How past small-scale manufacture gives pointers for future industrialisation

Today our economy is in the doldrums, with imports running sky high. If we are to reverse this position, we need to develop our industries, which requires commitment from both the government and the private sector. My experience as a government officer involved very deeply with development work, has given me insights how this might be done.

Harking back to the Fifties the Government, had a major problem to mill paddy into rice. Let us see what the then Government did. I quote from my 2006 book, How the IMF Ruined Sri Lanka & Alternative Programmes of Success:

“In 1980, when I met the Secretary to the Ministry of Agriculture, a former colleague of mine, they were pondering as to what to do with the excess rice. I replied that there should be no problem because the people preferred rice flour to wheat flour. To my amazement, I was told that the Jayawardene Government had signed a contract with Prima, a foreign company, for the Government to provide a definite quantum of wheat for a number of years and that this contract cannot be cancelled.”.

That was the contract to import wheat, mill it and hand the white flour to the Government and take away the high value bran. Earlier we imported wheat. A high ranking officer, a Deputy Controller of Food was in charge of buying wheat and getting it milled. Under the new Prima agreement it was Prima that bought the wheat.
That happened under President Jayawardene, when he embraced the IMF’s Structural Adjustment Programme of privatisation.

Rice mills…

Again from my 2006 book:
“To those who think that our private sector cannot act fast, and cannot be trusted let me narrate how the private sector rallied round rice milling. I was an Assistant Commissioner of Marketing in the Fifties and worked in charge of the Southern Province and later at Anuradhapura; key paddy producing areas. Paddy production increased and paddy had to get milled. The [then] UNP Government did not search for foreign multinationals. Instead the Government imported a few rice mills and installed them in key districts – Anuradhapura, Amparai and Hambantota. Then the Government called for applications from the private sector, to establish rice mills and said that if they were to establish rice mills they would be given a quota of paddy weekly for milling, for which they would get paid. The private sector responded quick – they were given guidance about importing machinery for which they were given foreign exchange, and told to put up buildings for storage and establish rice mills. I was one of the Assistant Commissioners who vetted and recommended and guided them, cnd I guided some 190 rice mills coming up in the Southern Province. To a man they worked fast, and private rice mills came up overnight, and what is important is that they all paid taxes, unlike Prima, which functioned on a tax holiday. When Prima’s first tax holiday was over, another tax holiday was given. The lesson in this is that we, Sri Lankan entrepreneurs can attend to development tasks ourselves.”

…and crayons

The success of the Co-op Crayon, which I established at Morawaka in 1971, which had islandwide sales till 1978, when the Jayawardene Government axed it, tells me that we can make most of what we import. A crayon is a sophisticated product and the Crayola recipe for crayons is a highly guarded patent, locked securely and sealed tight. Our Co-op Crayon was made to be equal to Crayola in quality. Under my direct supervision, at the Rahula College science lab in Matara, we fine-tuned the crayon making till it was perfect. That was achieved by my Planning Officer, Vetus Fernando, a chemistry graduate. Then it took Sumanapala Dahanayake, the Member of Parliament for Deniyaya to establish it as a co-operative concern. There were islandwide sales from 1971 to 1978. Harry Guneratne the Controller of Imports axed all crayon imports, and Coop Crayon was a hailed as a success by stalwart Ministers TB Subasinghe and TB Ilangaratne.

What this tells me is that Sri Lanka can produce everything we import and for that task our private sector is the only method. It is simple: Identify the product, turn it out at a school laboratory and allocate the task of making it to the private sector. In my recently published work, Wind power for Sri Lanka’s Energy Requirements (Godages), I have proved that if only a few hundred wind turbines are installed in our hill country, we can produce all the power we require within six months. That is a task in which our private sector will thrive. Instead of paying for foreign coal and foreign power suppliers, that money will stay in our own country.

… and paper

Is it not sad that ours is perhaps the only country in the world that does not make its own bicycle. It is the simplest of tasks. Let us not travel far. We produced paper at Valaichchenai till the LTTE took it over. It was our own scientists who found the art of making paper from straw. Today while we do not produce a scrap of paper, India and China are making paper out of straw. Let our Government consider identifying the ideal small scale paper-making machinery from either China or India, and request our private sector to invest and establish paper making industries all over the paddy producing areas. This is a task that can be done within six months and I can vouch for the fact that we will recoup the foreign exchange we pay out for the machinery within a year. This will be a grand success. We can be self sufficient in making paper within a year!

Let us hope that we will develop the will to do these tasks ourselves. There is no other way ahead. If we do not act, we stand to be doomed for ever.