By Garvin Karunaratne, PhD Michigan States University  

Introduction 

The Central Bank Governor’s statement:  The New Economic Model deviates from notorious Structural Adjustment “(Sunday Times: 20/12/2020) marks a watershed in the economic policies of Sri Lanka.  He has added that ” Sri Lanka will move away from an import oriented market economy towards a production-oriented strategy”.  It is also stated that working within a market economy…. the performance  of the economic policies introduced in 1977 will be viewed rigorously.”(DailyFT:5/1/2021)  

Our Central Bank Governor deserves to be praised and congratulated for deciding to get away from the notorious Structural Adjustment Programme of the IMF, which has in the last few decades taken many Third World countries that had self-reliant economies and were not in debt,  to their grave.   Sri Lanka happens to be one of them.  

What is Structural Adjustment?  

Structural Adjustment, include rapid price and trade liberalization, accompanied by a determined stabilization programme to restore or maintain price stability.. the immediate opening of markets to entry by new businesses.”(World Development Report 1996)  

The World Bank view is that 

strong liberalization stabilization help transition economies correct their inherent inefficiencies and macro economic inbalances and move to a path of secure and rapid growth.”(World Development Report: 1996)  

Though stabilization and rapid growth was talked of, in actuality by Structural Adjustment Programmes an attempt was made by the IMF, to  restructure the economies of countries that were economically  self reliant and did not have a debt, to become indebted. Sri Lanka, that  had a self reliant economy, was instructed to liberalize the use of foreign exchange, get loans and spend, getting into debt. The administrative infrastructure of development programmes that was being implemented to enable development was also abolished as instructed by the IMF.  

Our Central Bank then sang hossannahs, misleading the Government. The Annual Report 1978 states: 

’Substantial capital inflows, together with resources from the IMF went on to create a favourable balance of Sri Lanka payment”.   

In my words: 

The word ‘favourable’ can be construed to be misleading in the extreme, to refer to resources (loans) from the IMF as  favourable because IMF finances  are loans on interest that increase the foreign debt of the country. Actually the loans worsened the economy.”(From How the IMF Ruined Sri Lanka:2006: p47 ) 

The IMF loans were provided to Sri Lanka with  long grace periods, to entice our rulers to take the loans as they could enjoy spending the money, but may not bear the responsibility to repay. In my words, “It can be considered morally wrong  for any Government that had been elected for a term of 5 years to take any loan with a grace period beyond their legitimate incumbency because then the burden of repayment  will fall on a future government that did not contact and obtain the loan.”(How the IMF Ruined Sri Lanka: 2006:p.47)    The IMF stooped so low to entice our decrepit leaders  to take loans and get into debt.     

 The Structural Adjustment provisions provided loans and ensured that they benefitted a class of rich people, who enjoyed luxury imports, who were allowed foreign exchange to spend abroad, go on expensive  holidays, send off their children to foreign universities all done with the funds obtained on loans. It was inevitable that the countries would fall into debt as the funds were not used productively. The foreign exchange that came in as a loan was also somehow sent bank to the Developed Countries in some form or other leaving our country saddled with the debt.  The other provisions were to impose a high interest policy- this made local entrepreneurs find it impossible to make a profit and they gave up enterprises  making way for imports. Import controls were abolished and import taxes were reduced. Public Sector commercial activities- the development oriented infrastructure to enable development like the Vegetable & Fruit Marketing Scheme of the Marketing Department, the Canning Factory which enabled Sri Lanka to be self sufficient in food preparations(jam etc.) and viable small industries like powerlooms and handlooms were all abolished and there were to be no subsidies.  Foreign Exchange was to be used freely to import anything. The incoming Foreign exchange was to be handled by banks and commercial dealers and the Central Bank only controlled the Rupee. This in a nushell were the main provisions of Structural Adjustment. 

SriLanka, one of the first countries to follow the Structural Adjustment Programme  is perhaps the first country to declare that the IMF was leading our Third World Countries to become indebted.  

