By Garvin Karunaratne, Ph.D.

Karu Jayasuriya, the Deputy leader of the United National Party(UNP) has lamented:ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-How do we sleep at night, knowing that 280,000 people remain interned behind barbed wire fences in the north?ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚

It is interesting to note that the UNP has now joined the League of Superpowers band led by Robert Blake, US Assistant Secretary in the US Administration, Millband, the Foreign Secretary of Britain and Boucher of France to demand that the people who have been kept in the camps in the North be released. He forgets that the people are kept at a considerable cost till their lands are de-mined and the LTTE cadres amongst them are identified. It is a well known fact that Robert Blake is entertaining the Tamil Diaspora and they have the blessings of the US, Britain and other powers like Norway. What the Superpowers need is to allow the LTTE to regroup and Karu Jayasuriya has also joined that gang now.

ƒÆ’-¡ƒ”š‚ All this is not surprising because not long ago, his Leader Ranil Wickremasinghe the UNP Prime Minister, signed the Cease Fire Agreement which bestowed on the LTTE many priviledges which they never had earlier. The Armed Forces of Sri Lanka were kept confined to the barracks and one by one key military personnel were singled out and killed. He even allowed the LTTE to establish military bases all over the District of Trincomalee and almost encircled the town of Trincomalee and its naval base which made the President Chandrika take over the Defence Ministry. RanilƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s actions can be construed to be helping the LTTE to strengthen the land area they held. Karu Jayasuriya has gone back to the UNP fold to help the LTTE!

ƒÆ’-¡ƒ”š‚ Every citizen of Sri Lanka should be grateful to our President, Mahinda Rajapaksa for ridding the country of the LTTE terror, which held the entire country to ransom with suicide bombers and blasts all over for three decades. No one was safe anywhere. Monks were gunned down at Arantalawa, pilgrims in their hundreds were gunned down at Sri Maha Bodhiya, Anuradhapura, hundreds were killed when the Central Bank was blown up. We have had Presidents earlier: they tried but could not defeat the terrorists. If not for Mahinda Rajapaksa and the armed forces, Sri Lanka would have been by now, a bifurcated country, like Cyprus with the land border including a part of the Anuradhapura and Polonnaruwa Districts in addition to the North and the East- a vast coastline from Puttlam to Yala in the South, with the majority Sinhalese living in eternal fear.

ƒÆ’-¡ƒ”š‚ It is sad that the UNP, the political party that once fought for our independence has now become the lackey of the Superpowers.

ƒÆ’-¡ƒ”š‚ The UNPƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s spokesman . Gayantha Karunatileke has voiced himself stating emphatically that the Rajapaksa Government is wasting money on elections. Elections is the one and only method of ensuring that there is a democratic choice and now the UNP has come into the open to state that elections should not be held because it is a waste of funds. One must bow oneƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s head to the present Government for holding elections. One cannot forget that President Jayawardena of the UNP, was the one and only President of Sri Lanka who disenfranchised the entire population by holding a referendum among the Parliamentarians asking them to vote whether they would wish to continue in their member of parliamentary positions for a further term. It was a foregone conclusion- who would not like to enjoy the fantastic salary, pension and perks to be a Member of Parliament for a further five years, without facing an election and all voted yes. The people of Sri Lanka should never forget that Jayawardena got all Members of Parliament to sign letters of resignation and held it with him, threatening to dissolve Parliament if they did not vote at his bidding. I know this for certain because my friend Ronnie de Mel once told me that he was the only one that did not sign that death warrant. Further Jayawardena incarcerated all Members of Parliament in a Five Star Hotel in Colombo. When he wanted them to vote he would go there and take them under armed escort in busloads, to Parliament to vote. That was how the 13 th Amendment of our Constitution was passed. Today the 13 th Amendment which in the words of former Chief Justice Sarath Silva, was ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-compiled by taking parts of the Indian Constitution, does not suit Sri LankaƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚.is holding the sovereignty of our country to ransom. The 13 th Amendment is an imposition of India on us. To my mind, all important legislation done by that Referendum Parliament should be declared Null and Void. It is entirely a question of our sovereignty and our sovereignty is non-negotiable. That is the legacy that President Jayawadena left for us. What a fantastic record of Democracy for the UNP to boast about!. Does Karunatileke want the Rajapaksa Government to follow that dictatorial precedent. No Chance, the Rajapaksa Government is not that. So Mr Karunatileke please stop talking about democracy to the Rajapaksas. You will never entice Mr. Mahinda Rajapaksa to do the shameful act of having a referendum or having our Constitution amended to suit a Foreign Government in the Jayawardena style.

