Protecting national assets

Currently, the major constituent party of the United People’s Freedom Alliance, the Sri Lanka Freedom Party is celebrating its 60th anniversary. This is the occasion on which it is expected to reiterate its commitment to its founding principles.

On Tuesday, the SLFP Deputy Secretary, Environment Minister Anura Priyadharshana Yapa, did just that. He was addressing the Sri Lanka Independent Professionals Organization at the Mahaweli Centre.

He stressed that the SLFP stood for an independent economic policy, in order to build and protect the country. The Party positioned itself between capitalism and communism, but it nevertheless was committed to protecting national assets. It could thus be identified as leaning to the Left.

The minister’s words are of greatest import for the coming period. It lays emphasis on the self-reliant way to development as an economy, as a polity and as a country.

Foreign policy

In 1956, when the SLFP came to power in coalition with Philip Gunawardena’s Viplavakari Lanka Sama Samaja Party, it was committed to making Sri Lanka the Switzerland of the East. This did not mean only that it would reach for prosperity.

The country was to be independent and non-aligned in foreign policy, committed to peace, but nevertheless also dedicated to protecting its national integrity and sovereignty. It was no longer to be tied to the West, but would seek friends everywhere.

The policies adopted at the time were to be the bedrock of a bi-partisan approach to the country’s development over the next 21 years. Although growth terms of simple gross national product were not impressive, there were enormous strides in human, industrial and agricultural development.

A foundation was laid for future development, based on maximising indigenous inputs for developing national resources.

The country’s dependence on tea and rubber was to be minimised. National resources were to be developed nationally.

Hitherto the private sector (with a few notable exceptions) had been concentrating on consumption rather than production, piggybacking on the plantations’ wealth generation. Thus it was that the state sector had to shoulder the burden of development activities.

By 1977 Sri Lanka had thriving state and co-operative sectors. The 107 state corporations and other enterprises which were producing a surplus far outweighed those running at a loss. Plans were afoot to further develop our resources based on principles of self-reliance.

Privatisation of national assets

Then came the United National Party government of JR Jayewardene, which welcomed ‘robber barons’ to the country quite brazenly. Principles of self-reliance were forgotten as the economy was opened up to foreign capital.

Privatisation of national assets also commenced. Economic logic should have dictated that profit-making state ventures should have been retained and only loss-making ones should have been divested. However, it was the reverse which took place.

The process was helped by the fact that under the Jayewardene regime the state sector became the happy hunting ground of the UNP’s trade union, the Jathika Sevaka Sangamaya, and lack of discipline, corruption and outright grand larceny became normal.

A classic example of privatisation gone wild was the CTB’s Werahera workshops, which had been a model for South Asia. After divestiture, the entire complex was stripped of all its arduously obtained plant and machinery, so that today only the bare land on which the magnificent works stood exists.

State’s coffers

Similarly, the large Salawa plywood factory, established by Philip Gunawardene, is now an empty husk, occupied by the Sri Lanka Army. The contemporaneous textile factory at Thulhiriya nearly went the same way, but it now serves as a logistics centre for the garment industry.

Unfortunately when Chandrika Kumaratunga became President, she ignored the policy legacy of her parents, SWRD and Sirimavo Bandaranaike. The policy of dependence persisted and national assets continued to be hived off.

It was left to President Mahinda Rajapaksa to re-establish the self-reliant policy foundations on which the SLFP was brought into being. This was done with difficulty in the midst of civil conflict. The heightened level of borrowing over the previous three decades meant further borrowings were required to make interest payments. The disposal of income-generating state enterprises has had a negative effect of the state’s coffers and has exacerbated the problem.

The civil conflict itself was also about protecting national assets, writ large. Underlying the demand for Thamil Eelam was the greed of vested interests for the resources lying in the North and East. An indication of this is the fact that Eelam maps include Puttalam District, occupied mainly by non-Tamils, as part of Thamil Eelam. This is not unconnected to the bulk of potential petroleum resources being identified as off this district’s coastline.

In the post-peak-petroleum period, our mineral oil is likely to be one of our most valuable resources. By winning the war against the terrorists, the Rajapaksa government has ensured that this national asset will remain in the country’s hands and not in the greasy palms of some foreign robber barons.