2 March, 2024

Blog

Target 2048 – Go For Creative Capital And Not For Mere Human Capital

By W.A. Wijewardena –

Dr. W.A Wijewardena

Goal of 2048

President Ranil Wickremesinghe outlined a few points of the economic policy strategy which he will be adopting to deliver his goal of making Sri Lanka a rich country by 2048 in a nationwide address in June 2023. One of the four pillars of his economic strategy is the investment promotion.

Investments are needed to convert human efforts to tangible goods and services that will serve several purposes: generating new incomes and employment, making available a bigger quantum of goods and services for domestic consumption, helping Sri Lanka to earn foreign exchange to finance its imports by making available some of these products to consumers outside, and increasing economic growth and sustaining it at a level that is sufficient to make Sri Lanka a rich country by 2048.

Given the present level of wellbeing of Sri Lankans at an average level of income per citizen amounting to about $ 3,400, this requires an average compound economic growth of over 7% over the next 25 years. That growth will require a combination of physical capital, human and entrepreneurial talents, and the use of high technology. The details of how this will be done were not revealed by him in his address to the nation. Probably it will be decided and signed off in the Lab Approach he has suggested by getting private businessmen, bureaucrats, and Cabinet Ministers into a policy making forum for six weeks in the 3rd Quarter of 2023. One important aspect which his Lab participants should reckon is the development of human and entrepreneurial talents in the use of high technology to convert physical and human resources to tangible goods and services. I call this creation of ‘creative capital’ as opposed to the human capital often emphasised in development literature.

Creative capital sees solutions beyond the frame

How does creative capital differ from human capital? Creative capital looks for solutions beyond the frame that has been set for it by social, political, or cultural constraints, whereas human capital just seeks solutions within them. When the Macedonian army could not cross the Hydaspes River, a tributary of the Indus River, because there was no bridge, Alexander, the Great, ordered his engineers to find a bridge. It is reported that they built floating vessels by using a mass of hay lying in an abandoned field nearby to enable the massive army to cross to the other bank and attack the enemy. That is seeing beyond the frame and being creative in finding solutions to impossible questions.

Given the present declining growth and economic catastrophe it is facing, what is needed is a critical mass of creative people who will see beyond what ordinary humans normally see. Thus, creative capital is the use of human brainpower to do the impossible. Human capital simply does what others have already accomplished within the given parameters. In the 4th century BCE, when the Macedonian army facing the problem of crossing the Hydaspes River, a tributary of the Indus River, for lack of a bridge, Alexander the Great ordered his engineers to create a bridge. They did not have any material to do so, but had used a massive stock of hay that was lying unused in an abandoned field to build a floating bridge. That was the nature of using human talents creatively. It is this creativity that is needed by Sri Lanka to come out of the present economic crisis.

Freedoms of thought and expression

Creativity comes from the unrestrained freedom which people enjoy in questioning the existing order. This was eloquently said by the founding Vice Chancellor of the Vidyodaya University – Rev. Weliwitiye Sri Soratha, the predecessor to the present-day University of Sri Jayewardenepura, when he addressed the first batch of students in 1959. It is reported that the erudite university administrator had told them that they should be critical, probing, and questioning the existing order. When humans are deprived of this freedom, it is not creativity that comes out of them. Instead, they will be intellectual slaves, devoid of free-thinking power and ever ready to follow some crafty designers slavishly. Such type of intellectual slaves cannot take Sri Lanka to richness. It is only a critical mass-sufficient number that could change Sri Lanka’s growth path-of creatively thinking people that will usher richness to Sri Lankans.

Creative students creating a drama

Recently I had the opportunity to observe a group of such creative students at the Commerce Day Event of the Hermann Gmeiner School located at the SOS Village at Piliyandala. The students, guided by the tutorial staff, staged a short drama depicting the pathetic side of the sale of the State assets to fill the coffers of the Government. In the drama, there was a family –husband and wife – fighting all the time with each other due to economic hardships. Both had been used to a certain middle-class lifestyle and due to the economic hardships, it is now something in the past. No expensive meat or fish at the dinner table, and not even less expensive dried sprats. Wife complains that she cannot live anymore like this, but the husband responds with his usual aloof look. He is unemployed and cannot support the family as he had done in the past. There was suggestion that he should go out and look for work. He puts back his aloof look even to this suggestion.