ƒÆ’-¡ƒ”š‚ Karunatileke aso accuses that the present government is neglecting the countryƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s economy, its education sector, its agriculture, health and development. Perhaps I have the ability to speak about development more than many others who have no experience. I served as an Administrator in Sri lanka for 18 years, at the grassroots as well at the helm in a District. I also designed and established the Youth Self Employment Programme in Bangladesh, which is today the premier programme of self employment one can find anywhere, a programme that has rendered over a million self employed on a commercially viable basis. It is a programme that has left its imprints on the sands of time. I can state that it was the UNP that did ruin Sri LankaƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s economy, its education, its agriculture and its development. The damage done during its eighteen years was so marked that even Sakra, the King of Gods, will find it difficult to retrieve it. Karu Jayasuriya too says that the present Government is moving towards a collective destruction. The economy was totally destroyed during the UNP rule and if anyone doubts it they can read my book, How the IMF Ruined Sri Lanka & Alternate Programmes of Success(Godages).

Let me briefly tell the damage done by the UNP.

ƒÆ’-¡ƒ”š‚ The UNP followed the IMFƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s Structural Adjustment Programme from 1977. From the late Seventies the IMF urged every Third World country to follow this. The IMFƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s strategy is to ruin our Third World countries and aggrandize its wealth to the Superpowers. They did this by urging, coaxing and compelling our countries to liberalize the use of foreign exchange- allow anyone to use foreign exchange as much as they wished and for the country to borrow money on interest to enable this lavish spending. They also asked the countries to privatize assets to find money for this expenditure. Then they sold the concept of free trade which meant that we had to import freely without restriction and also told us to increase our interest rates to as much as 25% which made our entrepreneurs close shop. In came the glut of imports. We provided work for people in the foreign countries from which we imported goods while our people were unemployed. This process made our country totally indebted. When Prime Minister Sirimavo handed over Sri Lanka to President Jayawardena our foreign debt was only $ 750 million and that too on project development. When the UNP handed over the country in 1995 the foreign debt was at $ 9,405 million. This was entirely on consumption borrowing.

ƒÆ’-¡ƒ”š‚ There was a major change in how Aid was allowed by the World Bank and the IMF in the late Seventies. Till then Aid was only given on projects that would eventually generate an income to pay both the capital and interest. The IMF relaxed this rule to allow Loans for anything and advised the countries to follow deficit budgeting. Earlier a country had to balance its foreign exchange budget somehow. The IMF now allowed loans to meet the extra expenses incurred by following the Structural Adjustment Provisions of liberalized imports and liberalized foreign exchange. Sri Lanka last managed to meet its budget and acted without deficit budgeting in the days of President Sirimavo. By 1995 overly in debt we had to find loans to pay our debts. In this situation if a country is to survive we have to draw loans to pay our dues and Sri Lanka is today caught up in this trap. To add to the misery we had to finance the war against the LTTE, which thanks to the Rajapaksa Government we have finished.

ƒÆ’-¡ƒ”š‚ To be convinced further of what happened to our beloved country, one must read Confessions of an Economic Hitman by John Perkins.. Perkins was a hit man employed by a leading multinational to write- fabricate project reports giving Aid in such a manner that the funds provided will find its way back to the Developed Countries and the donors with profit, while the country gets saddled with the debt. The money is fritted away by the Developed Countries in services provided for evaluations etc and to feed the rich in that country and the countryƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s rich is fed with things from the Developed Countries. The money that the rich get pours into the Developed Countries in the form of education provided for the children of the rich and travel, cruises etc.. Perkins wrote and wrote and worked as a Hitman for years, till his conscience told him to make a confession and that is when he wrote his book. In his own words, ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-We channeled funds from the Banks.. into schemes that appeared to serve the poor while primarily benefiting a few wealthy peopleƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚¦ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚¦ we would identify a developing country that possessed resources our corporations coveted, arrange a huge loan for that country and then direct most of the money to our own engineering and construction companies..ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚

ƒÆ’-¡ƒ”š‚ Giving Aid to countries and getting the money back and also making the country indebted was worked out by the IMF in a shrewd and crafty manner. This process is aptly narrated by a journalist Karl Maier in the context of Nigeria:

ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-They lend Nigeria money, somebody here steals the same amount of money and gives it back to them and then they leave these poor Nigerians repaying what they never owed. The role of the Western Powers has been totally disgracefulƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚. (This House Has fallen: Nigeria in Crisis)The Stealing is done through a variety of methods- chiefly privatization,.

