16 April, 2024

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Ronnie De Mel: A True Democrat & An Economics Philosopher To The End

By W A Wijewardena –

Dr. W.A Wijewardena

The pioneer of market reforms in Sri Lanka

Ronnie de Mel, best known as a former finance minister, is no more with us. During his long life, short by one year for a century, he had been to many trades. Throughout his life, he had been a student of history, having completed a first-class honours degree in history at the University of Ceylon in 1947. Had he remained at the university as an academic, he would have been one of the most respected historians of our time. But fate drove him elsewhere.

In 1948, he chose the prestigious Ceylon Civil Service or CCS as his career. There, he held many positions but the most influential one, according to him, was the post of assistant secretary at the Ministry of Agriculture in late 1950s when the Minister happened to be another political stalwart, Philip Gunawardena. He, together with a few others at the ministry, helped Philip to design the paddy lands act and prepare the blueprint for a new cooperative bank at the national level to serve the farmers. The first one was accomplished while he was at the Ministry of Agriculture. But it took some time for the latter one to see the lights of the day but not as the cooperative bank but as the People’s Bank of which cooperatives were also shareholders.

Ronnie’s talent and competency scale was much wider than that of a typical bureaucrat. Hence, in 1964, he resigned from the Government service and entered politics contesting unsuccessfully the General Election in 1965. But he entered Parliament later and remained as a Parliamentarian till 1990. But his main contribution was as finance minister in JR Jayewardene government from 1977 helping JR, together with the late Lalith Athulathmudali, in the implementation of the free-market economy system in 1977. That was a new era for economic policy strategy for Sri Lanka.

Folly of the closed economy policies

Many years later in 2020, he recalled the type of the economic system which Sri Lanka had prior to 1977 in a brief talk to the Advocata Plus YouTube channel hosted by the private sector thinktank Advocata Institute.

He said that people had been duped to sing fine songs like ‘let’s eat meals without rice or drink tea without sugar’. To implement it, everything, from rice to wheat flour to sugar to dhal to petrol to diesel, to mention but a few, had been controlled or rationed. When the British ruled Ceylon, it was not a closed economy.

He further elaborated on this point as follows: “The UNP government that came to power in 1947 continued this British policy and they were blamed for it. They were blackguarded as stooges of the British, but they continued this open policy till 1956. When Mr. Bandaranaike came to power in 1956, some of the socialist ideas that were prevailing at that time were brought into government by him. This was despite Mr. Bandaranaike not being a member of the Lanka Samasamaja Party or the Ceylon Communist Party or even the Mahajana Eksath Peramuna of Mr. Philip Gunawardena. What he brought was some mild socialist reforms like the multi-purpose cooperative societies.”

But this was not to be continued for long. The hard socialism was introduced to Government after Mrs. Bandaranaike’s Sri Lanka Freedom Party, known as SLFP, won a landslide victory in 1970 with a two-third majority. He admitted that he was also a member so elected to Parliament on the SLFP ticket. But that Government messed up the economy within the first two years. “So, I resigned and functioned as an independent MP. There were few others who also functioned as independents in Parliament. Since we were not affiliated to any political party, we could speak without following the party line. It was these MPs who delivered the best speeches in Parliament.”

About central banks, these was Ronnie’s observations: central banks in countries like Singapore and Hong Kong were much more efficient than the central banks in this part of the world, including the central bank in Sri Lanka. But the central banks in India, Pakistan or Bangladesh were worse than even the bad central bank in Sri Lanka. Why the central banks in Singapore or Hong Kong were successful was because those countries continued with open economy policies. They did not adopt socialist systems. They were going on modifying or developing the open economy systems. According to Ronnie, that was the secret to their success. What Ronnie implied was that if the country adopts a set of a good flexible economic policy package, its central bank also becomes an institution of worth.