Selling everything to manage current finances

This is a fine depiction of the present state of the economy in Sri Lanka presented from a microeconomic stand. But that microcosm is valid for macrocosm too. At the national level, many who had been gainfully employed in the past are unemployed and have lost their livelihood. It had driven them to poverty from which they cannot get out on their own now. The drama goes on and the family gets excited by the news that an uncle of the wife living in England is visiting them soon. Husband is looking with suspicion, but the wife is waiting in excitement thinking that he would be their saviour. Finally, the uncle, a fat man dressed in a three-piece European costume, arrives at their doorstep with a large travel bag implying that it is filled with gifts for all.

He opens it and takes out imported Swiss chocolates for wife and a bottle of Scotch whiskey for the husband. Temporarily, the economic gloom that had been looming over the family disappears and the family is back to the previous merry making. But soon it is over, and they are back to the old economic hardships. The uncle comes very handy as an advisor and asks them to sell those assets they have in the household to wade through the current hardships. The toilet is gone followed by the kitchen and the bedroom. They have temporary cash boosting that helps them to have a jolly good time.

But once the cash is over, they experience personal difficulties once again, no toilet, no kitchen, and no place to sleep because all these assets are now owned by outsiders. The uncle from the wife side disappears to be replaced by another uncle from the husband’s side. He scorns them for selling assets to make a living but when the problems became so unbearable, his suggestion was to sell even the sitting room. Thus, those who plan to live by selling assets which they have acquired from their ancestors will one day reach a level where they no longer have anything to sell. At that stage, they are fully bankrupt and driven to destitution.

Sell assets but replace them soon

The students had also come up with a good piece of advice to anyone who wants to sell his assets. There is nothing wrong in selling a well-performing asset for a good price. In fact, this is what is happening in the business sector every day. You build a business, make it well performing, and then, sell it to another for a good profit. But you do not stop there and start building another business which you can sell again for a profit in the future. This is a continuous process. When the toilet was sold, the students had suggested that the family should have used a part of the sale proceeds to build another toilet. The same principle applies to the sale of the kitchen and the bedroom too. Do not spend all the sale proceeds for current consumption and use a part for further development.

This valuable piece of advice should be given to the Sri Lanka Government headed by President Ranil Wickremesinghe too. Sell profit making enterprises for a good price but use a part of the sales proceeds for further capital developments which you can sell one day when you will face a similar economic crisis. How do you decide the good price? Calculate the present value of the net income stream in the future – possibly for another 10 years, add it to the depreciated value of the present stock of assets, and get the new buyer to buy it at that price or at a price close to it. If you do not follow this rule, you are simply disposing your valuable assets for a pittance. In that way, you not only lose proper value, but also make yourself vulnerable for charges of corruption.

Inventions have no value without innovations

Creative capital brings in new products, systems, and techniques that will help an economy to move forward faster on one side, and be competitive with the rest of the world, on the other. These are known as inventions, the main output of research. But such research should be developed into viable products and services, the process known as research and development or R and D. But R and D alone is not sufficient because those inventions should be commercially produced and supplied in the market to sustain as a product. That part should be accomplished by entrepreneurs through a process known as innovation, according to the Austrian American economist Joseph Schumpeter. Then, for an economy to grow, such knowledge should be made available to other entrepreneurs which Schumpeter called diffusion and all those other entrepreneurs should copy them in production which is called imitation. Hence, it is the creative capital that works at every point: invention by engineers and scientists, innovation by entrepreneurs, diffusion of knowledge by media men, and imitation by other businessmen and entrepreneurs. All these people should see beyond the frame and be ready to challenge the existing orthodoxy as advised by Rev. Weliwitiye Sri Soratha, the founding Vice Chancellor of the old Vidyodaya University.

