By Ranmalee Nanayakkara –

Sri Lanka has had a complex economic history, marked by periods of growth and challenges. By the early 1970s, the country found itself at a crucial juncture, grappling with a combination of internal and external factors that would ultimately culminate in a significant economic crisis during the Sirimavo Bandaranaike’s regime. On most occasions, the only source of information the public had was the daily newspapers that were circulated islandwide. Among those, was a Sinhala-Language daily newspaper published from Colombo by the Communist Party of Sri Lanka(Hereinafter CPSL). The Aththa Newspaper emerged as an important element in Sri Lankan journalism. At the 1970 General election, Sirimavo Bandaranaike’s United Front won an overwhelming majority, defeating the ‘United National Party’ led by Dudley Senanayaka. Sirimavo’s coalition government consisted of ministers from several parties from the Left including the CPSL. Pieter Keuneman and BY Tudawe both held ministerial positions in the coalition government. This article will further discuss the economic crisis during the 1970s and the actions taken by the United Front. Additionally, it will explore the portrayal of this pivotal and contentious period in Sri Lanka’s history by the ‘Aththa’ newspaper.

The Aththa Newspaper spoke highly of the coalition government at the beginning. The newspaper used their resources to promote the then government in various ways. The following is taken from an article which was published in the Aththa Newspaper right before the 1970 General Election (1970/05/26). This particular newspaper also portrays a newspaper advertisement, issued by a collective of Samagi Peramuna supporters that request all  readers to be aware of news that is spread by the capitalist newspapers.

“Mrs. Sirimavo Bandaranaike requires no introduction, as her dedicated service to the nation speaks volumes. She is revered as a maternal figure for her profound impact on our country” – Malwatu Maha Nayaka

“Our struggle extends beyond merely ousting the government led by Dudley Senanayaka; it also aims to establish a government comprising the Lanka Sama Samaja-Communist coalition within the United Front. All three parties have wholeheartedly embraced this vision, and our policies are unequivocally aligned with it”.

However, uncontrolled inflation between 1973 and 1974 led to economic uncertainty within the country and public dissatisfaction against the Government. within the nation. The Aththa Newspaper began to criticize the United Front coalition and its policies. The following is taken from the editorial column of the Aththa  Newspaper which was published on 25th of May 1972.

“The true measure of government ministers lies not in their rhetoric but in their ability to actualize their proposed visions through implementation”

‘As public discontentment grew, Aththa began to criticize the same coalition government that it campaigned for” This shows that whenever there is a political turmoil in the nation the Aththa Newspaper would side with the people. It was critical of capitalist policies, often highlighting socio-economic disparities and injustices within Sri Lankan society.

After the United Front government came to power in Sri Lanka, it embarked on an ambitious economic agenda aimed at shifting the country from a liberal market structure toward a state-led model. Key initiatives included the nationalization of major industries, an emphasis on import substitution, and extensive land reforms aimed at redistributing wealth and increasing agricultural productivity. Initially, these measures were a response to the nation’s worsening economic woes rather than a deliberate embrace of import substitution industrialization. However, over time, trade restrictions evolved into potent tools, reshaping the landscape of private sector production to align with perceived national interests.

Between 1968 and 1970, Sri Lanka began modest economic liberalization, easing trade restrictions, promoting private investment in select industries, and boosting agricultural exports. However, from 1970 to 1977, this trend reversed as the government pursued a socialist agenda, bringing trade, industry, agriculture, and banking under state control. State-owned enterprises expanded significantly, emphasizing centralized economic planning.

This shift was as much political as it was economic. Sri Lanka aimed to enhance government control over the economy, deliberately reducing the influence of private businesses—going even further than India in this regard

In a system where getting permission to import was hard and what you imported determined how well your business did, government officials held a lot of power. They could decide if local businesses that replaced imports could make money or not.

By the mid-1970s, Sri Lanka’s economic trajectory veered sharply inward, with strict rules on trade, money, and lots of government involvement in everything. It was like sailing into unknown waters on the world’s economic map.

As indicated in the Ceylon Today, 2018

“This started off when The Sri Lankan government implemented significant land reforms driven by socialist principles, resulting in the nationalization of approximately 502 privately-owned tea, rubber, and coconut estates. This move aimed to curtail the extent of privately-held land holdings”

One of the memoirs written by Leelananda De Silva in the book ‘Sirimavo; Honoring the world’s first woman Primeminister’, states the following.

