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鲇 இச ہےیخ 8.స్టో *? *?(, في نه 's Bank Publicatiön*ä: ५' A People's
ܡ ܥ܊ ܗܝܼ
m, リر ,retسtي محا BARRwyr, :^
 
 
 
 
 
 
 
 
 

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Wedding Ceremonies
The pictures here and on the inside back cover depict some aspects of the nature of wedding ceremonies in Sri Lankan society. They also indicate apart from the evolutionary character of Sri Lankan wedding ceremonies, how the outlook of such ceremonies differs between rich and poor and different ethnic groups namely the Sinhalese, the Tamils and the Muslims.
The wedding ceremony is generally considered to be an important event, for people at all levels, notwithstarding ethnic, religious or other differences relating to means. These ceremonies are associated with a set of customs specific to different ethnic groups and religions. Even among the same ethnic groups the customs vary at times, depending on the socio-cultural factors in different regions. A striking example is the Kandyan wedding ceremony which differs from the low-country wedding ceremony in terms of ceremonial and customs that are observed and also in dress of the bride and the bridegroom. The dress in particular, as seen in the picture of a Kandyan wedding, often conforms to the dress of Kandyan feudal families.
The wedding ceremony is generally an occasion where people eat, drink and enjoy at the expense of the bride's family. Although gifts are exchanged (in an urban wedding ceremony the most convenient form of gift is a few bank notes put in an envelope) they hardly compensate for the expenditure incurred by the host party on food, drink and various other items. A simple wedding ceremony according to present day norms is a gathering of family menbers and close relations of the two parties (in some cases a few friends close to the couple are also invited) where a minimum degree of customs, such as exchange of rings, is observed. Even a simple wedding ceremony of this kind ends up with unanticipated expenses. Those who have limited means but think of distributing them more rationally between alternative needs may contract a marriage, but have no wedding ceremony. Yet, such marriages attract the attention of those who are ceremony-conscious and like to gossip about “secret marriages' etc.
(Continued on inside bare cover)
家。 TV جميسگات
Addendum : At page 9 in para. 2 of the middle column, at the end of line Io after 'advertised by...' add 'parents, particularly by the father. There were 29 (3 o' ...) self-advertised cases, while another 9 have been advertised by . . .
 
 
 
 
 
 
 
 

The traditional Kandyan wedding adopf, elaborate . , South Indian court influence in jewellery is apparent here.
An upper middle-class coastal wedding of 50 years ago-the hybrid - dress is apparen bere,
adițional marriage tions of the Sinhae. If it czyźOżary - the clasfied hands i he bride and bride107 fo be på hed h gia fer požared frozza jes fel vith a spott. i left are details from lia liorzbera 777a in /Doduna 19th century di right details from i Rahulula razma ing tagamitawa I 9th ceny, a drawn by anjizi Siri and reprored from “Ceylon ύ έργααν, ότι η αήέα day”, by kind perision of the Ceylon {"f B09"d,

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(EKONOMICN REVIEW )
Published by The People's Bank Research Department 48 Park Street. Colombo 2, SRI ANKA
HE ECONOMIC REVIEW is promote knowledge of and interest in the eCOnomy and economic development process by a many sided presentation of Viev S & reportage facts and debate,
THE ECONOMIC REVIEW is a community
Service project of the People's San Its contents, however are the result of editorial considerations only and do not necessarily reflect Bank polices or the official viewpoint Signed feature articles also are the personal views of the authors and do not repress in the institutors to which they are attached Stania contributions 35 wef als | ConneՈtS and viewpoints are MeCe”e HE ECONOMIC REVIEW is published northly and salariable both on
曇 -- -
Volume 2
Sudatta Ranasinghe
Earle de Silva
Philip Maxwell
Sanjay Lal
NEXT ISSUE
O. Irrigatior A discuss and the r
9 Janawasa
CoVER
9 A compC a creative of Sri La
 

Number 11 February 1977
16
17
18
CONTENTS
COLUMNS
Diary of Events
Agriculture
Commodities
Transport
COVER STORY
3 THE ECONOMICS OF MARRIAGE
FEATURES
9 A socio-economic analysis of newspaper marriage
advertisements in Sri Lanka
20 Principles and policies to promote Sri Lanka's milk
production industry
a26 The traffic in technology 27 Technological dependence and the international
pharmaceutical industry
1 - its growth and significance in ancient and modern times. ion of current issues, such as irrigation and land settlements, means of achieving optimum economic and social benefits.
s and group farming - an assessment through a case study.
site view of the economics of marriage by Upali Herath,
: student at the Institute of Aesthetic Studies, University
inka.

Page 4
January
I
IO
II
2
I 3
I6
DIARY O.
Problems faced by the poor nations repaying their debts of more than dollars 1.5o billions to rich nations may be exaggerated, a new World Bank Study released in Washington indicated. It said inflation had been a two-edged sword that not only had caused poor nations to borrow more, but which also might make it easier for them to repay their debts.
A foundation stone for the proposed National Museum of Science and Technology to be set up at a cost of Rs. 5 million at the Colombo Museum premises, was laid by the Prime Minister.
A Packing Credit Guarantee Scheme for exporters was inaugurated by the Export Promotion Secretariat and will be implemented by the Development Finance Department of the Central Bank of Ceylon. The Peruvian Military Government has decided to allow on the basis of a specific 'Peruvian Model foreign capital investments in petroleum prospecting projects on the whole of the country's territory, it was announced in Lima.
The Soviet Agriculture Minister
announced in Moscow a record grain
harvest of 223.8 million : for Janua 1976, a jump of 8o million tonnes The Governmer. from the dismall yield of the previous Rs. 200 million p. year. trification of the The 188th branch of the People's rail network, it Bank was opened in Ahangama in Colombo. the Galle district.
Central Bank Governors from lead- Involving a tota ing industrial nations reached agree- 13 miles the ele ment on a three billion dollar support will cover the lines scheme for sterling balances held by and Negombo, Ve: foreign governments in London, dura, which daily informed sources said. The main loads of commut contributors will be the United column on pages States, West Germany and Japan.
The 189th and 190th branches of the People's Bank were opened in Uhana in the Amparai district and Kaluwanchikudi in the Batticaloa district respectively.
An agreement was signed between the governments of Sri Lanka and Japan providing for an outright grant of fertilizer, equivalent to Japanese Yen 746,8oo, Ooo (Rs. 19,339,323) under the Food Aid Convention of the International Wheat Agreement.
An agreement was signed between the Government of Sri Lanka and the International Development Association providing for a loan of US $ 5 million (Rs. 43.6 million) to finance a Tank Irrigation Modernisation Project.
The United Kingdom signed an agreement with Sri Lanka providing for an outright grant of £4 million (Rs. 59.6 million) to finance the capital cost of a project to modernise
five irrigation tanks.
The U.S. unemployment rate dropped to 7.9% of its 96 million labour force in December after going up to a high of 8.1% in November 1976. However prices at the wholesale level increased by O.9% during December, it was announced in Washington.
New contracts for credits granted by the Special Fund of OPEC for making it easier for developing countries to meet their balance of payment problems was signed in Vienna. A total of III.6 million dollars was apportioned to 24 countries including Sri Lanka.