How Sri Lanka was trapped 

Sri Lanka was not having a foreign debt in 1977 when President Jayawardena commenced following the advice of the IMF. 

In  1975 Sri Lanka’s foreign debt was negligible in the early Seventies. Then the foreign debt-. only $ 743 million, and  at $ 750 million in 1977- were all incurred on projects and not on consumption. In my words, “Following the Structural Adjustment Programme of the IMF from 1978,  our foreign debt increased  to $ 1,845 million by 1980 in hardly three years of liberation, to   4,063 million by 1986, to $ 6,723 million by 1993, to $ 9,405million by 1995.”( From How the IMF Ruined Sri Lanka(2006)  

 In 2020 the foreign debt is around $ 56 billion.  

 In fact, Chandra Maliyadde one of our former Permanent Secretaries, queried how, while  “at the end of 1976 the foreign debt of Sri Lanka was only $ 75 million, how the external debt liability  had increased by more than 500 times in 35years”.(The Island:23/06/2013).   

What happened was that President Jayawardena of the United National Party when he came into power in 1977,  requested financial help from the IMF. There was no need for him to seek any  help from the IMF because Prime Minister Sirimavo, who ruled from 1970 to mid 1977 had managed to avoid getting into debt even though the Oil Producing countries had increased the price of oil fourfold in the early Seventies and she had also to pay in foreign currency for the take over of Estates over 50 acres when the UK insisted that the companies should be paid immediately.  The Superpowers, resenting the socialist policies that were  followed,  even resorted to subject Sri Lanka to sanctions like not providing us flour at reduced rates, as was normally done, which resulted in bread queues. This reduced our reserves yet the country was managed without falling into foreign debt. The balance of payments i.e. the amount of money created in foreign exchange by way of net inflows received from exports and other services, less the cost of imports and services  and payments made in foreign exchange, recorded a net . $ 58 million in 1976 and $ 117 million in 1977, while after 1977 there was a negative figure of $ 75 million in 1978, increasing every year to as much as $ 507 million in 1980. (From How the IMF Ruined Sri Lanka(2006, p.48)   

It is important to note that 1976 and 1977 were the last two years when we had a favourable balance of payments.  Since 1977 the balance of payments have grown negatively. Today, the balance of payments is negative in the region of over four billion dollars, all due to following the Structural Adjustment of the IMF.   

What really did happen is best expressed by the South Asian Commission (SAARC) on Poverty Alleviation:   

the industrial countries are for the first time since World War II in need of markets for their products.. So they have put into effect the Structural Adjustment Programme… the industrial countries are  pressurizing the receipients of  Structural Adjustment loans to unilaterally open  their economies to goods from them.”(Meeting the Challenge:1992)  

I have happened to be in the forefront against the IMF’s Structural Adjustment Programme(SAP). 

In 1990 I commenced  a series of courses on Third World Studies at Westminster Institute of Adult Education in London, These lectures subjected the IMF’s Structural Adjustment to critical evaluation. These lectures were attended by students of the  University of London. The University professors yet taught  traditional economics- to them the Third World economies were not falling apart under the IMF’s Structural Adjustment Programme. On the other hand, my Lectures exposed the detrimental effects of the SAP.  Our former Ambassador Mr Sarath Wijesinghe, the President of the South Asian Forum of the University of London,  in 1992 invited me to speak  about the economy of Sri Lanka at a meeting of the South Asian Forum in the University of London.  Minister  Nimal Siripala de Silva was also invited from Sri Lanka and spoke on the  political situation. 