A planter at heart

Ronnie’s specialty was history, experience was in Government service, and entrepreneurship was in planting, both tea and rubber. He owned the well-run tea and rubber estate called Geekiyanakandawatta Estate sprawling over a part of the three electorates, Horana, Bulathsinghala, and Agalawatta. Under the land reform program of the Sirimavo Bandaranaike government of 1970-77, of which Ronnie was a member, his estate was nationalised leaving only 50 acres for him. That was the condition of the nationalisation of the plantation companies: previous owners got only 50 acres. Later, Ronnie said that he handed over about 4,000 acres to the Government very willingly, because he accepted the necessity for it at that time of Sri Lanka’s economic transformation. But like the architect of the nationalisation of plantations, Dr. Colvin R. de Silva who became the Minister of Plantations Industry, he believed that the plantation sector was Sri Lanka’s national wealth and in no way, should it be destroyed by blocking out the estates and handing to villagers under such programs like ‘land to the tillers’.

His sincere wish was that that under the public ownership, they would be run more efficiently maintaining the high productivity which they had under private ownership. But the later events proved Ronnie was wrong. Instead of the nationalised estates becoming more productive, they became a burden to taxpayers owing to continuous losses they incurred due to bad management. He, therefore, developed the 50 acres left for him as a model farm for the publicly owned plantations. When he was the Minister of Finance, he used to do the finishing touches of his budgets, while enjoying the serenity and the peaceful environment at the Geekiyanakandawatta estate.

Keen interest in learning economics

Ronnie was a student of history, but he was a student of economics too. I recall that in late 1979 Governor Warnasena Rasaputra calling me to his office and telling me that Ronnie was reading all the latest publications like the Wall Street Journal, The Economist, Newsweek, Far Eastern Economic Review, etc., and discussing with Governor the latest developments in the global economy affecting Sri Lanka in particular. I was a Senior Economist at the Economic Research Department at that time. Governor Rasaputra wanted me to read through these publications immediately after they were available and brief him about such latest developments reported in them. Armed with these notes, he was able to brief Ronnie appropriately. Ronnie took these messages very seriously and orchestrated advance planning to avert possible adverse effects on Sri Lanka.

One incident arose from a report in The Economist that the grain harvest of the Soviet Union had failed in that year. Since the Soviet Union had to import wheat grain from Canada by paying in dollars, it had to sell its gold stocks in the market. There were two implications. One was that the gold prices would fall in the market due to oversupply. The other was that the prices of wheat grain would rise due to the new excess demand. Ronnie advised his Cabinet colleague Lalith Athulathmudali to buy wheat flour and run a safe stockpile of same to avert a food shortage in the country.

Financial services to the rural population

Ronnie had a good companion in the Central Bank, Governor Rasaputra, who was his contemporary at the University of Ceylon in late 1940s. Both had respect for each other. Unlike today where the ministers of finance are trying to steamroll over the Governor and senior officers of the Bank, Ronnie was willing to listen to the Central Bank. I recall that when the inflation rate accelerated to above 22% in early 1980s, the Central Bank took drastic policy actions by increasing the interest rates and imposing credit ceilings on commercial banks. Rasaputra had Ronnie’s full cooperation to implement this extremely restrictive monetary policy package to beat the rising inflation, the public enemy number one always.

To ensure credit delivery to farmers and rural entrepreneurs, both initiated a new barefoot banking system called Regional Rural Development Banks or RRDBs, an emulation of the Rural Development Banks in India. These banks were expected to operate apolitically catering to the needs of the rural population of the country. But in 1990s, they were highly politicised, and the Central Bank had to reform them in late 1990s by amalgamating them into province-based development banks. Now they have been amalgamated nationally into a regional development bank, a specialised bank under the supervision of the Central Bank since the province-based bank model did not work.

However, Ronnie’s ambition of making banking available to rural population at a level higher than the cooperative rural banks has now been abandoned creating a vacuum in the rural finance of the country. As a result, the rural people have been victims of the informal money lenders who lend money at exorbitant rates on stringent repayment conditions and the mushroom type of microfinance institutions that have stolen, with impunity, their hard-earned savings.