F EVENTS
17. A meeting of leading natural rubber producing and consumer countries commenced in Geneva to prepare for negotiations on an international agreement on rubber to stabilise rubber markets and prices under an 'Integrated Commodities Programme'.
2 o The Ministry of Plantation Industry in collaboration with the People's Bank has inaugurated a loan scheme to assist organisations or persons interested in modernising their rubber factories for production of crepe and new forms of rubber, it was announced in Colombo.
2 I A 5oo million dollar international commercial loan to Iran from American and European banks was formally signed in London. The seven year loan is to be used to finance development projects in Iran and meet a budget deficit caused by falling oil revenues.
22. The new Headquarters building of the People's Bank was formally declared open by the Prime Minister in Colombo.
24. The 6ooth National Lotteries draw, marking 21 years of the
State Lottery was held in Attanagalla.
24 Japanese Prime Minister Takeo
ty 24 Fukuda unveiled a surprisingly
stimulative budget of $97 billion t has approved a for the fiscal year beginning in :":':* April. In presenting the budget, Colombo suburbs Fukuda whose prime goal in the was announced in past has always been to dampen
inflation, was clearly responding to widespread charges abroad that
track distance of Japan had not done enough to spur ctrification project the recovery of its economy.
between Colombo 25 Countries pressing for a six billion yang Oda and Pana- dollar (about 3.5 billion sterling) carry the heaviest common fund to help Third World er traffic. (See states with their exports were told in 18 & 19). Geneva that they still faced a long
road full of difficulties. -
A three-day conference of the Ministers of Economic Affairs of ASEAN countries (Association of South-east Asian Nations) ended in Manila after reaching agreement on the introduction of preferences in commercial and financial relations between member countries of this organization.
A loan agreement was signed between the governments of Sri Lanka and the United States of America providing for US $ 3.8 million (Rs. 33.1 million) to finance the foreign exchange costs of co-ordinating Rice Research projects and Cropping System Research projects. -
26 Sri Lanka’s Bank rate was revised upwards by two percentage points. The rate which was 6 percent per annum from January, 197o was increased to 83 percent per annum with effect from January, 26. ܗ ܘ ܢ - . British commercial banks took advantage of Britain’s improved finances to reduce their basic lending rates, by one percent, to I 3 percent.
27 Air Siam, the privately owned Thai Airline whose discount fares made it popular with thrifty Asian travellers, has an accumulated debt of $17 million, and had been losing more than $2.4 million a month; its operating license has been. suspended by the Thai Government and its last aircraft, a . Boeing 747, has been repossessed by KLM Royal Dutch . Airlines, it was announced in Bangkok.
2.8 The Ceramics Corporation’s new wall tile complex in Balangoda was officially declared open by the Prime Minister. This project was set up at a cost of Rs. 70 million in collaboration with Messrs. Danto Co. Ltd., and Nichiman Co. Ltd. of Japan. ܘ ܢ
Economic Review, FEBRUARY 1977

Page 5
Marriage in Sri Lanka has been an important social institution not only in terms of present day values but also in terms of historic norms. The institution of marriage and its functioning in present society provides an interesting base for the study of the economic rationality of people in their social behaviour. After centuries of evolution marriage still preserves some of its traditicinal characteristics; namely caste, ethnic and religious considerations and transfer of property from one generation to the other or transactions (in money or property) between different families when marriage contracts are entered upon. Present day values of marriage tend to perpetuate some form of a 'social cost which is reflected in several spheres. More clearly it can be identified in the consumption patterns of the elite groups who spend lavishly on such ceremonies for status reasons. People of all classes in Sri Lanka take their ceremonies, such as marriage ceremonies, very seriously; in fact so seriously that many end up in debt by over indulging in such luxuries”.
Another important feature of this 'social cost is the dowry system that contributes to a widening of income inequalities. In addition, our marriages today tend to perpetuate the competitive character dominating society which is reflected in the educational system, the employment market and also in politics. A relationship between this competitive character and the institution of marriage is not difficult to find if one examined the values governing present day marriages.
صبر
Historical perspective
The 19th century development of apitalism contributed a number of nificant changes to the practices of marriage in Sri Lanka including the introduction of a legal basis for marriage, through legislation. These changes are attributed to the contiinfluence of western culture :1. . " 14 : ܙ religion. In the West too the situation generally prevailing in the
ancient world was profoundly changed by Christianity. In the Christian
tradition as it evolved, the sex reonship, in order to constitute iarriage had to be monogamous and
Ecoxotic Review, February 1977
AMONEY cox AMARRIAGE
4ff: ; Janakż
Ranmatigala
THE OF
also be characterised faithfulness. It came long union of one woman to the exclus Such unions were p form of ceremonial 1. law of the particular it took place. It also to determine whe marriage existed as
the adjudication o estate. Marriage thu universally a forma requiring a public a
A closer look at th
ground of marriag
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ECONOMICS MARRIAGE
i by the duty of 2 to mean a lifee man and one sion of all others. receded by some "ecognised by the country in which became necessary ther or not a a preliminary to f claims to an is became almost lised transaction ct Of Ceremony.
e historical backe in Sri Lanka
before proceeding to its present forms would be instructive as the modern practice of marriage appears to be the product of a long term evolution.
As in all other societies and cultures marriage in this country too has performed many basic personal and social functions such as procreation; a formalised upbringing of children; providing for satisfaction of personal needs, for affection, Companionship and status; regulating of lines of descent; division of labour between the sexes; economic production and consumption.

Page 6
The historical evidence of marriage practices in Sri Lanka can be traced back to early times. Reference to the economic aspects of this partnership are of particular interest.
In their monumental work on the “Veddahs' the Seligmaains commented thus on this aspect: "The man goes to his future father-in-law with a present of honey, yams, grain or dried deer's flesh tied to his unstrung bow, which he uses as a carrying stice. Whether he generally repeats this visit or receives bis bride immediately ya no clear, and probably the custom varies in this particular. Handuna of Godafalaya told us that he did not take his bride away until he had twice taken a present of food to his mother's brother (father-in-law). When a girl married, her father usually made over to his son-in-law a fract of land, generally a hill enown to be inhabited by colonies of the bambara' or rocé bee, or gave him a piece of personal property ouch as a bout or one or tuvo arrous. Sometizme s a dog uvas given”.
The Mahavamsa makes reference to the custom of 'giving in the period when King Sena ruled in the 9th century A.D. After the King died the Mahavipada Sena entered the town and Samgha who was his consort, he consecrated Mahesi and gave her a dowry according to custom.
In primitive Buddhism the arrangement of a marriage bond was strictly a family affair and unlike in later times no soothsayers or astrologers were called in either to approve of the union, or to cast a day for the ceremony. But fathers were expected to gift their daughters with a marriage portion consisting of jewellery or other forms of wealth. Even in early times, however, our folk Customs and ceremonies varied according to the locality and the social and financial position of the parties. After the period of foreign rule began in Sri Lanka several writers recorded interesting details about out marriage customs and ceremonies. Among one of the first Western writers was Father Queyroz., the Portuguese historian. In his book about the Island, published in 1685, he wrote:
“Among the Singhalese, however, though the lower folé buy wives, and the man bring a dowry and furniture vith him, and the woman brings only her
personal orname there is a differe groom-elect sends of the bride, an a of the contract, a the dowry agreet daughter. In oth siderable diversit. is no fable mat, ass long as they li ήηorή οθωβγναηέ ι fhoire of their eas
This principle known as the system as it exis is the adaptatio. tice to modern c times a person's ded on his statu: his caste and the held land. Whe in marriage (dig of the same stat with her some p wealth as her pi some cases, how not actually giv rather she took who became ad family and her sh was her dowry. I ever, though pec to caste especial tracts, it is one' ployment that social status; an employment no son’s education or family; it has parents of mean for their daught sional class by dowries.
More definite practices in Sri ) able in the 18th there was no le effect to marris period, observa lities and custon union between practices were property inherit lies of the same of legality of a in since the Kandy distinguished b illegitimate chil elements of a Kandyan law h
Hayley (I 923) a