My address highlighted how the foreign debt increased from a low of $ 743 in 1975 to as much as $ 5101 in 1989, how the Rupee was devalued  from Rs. 15.50 to the pound sterling in 1977  to Rs 34.53 in  1978( a devaluation of over 100%), to Rs. 39.06 by 1981, how the income enjoyed by the richest increased from 28% in 1975 to 35% in 1987 and the incomes of the poorest declined from 19% in 1975 to 16% in 1987, how the people were deprived of the rice ration scheme which provided rice at low prices by abolition of the Rice Ration Scheme and instead introducing a Food Stamp Scheme, which in its first three years of implementation, the per capita calories consumption  of the bottom 20% declined by 8% from an already low of 1490 calories in 1978 to 1368,  documents  a tremendous increase in the foreign debt (due to)  being extremely liberal  in allowing foreign exchange for foreign travel, offering students foreign exchange for overseas expenses for stay and fees at foreign universities, allowing the unrestricted  import of non essential consumer goods, importing built up buses lorries instead of importing chassis and building them locally, causing loss of employment to thousands , leading  the country  to disaster in terms of foreign debt,  currency devaluation, high inflation, increased imports , poverty and unemployment.”  

This  Address to the South Asian Forum at the University of London on  18 th October 1992 has been published in my book: How the IMF Ruined Sri Lanka(2006).Pages 43 to 82)  

Following this Structural Adjustment Programme  has today led to Sri Lanka having a foreign debt of around $ 56 billion. Paying back these loans is impossible. Even to service the loan- not to default, requires around $ 6. 5 billion annually.  The total foreign exchange earnings is hardly sufficient to meet this commitment.   In short, we have to find loans and get into further debt to service our loans. 

The foreign debt was $ 13 billion in 2005 and $ 18 billion in  2009, which indicates that Sri Lanka did not get into massive debt to defeat the LTTE.  Thus the foreign debt was entirely created by living beyond our means- by financing the rich to spend lavishly. The IMF dictated and we followed, like the children following the Pied Piper of Hamelin. 

Abolishing the administrative infrastructure that Sri Lanka had built up to enable development  Sri Lanka had since achieving independence in 1947, put together a development infrastructure to enable the move from a colonial vassal status to a self reliant situation where a bold peasantry will be well established in agricultural pursuits and  agro industries, making what is required for the country. By the time the IMF took over the running of the country by imposing the Structural Adjustment Programme in 1978, the country had achieved self sufficiency in its staple crop- paddy and industries were developed making many consumer items. We were making all our textiles. To achieve this we had developed a Scheme for Vegetable and Fruit Purchase paying high prices and also having a Canning Factory that made Sri Lanka self sufficient in all  Jam, Fruit Juice  and Sauce. Sri Lanka, had developed a Paddy Purchasing Scheme paying a premium price to producers and also established rice mills. The Vegetable Purchasing Scheme, the Paddy Purchasing Scheme were stopped and the Rice Mills abandoned and left to rot, following the IMF advice. Handlooms and Powerlooms that turned out textiles were all closed  down and the infrastructure of Velona the research institute that helped textile manufacture was closed down. The Small Industries Department that handled the development of small industry in both the public and private sector was crippled.  According to the IMF the Public Sector should not attend to any commercial activity. The IMF concept was  the Private Sector as the Engine of Growth. It was forgotten that the private sector had as its aim making profit and service to the nation was not in their books. In industries we had developed small industry- made mechanized boats, crayons on a cooperative framework, made tools etc and all this had to be abandoned on the IMF advice. Thus the IMF’s advice  to abolish the development infrastructure was very detrimental for the development of the country. 

Sri Lanka did not subject the IMF teachings to critical evaluation 

Our Central Bank sang hossannahs in praise of neoliberal economics that underlay Structural Adjustment.  

Our University professors the erudite economists of the country ignored what was happening to our economy. Our Universities teach only traditional and historical economics and never even touch the neoliberal economics of Milton Friedman of the Chicago School of Economics which propounded the Structural Adjustment Programme of the IMF. 