Establishing COPE

Ronnie, the seasoned civil servant, went on to reorganise the Finance Ministry on modern lines, as revealed by one time Treasury Official, M. Somasundaram (available at: https://www.sundaytimes.lk/981108/bus2.html). Ronnie set up the Public Enterprise Division at the Ministry to assess the performance and direct the enterprises to run profitably and efficiently. At Parliamentary level, the Public Accounts Committee or PAC was broken into two: The Committee on Public Accounts or COPA to look after the government departments and Committee on Public Enterprises or COPE to look after the public corporations. COPE was to be assisted by the newly established Public Enterprise Division at the Finance Ministry.

The management culture which Ronnie introduced to new public enterprise division was to shift from ‘control and command culture’ to a ‘partnership with private enterprises’. Ronnie also changed the mandate of COPE. Says Somasundram: “Earlier the PAC was charged only with reviewing the accounts that is of past activities as presented by the Auditor General. COPE in addition to this responsibility was to monitor (that is, review the present) and check on corporate plans (that is, analyse the future). In both these activities, COPE was to be assisted by Public Enterprise Division or PED, a distinct structural change in governance. By this measure the legislature and the executive were to work in closer collaboration. The PED was able to undertake the activities because it was the focal point for all matters pertaining to public corporations.”

In today’s governance structure in the country, COPE is the third and the fourth eyes of the President of the country requiring him to recognise at all times the useful role played by it in the governance system. However, it appears that over the years COPE’s mandate has been diluted and it has lost its due recognition as the most important machinery of safeguarding and promoting the country’s economic policy governance. On one side, COPE has concentrated on highlighting the past malpractices of public enterprises refraining from examining the current management practices and future plans of those public enterprises. On the other side, even with respect to past malpractices, its reports have not been used by the Executive to correct the lapses in the country’s economic governance. This unhealthy development was not what Ronnie expected of COPE as its pioneer.

Man behind the Ruhuna University

Ronnie was also responsible for establishing the University of Ruhuna at its present site in Matara. During the initial years of JR rule, there was a demand that a fully fledged state university should be established to cater to the needs of the people in the southern region of the country. An idea was mooted by the late Upali Wijewardena to set up this university in Kamburupitiya and he promised to make available all the needed funds for the university. But Upali and Ronnie were rivals and therefore, the latter did not view that proposal favourably. The result was the abandonment of the Upali Wijewardena proposal and set up the university in its present site. Therefore, those in the Ruhuna University are eternally grateful to Ronnie for the yeoman services he provided to establish that university.

Hold elections in time

Ronnie’s last speech in Parliament on 25 August 1988 was a confession of a repentant politician. He had supported as a member of the Cabinet the J.R. Jayewardene government to suppress the democratic rights of people, postpone elections, and violation of the rule of law. It is unfortunate that politicians gain this wisdom only after committing the sin not partially but wholeheartedly. Ronnie warned the Government about the postponement of elections, Presidential, Parliamentary, local governments, or by-elections, and the increased militarisation of the Government rule.

He said: I firmly believe that elections should be held in time. At the same time, these elections should be just and peaceful…We all have done a grave mistake. I was also a party to that. That mistake was not holding the Parliamentary elections in 1983. We made a big mistake by conducting a referendum instead of a Parliamentary election. We are all guilty of this criminal activity. If we admit it and act in the future, that will be best for the country (translation mine).

It would be for the benefit of the country if those politicians who went to pay the last respect to Ronnie learn a lesson or two from Ronnie’s last speech in Parliament.

In my view, Ronnie, the multi-talented politico, will be remembered for many more years.