Let many thousands of flowers blossom

Creative capital comes from the freedom of thought and the freedom of expression. If Sri Lanka wants to become a rich country by 2048, the Government should ensure that the people do enjoy both these freedoms. Any suppression of these two freedoms will create not independently thinking creative people but those who are simply intellectual slaves. The more intellectual slaves present in society, faster the country will recede to the past. Hence, Sri Lanka should have a critical mass – minimum number that is needed to make a change in the system –of independently thinking creative people. It is the duty of the Ranil Wickremesinghe administration to lay foundation for the creation of such a critical mass.

Chairman Mao Tsetung of China too made this need known in a similar tone in 1949. He said ‘Let thousand flowers blossom’ meaning that thousands of creative people should be developed in the new People’s Republic of China to make the country the great nation which it aspires to be. In today’s context, a thousand flowers are not sufficient to play as a game changer in society. It should be ‘many thousands of flowers’ expressed in multiple terms.

Sri Lanka should invest heavily in coming out as inventions and developing a critical mass of entrepreneurs to innovate the same. A larger portion of national wealth should be allocated for this purpose. Then, it should ensure that the new knowledge is disseminated and copied by successful parties. Without going through these steps, it is unthinkable that Sri Lanka will become a rich country by 2048.

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

Related stories: Target 2048

Print Friendly, PDF & Email

Latest comments

  • 6
    2

    Is Creative Capital a new idea. Perhaps, in name. We are familiar with that in different names. Old: Invention. New: Thinking outside the box.
    I’ll accept, Creative Capital, for the sake of the word Capital in it.
    What it all sums up is, Brain Power. Yes, optimising the power of intellectuals.
    We have a achieved an ‘F’, on that. Even more unfortunate is that we have let others use our Brain Power. We have achieved that with our glorious Brain Drain. Exodus of brainy individuals in doves!
    .
    (If you would permit me, let me ask you. How did LTTE last that long against a national Army. How did they manage to build a submarine.)
    .
    Sri Lanka cast out talented minds.

    • 0
      0

      droves.

      • 2
        0

        Nathan,
        “(If you would permit me, let me ask you. How did LTTE last that long against a national Army. How did they manage to build a submarine?”
        Good question, and an indication of what should be done to promote creativity. The people who built submarines and attack boats were indeed creative compared to the other side, which had resources and manpower. After WW2, the victors used captured German talent and technology to further their own interests. In Sri Lanka, we murdered or banished the creative people. That attitude has to change first. People must be judged by their ability, not by their ethnic, religious, or political labels.
        For an example, look at the state of the scanners and radiotherapy machines lying broken in State hospitals, without spare parts, while those who are paid to maintain them are busy blaming each other at press briefings. I am sure a dozen ex-Tiger engineers would get these running in no time at all. What is required is creativity.

        • 1
          0

          old codger, I appreciate you being with me on this.

        • 1
          2

          OC
          The LTTE had some highly skilled people, I agree.
          But why were they not intelligent enough to see that the LTTE leadership was on a suicidal path at least after the first few defeats starting 2006.
          If you ask me, I have come across a far larger number of technically creative and practical minded people among Sinhalese than among Tamils.
          It has nothing to do with race but with attitude to learning.

      • 2
        0

        As I suspected, according to news, a doctor from Kandy Teaching Hospital, Transplant unit reported Fungal contamination. This is uncommon, but deadly adversity when there are no proper quality / cleaning / checking measures (the medium like dextrose / sugar used for dialysis can cause such contamination of dialysis equipment ). Apparently 10 patients out of 200 who received peritoneal dialysis died of complications while receiving treatment. That means , obviously there may be more unreported cases. I remember the death reported initially as medicine / Ceftriaxone allergy in Kalutura was a chronic kidney patient, receiving dialysis. Death in Kandy includes parent of a doctor, a nurse and two staffs , all from same hospital.

