By C. A. Chandraprema –
This book has been written in Sinhala obviously with a student readership in view. As such, much of the content would interest students of Business Management and Economics and related fields. But what would interest a political readership would be the critique contained in it of the Rajapaksa development model. In the late 1970s and early 1980s, the economic reforms introduced by the J.R.Jayewardene government was subject to a great deal of intellectual debate. Even as A/L students of economics, the present writer’s generation read critiques and analyses of the UNP’s development model.
This extended from debates in the Lanka Guardian to critical writers of school text books. One of those who wrote school text books in applied economics, which were critical of the UNP’s development model was Bandula Gunawardena, now a cabinet minister. Today however, intellectual debate appears to have dried up with even so called anti-government intellectuals producing nothing more than press statements full of political posturing and accusations. There is nothing by way of an intellectual questioning of the trajectory of this government certainly nothing coming even close to what we had during the first several years of the UNP government formed in 1977.
In this unpromising situation, Milton Rajaratne’s book Sri Lankawa: Aasiyawe Ahimi Ashcharya is an invitation to the Sinhala reading public to think.
One might say that Rajaratne begins from where the debate on the UNP’s development model left off in the 1980s. The UNP was trying to follow the development model of the East Asian dragons but did not quite make it due to reasons examined by the author. This book is a critique of the UNP’s development model as well, because the author suggests that Sri Lanka’s attempt to emulate the East Asian dragons was doomed to failure from the start, war or no war. He has examined in detail the factors that led to the rise of the East Asian dragons and pointed out that none of those factors were present in Sri Lanka. The upshot of this being that even without the war, Sri Lanka would not have succeeded in the targets set by J.R.Jayewardene. A problem that confronts this country even today is the non-availability of capital for development. The author has examined in detail how the East Asian dragons met their capital needs.
Of the east Asian countries that succeeded in the export led development model, only Japan, South Korea and Taiwan had an agricultural sector worth talking about. As it was not possible to generate an economic surplus through agriculture, these countries wanted to industrialize without delay. Instead of obtaining foreign investment to develop an industrial sector, these nations squeezed the required capital out of the agricultural sector through land based taxes and the like. In the first round, while the agricultural sector was squeezed out to obtain capital for industries, in the second round, when incomes increased as a result of industries, the prices of agricultural produce was also increased in tandem with increasing incomes. The author told the present writer that in Japan when industrial wages are negotiated annually, the price of rice was linked to the wage index so that when wages rise so does the price of rice.
Thus a system where the industrial and agricultural sectors reinforced one another came about in these countries. Furthermore, this industrial base made it possible to increase the productivity of the agricultural sector in those countries by making possible the production of agro-chemicals and fertilizer.
The author argues that in most Asian countries (including Sri Lanka) the governments did not squeeze out the agricultural sector to obtain capital to invest in industries. So this meant that these countries lacked the capital to industrialize. It was Mick Moore of Sussex University fame who pointed out in his book on Peasant Politics in Sri Lanka that all governments in Sri Lanka had a mortal fear of the consumer and as a result, the emphasis of every government was to keep the price of food low. When the prices of agricultural produce is kept low, that keeps agrarian incomes low and there is no rural surplus that can be skimmed off to industrialise. Due to the lack of industries, incomes in the country as a whole remain low necessitating food prices to be kept low and this vicious cycle goes on and on.
Rajaratne argues that due to various reasons, this vicious cycle did not exist in the five Asian ‘dragons’ that he has based this study on.
He points out that in all five Asian dragons, food was scarce and expensive. In the case of Hong Kong and Singapore, they had no agricultural hinterland to begin with and the inhabitants of these countries had to toil harder than most to generate the income to import food from overseas. Even in Japan, South Korea and Taiwan which had agrarian hinterlands, food fetched high prices. (The author does not elaborate on why high food prices appertained in the latter three countries despite the agricultural hinterland they had, but we can assume that food prices would have been high even in these countries in the aftermath of the second world war, thus giving the agricultural sector a head start in generating a surplus.) This model of using high priced agricultural products to generate a rural surplus that can be invested is perhaps a model that can be followed in Sri Lanka as well if the government has sufficient resolve and is willing to take the risk of incurring the wrath of the consumer in the short term, for a laudable long term purpose. The present government has a potent weapon, patriotism, which they may be able to use to persuade people to accept higher food prices so as to channel money into the rural sector which in turn will become a market for locally produced goods and services.
Be that as it may, the politically noteworthy thing in Rajaratne’s book is his critique of the Rajapaksa model for developing Sri Lanka.
He says that the Rajapaksa government has posited for itself a development model couched in attractive phrases which seeks to turn this country into a global hub in five major areas. In pursuance of this objective Sri Lanka is to be turned into a knowledge hub, an energy hub, a shipping, aviation and commercial hub. Rajaratne points out that that no strategies, plans or methods have been presented as to how this country was going to achieve this goal. He has described this theory of five hubs as a chimera and a myth. He says that the process of myth making is present because this development model harks back to the glorious days of the Sinhala kings – a notion of glory which he points out is not borne out by historical facts.
Rajaratne asserts that if Sri Lanka becomes an international hub in the above mentioned areas, the world will be dependent on Sri Lanka.
He points out that Sri Lanka is not an important factor in global industry, commerce, technology, investment or politics and poses the question as to how this ambitious goal of becoming a global hub in five spheres is to be achieved in such circumstances. He says that without any conception of what is to be produced, using what technology, and sold to whom, at what prices, Sri Lanka can be turned into an international hub in five major spheres only by a miracle.