*The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com

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Latest comments

  • 2
    14

    Someone that spoke at Mr. De Mel’s funeral (may be the Prime Minister) had described him as the socialist that implemented capitalism in Sri Lanka. I see that he was a historian turned an economist too. A man of many contradictions himself.
    .
    I have heard this rivalry between Upali and certain other factions in the UNP that basically didn’t like Upali’s aspirations of getting into politics. He, Upali, I think was planning on contesting from Kamburupitiya electorate, his maternal hometown, and apparently would have been a threat to his rivals from his own party if he were to get elected, which many believe would have been possible.
    .
    It is widely rumoured and equally strongly believed that Upali’s disappearance was a result of a sabotage of his private jet, ochestrated by this rival group within his own party. I have run into people who seem to know who did what to the Lear Jet that carried Upali and his crew to be blown up and disappear.
    .
    TBC

    • 3
      13

      Continued from above…
      .
      I am not in a position to objectively assess the contribution that Mr. De Mel as an individual may have made to the country as a former Finance Minister, but I always thought and believed that the premature death of Upali was a great loss for the country.
      .
      Upali it seems was a true capitalist, and a true son of the soil, liked by many, not just locally but internationally as well. If lived his full life, could have left a lasting legacy. A Branson of sorts of Sri Lanka on the one hand and a policy maker that could have served the country on the other, were he to accomplish his political ambitions.
      .
      This untold and unverified story of Upali to me is indicative of the political culture or a culture that has prevailed in the country. A culture in which killing and sabotaging one’s opponents and rivalries is common place. A reason perhaps why JRJ’s capitalist project that Mr. De Mel helped to implement as Finance Minister never took off the ground. Why Sri Lanka Never became the Singapore, or the Japan, or the Switzerland of South Asia despite the potential it said to have possessed.
      .
      TBC

      • 3
        14

        Continued from above…
        .
        Finally I believe it is time to start anew, a new political culture, with fresh faces and fresh policies that could reclaim Sri Lanka’s position in the region that we are rightfully capable of.
        .
        I also hope that Mr. De Mel didn’t have any direct involvement in, or knowledge of, the activities that alleged to have caused Upali’s jet to disappear.
        .
        If a socialist Like De Mel implemented capitalist policies successfully, there’s no reason why a party that was historically known for its socialism could lead Sri Lanka to economic prosperity.
        .
        Whatever said and done I hope Ronnie De Mel attain Supreme Bliss of Nibbana for what its worth he seemed to have done what he did with full conviction that he is doing his best for the country and unlike many other contemporaries he seemed to have reflected upon and regretted the mistakes done in the process.
        .

        • 13
          1

          Ruchira,
          “If a socialist Like De Mel implemented capitalist policies successfully, there’s no reason why a party that was historically known for its socialism could lead Sri Lanka to economic prosperity”
          True.
          From the mouths of babes and sucklings………..

          • 3
            11

            Time will tell. You may have to find a place to hide… Perhaps Tamil Nadu…? Or Kerala….? Or Indonesia…? Give some thought to it in advance.

            • 11
              2

              Ruchira,
              Read your comment before you rant, please.

              • 11
                4

                OC,
                What if he has nt learnt to do so? .
                .
                He is the only person who praises Lester the joker.
                Alas, srilanka is filled 😢 with human beasts. 😢..
                .
                Can we ever think of a real change? 🤔
                .
                Pigs 🐖 might fly 🫠🫠😗😗😗😗😗

                • 8
                  2

                  LM,
                  You mean reading or ranting?

              • 10
                3

                Read it very carefully, wearing your glasses.

                • 9
                  2

                  Ruchira
                  So? Have you read it?

                  • 7
                    2

                    Ruchira,
                    Tamil Nadu…? Or Kerala….? Or Indonesia…
                    Where are you hiding?

  • 12
    0

    Does the author have any idea of what socialism is?
    One dubs a government socialist and blames socialism for all the failings (real and imagined).

    • 2
      11

      As if its only this author who is guilty of such dubbing…

      • 10
        0

        Never said anything about ‘only’.
        You can happily join the club.

        • 1
          8

          I am happy by myself. But thanks for the invite.