ƒÆ’-¡ƒ”š‚ This is exactly what the UNP did to Sri Lanka in its eighteen years. The country and its resources were sold to foreigners and to the rich of our country. The UNP in its eighteen years did what John Perkins did to Ecuador, the country where he worked.. They allowed the country to be swindled. Minister Dinesh Gunawardena has said of how the Hingurana Sugar Proiject was privatized. It was valued at Rs. 300 million, contracted to be sold for Rs. 128 million and ultimately the Government got only Rs. 25 million(Statement to Parliament 21/10/09). Why? Sugar is a key item to stay within the Developed Country Multinationals and any country that tries to develop any sugar project has to be sabotaged. Through Privatization, the IMF saw to it that all the commercial ventures of the Government were swindled. The IMF strategy is to open up the assets of the country for investment and investors are offered tax free periods. In come investors, use our assets- like porcelain, land, water and take away the profits. Our countries do not get paid for the assets used, but the investor country charges taxes on the investors and when the goods manufactured with our resources gets sold the countries get taxes. It is really exploitation in the guise of investment.

ƒÆ’-¡ƒ”š‚ Sri Lanka carefully developed the infrastructure for development from the days it became independent. During the Colonial Period the Superpowers had their aim as maintaining law and order and collecting taxes. There was no development except to show people that something was done. Sri Lanka had to build up the development structure from scratch. I was a part and parcel of this process- first in the Department for Development of Agricultural Marketing where I was an Assistant Commissioner. In 1956 I was in charge of the Vegetable and Fruit Purchasing Scheme at its central depot at the Tripoli Market, Maradana. Vegetables and Fruits were purchased by Marketing Officers all over the island and sent to Tripoli Market where it was distributed to retail depots all over. The motto was to buy from producers at the highest possible price and sell to the urban population at the lowest possible price. We ate into the profits that the middlemen traders made. Working at the Tripoli Market, I fixed the islandwide purchasing price for all vegetables in demand. Our Marketing Officers took their lorries to all the Producers Fairs in the island and our buying prices were displayed on a board. Producers sold to us and our officers purchased and dispatched overnight to Triploi Market, Colombo and our centers at Kandy. Traders had to be guided by our buying prices otherwise they would be out of business. In Colombo our retail sales depots were supplied with the vegetables by 10 AM the next day at a low price. The traders at the Colombo Market and all retailers had to be guided by our sales price as they would otherwise be out of business. Generally we kept a margin of ten to twenty percent as against the 50% profit that traders kept. Assistant Commissioners had to face the Commissioner at the end of every month where we were hauled over the coals if our profit happened to be near ten % or we had incurred a loss of near 10%. Our aim was to break even and those who incurred a loss of 2-to 3% or got a profit of 2-3% were applauded. Our aim was two fold. We offered a high price to the producer and this enabled us to be self sufficient in all vegetables and fruits. We adopted this scheme on eggs till we became self sufficient in eggs. The other aim was to supply veg and fruits at cheap rates to the urban dwellers and this controlled inflation. To add to this the Marketing Department had a Canning factory where we processed fruits into jam and juice. We offered floor prices for fruits like Red Pumkin, Pineapples and Oranges and all purchases were fed to the Canning Factory. We had major problems in canning but overcame them all. We became self sufficient in jam and fruit juice. Then came the bogeyman the IMF and their protƒÆ’†’ƒ”š‚©gƒÆ’†’ƒ”š‚© the UNP that followed their dictate- privatized the Canning Factory and closed down the Marketing Department. This was a unique method of ensuring a good price to the producer as well as unofficially controlling the prices in the Cities a system that is not there in any other country in the world. This was the brainchild of R.H.Basset and Commissioner B.L.W. Fernando.