is, among the nobles f fashion, for the bride1 present to the parents ticle for each as a to seen they are obliged to give
upon, along with the ή έβληg, έθεrε ένα βοηfor among them there "mony mor union except 2e, though they are also not marrying except
33 2丁。
of 'giving came to be lowry system. The is in Sri Lanka today, 1 of an ancient praconditions. In ancient consequence depenin society, that is on service on which he ) a woman was given a), it was to a person us, and she brought ersonal ornaments of rtion or dowry. In Ve Ver, a W Oman Was 'en in marriage, but a husband (binna) Lopted to the wife's are of the inheritance in modern times howople still tend to stick ly in matriage conos profession or emtakes the place of ld as profession and w depend on a perand less on his birth become common for s to secure husbands ers from the profesthe offer of rich
evidence of marriage Lanka becomes availcentury. Although gislation giving legal ge in the Kandyan nce of Some formais confirmed the legal two parties. These related primarily to ance within the famiCaste. Determination Larriage was necessary an law of inheritance tween legitimate and diren. The essential egal marriage under as been classified by s follows:-
I.
3
The parties must have connubium (an agreement for union). Generally marriage between persons of different caste or even of different ranks within a caste were prohibited and void. But there were exceptions, and in some districts men of one caste regularly took their wives from another caste. Niti-niganduwa considers the case of a goigama or rate woman marrying a man of a higher caste than herself, and states that children did not succeed to their father's caste, but were considered legitimate and entitled to inherit their father's property, even if he should have other children by a wife of his owa C2a Ste.
The parties must not have been within the prohibited degrees of relationship (i.e. laws such as a marriage should not take place between parallel cousins, i.e. one should not marry his father's brother's daughter or mother's sister's daughter and one should not marry his paternal grandfather's brother's blood daughter etc.).
The parties must have cohabited with the intention of forming a definite alliance, the intention being inferred from the circumstance as far as inheritance was concerned, the formalities were not looked into in order to determine the regularity of a marriage.
The consent of the respective heads of the families; the Countenance and sanction of the relations to the third or fourth degree on both sides to the union of the parties. A woman was entirely at the disposal of her parents or after their death, of her nearest male relations, even after the termination of her first marriage by death or divorce. But she could choose a suitable husband for herself if her parents or brothers neglected their duty of finding her a suitable partner. In the case of men a greater freedom was allowed, a man being entitled to contracta valid marriage with a woman of a low rank after the death of his parents. But generally opposition of parents or kinsmen was sufficient to annul a marriage
Economic Review, FEBRUARY 1977

Page 7
celebrated with all due formality. In the case of chiefs of high rank, the kings consent was necessary before they married.
In Sinhalese law and social practice matrilocal and patrilocal marriages were distinguished. Ralph Peiris, in his study of Sinhalese Social Organisation (1956) states, “In the binna (matrilocal) marriage, the husband lived in the wife’s parental home and she had an equal interest in her parents estate with her brothers, and her children had a claim on the family estate equal to their mother's interest. 4 binna husband had no privileges in his wife's house, no power over her property and was liable to expulsion or divorce by the wife or her parents at any moment. In the case of diga (patrilocal) marriage the daughter lost her right to inheritance, but was entitled to maintenance in the event of her being obliged to return from misfortune in her father’s lifetime’.
During the Kandyan period polygamy was found to be a common practice, the most prominent form was the polyandrous marriage where two brothers had one wife and cohabited in the same house. Robert Know who was an English prisoner in Sri Lanka in the 17th century has also commented on polyandrous marriages among the Kandyan Sinhalese. It is clear that this form of marriage had been treated as a convenient method of passing down property from one generation to the other. It is believed that those who inherited little land from their parents often contracted polyandrous marriages in order to retain the ownership of land within the family.
According to Davy (I821) “This singular species of polygamy is mot confined to any caste or rané; it is more or lery genera / a^207ạg.7Z //e ẳậg/, a/?a /02), the rich and poor; the apology of the poor is that they cannot afford to have a particular wife; and of the wealthy and men of rané, that such union is polife as it unities families; concentrates property and influence and conduces to the interesi of the phildren who having two fathers will be better faéen care of and will still have a father though they may lo se one”.
Ralph Peiris also shows how the practice of polyandry minimized the fragmentation of ancestral property. For three brothers having four sons
EconoMIC REVIEW, FEBRUARY 1977
by a joint wife, w, had to provide f each had a separat tracted a polyar paternal estate w dividedly by their andry was finally éariya system wh a person to be av public service, l. unattended for se time. It was cust at home to till the the joint wife and SO CO in On Was fraternal polyandr times that such a presumed when thers holding land pied the same Mu them married.
The joint hust “brothers’ and if was allowed with as to the number O Wife could not tak ted husband with the first, If the Se
not a brother of t
family had to be could refuse to ac band even if he we first. The most
polyandry was fo have a wife betwe in a family of m would arrange to and live separately
The available cases, after enforce an Marriage Ori reveals that althou registered in the na the others had a the polyandrous imperceptibly into if one of the brothe wife into the mulig widespread practi there had been c niganduwa states frequent custom fo to have two of th mon’. It would household where shared a spouse wives of their ow might be such tha not regard his will property, and his ri to his brothers During the Kandy