          • 7
            0

            Ignorance is bliss.

            • 0
              3

              Do you have anything original other than copying my lines….?

  • 12
    1

    This thing about Ronnie de Mel having a hand in the disappearance of the personal jet of Upali W makes me wonder how some minds work.
    After suggesting evil intentions we have the escape clause:
    “I also hope that Mr. De Mel didn’t have any direct involvement in, or knowledge of, the activities that alleged to have caused Upali’s jet to disappear.”
    *
    I hope that at least some readers remember whom Upali W had problems with.

    • 1
      11

      Kindly see the original essay. It is the author that states that Ronnie and Upali had a rivalry, particularly WRT the establishment of the RU. I have not stated anything that you say I have in my three part comment. I wonder how YOUR mind works to come to the conclusions you come to? Everyone knows the rivals that were alleged to have had a hand in UW’s disappearance and I have stated that too. So no need to ask support from others. If you know something that you think needs to be revealed you could do it yourself. Again logic does not seem to be your strong suit.

      • 10
        0

        No rivalry is basis to accuse one of a criminal deed.
        Do you claim that you did not suggest a possible role?
        *
        One needs to be true to one’s self— even slightly in your case.

        • 1
          9

          Firstly there was no accusation. If there’s an imply, it is still no accusation.
          .
          On the orherhand if he were in the same rival group he could be considered guilty, perhaps not of the actual crime, but morally, given that he continued to remain in that rival group and benefitted from being in that group and UW’s untimely death. .
          If he were true to his conscience and was a decent human being, he could and should have refused to be a patron to a group that was alleged to have commited the crime and refused to benifit from it.
          .
          Hence the inclusion of clause that is refered to as the ‘escape clause’. But I guess people or politicians particularly, of such calibre are hard to find. They would happily join the popular bandwagon against the one who shined above the ordinary, especially qhen there are incentives to be collected.
          .
          If at all that is the intended message.

          • 1
            7

            In short if anyone needed to be true to one’s own self, it was Ronnie De Mel.
            .
            Not me.
            .
            That’s how my mind works.
            .
            But you have been showing how yours does. Quite revealing.
            .
            But I should have known when you were attacking Hoole.
            .
            He said it was people like you, the Peking Commies, that made him flight, seeking refuge elsewhere.
            .
            I am begining to wonder what he meant by that.
            .
            Pitty he hasn’t written anything for the longest time.
            .
            Hope he is well and alive…

          • 6
            0

            One needs to be true to one’s self— even slightly in your case.

            • 5
              0

              “In short….etc.”
              *
              You are really pathetic.
              Try another line.

              • 3
                0

                SJ,
                Not ganging up on any sensitive souls, but unsolicited estimations of character, integrity, morality etc are changing by the day. Only Lester is safe- so far.
                What extraordinary skills some have for making friends and influencing people.

  • 18
    1

    This kind of effusive articles have been written about many Sri Lankan politicians.

    Just because a person does studies in history he does not become historian. Just because he reads some economic books/magazines he does not become a philosopher.

    JR and his team looked good for a few years from 1977 because Mrs Bandaranayke government of 1970-77 was the most stupidest lot ever. Like Ranil looks like a earned man compared to Mahinda/Gotabaya !

    Ultimately all these philosophers and heroes have created the joke of Asia .

  • 10
    3

    You make lot of sense today, deepthi silva. As usual, Ruchira warps and bends the truths to pretend that she/he has direct connections with the incidents. Upali was not that much respected that time as a leading business man. There was suspicion in the media about how he was making such wealth so quickly. His media business created unfair competition and enemies. Upali’s sextual behaviors were frowned by many because it was rejected by the world that time. Especially his action of having a boy as an employee and in he other form too. But those matters are not big issues now compared with Rowdy Royal, Polonnaruwa Mafia like political cases. The current mafias are not just buying anything they want in politics for them with the stolen lot, but they are even buying those things for Evil like discardeds by Sinhalese and remaking them as star politicians in Langkang. Otherwise, why is there so much noise in the media about Evil as a sacrificial angel who saved the country from bankruptcy by his sacrifices, but in fact he was trying to quit the Yahapalanaya government not being able to run it, from the time of his NCM.