    • 3
      2

      May I ask a related question?
      Was it simply the LTTE battling the SLAF?
      There were important external players who had concealed their identity to avoid embarrassment. But arms smuggling and other illegal activities were known, but turned a blind eye to.
      *
      There is more to learn from its defeat.
      The day the LTTE antagonized the US by refusing to play its assigned role, it was marked for punishment by two rival ex-sponsors.
      Let us ask why the Palestinians have lasted in their struggle for some seven decades plus.
      How did the Colombian guerillas hold out against a US backed government for six decades?
      How did the Sandinistas withstand the wrath of the US and its proxy, the Contras?
      *
      If the LTTE was a genuine people’s army, its progress would have been slower but surer. It could have won friends from among the Sinhalese, a prospect that it had shunned all along, but for a brief moment in 2002.

      • 2
        1

        “May I ask a related question?
        Was it simply the LTTE battling the SLAF?”

        Do you have a question Professor?
        What was your speciality? Do you work under Rohan Gunaratne?

        • 1
          0

          Rohan was employed by the CIA until CIA took its lesson, and a Canadian Judge punished Rohan. Britain never wanted this Karl Marx college Mechanic within their compound. So kicked on his butt out in time to save Britain. After that, Sadampy returned home and worked under Minister Deva in his Deva’s Industries (That time known as UoJ).
          Sadampy is an unwanted – unwelcomed patient even in Angoda Hospital.

        • 1
          0

          A
          Cannot you not understand if something is a question?

          • 1
            1

            A
            Cannot you understand if something is a question?
            Pity!

  • 3
    2

    What for the talking, Dr. W.A Wijewardena!

    You are trying to teach your grandmother to suck eggs!

    Ranil is the most creative man in Lanka, no one even comes close ……. second only to his illustrious uncle JR.

    His creativity is all for his befit: to remain in the president’s chair as long as possible without a vote ……..

    His creativity for the benefit of the country/people is less than even 0.0 …….. all down the pallam ……

    Wanna bet? ……. Any takers?

  • 3
    1

    Good for nothing RW’s presidency is “illegal”. A real lawyer can send him home at any second.

  • 4
    1

    “The details of how this will be done were not revealed by him in his address to the nation.”
    This is RW who was failed six times as Prime Minister and first time with the maximum Corruption and maximum debt. What is his achievement with 50 years of politics? Zero members in the Parliament.

  • 3
    2

    “It is this creativity that is needed by Sri Lanka to come out of the present economic crisis.”
    Destroying Hindu Temples and replacing with massive Buddhist Temples involving thousands of Military personal and thousands of Buddhist Monks in the North and East is called as Creative Capital under RW leadership is creative capital.
    Arresting Sinhala Youths using massive Police force and chasing the doctors and engineers out of the country and protecting the criminals is a creative capital.

  • 2
    0

    Dr. W.A Wijewardena,

    It is good to encourage creativity, invention, innovation and entrepreneurship. Before all that ask your erstwhile leader to enforce the rule of law to the letter. I see it violated everyday in the North-East and elsewhere.

    No smart investor or entrepreneur is going to invest in Sri Lanka where rule of law is given scant respect. They would rather invest in Singapore where rule of law rules.

    For 75 years you all drove away more than a million hard working Tamils from the island just because you don’t want to share the pie with them. The whole world knows the your periodic anti-Tamil pogroms did that.

    The kind of thinking, and the leaders who created this problem cannot solve the problem, I am afraid.

  • 1
    0

    Sri Lanka today is faced with an unbearable increase in the cost of living, skyrocketing unemployment, and an unprecedented breakdown of law and order. In this context, “Target 2048” is nothing but a cleverly disguised red herring swallowed hook line and sinker by our gullible citizens who can’t see beyond their noses.

