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by Lionel Gulawita

During this formative period, action has to be taken to formulate the National Development Plan. The rural farmer, technician, mechanic or the small industrialist should be didactically enlightened on the usefulness of being at the gate to large-scale production.

The recent post election political development has brought into focus the question of economic change and reform. Confrontational politics and politicization could now be treated as having waved us by good-bye forever. The people of Sri Lanka, battered and bruised by misgovernance and negative development are in need of a system of solid democracy, and a sustained development. In the recent public opinion expressed through polls, the country has realized that they no longer require the brand of politicized development running into minus growth.

They do not even want pseudo miracles, which are the results of sentimental promises. The growth that comes out from well-planned national planning only could result in a strong base for a sustained overall development and the long-term interest of the nation. It is for this reason that good Governments of all political persuasions do embark on long-term structural change and reform in order to improve the living standards of people.

A proper national planning and a well-grounded economic development is indispensable and there is definitely no place in Sri Lanka now for arbitrary schemes with narrow political motives.

The novel political culture has sprung up with the new Government together with a new economic order. The country expects the intended reforms to produce the following objectives.

a. Sound political and economic management and public awareness.

b. Employment opportunities for the unemployed. Training of unskilled youth for vocations - technical, electronic and information technology etc

c. Provision of water for dry-zone farmer for cultivation

d. A sound policy of industrialization of the country.

e. Rural economy and township development to receive simultaneous attention.

f. Total democratization of society

g. Peace in undivided Sri Lanka

A sound political and economic management is important. Similarly it is also important for the Government to understand the extent to which the people in various parts of the country enjoy and feel comfortable with the economic benefits of development. The ways and means for the rural people to understand the State policy and the new economic order need be established. The Government and private schools are effective institutions for dissemination of information.

Due to a fast changing world into a global economy, the people face tough competitions on commodity prices, cost of services, transport etc and entertain many uncertainties on their standard of living available technology, international markets for goods, services and capital goods, services and capital. Hence the feelings and the mindset of the community is useful for the political leadership to negotiate the bends and detour from the cruise when it is really necessary to do so in time.

With our internal politics now turning development conscious we should marshal our efforts to seize the opportunities and utilize talents of the people for sustainable export-led growth. Sri Lanka's import bill is tremendously higher than the value of her exports. For instance Indian goods Sri Lanka imported during 1999 was valued at SL Rs. 36.012.9 million while Sri Lanka during the same period exported to India goods to the value of SL Rs. 3.320.3 million only. The favourable trading balance in favour of India was SLRs.32.692.6 million. In the year 2001 Sri Lanka Imported from India goods to the value of SL Rs. 53.6b while our exports to India was only SL Rs. 6.2b.

To bring about equilibrium in Indo-Sri Lanka trading in the short run is impracticable. Neither could we ask India to wipe out Sri Lanka's adverse trade balance buying more of our exports. Cutting down imports or resorting to an import substitution program to bridge the colossal gap is a poor approach. On the contrary, such a program will put the exports too on a reverse gear. It has so happened in many countries in their experiments. The only effective strategy to make a headway is to continue with the principles of 'open economy' and liberalize imports and exports of the country.

National Export Development Plan & EDB

Under export-led economy, the National Export Development Plan is a task for a Ministerial Council. A political timetable is totally inappropriate. Politicization the country knows through experience, does harm to a country and even to the political party, which promotes the ill-conceived, shortsighted concept. It halts development, makes the governance corrupt, inefficient and inept.

Export Development Board (established by Act No 40 of 1979) should be called upon to energize a vigorous export drive undertaking market research, market information. Market promotion assisting exporters, arranging trade fairs and exhibitions for the exporters. EDB also forecast the Export Growth Rate by the end of each year and tirelessly endeavour to boost up the ongoing progress. It is also not too early for EDB to declare the Year of Export so that the exports will grow progressively to register a record high in the Year of Exports and set a rapid pace of growth thereafter.

Developing countries are making economically ambitious attempts to enter and occupy a share in the international market for its products. The many of them in the third world have entered the NIC (Newly Industrialized Country) race but in Sri Lanka's NIC-preparedness is slack and non-conspicuous. Attention and strong commitment on this aspect is warranted.

