the people as most of them suffered losses.
Sixth Chapter
The sixth chapter describes how land reform has converted peasant farms into successful farming business enterprises in Japan, China, Taiwan and South Korea. The process consists of the state buying up farming lands and planning to convert them into feasible units which are handed over to the owners, while accommodating the farmers of uneconomic units who did not get land, with jobs in industrial ventures. In Sri Lanka, the belief is that all farmers big or small are to be used in food production for the country. According to the Agricultural Census of 2002, 45 per cent of farming lands are under ¼ acre in size: now there must be more. There is no objective of improving the incomes of the farmers and the profitability of the farms by enlarging their size, so that the entire agricultural sector contributes to expanding the national income. The intention is only to modernise the techniques of production without resorting to using additional factors of production such as land and capital. Thus the productivity of most of our farms are so low that the country uses 26 per cent of the population to produce our food needs, while Israel is reported to use only 1 per cent of the population to produce their food and export needs!
Seventh Chapter
The seventh chapter is an outline of an economic and export development plan consisting of leadership, goals and strategies.
Conclusion
The book emphasises mainly on creation of socio political stability to attract investments both for economic development for poverty alleviation as well as for faster expansion of exports to enable the country to earn foreign exchange to pay off the dollar debts. In addition to other essential strategies it points to the manner in which the farming sector could be improved to raise the incomes of farmers while they provide the food requirements of the country and for export.
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