 In  1996  as a Visiting Lecturer in the Faculty of Economics at the University of Peradeniya, my first assignment was to lecture on any subject I liked to the faculty. I selected the IMF’s Structural Adjustment, which was  forced on Sri Lanka by the IMF. in 1978. I detailed how the implementation of the Structural Adjustment Programme caused poverty and deprivation in our country and ruined the economy. I detailed  how through the development of microenterprises, we  can yet  bring about development. .None of the erudite faculty  who listened to a two hour’s  lecture , raised a single question, but my lecture  also sealed the fate of my being a visiting lecturer. My critique of the IMF was   anathema to the thinking of the erudite dons who perhaps thought I would indoctrinate their students. 

This presentation was published by  Sarasavi Publishers in 1997 and this book: Microenterprise Development: A Strategy for Poverty Alleviation and Employment Creation in the Third World: The Way Out of the World Bank and IMF Strangehold,(69 pages) happens to be the first book critically evaluating  the IMF’s Structural Adjustment Programme and also providing a detailed new paradigm for the Third World countries to save themselves from the IMF’s Structural Adjustment trap. In my words:   

As far as economic development and productive growth is concerned  Structural Adjustment provisions spelled death for the economies of the Third World…. The provisions of the Structural Adjustment Program are so binding on the Third World countries  that they have no power to plan their economies. The countries have to accommodate to the dictates of foreign investors  and foreign financiers coming to them directly and covertly in the name of the WB and IMF.(From: The Way Out of the IMF and World Bank Stranglehold:1997)  

Professor Sirimal Vithane in evaluating this book states:  

The author is successful in providing a critical picture of the inherent features of the World Bank and the IMF’s policies and their implications for rural development in the Third World and suggesting a reasonably powerful alternative or sustainable  economic development at the community level. It is a valuable addition to the literature on Development Economics.”  

The United Nations woke up only in 1996, making a petty statement in its Human Development Report 1996:  

The stabilization measures of the IMF  aimed at reducing  both budget deficits usually involved cutting public spending and increasing interest rates… Although these policies reduced deficits in some countries they often did so at the cost of inducing recession In short, they often balanced budgets by unbalancing peoples lives”.   

That was all the United Nations  did.  The United Nations  ignored the detrimental effects of countries following the Structural Adjustment Programme, while the Third World countries  bled to death.   

Two celebrated professors who have now come out against the IMF’s Structural Adjustment  are Noble laureate Joseph Stiglitz and Jeffery Sachs. Both were working for the IMF, the World Bank  or affiliated institutions and for years were furthering the interests of the IMF.  In the case of Indonesia, Stiglitz had the audacity to advise the IMF: I suggested that the  excessively contractionary monetary and fiscal programme could lead to political and social turmoil in Indonesia. If the people we entrust to manage the global economy in the IMF  don’t begin a dialogue and take their criticisms to heart, things will continue to go very wrong.”(The Insider, The New Republic:17/4 2000) Stiglitz was given a standing sack.  

That was after he had served as the Chief Economist and Vice President of the World Bank from 1997 to 2000, furthering  the Structural Adjustment Programmes.   

Professor Jeffery Sachs came up with a major criticism of IMF policies in his The End of Poverty(2005)  

Western Governments enforced  draconian budget policies in Africa during the 1980s and 1990s. The IMF and the World Bank virtually ran the economic policies of the debt ridden continent, recommending regimes  of budgetary belt tightening, known technically as Structural Adjustment Programs. These Programs had little scientific merit and produced even fewer results. By the start of the twentyfirst century Africa was poorer than in the late 1960s when he IMF and the World Bank had first arrived on the scene with disease, population growth and environmental degradation spiraling out of control. IMF led austerity frequently led to riots, coups,  and the collapse of public services.”  