  • 0
    1

    Dr. WAW has been spending time in the Buddhist religious governments in India that existed before Christian Era. His Buddhist university is not out of the box thinking. It is a thing, packed inside the box. With that unescapable handicap, he is working on ultra-modern capitalism called “Creative Capital”. Blind and lame guiding a blind! This Creative Capital is just the right match to the Evil emperor’s 13A Plus, minus Police authority. Then he brings a three-legged horse to run his race, Jayewardenepura University! Suppose if Alexander had taken the Sinhala Buddhist Rapist Army with him, the dominant Sinhala Intellectual Half of that might have told the Modaya half, “the True Patriots who sacrifice your life to the land, you go out and find some Demulo Kellas to rape and Thalikodies snatching, in that time we will have built the bridge to cross the river.” Then, while the Rapist half on its job with a UN Charter in one hand. Sinhala Intellectual half would have collected every remaining hay straw from the fields to sell it in black and deposit collection in foreign bank accounts. When Alexander comes and asks if they are all ready for the war, they might have captured him, handed over to foreigners, and collected money on that deal too.

  • 0
    1

    Then one of them will become a Portuguese agent and marry a white home aid to have a white woman for sex. She will not bear any Child. So, the death of Don Juan means Langkang is a Portuguese Colony. Isn’t all of this done with excellent creative capital? Tell me the incident of, in the History of Sinhala Langkang, the Sinhala Buddhists did one thing right, please? This guy, like all other Sinhala Intellectual True Patriots, who have been giving blood and flesh, to create the Evil Empire under Nariya’s leadership, in order to, in turn, Neriya to save Central Bank Cabal and Old Rowdy King, now, inventing the “Creative Capital” solution.

    Do not spend all the sale proceeds on current consumption and use a part for further development. This valuable piece of advice should be given to the Sri Lanka Government headed by President Ranil Wickremesinghe too. Great. Magnificent advice! Did those students do not remember that the family not just selling one house item, but selling one after other, all items. This sounds like CBSL governor cabal is a smart economist because he fought the civil war with the three months, Chinese LC credits.

  • 0
    1

    Sell profit-making enterprises for a good price but use a part of the sales proceeds for further capital developments What??????? Where are you now? I thought we were setting up a policy of selling government corporations and making the government slim because that was the IMF’s condition for new loans! Well, I am confused, I got out of this bankrupt Creative Capital!

    Here we go: “Thus, those who plan to live by selling assets which they have acquired from their ancestors will one day reach a level where they no longer have anything to sell. At that stage, they are completely bankrupt and driven to destitution. “ MMMMMMM…. Was it a Poya day last night? The Sinhala Modayas’ Colonial Masters, the Great Britain created assets up to 1948 are being sold and deposited in American, British, EU, Swedish, Belarus, Seychelles bank accounts. This is Porimathondi’s Economics theorem! One time a beggar went to beg. A graceful mother gave him a pot of Porima, sweet rice powder (some kind of Tamils’ cereal). That was an unseen amount for the beggar; so he dreamed of selling it and setting up a new business, instead of eating it out of hunger. In his new affluent life he dreamt, he had to beat his wife. That is it, the cereal and the pot are gone.

    • 1
      0

      Malli,
      “Thus, those who plan to live by selling assets which they have acquired from their ancestors will one day reach a level where they no longer have anything to sell. “
      People forget that many present-day “state assets” started off as private ones. That includes the ports, buses, telecommunications, plantations, insurance, etc.

      • 0
        1

        Old,
        Exactly! Perhaps, that is why the article says Evil’s assets on sales were built by forefathers, the British Administration. Still the best export earner is the British created (a supreme Creative Capital of that time, 1830s) tea industry. Any assets built during Appe Aanduwas are lying in foreign Bank accounts, offshore.
        And there is a catch too. When the private started properties go as State Property, then only t become true private property; rather Aanduwa Ministers’ property as recently pointed out by somebody. When schools and bus companies operated privately, they were obligated to follow many rules established for the public’s benefits. A school principal had to make sure the school inspector was satisfied with the way the school was run and when he returned to the central office, instead of putting complaints in the book, would put recommendations for funds. But Air Lanka’s Peter Hill was fired for giving priority to passengers and refusing to unload them to load the President and ministers’ entourage. When an Airline runs efficiently and effectively, it charges high fees because people want to pay that. Cheap Air Lanka gives out free arrack and Biryani because passengers have to jump out of the plane in midair for Royal to take the seats. It is the third-grade class of Air Lanka, even below the 3rd class tickets of other airlines.