༄།
ould certainly have
or twelve heirs if
ewife. If they con
drous union the ould be held unfour sons. Polyrelated to the rajaich required many vay from home On eaving his family veral months at -a Omary for brothers : fields and care for children. Indeed s the practice of y in late Kandyan in arrangement Was two or three broin common, Occuligedera and one of
ands were always raternal polyandry out any limitation f husbands, but the e a second associaout the consent of cond husband was the first, the wife’s consulted. A wife imit a second husare a brother of the
common form of r two brothers to en them, and even any brothers, two
have a joint wife .
evidence of divorce ment of the Kandydinances of 1859 !gh a marriage was me of one brother, ccess to the Wife; situation changed One group marriage 'i's brought another edera. Besides the ce of polyandry, yther forms; Nitithat “it is also a ir two or three men ree wives in comappear that in a some brothers while others had in, fraternal amity t a brother would e as his exclusive ghts were extended by tacit consent. 'an period divorce
POLYANDRY
Polygamy was found to be a common practice in the island when the foreigners arrived. Ribeiro (1685) described “Sinhalese marriage at the time of the Portuguese occupation as follows:
“Their marriages are a ridiculous matter. A girl makes a contract to marry a man of her own caste (for she cannot marry outside it), and if the relatives are agreeable they give a banquet and unite the betrothed couple. The next day a brother of the husband takes his place, and if there are seven brothers she is the wife of all of them, distributing the nights by turns, without the husband having a greater right than any of his brothers. If during the day any of them find the chamber unoccupied, he can retire with the woman if he thinks fit, and while he is within no one else can enter. She can refuse herself to none of them; whichever brother it may be that contracts the marriage, the Woman is the wife of all, only if the youngest marry, none of the other brothers has any right Over her but he can claim access to the wives of all of them whenever he likes. If it chances that there are more brothers than seven, those who exceed that number have no right over her; but if there are two upto five, they are satisfied with one woman; and a woman who is married to a husband with a large number of brothers is considered very fortunate, for all toil and cultivate for her and bring whatever they earn to the house, and she lives much honoured and well supported, and for this reason the children call all of the brothers their fathers’.
was flexible and could be arranged with mutual consent. Divorce was also a common event, the usual method by which a man repudiated his wife was “by taking her back to her village’. The law required her parents or brothers to support her until she re-married as daughters did not usually inherit land, although a dowry is given when they are given in “diga'. The Kandyan custom did not allow Community of property between husband and wife, this may have been a natural consequence of the looseness of the marriage ties. It is evident that even in diga marriages, where the bride left her parental home to reside with her husband, the latter had no control over her dower, nor could he interfere with any property acquired by her after marriage, independently of him. But the wife could make use of her husband's property for the maintenance of the family, even selling the produce or mortgaging his lands if necessary for subsistance, but she was
5

Page 8
precluded from selling his estate. D'Oyly (1835) notes that a wife could take nothing belonging to her husband if she left him contrary to his wish, and must leave even the wearing apparel provided by him.
Since the contract of marriage was easily terminated, some rituals such as binding the hands of the
bride and the bridegroom have been
avoided in some instances for symbolizing that the bond was not indisposable. Similarly there were other rituals, the performance of which had been avoided at times, for symbolizing the observance of certain practices in the future.
Development of Commercialism and its Impact on the Institution of Marriage
Although marriage practices in the
Kandyan regions were not subject to
significant changes in the nineteenth century, the institution of marriage in the maritime provinces experienced changes due to the constant influence of foreign powers, namely the Portuguese, the Dutch and the British who ruled the maritime provinces Over a few centuries. During the Portuguese and the Dutch period, the maritime provinces were exposed to the pressure of a commercial system based on trade. Along with these changes that resulted there were considerable changes in social patterns among the low country Sinhalese. The influence of Christianity and other changes introduced to the educational and legal systems made a significant impact. Traditional norms such as the externded family started breaking up since the emphasis placed on its basis, namely agriculture, shifted more
towards trade and other Occupations.
The pace of change became more rapid when the British regime succeeded the Dutch. The English established what they regarded as a sound basis for their administration by creating a plantation economy on the one hand and an indigenous capitalist class supporting them On the other. The indigenous capitalist class
consisted primarily of low country
Sinhalese who entered into business related to the plantations. They also generally became Christians and used Christianity as a resource to obtain favours from the English rulers. The children of these locals were given an
ད་》
6
English education to various middle the administratior education during
an important role cultural changes.
fitted from thes changes were ali with the British
captive in their so values. Kinship a these elite group form from that of When intermarria between cross c. sidered ideal acco tradition, the elite gave more promir nomic and social thus have used “r to mean a union also to align two
In his study ofeli Michael Roberts marriage alliances formation of family such marriages as ment of elite form teenth century. negotiation of such has been One’s Occ cial background. marriage alliances Country families leading families genous capitalist teenth century, ha wealth as well as
The Kandyan were flexible and day norms they w were no legal b. while polygamy practice. Concubit liaisons were also These marriage pr; tO) COf Stafft C^1t1C nation by the Ein country Sinhalese extent of criticisi other marriage pi Or "barbarous” hal Of View Of Weste felt that such habi čivilization taugh English. These c the extent to w
culture had influet
It was not onl members of the l lese elite who wa marriage practices cal evidence show

ind were recruited level positions in
The missionary his period played in bringing about Those who bene
socio-economic
ned economically
interests and were a life to Western d matriage among
took a different Candyan Sinhalese.
ge (i.e. marriage
usiris) was COnding to Sinhalese of the low country ence to One’s ecO
background and narriage not only of two parties but business interests.
te formation (I975) refers to 'strategic and identifies the phalanxes through an important ellelation in the nineThe basis for the marriage contracts upational of finanThe business and s of some lowwho emerged as forming the indiclass in the ninelive bolstered their
lite status.
marriage practices in terms of present ere casual. There arriers to divorce
WaS a COnn Oil nage and temporary
widely prevalent. actices were subject ism and cOndemglish-educated low
who went to the ng polyandry and actices as "brutal its from the point rn values. They ts were against the to them by the liticisms also show hich the Western lced their thinking.
I the Britishers or Ow-country Sinhainted the Kandyan changed. Historis that in the 185os
the Kandyan elite consisting of Kandyan chiefs, Headmen and other
noble persons had sought legal enact
ments which would prohibit their
marriage practices, and enforce mono
gamy and the registration of mar
riages. The first request for such
reforms was made by a group of Kandyan chiefs at an interview with
the British Governor. Sir George
Anderson in the early 185 o’s. This
request was however not given
serious consideration by the British
rulers. For the second time a large
deputation of Kandyan chiefs re
peated their request at an interview
with the new Governor Sir Henry
Ward in May 1858. The records of the then Government Agent in Kandy,
Phillip Braybrooke, show that he had
received a petition signed by a large
number of people including Kandyan chiefs, Headmen and others request
ing the Government to bring about
immediate reforms to the Kandyan
marriage practices.
The Kandyan Marriage Ordinance No I. 3 of 1859 was passed as a response to these requests. The attempts in implementing this Ordinance were however not successful as expected. The records of Government Agents and other district officers show that the registration of marriages had been difficult. In some instances the practice of polyandry had been continued even in the case of registered marriages. It appears that registration of marriage was not a felt need among the peasants although there were pressures from the elite for reforms in marriage customs.
As the economy faced a transition from feudalism to commercial Capitalism based on plantations, the attitudes in regard to ownership of property would have changed. Thus private ownership of property based
on the nuclear family would have
been preferred against the joint Ownership of land and other property which was the basis of polygamic marriage. The evidence supporting the change of attitude in regard to property ownership shows that the initiative for such changes came first from the low country Sinhalese elite. The Kandyan regions were affected by these changes in the latter part of the nineteenth century. It is reflected in the monogamic marriages entered. upon by the Kandyan aristocracy (the Kandyan elite) who had an English
EconoMIC REVIEW, FEBRUARY 1977