It is interesting to note that till 2005 Jeffery Sachs was a proponent of free market economics and served as the Advisor to the Governments of Bolivia in 1985, to Poland in 1989 and Russia in 1991. In all of these positions he was advising his ‘Shock Therapy’’ how to be a success in following  the market economy  through open trade, privatization of State Assets, elimination of price controls and subsidies- the core tenets of Structural Adjustment.  This was done through obtaining more loans actually making the countries more indebted… His shock treatment  was furthering the structural adjustment policies. He has been criticized  for his shock treatment  in that it had produced misery and death for an untold number of working people”  

.(internalist.org.JefferySachsachsows1110html)  

In fact I have had to comment on Jeffery Sachs:  

Jeffery Sachs in the Eighties and Nineties when working to further the Structural Adjustment Programme did not have the foresight to understand  that the very policies he implemented would not only push the countries  more towards bankruptcy and debt., but also leave the people impoverished and poorer.”(From: How the IMF Sabotaged Third World Development,  (2017)  

The Left Busines Observer  states:  

Poland looks like a success to some but with the transition came high unemployment, falling real wages. Russia though was a thorough disaster, one of the worst collapses in human history. Living standards fell and the population shrank, an almost unprecendent event in a country not at war.”(The Long Strange Career of Jeffery Sachs: Left Business Observer, 11/8/2005)  

What happened to Tanzania illustrates how the countries were trapped:  

The IMF in routine consultations advised Tanzanian leaders  that their reserves were embarrassingly large  and might lead the country’s aid donors  to reduce their contribution. A poor country, the IMF argued  should not hoard its reserves but spend them in order to develop more rapidly. They persuaded the Government , to abolish the foreign exchange budgetary system… lift controls on imports and consequently by the end of 1978 Tanzania had only reserves for ten days worth of imports. Then the IMF imposed its Structural Adjustment reforms. Tanzania which had a stable, self reliant economy  was broken down and brought to its knees.(From Lent and Lost by Cheryl Payer )  

The foreign debt of Tanzania which was nil in the Seventies increased to $ 2.4 billion by 2011 and $ t4 billion by October 2020.   

What did happen to Sub Saharan African countries is an eye opener:  

After more than a decade of acrimonious debates and tonnes  of evaluation reports there is an increasing convergence  of views that Structural Adjustment Programmes have not worked and that as designed  they are grossly defective  as a policy package for addressing the endemic poverty  and pervasive under development  of the region.” :(Our Continent: Our Future: African Perspectives on Structural Adjustment by Thandika Mkandawire & Charles Soludo(Africa World Press Inc.1998) 

Under the tutelage of the IMF the Third World countries that had a negligible foreign debt before the IMF came on the scene have piled up debt, with poverty and deprivation out of control.   

Making the countries to pile up a foreign debt has been the method the IMF used to make the countries become ‘colonies’ of the Developed Countries once again.  

My book:  How the IMF Ruined Sri Lanka  and Alternative Programmes of Success   was published in 2006.  

 Assistant Dean George Axinn of Michigan State University in his Introduction to he book commented:  

A valuable and timely book that will enable international organizations to arrest the trend of failures. It provides a comprehensive approach which includes policies for employment creation, poverty alleviation, import substitution and self reliance as well as community development and non formal education the educational strategies that can usher in development.”  

This book details  how  the IMF ruined Sri Lanka in its 480 pages..  

In 2017, my book: How the IMF Sabotaged Third World Development was published by Godages/ Kindle.(136 pages) 

Universities keep away from teaching the economics of Structural Adjustment  

While many countries were falling a prey by following the IMF’s Structural Adjustment policies forced on the Third World since the late Seventies,  is it not sad that there is no university in the world that teaches and critically evaluates the neoliberal economics that underlie the Structural Adjustment Programme. All Universities confine  their teaching to traditional and historical economics and ignore how Structural Adjustment economics is currently ruining the Third World countries.    

It is my humble request that one of our Universities should immediately commence research and studies on the neoliberal economics of the Structural Adjustment Programme. This will be a great success, will attract students worldwide and will be a great service to Third World economies.  

I have detailed how Sri Lanka fell into debt and now that the Central Bank has decided that this was caused by following the IMF’s notorious  Structural Adjustment, it is necessary to carve out what has to be done to bring Sri Lanka to Prosperity  and Splendour, the avowed aim of President Gotabhaya.   