ƒÆ’-¡ƒ”š‚ Take what happened to Paddy Purchases. We fixed a premium price for paddy and purchased it directly from producers and not from middlemen or traders or rice millers. Then the subsidy given reached the producer. Then we had rice mills all over the island where we milled the paddy and handed over the rice to the Food Commissioner to give on the Rice Ration Scheme to the people. Down comes the IMF-UNP bogeyman and abolishes the Paddy Marketing Board. (Earlier these functions were done by the Marketing Department)The Rice Mills- the state of the art Rice Mills were sold for a song and scrapped. Once in the Eighties on my way to Kataragama I went to see the Ambalantota Rice Mill and could not fathom how it had been broken up and vandalized. It was one of three State of the Art Rice Mills in Sri Lanka, milling four thousand bushels a day and employing over a hundred workers. I gazed for ten minutes venerating the rice mill that I had worked for, earing my daily bread. Today the producers cannot be given the subsidy all due to the UNP scrapping the Paddy Purchasing System. Today the Government is trying to do something, but without a full Canning factory the vegetable and fruits production cannot be build up. We are importing vegetables and fruits. We cannot build the rice mills and have a scheme to buy from producers overnight.

ƒÆ’-¡ƒ”š‚ The UNP of today should not forget that it was President jayawardena that abolished the Rice Ration Scheme which sold a small amount of rice to the people at a reasonable price. Jayawardena at first instead established a Food Stamp Scheme. In my own words, The Food Stamp Scheme was targetted to reach the real needy. Many who were not in that poor category could not afford to buy their food requirements. This was partly due to the devaluation of the currency and the high inflation that it brought about. This reduced their food intake and led to a situation of malnourishment, documented in the authoritative United nationsHuman Development Report of 1990.( From How the IMF Ruined Sri lanka, pg. 57)

The UNP should be ashamed of bringing about a situation of malnourishment in a country that never had such a situation earlier because for decades we have had the Rice Ration Scheme.

ƒÆ’-¡ƒ”š‚ The CWE was another creation whereby we imported and sold essential goods at cheap rates to the people. It was a method of selling essentials like lentils, sugar etc.to the people keeping a very low margin of profit.. The low prices of the WE unofficially controlled the prices because otherwise private traders will go out of business. The CWE was abolished by no other than Ranil Wickremasinghe and Ravi karunanayake two of todayƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s UNP leaders. They should hang their heads in shame for that very act.

This was in brief the infrastructure that was meant to develop our agriculture and as an administrator for eighteen years I myself worked the schemes and administered them very effectively. It pains me immensely to see the damage done to the working of the Departments that offered a yeoman service to the people.

ƒÆ’-¡ƒ”š‚ The UNP in its eighteen years neglected the State Education system and allowed a fee paying private education system to develop side by side, educating the children of the rich- because it was only the rich that could afford to send their children to these international schools. Then the UNP provided foreign exchange to educate these children at Universities in foreign countries. All this for around 100,000 students, while the education of four million students in State Schools was neglected. The amount of foreign exchange used for foreign education came from loans obtained at interest. The UNP has a good record of spending the countryƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s foreign exchange for the rich, in short the country became indebted because of the policies that enriched the rich at the expense of the masses.

ƒÆ’-¡ƒ”š‚ In fact , Sri LankaƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s Budget of 2002, when Ranil Wickremasinghe became the Prime Minister indicates what will happen to Sri Lanka if ever the present UNP comes into power. In my own words,

Sri LankaƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s 2002 Budget can be correctly called and IMF and World Bank Budget. This is because the budget proposals all stem from the measures that the IMF has been urging Sri Lanka to follow over the past few years. The Budget will take Sri Lanka a few further steps towards more poverty, deeper deprivation and increased indebtedness.

To take a few specific instances:

Reduction of taxes levied on companies and the abolition of stamp duty on property transfers only help the rich. The budget imposes a 10% taxation on interest paid on deposits. While this fleeces the small investor whose income is lower than the taxable limit, it provides a bountiful return for the large investor who can henceforth pay only 10% instead of paying the 35% paid earlier.

The Budget offered Sri Lanka on a platter for exploitation by multinationals. I wrote:

ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-Concessions and incentives will be offered to Transnational Companies in the fields of construction of residential buildings, roads, supply of water, mass transportation,,,professional services, finance, insurance and the production and distribution of energy and power.ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ In other words what will happen is that foreign companies will come, , invest, pay no taxes to our country and take away the profits that should stay in our country. In short if a hydro electricity project is privatized to a foreigner, he will administer the project, charge for electricity

supplied and the profits will go to the shareholders of the company overseas. This is happening all over the world as dictated by the IMF. Thus Transnationals are getting profits even from the provision of water in Bolivia. Once this is done the water bill paid by a consumer in Colombo will ensure a profit for a shareholder in the USA, if it is handled by a US Multinational..