    Upali’s entrance into politics was not very welcomed by many, because, in the party, the UNP had many competing leaders inside it.

    • 2
      8

      So Upali’s alleged killing is justifiable because of all the reasons that you have mentioned? That was the point made.

      • 10
        0

        That is the ideal sparring partner for you.

        • 1
          7

          Who?

          • 6
            0

            I thought that you are clever enough to work it out.

      • 5
        1

        Ruchira,

        ” So Upali’s alleged killing is justifiable

        You hated LTTE. What did you do with them?
        You are a bigot, Ruchira, you always propose one rule for yourself and another for others, don’t you?

        Justifiable or not, someone who is equal or more heroic for Upali and hates Upali, and after all it is happening in your Langkang. Tell me your guess what else could be done with Upali, in those circumstances? Any ideas?

        You are just good up to warp my comment if I tell you that you are warping. You don’t go beyond proving who you are. If you want to prove that I am wrong and I didn’t tell the person who killed to kill him, read my comment again. It is a comment for your comment as a whole, it is not a comment to pass judgment if Upali’s death bankrupted Langkang by killing the best businessman ever born in the world.

        Are you Lester’s sibling?
        Hopelessly dumbfounded!

        • 2
          3

          So now you compare Upali to the LTTE?
          .
          A simple question do you think killing Upali was justifiable – assuming the stories are true and that he was indeed killed?
          .
          And where have I said that Upali’s killing was the reason for country’s banckruptcy?

          • 3
            1

            “And where have I said that Upali’s killing was the reason for country’s banckruptcy? “

            I can’t reveal in public the secret coding that my line is written on that point. Anyway, you are too young for all those. There is no other way but to wait until you grow up to know all those mature people’s secrets.
            Additionally, until I get back to you, chase this ball too: “There is no need for 225 donkeys to Langkang parliament to create, day in day out dumbfounded, skunking, blackguarded, anarchy, disarray, discord, disorder, lawlessness, pandemonium, …….. because you one alone will do it all, but only if the Langkang Modayas discover you successfully in an election.
            Best wishes

            • 1
              2

              I simply can’t follow what you mean. May be you could get someone’s help to write a better response?

  • 11
    2

    And outside, people were fearing a mafia economy & politics coming from the already corrupted Langkang politics, by his financial might.

    Ronnie was democratic, market economic, socialist. These are about human social activities so not many treat them as mutually exclusive, other than the bogus philosophers like UOJ Sadampi. Ronnie was one in the few, extremely few, non-Racist Sinhala Politicians. An outspoken, non-pretentious person. Political parties have been viewing him as an enemy because he wanted to do good for people. That time it was said Siri Ma O rewrote some of his nationalized estates on her name, but wrote off her baron land, low class estates as she wanted to pretend, she too was giving to the government to distribute. You all know how the Hangbangtota Help fund was used or how Rowdy Rampo spent the Indian loan given to buy emergency medical supplies in buying fake products and to rent rooms in the Prison Hospital. Not arresting these criminals is also expensive for citizens, arresting these crooks also expensive for citizens. That is what Siri Ma O did with some of the nationalized Estate properties. Chandrika first appeared that she didn’t want to share with those sinful assets, but changed her mind as she learned trade by being the President.

    • 7
      1

      Mallai, today fugitive President Gotha’s book is released titled ” THE CONSPIRACY, to oust me as president “. Apparently he was so successful in LA as system analyst earning 135 K USD , he decided not to write on his success but how he managed to run away from a bankrupt island. Gotha said ( Sinhala version) it will not only enlighten his 6.9 million followers but foreigners too ??? ( English version translated and edited by Namal ) . More than said, it may help him in getting a nomination seat after elections. ??

