Is the fault with the IMF or our leadership? A former Sri Lankan burueaucrat and economist Dr. Garvin Karunaratne today, on this page, makes very cogent arguments against the economic prescriptions made by the IMF and the World Bank for Third World countries and points out to the disasters suffered by these countries consequent to these recommendations being implemented.
These arguments, as the Dr.Karunaratne says, are being made in the context of the visit of a well-known economist Professor Jeffrey Sachs, a professor of sustainable development who is scheduled to deliver two lectures during his visit. Even though many of the arguments made by Dr. Karunaratne against the IMF and World Bank recommendations are well known, it is indeed worth reiteration because Sri Lankans have now come to accept IMF and World Bank dictates as predetermined karmic fate and that nothing can be done about it.
For example, last week the price of bread shot up by Rs 1.50 and the week before a cylinder of LPG went up by Rs. 31.00. Apart from an MP producing a loaf of bread in the chamber of parliament and some parliamentary antics that followed, these price hikes did not even invoke a serious editorial comment whereas two decades ago there would have been demonstrations on the streets. Sri Lankan impotence against world market forces has now to be accepted as a fact of life.
Indeed, the IMF, World Bank and world market prices are realities that do affect us but do we have to succumb to them as being inevitable? For example the price of bread will rise when prices of wheat flour increase in world markets and we are helpless because our climate is inhospitable to cultivation of wheat. But we are a rice-eating nation and have always been so. Most Sri Lankans, not so long ago ate three meals of rice till they were veered away to bread.
Since Independence till the 1990s, the prime development target of this nation was to achieve self- sufficiency in rice And now we are told that we are nearly self-sufficient. It is perhaps because people have given up rice most of the urban populace taking only one meal of rice and the other two meals being with bread. And our economists and visiting agro-economists have been urging rice cultivators to give up paddy cultivation and take to cash crops!
Like the Japanese, we have not realised that rice is a strategic material for us. While rice too is dependent on products such as fertiliser, insecticides and tractors, it is still a crop that we produce and will be able to adjust to changing conditions unlike being total prisoners to the vagaries of the price of wheat.
Today, we have become absolute vassals to the open economy. A Sri Lankan mango costs twice the price of an apple imported from Australia! And no one in power seems to give a damn about it!
At one stage, following a sustained and successful import substitution industrial policy, we attained near self-sufficiency in the manufacture of textiles. Within a few years this industry collapsed following new import policies on textiles and garment manufacture.
There are many such examples of national hara-kiri that have been performed. The IMF and the World Bank are not the only culprits. It is the absence of a dedicated and enlightened leadership at a time the nation needs such people most of all.
The IMF and the World Bank have been the whipping boys of the Third World for the past half century but yet there are the Third World countries, particularly those of South East Asia that developed into powerful economies within this period while Sri Lanka and some south Asian countries retrogressed from the positions they were in 50 years ago. South Asian pundits delighted themselves in expounding the esoterics of non- alignment and calling those South East Asian nations, American puppets, while they made dramatic progress in the economic field while we kept sinking.
The resilience of the South Asian economies was evident when they recovered from the South Asian economic crisis whereas Sri Lanka that was practically untouched by that economic crisis is today in a far worse situation.
Undoubtedly, the present and past governments have faced tough economic propositions with terrorism and a hostile international economic environment. But is there even a basic economic strategy for food, clothing and shelter?
Of the earlier the three props of our economy tea, rubber and coconut only tea remains. Now we depend on housemaids and garments. These two are not very steady props one depending on the volatile Middle East and the other on our low cost of labour which is now on the rise.
There are countries like Malaysia that has defied institutions like the IMF in times of economic crisis and still survived. In contrast Sri Lanka today is capitulating to their own terrorists at the negotiating table. And as for enlightened leadership, the president of the country is accusing the prime minister of plotting to assassinate her while no one seems to be much concerned about it!
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