It is absolutely necessary that we control every dollar that comes in. Sadly now we do not control our incoming foreign exchange. The foreign exchange  that comes in is in  charge of the banks and  private money changers to make a profit. This has been happening for long but what happened in January 2001 reveals the stark fact that our country is not in charge of the foreign exchange that comes in.  

 On 25-1-2001,  when the two State banks, the Bank of Ceylon  and the Peoples Bank did not have sufficient dollars to pay a large oil bill, and approached a private bank in Sri Lanka,  that  foreign commercial bank that had collected our incoming foreign exchange, increased the price of it to Rs 106 per $ when the current rate was Rs 85.00. Our two banks were forced to buy the dollars at the higher rate  and this effectively devalued our rupee by over 15% immediately. Our  Central Bank then admitted that it controlled only the Rupee and not the incoming foreign currency”. (The Island: 17/2/2001)  

Further, our banks are allowed to purchase foreign currency and sell the foreign currency making a profit.- This came to light on 25/1/2001 as quoted earlier.   

Thus today the incoming foreign exchange does not get into the Government’s  Treasury.  In fact the other private banks have for long grabbed foreign funds coming into the NRFC accounts of  banks. For details  see my book: How the IMF Ruined Sri Lanka, pages 98 –100, which tells how a foreign bank in Sri Lanka grabbed the pounds sterling that came to my own NRFC account at the Bank of Ceylon. .  

It is absolutely necessary that our Central Bank takes charge of all foreign exchange that comes in and also decide the exchange rate. Today the banks and private exchange dealers fix their own rates. Controlling the incoming foreign exchange is the key to the development of a country and as former Prime Minister of Malaysia, Mahatir Muhammed states   

Any country  at all which says it cannot control  its banks and its banking system… they are not fit to be Governments and they should either resign or be overthrown.”(Daily News: 1/2/1999)  

Can Development Programmes be implemented without a budget 

Finally, while I have made a strong case to enable a bankrupt country to get back to become self reliant, a question that emerges is as to how any development can be brought about without funds.  This is very critical for our country today. 

The answer to this key question comes from the Youth Self Employment Programme of Bangladesh,.  I was the Commonwealth Fund Advisor on Youth Development to the Ministry of Labour and Manpower in Bangladesh in 1982,  At a Conference held by the Hon Minister Air Vice Marshall Aminul Islam, I locked horns with the Secretary to the Treasury, the highest officer in the land, when he contested my request that I should be allowed to establish a self employment programme. He quoted the failure of the ILO to establish such a self employment programme in the earlier three years in Bangladesh, causing a major loss. Intensive  arguments between me and the Secretary to the Treasury  continued for over two hours, when the Hon Minister stopped us and immediately approved my establishing a self employment programme. The Secretary  to the Treasury, stumped stating that the Treasury will not provide any funds. I said that I did not require a budget. I sought  approval to find savings in approved budgets and use them to do extension work in creating self employment and requested authority to redeploy officers, changing their remits. For the first four years this Programme was worked entirely from savings. Finally the Treasury had to eat its words and document the progress of this Self Employment Programme by devoting eight full pages in the Fifth Five Year Plan1997-2002. This Programme that was commenced in 1982 has by now guided over three million youths to become commercially viable entrepreneurs. It is today the premier employment creation the world has known.  

 I may also mention that in the case of the Divisional Development Councils Programme of 1970-1977, the largest programme of poverty alleviation and employment creation Sri Lanka has known, easily eighty percent of the personnel were obtained from the Sri Lanka Administrative Service without any payment as they did perform in addition to their normal duties.   

Sri Lanka has already clamped import controls on non essential imports. In a country where even tomatoe sauce and all fruit juices and jam has been imported since 1978, there is bound to be shortages of many consumer items. The Government has to immediately initiate small industries to make small industrial goods. Prior to 1977 Sri Lanka was full of small industries- we had handlooms and powerlooms which enabled Sri Lanka to become self sufficient in all textiles. The Small Industries Department was very active prior to 1977 when it offered help to small industrialists  This was by a Research and Advice Centre  at Velona,  Moratuwa, which was closed down on IMF advice.   