      • 5
        2

        Chiv,
        The foreigners who worked on the regime change were only the Hitler King and his brother Mr. 40% percent. The consultant and PR agent to that regime change is Ruchira only. Repeating: “The consultant to that regime change is Ruchira only”.

      • 0
        1

        Only these two Americans called Evil to their Palaces and told to assume the 6.9M Modayas’ mandate and in return, save the Old Rowdy Royals from all other Langkang masses’ uprising. Every Afghani donkey in the Slap Party has said in the parliament that all in Langkang are cowards because when they wanted to crown a new King to take further their “save our Sovereignty” mandate, only Evil came forward. I don’t see any of the part in the regime change was done by anybody other than the Lala Country foreigners, who were born to a wildlife species Sinha. The Hitler King, when asked in a campaign meeting about a question of foreign exchange, looked at the left, looked at the right, then looked behind, but didn’t answer. When the BBC anchorage asked him if he killed Lasantha, in return, because he was high on dope at that time, asked a counter question, “Who is Lasantha”. Now with the Kamala, the author of “Gothapayal’s War”, fed milk he has grown tall enough to write books? Hitler King, as the last deal as EP, bought Chinese poop and collected the commission, now writing books and collecting anything left out in the country? Has he mentioned anything in it about how the country failed in importing goods, because the Peoples’ Bank was blacklisted for defaulting on a LC obligation?

      • 6
        1

        Chiv,
        According to an excerpt of the book, Gota now claims that he was for Muslim burials, but one of of his fake Viyathmaga experts, Prof. Meththika Vithanage, was dead against it. Which begs the question, wasn’t he an executive President?
        The truth is that all the Viyathmaga were racist halfwits running their witch-hunts even at risk of destroying the country they were supposed to be defending.

        • 2
          1

          Yes OC, I too heard , even while he was running away with suitcase full of cash, he was thinking of the suffering people. India was desperate to keep him as President at any cost , promising unlimited financial aid but U.S wanted to see him off. Kamala and Shavendra are risk to national security. It’s never Kaputas fault. Viyathmaga , my foot, just a bunch of corrupt , intellectually bankrupt racists.

  • 5
    1

    Was Ronnie de Mel the architect of the OGL scheme that decimated thousands of farmers of the North? Some believe that the frustration and dissatisfaction that followed was a catalyst for the insurrection which followed in the eighties.

    Ceylonese companies were assembling Mitsubishi Jeeps, Mazda and Isuzu cars in the period 70 – 77. The plan was to export these vehicles to the African continent. Such industries were also wiped out after the so called ‘open economy’ encouraged the importation of used cars from the UK and Japan.

    Sri Lanka is possibly the only country in the world where a person with absolutely no background in economics is appointed Finance Minister. Ronnie De Mel should have remained a historian just as his kinsman GLP should have stayed an academic.

    • 6
      0

      P
      What you say is correct, but for that Ronnie did not plan it all on his own.
      Most often he did JR’s bidding.

    • 6
      0

      ‘Sri Lanka is possibly the only country in the world where a person with absolutely no background in economics is appointed Finance Minister.’
      .
      Its not the only occasion. Remember Basil (Mr 10%), now back from the US to help the thieves.

      • 3
        0

        Paul
        A degree in economics could help but is no guarantee of success as a minister of finance. No two economists agree on all economic issues. Finance and economics too differ as disciplines.
        Most policy decisions are by Cabinet and administration is based on advice by officials.
        What a good minister needs is common sense and the humility to recognize when he needs to seek advise from better informed people.

    • 1
      6

      “Sri Lanka is possibly the only country in the world where a person with absolutely no background in economics is appointed Finance Minister. Ronnie De Mel should have remained a historian just as his kinsman GLP should have stayed an academic.”
      .
      On second thoughts that sounds reasonable. Then Ronnie wasn’t the only Finance Minister in Sri Lanka with no economics background.