      • 1
        1

        OC
        But many of them did far better as state enterprises than as private businesses which were interested only in profit.
        Besides, severral highly successful state enterprises had been wrecked by privatisation.

        • 1
          1

          So now the country is poor because, British administration’s national Industries are privatized by Siri Ama O? Why do you keep saying “many, many”, but not coming out thing one name? Post us to read case studies of the corporations you are mentioning because you worked only in Deva’s Corporation UOJ, never at any Siri Ama O corporations, After Siri Ama O’s privatizations,

          Why don’t you ever be explanatory in your conspiracy theories?
          Read Roni de Mel’s speeches on Siri Ama O’ tea estates privatization.

        • 0
          1

          SJ,
          It depends. The plantations were economic successes before nationalisation, but at the cost of virtual slavery for the workers. It seems commercial agriculture everywhere has similar problems.
          https://youtu.be/C1j-vEqIClw
          Telecommunications were run , I think, by Cable &Wireless, until takeover by the colonial government. By the 70’s it was a mess of bureaucracy and political interference.
          I suppose it is possible to have successful state enterprises, like private ones, but that requires independent and imaginative mananagement, not the President’s brother or some defeated candidate. In our society, State enterprises mean simply jobs for the boys.

  • 0
    1

    I really ask the Sinhala Intellectuals and rulers, where are they going with so many heavy dreams and the little bankrupt beggar country to bear it all? They say they need money to feed the poor, so they sell the assets in the house. Then where does the theory of building new capital assets from selling the old assets come from? Theoretically that is renewal of production assets. Is this called Porimathondi Economics or creative capital? “Pachchai Thanniyilai Palaharam.” (Short eats out of tap water. comedy Thamai! Selling assets to feed the poor and you are renewing in the leftover fund? The author misunderstands the notion of the advice given to kids putting a penny in their piggy bank, daily. Businesses run with budgetary planning that is whether to sell the old assets, whether to feed poor or let them die, whether to buy new assets or deposit the money in a foreign bank) The writer should go and talk to garment exporting mills owners and talk about what is called competition; then he has to return to Central to start his duties all over again. Then the Central bank can guide the country in economic development.

  • 0
    1

    Creative Capital emphasizes the preparation of society’s human capital, with a stomach for creativeness. It includes all forms of creativity, including the usual art forms. What is the “creativeness of a labor”? It is the quality of the labor, achieved through education and training & fine-tuned with small portions of work ethics. I would not attach too much theory of freedom to the economical development because many dictatorial and communist countries too have shown economic developments. If the country’s economic policy is developed with a market economy, then freedom of expression and democracy are necessary for the growth of that economy. With Sinhala Only and standardization, the Universities are creating only back washers for Middle East, the New Colonial Masters of Langkang opportunistic. The Sinhala Buddhism has completely wiped out the work ethics in Langkang. What left is laziness, corruption, nepotism, looting, robbing and rape the women and children then set fire to their remaining homes. The police authority is extremely important to stop the disturbance to the peaceful life of Tamils by Bald heads, Rapist Army & by the Paramilitary Forces and destruction to the economy in Tamils’ area. Then only Tamil area Economy can develop.

  • 1
    0

    “Go For Creative Capital” – President Ranil Wickramasinghe. Trust him. He has proved it:

    (1) Sell the assets and secure whatever the capital. (e.g. Hambantota Port) Now many such assets are lined up for sale.

    (2) The latest is to sell the DISTRICTS of the country. (e.g. several such MOUs already signed after his official visit to India)

    There is no such thing as “CREATING HUMAN CAPITAL” in his vocabulary. So credit must be given to him for not talking about what he doesn’t know.

Leave A Comment

Comments should not exceed 200 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically disabled after 5 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.