Page 9
education and thus were exposed to Western culture and values. The records of the government officers during this period show that revision of old ordinances and enforcement of new laws became necessary to establish a system of laws governing marriage and divorce in order to minimize litigation and settlement of other matters pertaining to property transactions.
Although some practices and traditions relating to marriage were changed after introducing legal bases, such changes could not influence the patrilineal kinship pattern among the Sinhalese within which marriages Were arranged. The diga marriage predominated and under that system possession of a woman and her children are surrendered by marriage, to her husband and his kin. The norms of a patrilineal kinship pattern were such that the father enjoyed a right of dominance and it was his obligation to support his daughters until they married. The father was also obliged to arrange suitable marriage partners and to provide dowries with them. After his death these duties devolved upon his eldest son regarded as pater famillas.
If a daughter was given in diga, she was given a dowry of money, jewellery, clothes and other moveables, and was entitled to return to her family and claim maintenance if she divorced. This implies that a father was also obliged to look after his daughter in case the partner chosen by him turned out badly.
Within this kinship structure the marriage between cross cousins (father's sister’s daughter or mother's brother's daughter) was considered proper and thus such marriage was a norm among the Kandyan Sinhalese. The terms of Cross relationship
anassa (derived from Sanskrit Ava
shya) meaning necessary signifies the fact that one is not only permitted but even enjoined to marry cross
cousins. Although patrilineal mar
riage customs such as arranoringo - -***>
marriage partners by the father,
giving a dowry etc. applies even to
the low country Sinhalese, the norms
such as marriage between cross cousins, does not appear to have been given an important place in the low Country marriage practices.
The economic significance attached to the institution of marriage was
EconoMIC REVIEW, FEBRUARY 1977
demonstrated in
tices such as poly age between cro eCO nomic rationa polygamic marria marriage practice place as the ecor a feudal to a сар changes were mo time provinces a which grew as to creased commerc Kandyan areas tot areas where edu facilities were av, these changes an that emerged subs lopment of educat were more recepti
'They give acco a portion of cattle With their daughter to dislike one anoth this portion must and then she is H being as they accou for wearing’. Rob f he custom of portion prevailed in the Kandy century).
Arrangingo marri
group, obtaining
match-maker (Kaj accepted norm, p the middle class. intermarriage syste marriages are still the peasants) and dynamic system of riages to the mic Even in the case riages traditional caste, religion, plac up-country or lowetc. are considered time modern attrib background of (whether well co Occupation, educat (whether professi wealth, dress (whet or not) etc. play an role. If the latter not satisfied a maí entered upon even quirements are m There are also inst match of either cast considered a seriou latter requirements shows the extent to
class has adopted
marriage consideri In some instances, or family backgrou
 

arly marriage pracamy; and the marriis-cousins also had e similar to that of ge. However, these gradually lost their Dmy changed from calist stage. These e clear in the mafild in urban areas V nships due to i FAall activities. The in more urbanized tational and other ilable, experienced
l the middle class -
equent to the deveOn in these regions ve to changes
ding to their ability, , slaves and money S; but if they chance er and partasunder, be returned again, for another man, nt never the Worse εrt KnOΧ. (Κηox oη ing the daughter as if 'an country in the I7th
tages Outside One's the service of a Dunya) became an articularly among This replaced the em (though inter| CO111fInOf1 afmOfig offered a more contracting maridle class society. of arranged marattributes such as e of birth (whether country)horoscope ; while at the same utes such as family respective parties innected or not) ional qualifications onally qualified), ner European dress equally important "equirements are riage may not be if the former reore than Satisfied. tances where mise or religion is not ls drawback if the are satisfied. This which the middle flexible norms of ng its economics. either Occupation Lind of the bride Or
the bridegroom becomes the primary factor of matching two parties if the families are well connected (meaning influential capacity or access to wealth etc.) Of the prospective bride or bridegroom belongs to a reputed profession. These changes imply a development of a 'class concept inherent in capitalist Societies and a decline of caste concept inherited from the old feudal social Order The consideration of 'class, when union of two parties, are confirmed through marriage, is however not a feature that can be generalized; because such changes are yet confined to a relatively smaller group who are more educated, westernised and also live in urban areas The large majority of the Sinhalese population still live in rural areas where feudal Social and economic characteristics are still existent. Their social lifeisless affected by changes taking place in the urban areas; thus the importance attached to such traditional attributes as caste is clearly demonstrated in their marriages arranged with the consent of the kin group.
The marriage practices among the peasants in some parts of the island takes a still different form from those of the Kandyan peasants The dry zone peasants in the areas like Amparai, Monera gala and other remote areas particularly have attached more intensive economic values to the institution of mattiage. According to these values, a marriage means a union of two labour units rather than a union of two families. In such marriages, prominence is given to the agricultural skills possessed by the bridegroom rather than to his caste or family background. In most instances the skill of the prospective bridegroom is subject to test by the father of the bride of the eldest male member of her family. It is only if the bridegroom can convince the bride's party that he is an efficient agricultural worker who can look after the family that the marriage is confirmed. In most instances these marriages are not legally confirmed through registration. The practice is that the bride goes and cohabits with the young man who opens up a chena in the jungle. If he succeeds in proving the results of his labour, the patents of the bride allow her to continue her stay with him and assist them to setup a family. In some cases the bride groom is expected to pay a certain price to the parents of the bride in the form
7 a.