Despite this predicament of the economy being bankrupt today, we can hark back to many developmental tasks done successfully before the 1977 IMF intervention. In the three years 1955 to1957, Sri Lanka became self sufficient in all jam, juice and food preparations. This was done  by the Marketing Department Cannery.  

We can also talk of the Divisional Development Councils Programme(DDCP) which in the period 1970 to 1977 created employment for as much as 33,000 youths and established many successful industries, creating employment for the youth and also providing consumer goods that otherwise had to be imported. The viable Small Industries established under this DDCP included a Mechanized Boatyard,  established by the author which was in full action within three months, where youths were trained and made around 30 –35 , 40 ft long seaworthy boats a year. This Boatyard was closed down on the orders of the IMF. Instead if such boatyards are established Sri Lanka could have been self sufficient in all fish supplies today, creating employment for hundreds in making the boats and in fishing on the high seas. .  

The Divisional Secretary at Kotmale established a unit making paper and cardbord from waste paper. Is it not sad that Sri Lanka does not have a plant to turn waste paper into cardboard, which is there in most countries. Among the youth entrepreneurs in the Youth Self Employment Programme I established in Bangladesh, there were a few youths who collected waste paper and made paper and cardboard out of it.   

The author was also instrumental in finding the art of making crayons  done at the Rahula College Science lab and establishing a Cooperative Crayon Factory at Morawaka where our youths not only made crayons but sold them islandwide saving foreign exchange on imports. Under IMF advise this Crayon Factory was stopped. In fact today walking through the Supermarkets in Sri Lanka my blood boils when I see Crayola Crayons on sale in Sri Lanka. My mind travels in nostalgia to the days when our youths did make crayons, equal in quality to Crayola of today and marketed them islandwide. Sumanapala Dahanayake, the Member of Parliament for Deniyaya undertook to establish Coop Crayon and did perform a yeoman service in his capacity as the President of the Morawak Korale Cooperative Union. This Coop Crayon was the most successful small industry and finally was the flagship industry of the Divisional Development Councils Programme of 1970-1977.   

 Finally, We old hands, are  here to tell the tale of development, of what we did achieve prior to the IMF taking charge of our economy in 1978, to our President who is now humbly requested to take the lead.  This sir, is the only path to achieve your avowed aim of  Vistas of Splendour and Prosperity   

My humble request to our President,   

1. To take action to direct the Central Bank to control the foreign exchange that comes into the country. This involves collecting  every dollar that comes into Sri Lanka and fixing the exchange rate as was done before 1977.   
2. To immediately establish a programme to establish small industries, especially agro-industries to make items that were imported which can be made in Sri Lanka(import substitution). We hold the expertise to make many items that we imported and these industries can be established within three months and the total outlay can be covered within a year or two at most. This includes making paper and cardboard out of waste paper, illuk grass and straw, making all food preparations- jam, juice etc, by establishing a few canneries, making all textiles visa handlooms, power looms. . These were done earlier and there is no doubt whatsoever about success.   
3. To consider directing any of our Universities to commence teaching
   and research in the neoliberal economics of Structural Adjustment.  
   This will enable the development of a new paradigm for development. 
   Garvin Karunaratne, Ph.D. Michigan State University
   Former SLAS,  G.A. Matara 1971-1973 
   
   Author of: Microenterprise Development: A Strategy for Poverty Alleviation and Employment Creation in the Third World: The Way Out of the World Bank & IMF Straglehold,  Sarasavi Publishers, 1997 How the IMF Ruined Sri Lanka & Alternative Programmes of Success, Godages, 2006 How the IMF Sabotaged Third World Development, Kindle/Godages,2017

16/10/2021