Accelerate Projects

Only accelerated approach and swift movement could match the present day speed and the competition. The sense of urgency, strong political patronage and participation of the community. Voluntary Organizations, national NGOs could bring in their efficiency and performance-expertise on the projects under the Plan.

The people of Sri Lanka generally and characteristically forget the past soon. They expect quick results to generate. Those suffered long politically and economically could invariably be impatient in looking forward to receive some relief they anticipated. Hence the need is pressing to accelerate all projects and National Development endeavors in the country on a fast track. Acceleration should begin from the Planning process into all other departments setting and achieving the quantitative and qualitative targets on time. In the meantime however it is feasible for the political leadership to put the people into appropriate mindsets and turn the economy into the right orientation.

It is useful to recall how the Greater Colombo Economic Commission (GCEC) functioned and what achievements it reaped in Sri Lanka's economy. The GCEC was established in 1978 and it spearheaded the export led economic growth in the country. GCEC established a number of Export Processing Zones commencing Katunayake EPZ.

Biyagama and Koggala EPZs followed. Foreign investments began to flow into these EPZs and hundreds of foreign industries were located in them. Garment factories are a notable industry in these Zones and even outside them. The employment problem in the country was minimized to a large extent through this industrialization process led by GCEC encouraging both the foreign and local industrialists. Sri Lanka's first Economic Commission was thus a grand success and the country would have been very much poorer and economically much weaker today if not for the achievements of the GCEC. Under such economic zone programs it was planned for Sri Lanka to reach NIC status by the year 2000.

Unfortunately the development orientation of the country was disrupted due to assassination of a leader and change in ruling politics.

Ground being set

The appropriate ground is being set for the development and large-scale international credit outlay. Sri Lanka's Governance, Internal democracy, rules and regulations, labour laws, human rights situation etc is sound. With the new Government in saddle, investor confidence has risen remarkably well. The industrialists in large number are ready to install their industries using BOI incentives. The country is poised and the people enthusiastic on the new economic order to work hard and economically forge ahead.

The Ceasefire Agreement paves way or the inflow of Foreign Direct Investment into the country. The peace initiative is an added motivation to the foreign investors to open up exports industries to cater to the potential dollar-rich markets abroad. Tourism that suffered many a set back in the recent past has turned round with increasing tourist arrivals.

Agriculture, Industry and services sector

Agriculture is the largest industry fragmented into smallholdings. It needs a new approach and updated dimension. Subsistence-agriculture remained with us for a long, long time due to continuance of due to continuance of tradition. It is now timed to revolutionize agriculture as an industry absorbing the subsistence-farmer into the fold and expanding his role. High rates of growth result in Industry and Services Sector. They also provide opportunities for mass employment and technical training for youth.

Agriculture which provide the majority of rural people their wherewithal, remains the mainstay of the economy is an important segment for socio-economic development of 60% of Sri Lanka's rural community. The said 3 sectors hence need be managerially efficient and productive. Sri Lanka should strengthen her economic partnership with foreign Multinational Corporations (MNCs), build up and develop domestic competence in order to prepare for the world's competitive markets. The well-managed business houses should be encouraged to turn into world-class companies. The already intelligent workforce should be motivated to be highly productive.

Indo-Lanka discussions

The official discussions by the Prime Minister has had a charismatic effect in the Indian Government and the discussions on improvement to trade and investment, exchanges and the consensus on the possible construction of a bridge between Talaimannar and Rameswaram linking Sri Lanka with the Sub-Continent have reportedly been successful.

During this formative period, action has to be taken to formulate the National Development Plan and have it in blueprint stage with the rural economy assuming close and dedicated attention therein. Let us not make a mistake about it. Our rural economy is empirically most vulnerable to major overseas developments and trade exchanges. The rural sector should hence be strengthened in time to be able to go into production competing not only locally but also with the outside world both qualitatively and quantitatively.

The rural farmer, technician, mechanic or the small industrialist should be didactically enlightened inter alia on the usefulness of being at the gate to large-scale production. Small or village scale planning has to be permeable into major industries in the future cooperatively. Without this elasticity in the small-scale ventures in the village economy, the surge of imports from India or the SAARC countries may affect the competitiveness and marketability of produce of the smallholder. The Prime Minister's concept of Sri Lanka's open economy development paradigm does not sacrifice the smallholder. He has to be netted in and the development secured with him in the wagon.