Page 10
of labour or agricultural implements
for compensating the resulted loss of a family labour unit due to his marriage. These marriage practices appear to be more flexible and somewhat similar to tribal marriage practices in Africa in terms of the value attached to labour when a marriage contract is entered upon. In Sri Lanka, however, this type of marriage practices is not common and cannot be generalized for the dry zone peasantry as a whole. Even in the dry zone areas, the practice of marriage differs significantly between various groups. For instance in the "purana gamas” of Anuradhapura where some characteristics of the ancient hydraulic civilization are still existent, marriages are governed by a rigid set of values which give prominence to castes and ethnic distinctions. Although the element of labouris considered important in choosing a suitable partner, more prominence is given to caste (or the van saya), and ownership of land and family backOIround of the proposed partner. These values reflect the feudal characteristics of the socioeconomic order of traditional villages (purana gamas) in the dry zone, where a vertical power structure based on caste distinctions is predominant.
Over the last two decades, the pace of social change became more rapid in these areas due to increased development activities such as government sponsored settlement schemes, land development schemes, irrigation development schemes, rural electrification programmes etc. which resulted in the mobility of communities as well as labour. With the increased mobility the old villagers became settlers in an area away from their villages. Thus they were compelled to adopt to new situations and mix with other people who had different origins. This also resulted in changes of their social life, values, and atti
tudes. It also resulted in developing
new kinship allies between settlers of different origin who used marriage as
a way of building social relations.
Thus, the marriage practices of settler communities in the present colonisation schemes represent a mixed value system which is more receptive to change.
The development of mass media has also contributed to the changes in marriage practices. Particularly in the case of middle class marriages the mass media has been used widely
8
as a means of matc. service rendered papers for prosp bridegrooms has bi over the last decad reflected to an exte: number of advertist and the rapid decli arranged by matc other. The newspa efficient and econo ing partners for th traditional as well butes in contract Although the new any one who seeks of advertisers are d the middle class w. in the modern sec keep pace with the C and to what exten traditional attribute partners reflects to present values of S class. The socio-e of mattimonial adve in this issue on pag further light on thi Social and Econor Implications of M
The Social and e. tions of present day to marriage can be tion to several spher earlier the transforn nomy from feudal to brought significant more specifically the of society were cha nomic basis of so changes. The deve cation and commut the attitudes of p behaviour. Some particularly the low elite were more te changes at the begi later stages. What accepted became mo norms among othet well. In the case of r the feudal norms w entirely. Even after lution, the mobilit of different castes ethnic groups has b contracting of marr system which preva still plays an impor change is that it in forms as dowries a in money, jewelle but also in the for facilities abroad,

ng partners. The foreign exchange channelled through 7 leading news- Convertible Rupee Accounts etc.
tive brides and in more extensive The present norms particularly
or two. This is among the middle class allow for a greater degree of mobility between son the onehani different castes, religions or even of the marriage between ethnic groups. Although makers on the parental intervention on the part of er offered a more the family interests is common in lical way of find- middle class marriages, the prosise who consider pective bride and bridegroom also as modern attri- enjoy a greater participation when ng a marriage decisions are made. The obligation paper is open to to give a dowry under the present day s service the type norms is lessened if the bride is emawn mainly from ployed and earns a reasonable income. no are employed. This has encouraged parents to give ors. How they their children a better education which anging economy has in turn enabled them to find jobs they accept the such as in teaching, or some other form in finding their of employment, possibly of a prosome extent the fessional status. To many parents a i Lanka’s middle job for their daughters has been a conomic analysis Source of Security for them, partirtisements carried cularly at marriage and in later life. is 9 to 11 throws The result is that female participation s subject. in higher education and in the labour force has increased over the last few
in the increasing
nic
e years and it can continue to increase arriage -
- - at a higher rate in future. conomic implica
norms in regard The values of present society have
examined in rela- laid down certain conditions upon es. As mentioned marriage that also have some impact lation of the eco- on the employment market, educaa capitalist stage tion, job aspirations etc. In the case social changes, of arranged marriages one could find values and norms that these values are geared more nged as the eco- towards raising the price of males ciety experienced according to Occupational status, lopment of edu- qualifications etc. While in the case lication, changed of females a compromise in regard to eople and their price can be entered upon only if they roups of society can match the occupational status or country Sinhalese qualifications of the male. This is ceptive to these reflected very clearly in the dowry nning and at the system. For instance, the highest the elite groups dowries are generally offered to e or less common doctors, engineers, accountants and Social groups as other professionals who are in governarriage,however, ment or corporation service or to are not changed officers in the Sri Lanka Adminiscenturies of evo- trative Service who enjoy a higher between people occupational status though their inreligions, and come in terms of salary is lower when en limited in the compared to the former. The second ges. The dowry preference is given to executives, ed centuries ago managerial and similar employees nt role, the only preferably in the government or corv takes different poration service, while the third pregiven not only ference is given to teachers, clerks and , property etc. similar workers in the public and mer
of educational cantile sectors. 2ntitlement for (continued on page II 2)
EconoMIC Review, FEBRUARY 1977.

Page 11
A SOCIO-ECONOMIC ANALYSIS OF NEWSP. MARRIAGE ADVERTISEMENTS IN SRI LAN
The use of mass media as a means of arranging marriages has become increasingly popular among the middle classes over the last two decades. The marriage advertisement system makes direct communication between two parties feasible without the help of middlemen, known as 'match makers' or magul kapu was, and thus offers a more economical and practical method of contracting marriages. The use of mass media for arranging marriages is an indication of how the institution of marriage in Sri Lanka has been adapted to commercial practices. However, the nature of these advertisements does not suggest a strong departure from traditional norms; it gives those interested in choosing their partners an opportunity to consider both the traditional as well as modern attributes. Generally newspaper advertisements carry information on the caste, religion and ethnic background of the advertiser in addition to information. On occupational, educational and family background. The type of bride or bridegroom sought is also mentioned in most cases. One can therefore communicate directly with a suitable party depending on this information.
This study which examines the characteristics of prospective brides and bridegrooms who advertise in leading Sunday newspapers, is based on a sample of 20 per cent, selected randomly from among 582 marriage advertisements appearing in leading Sinhala and English Sunday newspapers over a period of three months. There are, however, limitations to this study as one cannot expect to make broad generalizations on present day marriage in Sri Lanka, based only on marriage advertisements since the advertisers do not represent Our Society as a whole. However, the advertisements provide a mirror to the values and norms behind marriage in middle class society through which one can attempt an examination of the nature of social change.
The sample consisted of 17 marriage advertisements made up of 46 males and 7 I females. The socio-economic background of these advertisers suggests that they come from different levels of the middle class. Some advertisers may fall into the upper stratum of the middle class if one employs criteria such as income, occupation, educational qualifications, family background etc. for classification. These advertisers come from different parts of the island. Among
the sampled advertisers, 69 have men
tioned their hometowns which are
shown in Table I. , " According to this Table, a majority of the advertisers come from the Colombo district or the Western province. The second largest number come
from Kandy and if we take the Central
province as a whole, the advertisers of
Kandyan origin constitute about 33 per cent. A large number also come from the Southern province. It is however interesting to note that about 7o per cent of
TABI
DISTRICTWISE
OF 4DE
Colombo Kandy Galle Matara Kegalle Kurunegala Ratnapura Kalutara Matale Badulla Moneragala
T
the advertisers had a this suggests that t environment of great the Maritime provin conducive towards ch methods of contracti, historical evidence als that changes of tr practices were initiate the Maritime province tO socio-economic cl introduction of capita ing and after the occ pOWCrS.
The influence of
patterns, where marri reflected even in the arranged through the tisements. The ideal kinship pattern accep arrange suitable marri daughter who will Among the sampled or 69.5% have be “others’, meaning at the family or a close r of females, almost al. tised by parents; am tised cases the majorit This shows that the , had, according to tr to find a suitable partir is still continued in A large number ( advertised by the phrase “father seeks’ shows that even ai classes who are more nected to urban are pations or otherwise tions are still domir parents consider it suitable marriage p children.
TABLE III
Age Group I 8 - 24 24 - 30 30 - 36 36 - 42 42 - 28
Total
EcoNoxAIC REVIEW, FEBRUARY 1977