The budget even reduces the 100% tax levied on foreigners when they purchase property in Sri lanka.

It is a total sell out of our country to foreign investors and to the rich. Austerity is only for the poor and the middle classes while the rich are better off in taxation.(Quotes from: How the IMF Ruined Sri LankaƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚¦, Godages, Colombo)

ƒÆ’-¡ƒ”š‚ The UNP has to be held severely responsible for taking Sri lanka on the ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-no-growthƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ path of the IMF.

ƒÆ’-¡ƒ”š‚ Devaluation of Currencies was another ploy of the IMF and Sri Lanka was one of the guinea pigs. The aim was to get our countries indebted and then to get foreign banks in and finally to get our State banks abolished. Our currency was at Rs 15.50 to the pound sterling in 1977 and it had been at around Rs. 15.00 for over a decade. Down comes the bogeyman-IMF and UNP and down goes the currency. We had to devalue the currency to get Loans and the Rupee that was valued at Rs. 15.50 to the pound dwindled in value to Rupees 31.60 to the pound by 1978- a drop of 103% in less than a year. That means that all our imports came to us at the increased value of the foreign currency and all our exports wsent out at the lower value of our currency. This process has continued to this day. Once a country is indebted it cannot raise its head.

ƒÆ’-¡ƒ”š‚ The IMF has ruined every country that has followed its Structural Adjustment Programme. Take Turkey, the Lira has dropped in value from Lira 336 to the pound in 1983 to Lira 2,640,000 to the pound by June 2007 marking a devaluation of 787,000%.. I had a grand holiday in Turkey using a few pounds due to this phenomenal devaluation. The Ghanian Cedi has been devalued from 5.7 Cedi to the pound in 1983 to 18,950 Cedi to the pound in 2007, marking a devaluation of 332,000%. The Bolivian peso that held a value of 116 peso to the pound in 1983 has dropped by 6,637,000 % to 7.7 bolivanos in 2007,. where a bolivano was equal to one million pesos in conversion in 1987. This devaluation is true of many countries that followed the IMF dictates and the drop in value indicates the extent to which the exports of the country was discounted.

. In short it means that the copper of Bolivia now reaches the manufacturers in the USA at a discount of 6.6 million percent. This indicates the poverty that the devaluation has created in the country and the immense profit that has been brought to the importing Developed Country,

ƒÆ’-¡ƒ”š‚ The UNP stalwarts also lament on the fact that journalists have had to flee the country. Journalists do try to make a drama out of nothing. I know this quite well as an administrator and some of my programmes have been distorted to gain prestige. Damage is done to us workers who have burnt the mid night oil to see that development programmes are done efficiently and I have had to defend my programmes to politicians who come to see the newspapers. Where a countryƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s development is concerned, journalists have to play a major role in providing publicity in a constructive manner which is not the art of journalism in Third World Countries.

It is not only Journalists that have taken to their heels to foreign countries in search of security- there are good opportunities for success in developed countries and one can get priviledges by criticizing their own country. It has been found that many journalists have been in the pay of Non Governmental Organizations to distort facts for their gain. Though the UNP has tried to distort facts and show that the media is running under a Gestapo by the Government of Sri lanka, the fact is that if there is a Gestapo in function a large number of our journalists like Tisaranee and NGO funded people,-Pakiasothy and Jehan Perera would have really ceased to exist by now. Many of the present leaders in the UNP are aware of what happened to Richard Soysa for writing a play,, the Gomes girl for reading out news on our radio and the poem writer Alwis. That type of situation no longer exists in our present Sri Lanka and our news papers are full of criticisms of the present Government.

ƒÆ’-¡ƒ”š‚ Let me finally hope that the UNP will mature to be constructive. That should be the motto of any political party in any part of the world. Let the UNP of today really understand that it was they that ruined our economy. It stands to reason that the UNP should at least, stand by this Government in its attempt to develop the country. They should cherish that the country had been rid of terrorism and cooperate in building up the economy which the UNP itself sacrificed to the IMF.

ƒÆ’-¡ƒ”š‚ Garvin Karunaratne, Ph.D.(Michigan State)

Formerly of the Sri lanka Administrative Service

Author of How the IMF Ruined Sri lanka and Alternate Programmes of Success(Godages, Colombo) 2006

25/10/2009