Under this political guidance the economy need be built up fine-tuned and regulated to protect the small timer until he musters enough strength to stand on his own feet. All Ministers and Members of Parliament are national leaders, though they also represent districts or a particular electoral seat. The collective national responsibility and attitude orientation could close many gaps and fill many hearts in the joint task of national development.

Human Resources Development

Knowledge and innovation are keys to the future development. Sri Lanka's economy depends on the quality human resources available. Human resources development centers are hence necessary in each electorate to develop:

a. trade-specific skills through different technical courses

b. to provide talent-based opportunities of advanced training for the youth

c. to promote small industries and employment of technicians and technocrats in townships

The courses offered to the youth may include Civil construction, Motor mechanism, Welding, House wiring, Industrial electricity, Technical drawing, Electronics, Information Technology, Entrepreneurial development, Vocational English, Entrepreneurial training, Machining, Air conditioning general and auto, Accounts keeping etc.

The training would also be a short-term strategy to create employment for the unemployed and also to increase the number of youth employable in countries abroad. It is necessary to declare the Year of Exports and arrange the launching pad for Sri Lanka to leapfrog into NIC status. Exhibitions, fairs, Exports seminars, large-scale enterprise development, development of small-scale industries and similar activities not only create the requisite awareness but result in heightening the morale of exporters and the individual countrymen to step up the production of goods for the foreign market. At awareness programs they will be aware of what goods to produce for which market.

Technical guidelines and assistance, production incentives, credit facilities available and the benefits to them and the country's economy from developing of exports etc. Other than our Tea, Rubber, coconut and garments, Sri Lanka has a variety of non traditional exports which include gems, jewelry, vegetable, fruits and nuts, cut flowers, foliage plants, aquarium fish, leather goods, value added goods, furniture, handicrafts etc. attract considerable demand abroad. Sri Lanka earned SL Rs 50 billions on non-traditional exports in 1990. In a preliminary year before we reached the Year of Exports in 1992. Sri Lanka's handicrafts are of high quality and attract upmarket prices abroad. The World Trade Center and EDB assistance and guidance to the producers are vital for the product promotion abroad.

Prime Minister Ranil Wickremasinghe's ambitious plan to develop the country under 5 Economic Commissions is creditable. The proposal though gigantic is a pragmatic strategy. The Prime Minister is aware that large scale and development is the solution for the economic ills the country is facing and the butterfly industries are no answer to a run down economy.

So we need think in terms of big business and move into work sites not with wheelbarrows but with bulldozers to speed up the development. Many countries have done so with tangible results.

5 Economics Commissions to be established will open up great possibilities created for large-scale production and employment. The reenergized economic activity under the said 5 economic Zones will enhance the production many fold. Export Development and Market promotion should therefore be our main strategy for faster growth. The proposed 5 Economic commissions are to take over all development activity involving every electorate in Sri Lanka. Inter-zonal consultations sharing innovative skills and experience. Healthy competition will promote productivity and production within the Zones.

Prime Minister has succeeded in the neighbourhood consultations receiving the positive nod for joint collaboration from friendly nations.

a. To create investment opportunities for the unemployed is the most logical and effective development technique practised in the world over.

b. It gives them the freedom to select their own employment to be developed with their family members as partners.

c. The investment loans have to be released at low interest on easy terms but subject to an accepted collateral. Recoveries to be made after 2 months. A Special counter at Banks be kept open till 6 p.m. to accept deposit collections by field officers on behalf of the rural investors.

d. No preferential credit lines should be allowed. Many Governments failed and entered the financial crisis during 1997-98 owing granting loan facilities on personal basis at a rate of interest lower than the specified and trying to expand family businesses by allowing concessions surreptitiously under the counter.

e. Depending on the effectiveness of the investment further loan arrangements are encouraged for improvements.

f. Free guidance and advisory services on agricultural and entrepreneur development. g. Development Audit introduced to ensure steady progress and course corrections. This check traces how successful the applicant is with the previous projects and in case of failure of projects the kind of action taken to revive the success or minimize the capital loss. It is also necessary to check as to what institutional action was taken to prevent recurrence of baneful practices resulted in failure. This 'Guiltless conscience' is not only a useful check in the final assessment of the aid package but a vital element contributing at least to a modest recovery process.

Development and Environment are non-conflicting issues. This message Singapore has given to us, is with a proven record of success.

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