“There were many unintended consequences that arose from the policy of land reform of the 1970-1977 government, one of which was the elimination of most of the traditional land-owning classes from the political arena of Sri Lanka. Mrs. B herself was one of the “Victims” of this policy of land reform…..A significant aspect of the takeover of tea and rubber estates under the Land Reform Act was the nationalization of the sterling companies. There were over a hundred such British-owned companies holding around 125,000 acres of land.”

Bandaranaike’s administration initiated land reforms to tackle landlessness and enhance agricultural output in rural regions. The 1972 Land Reform Law sought to redistribute land to those without it, empowering rural dwellers and promoting agricultural self-reliance.

In a newspaper article by Milton Perera for the Aththa Newspaper, on  26th of February 1972 states the following,

“The government’s imperative now lies in reclaiming lands rightfully belonging to foreigners without compensation. This approach stands as both just and effective. Centuries of exploitation by foreign companies, predominantly of white descent, have exploited our people and resources. It’s time to rectify this historical injustice”.

Throughout this period, the government invested extensively and prioritized substitutes, a trend that was highlighted by the Aththa Newspaper in 1972.

“Only 25% of the country’s population constitutes the active labor force, with the remaining 75% relying on this minority for sustenance. This imbalance contributes to a stagnant economic system within the country”.

Between 1972 to 1977, there were even recommendations to the government to halt not only the importation of goods but also of equipment. In an interview to the Aththa on 18 January 1973,  SSS Karunathilaka, a former Additional Research Director at the Central Bank, mentioned that the sole path to economic recovery lies in fostering and enhancing the agricultural sector of the country. He suggests that as a nation, we should even consider prohibiting the importation of tractors and other necessary cultivation equipment. Instead, the focus should be on domestic production of these items to stimulate our economy’s growth.

In 1948, a six-year economic integration plan, including the private sector, was introduced but abandoned due to a government change. In 1959, a new administration created a National Planning Council (NPC) and launched a comprehensive ten-year plan targeting both public and private sectors. The plan, projecting 6% growth, aimed to prevent Sri Lanka from lagging behind East Asian nations. However, successive governments failed to fully implement it.

As stated by Kelegama in 1998 in ‘Development in Independent

Sri Lanka: What Went Wrong?,’ in 1962, a short-term implementation program was initiated, sidelining the NPC and the ten-year plan. Foreign-exchange crisis further disrupted planning efforts, leading to a new recovery program in 1965 under a different government. This program focused on mobilizing foreign aid to support economic growth but was discontinued after a change in government in 1970.

Reading the Aththa Newspaper sheds light on the profound shifts in policy that had a dramatic impact on Sri Lanka’s economy. This pattern, sadly, resonates even in today’s context. Governments of the past, in their bid to please various stakeholders, often altered policies without considering the long-term consequences. The recent economic crisis of 2022 serves as a stark reminder of this phenomenon, mirroring the patterns seen in the economic turmoil of the 1970s.

In 2021, the Sri Lankan government persisted with ill-conceived policies, including flawed monetary strategies, mounting foreign debt, stringent import regulations, and dwindling export revenues. These decisions stemmed from a short-sighted focus on appeasing voters rather than prioritizing the nation’s growth. Short-term fixes and fleeting satisfaction only sowed seeds of chaos, ultimately prompting the nation’s leader to step down. This narrative underscores the crucial importance of stable, enduring policies that foster long-term growth rather than serving the narrow interests of a few.

In tracing the economic journey of Sri Lanka through the 1970s, the Aththa newspaper provides a revealing lens into the shifting policies, ideological battles, and public responses that shaped the era. Initially a fervent supporter of the coalition government’s state-centered approach, Aththa later became a critical voice, capturing the people’s growing disillusionment with economic strategies that ultimately deepened hardship. This archive reminds us of the cyclical nature of economic policies shaped by political motivations, parallels that resonate with the recent economic challenges of 2022. As the country grapples with modern issues of foreign debt, inflation, and policy instability, the lessons from the Aththa newspaper serve as both a historical record and a cautionary tale, underscoring the need for sustainable, well-considered economic strategies that prioritize the long-term welfare of the nation.

The Aththa newspaper from 1964-1992 is now digitised and open access on JSTOR.

https://www.jstor.org/site/south-asia-open-archives/saoa/aththa-38065172/?so=item_title_str_asc