APER KA
E I
DISTRIBUTION RTIS ERS
30 II 6 9 2
3. 2 3. 2
I
2.
'otal ... 69
Ow-country origin; he socio-economic ir commercialism in ces has been more hange of traditional ng marriages. The o points to the fact aditional marriage 'd by the people of s who were exposed langes (largely the lism) induced durupation of foreign
patrilineal kinship age is concerned, is
case of marriages : newspaper advers of the patrilineal t a father's right to age partners for the be given in diga.
advertisements 79 en advertised by in elder member of elation. In the case I have been adverDng the self-advery were from males. obligation a father aditional practices, ner for his daughter
a modified form. especially females) parents (with the or 'parents seek') mong the middle
educated and con'as through occu, the earlier traditant as most such their duty to find artners for their
The age distribution of the prospective brides and bridegrooms who advertise in the newspapers suggests that here late marriages is the norm. It probably means that other avenues of obtaining a partner may have been attempted whilst the advertisers were younger and having failed, now the mass media is resorted to. The mean age of marriage for the country as a whole is 28 for males and 23 for females. Among the sampled advertisers, the mean age for males was 33 years while for the females the mean age was 29 years. The age distribution of the advertisers, given in Table II, shows that a majority of the female advertisers are below the age of 30.
Over 5o per cent of the female advertisers are concentrated in the age group of 24-3o years. There were only 9 females in the age group of 18-24 years. In the case of males, the majority is distributed over older age groups. There were only I9 male advertisers (nearly 35 percent) below the age of 30 years. The age differences between male and female advertisers also reflects the differences of their activity status. In the case of female advertisers 39 were unemployed and 32 were employed, whereas all the male advertisers were employed. The female advertisers in the younger age groups consist mainly of the unemployed. It is however important to note that age at marriage, even among the unemployed female advertisers is generally over 25 years; this also reflects how the traditional norms in regard to the age of females at marriage changes in the preSent CO1) text.
In this analysis of newspaper marriage advertisements, Sudatta Ranasinghe, a senior researcher at the Marga Institute, shows the extent to which out middle classes keep pace with the changing economy and how far they still accept traditional attributes and norms in finding their marriage partners.
The occupational and educational background of the advertisers reveals some characteristics of their class nature; showing that a large number of them are employed in modern sectors of the economy and earn wages or salaries. A majority of them were engaged in public sector jobs. Table III classifies them by occupational categories and nature of employment.
The data given in Table III shows that the advertisers are distributed largely between three major fields of employment, of which professional, technical and clerical categories cover over 6o
-4 GIE DISTRIBUTION OF ADVERTISERS
7 oñz፤
2. 52 38 I4
% Male %. Female %
IO. 3 3. 9 I2.7 44。4 I6 34.8 36 5 O.7 32.5 I9 4I.3 I9 26.7
2C 7 I5.2 7 o.O
o.8 2。幸 ~=-— ത്തb
Ioo.o 46 loo.o 7 loo.o

Page 12
TABLE III
OCCUPATIO INVAL
CATEGORY No. 5% Professional & Technical 25 32.5
Medical ... . . . 3
Engineering 5
Para Medical ...
Technicians 2
Scientists - - - I
Teaching ... I 3 Administrative, Managerial
and Executive ... 9 Ι. 2. I Clerical ... 2I 27.3 Self-employed ... I8 23.9
Agriculture 3.
Trade 9
Industry 4.
Services ... - 2. Defence Services ... Ι. 3 Employed Abroad 3 3.9
Total ... 77 I OO. O
per cent. In the case of those employed in the category of professionals and technologists income levels as well as social status attached to the job can vary depending on the skills. For instance those employed in the medical and engi neering professions can enjoy a better social status as well as a higher income level compared to those employed as teachers or technicians. In the clerical category, however, such differences can be minimal.
- Almost all the adv information on their In the Case Of minori ethnic group was sp religion were two m of matching two pa. arranged marriages. attached to caste in practices was express legitimate and illegit using such criteria tC property inheritance were however chang lating to property caste distinctions co important role in ma
In the case of 1 using mass media, given to other fact background, employ in addition to that Ol The emphasis given t other ethnic differen inherited from traditi the emphasis placed O such as family backg and income of the extent to which Weste trated into what are tional factors. This t new social trend, par middle class.
The distribution tisers by caste and Table V. It sho VVS
TABLE IV EDUCATIONAL BACKGROUND OF A
T0fo/
G. C. E. (OL) . . . 42 G.C.E. (AL) - . . . 2 Graduate (Arts) ... ... I 3 Graduate (Science) 6 Post Graduate (Arts) I Post Graduate (Science) Professional or Technical 4
69
The educational background of the advertisers shows some differences between the education levels of males and females. Of the sampled advertisers 69 specified their educational background. Table IV classifies them by levels of education and sex.
According to the table, 75 per cent of the female advertisers have passed the G.C.E. (O.L.), while a little over 20 percent have received a University education. Those with a G.C.E. (O.L.) qualification consist mainly of unemployed female advertisers. The female advertisers with University degrees were in most instances employed as school teachers or were engaged in middle level managerial positions. The male advertisers had relatively higher educational qualifications. All those who had professional of technical training were males. They may have spent a fairly long time to gain these qualifications and the fact that male advertisers are generally above the age of females is also explained to some extent by the differences of edu
cational qualifications between males and
females.
% Male % 6 I.O 9 36.c 3. O I 4.G I9.O 6 24.( 8.o 4 I6.(
... O ബ I.3 I 4.( 5.8 4 I6.
OO. O 25 I Og. {
forms the majority w to the Karawe caste largest number. The ing to minority cast ber. This distributi caste composition ir the Govigamas and the majority, while t
BACKGRO UN
Oαι έe AM
Govigama 3 I Karawe 6 Durawe 3 Salagama -in Navandanne – Deva mRajaka 2. Vellala* .ܝ Chetty** Unspecified 3
TOTAL 46
* A caste among **Refers to an eth:
110