  • 5
    0

    Ronnie defends JR Jayawardene’s political strategy, although many political historians decry the means used to open the economy while poverty was still the main status for the vast majority of people. The fact that he changed sides almost on a constant basis was in those days deemed very unethical as society had not generated to the depths it is in now. His account of the economic situation that prevailed from Independence onwards seems accurate though.

    • 3
      10

      Opening the economy with no plans for real economic growth, I believe was the disaster. Some seem to think importing everything and anything, since it is cheaper than producing them onshore, is the way forward. Why was the economy opened to begin with…? Was it based on sound economic analyses and having a plan developed subsequently or was it a populist decision in retaliation to the existining closed economy, with which people were frustrated by then?

    • 1
      7

      (Cont’d)
      .
      It was this decision, the establishement of the Central Bank, that paved the way for the subsequent policy makers who lacked financial discipline, to use, misuse and abuse, its independence of being able to indiscriminately finance the budget deficits in their proposals, without focusing on real economic growth.
      .
      A fundamental issue that seems to have prevailed throughout successive governments of the country up to date, that may be responsible for its banckruptcy.
      .
      Despite the many admirations and positive testimonials offered in praise of Ronnie De Mel, he I am sure is not without any guilt of supporting such ill disciplined economic management that seemed to have initiated and championed by none other than J.R. Jayawardena – the father of Sri Lanka’s free trade and open economics. The UNP’s economic and political father figure – whose legacy they are still proud of.
      .
      This is quite in contrast to the comments made in favour of Ronnie praising his contribution to the country’s economy.
      .
      I wonder what thoughts Dr. Wijewardena may have, if any, on this perspective of Ronnies role as a former Finance Minister?

      • 0
        7

        Dear CT moderstors- Please delete the above comment as it is a duplicate of a post made below, posted inadvertently.
        Thank You.

  • 1
    7

    Dr. W. A. Wijewardena in his book titled “A Child’s Guide to Ranilnomics, Cryptos, and Currency Boards” makes two important revelations that I had only partly and vaguely heard before.
    .
    One is that it was J.R. Jayawardena first as a Finance Minister, before becoming the Executive, who proposed a highly nationalist and a closed economy for Sri Lanka, way before Sirimavo, to whom most of the time the accusations of implementing socialist policies are levelled at.
    .
    Secondly among JRJ’s policies implemented establishing a Central Bank by getting rid of the Currency Board that the British had established was a fundamental change, whose impacts and effects had been far reaching, and perhaps may even at the center of the economic crisis the country eventually fell into and now we are faced with.
    .
    While JRJ abondoned his original protectionist policies and embraced open free market economics that Ronnie De Mel seems to have helped him shape and implement abandoning the Curency Board in lieu of a Central Bank prevailed.
    .
    TBC

    • 1
      7

      (Cont’d)
      .
      It was this decision, the establishement of the Central Bank, that paved the way for the subsequent policy makers who lacked financial discipline, to use, misuse and abuse, its independence of being able to indiscriminately finance the budget deficits in their proposals, without focusing on real economic growth.
      .
      A fundamental issue that seems to have prevailed throughout successive governments of the country up to date, that may be responsible for its banckruptcy.
      .
      Despite the many admirations and positive testimonials offered in praise of Ronnie De Mel, he I am sure is not without any guilt of supporting such ill disciplined economic management that seemed to have initiated and championed by none other than J.R. Jayawardena.
      .
      This is quite in contrast to the comments made in favour of Ronnie praising his contribution to the country’s economy.
      .
      I wonder what thoughts Dr. Wijewardena may have, if any, on this perspective of Ronnies role as a former Finance Minister?

  • 4
    0

    When did India have its ‘Central Bank’ (really Reserve Bank of India) I wonder.

    • 2
      1

      SJ,
      Strangely enough, the grandly named Central Bank of India is a private commercial bank. The real one, as you say, is the Reserve Bank.

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