ertisers have given caste and religion. ty communities the ecified. Caste and ajor considerations ties in the case of
The importance : he earlier marriage d by distinguishing imate children and make decisions on These practices ed by new laws reinheritance. Yet, ntinued to play an rriage.
marriages arranged 2mphasis has been ors such as family ment, income etc. caste and religion. D caste, religion and ces reflects what is onal practices; while in modern attributes round, employment partner, reflects the rn values have pene
regarded as tradiendency indicates a ticularly among the
of sampled adverteligion is given in that the Govi caste
DL/ERTHIS AERS) Female %
D 33 75, O D 2.3 D 7 Ι6. Ο D 2 4.4
I 2.3 D ---
O 44 I OO. O
hile those belonging
takes up the second : advertisers belonges are small in numon also reflects the the country where
the Karawes form he other castes who
performed different service functions under the feudal society form the minority. Although the advertisers have specified their castes, they are not engaged at present in their respective caste Occupations, or the occupations of respective castes are not related in most cases to their present jobs. In this context the information given about caste has no economic significance. The table also shows that the majority of advertisers (84 per cent) are Buddhists, while Catholics and Christians are small in numbers,
Socio-Economic Considerations
In examining the emphasis placed on caste and religion for arranging marriages through newspaper advertisements, it was found that over 55% of the advertisers did not specify whether they sought partners from their own caste and religion. A majority of the advertisers thus seemed indifferent towards choosing partners from a particular caste and religion. This majority of advertisers, however, specified their own castes and religions, which implied that accepting a partner from a different caste or religion may be allowed but it also showed that they attached significance to their own Castes and religions. The decision of this group on arranging a marriage with different castes may depend more on economic factors such as employment and income or social factors such as family status of the partner. This points to a tendency away from traditionally accepted norms in a situation where adoption of modern norms is likely to take place as a response to rapid economic changes.
About 33% stated explicitly that the bride or the bridegroom sought should be from the same caste and religion; while about I 2% stated that they did not consider caste and religion as important and were willing to accept partners of any caste or religion provided other considerations such as employment, income, or family status were satisfied.
A classification of the advertisements by caste and the degree of emphasis placed on caste and religion in choosing their partners, shows that the lack of emphasis given one's own caste is common to all Castes. In the case of 79 advertisers of the govi caste only 25
TABLE V D OF ADVERTISERS BY CASTE AND RELIGION
Bud- Catho- ChrisF T % dhis? lic βίαιη Hindu Other 48 79 67.5 73 5 I
7 I 3 II.O 8. 4. I - 2 5 4.3 4 - — - 4 4 3.4 3 I - - 2. 2 I.7 2. n— - — 4. 4 3.4 4 nu — ー I 3 2.5 2 --— - I I o. 9 - n - .معسمية
2 I.8 - - 妻 I 4 3.4 2. n - 2
7 т т т 7 , оo.o 98 (84.о)
II (9.4ο) 2 (1.7ο) 1 (ο.85) 5 (4,27)
he Tamils which is similar to Govi caste among the Sinhalese. - hic minority in the coastal areas.
EconoM1C REVIEW, FEBRUARY 1977.

Page 13
(31%) stated that the bride or the bridegroom sought should be from the same caste and religion. While six advertisers of the Govi caste (7.6%) explicitly stated that they do not consider caste or religion; another 48 advertisers (60.8%) did not specify whether the partner sought should be from the same caste and relig1on.
In the case of Karawe caste three Out of thirteen advertisers (23%) stated that caste and religion are considered important while another ten (78 %) did not specify whether the partner sought should be from the same caste and religion. Among the advertisers of other castes not much emphasis has been placed on caste and religion of the partner except in the case of a few advertisers belonging to the Salagama, Navandanne and Vellala castes where a majority had sought partners specifically from their own castes and religions.
Among the sampled advertisers only (12%) stated definitely that no caste, religious or ethnic differences would be considered in choosing their partners. As against this number, 30.8% stated that the partner should be of the same caste and religion, while 57% of the advertisers had not specified whether they expected partners from the same caste and religion. Although the number willing to deviate from the accepted norms is still small, the increasing number of advertisers who take on an attitude of indifference towards the traditional norms such as contracting marriage strictly within one's own caste and religion suggests that the tendency towards a departure from such norms can continue to grow as new values affecting marriage are likely to be developed in the changing economic context.
Employment and Family Background
Apart from the factors like caste and religion, emphasis has also been given to employment, family background and income or wealth of the partner. These modern attributes of choosing a marriage partner appear to be playing an important role in arranged marriages through newspaper advertisements. Among the sampled advertisers 73%, expected employed partners preferably in Government or Corporation service, while another 23% expected partners with a good family background. This consists of 16 male advertisers who sought nonworking brides from well connected families. The phrase 'well connected implies the relationships of the respective party to various positions in the power structure including not only wealth but also political, bureaucratic and other power positions. Among those who sought employed partners, there were 25 males who made up over 54 per cent of the male advertisers. Four of them expected professionally qualified partners. All the female advertisers sought employed partners earning a good salary. In some cases the type of employment of the partner was specified. Among them, there were ten females (I4% of the female advertisers) who sought professionals
TABLE VI
Occupational Category of Bridegrooma Professionals Executive and Staff Govt. or Corp. Se Public & Mercantil ral employees(Teас etc. - - - Self-employed in bu
Total
(Doctors, Engineers and another I6 (2.3% tives of Staff Office Government of Cc
Dowry
The Offer of dow traditional feature C in Sri Lanka, appea1 tant place in marriag newspaper advertiser the number of pros Were entitled for dC money, property etc (75%) of them 34 while the remaining It is interesting to unemployed female a did not offer dowr that the possibilities partner for marriage values are not limite bride is employed income. In the ca. females, however, a an important qualifi
It is evident fron occupational status sought depends to a quantum of the dow ments which specify the bridegroom soug the dowry to which shows that the hig dowry the greater til bridegrooms in re In some cases the carried by a female an engineer was a while, those who so Staff Officers, the Rs. 5 O,OOO to Rs. It mation on dowries w occupational catego groom sought shows female advertisers W. worth Rs. Ioo, Ooo o professionals. Anc professionals were ei lesser dowries. Out tisers who sought Officers in Governm service four had do 5 O,OOO - IOO,OOO Or in those who sought clerks and teachers mercantile sectors, th generally less than t fessionals or executiv This data reveals th dowry offered varie occupational status
EconoMic REVIEw, FEBRUARY 1977

* 4 LUE OF DOWRIEF OFFE RED FOR MEN IN
PARTICULAR OCCUPATIONS
IOO,OOO 5 O,OOO IO,OOO IO,OOO Vo Value of Of λία A0 ακ donvry Doury-Rs. above IOO,Ooo 5 O,Ooo les r
- - - - - - 4 2 I - 7 Officers in ΕνίοeS ... 3. 3 3. IO
Sec. genehers, Clerks
- - - 9 9 Y 8 iness - - I I 2
5 5 I4 I3 37
Accountants etc.), who sought Execuis preferably in the irporation services.
y which is another f marriage customs s to take an impores arranged through nents. In the sample, pective brides who wries (in jewellery, ...), amounted to 53 were unemployed I9 were employed. note that out of 39 dvertisers, only five tes. This suggests of finding a suitable : under present day d if the prospective and earns a fair se of unemployed dowry seems to be Cation for marriage.
in the data that the of the bridegroom
large extent on the 7ry. The advertise7 the occupation of ght and the value of the bride is entitled, her the value of a he tendency to seek puted professions. value of the dowry seeking a doctor or bove Rs. Ioo,ooo; ught Executives or dowry was around boooo. The inforwith reference to the pry of the bride
that four of the five tho offered dowries r over were seeking ther three seeking ntitled to somewhat of ten female adverExecutives of Staff hent or Corporation wries worth of Rs. hore. In the case of employees such as
in the public and e dowry offered was hat offered to prores and staff officers. at the value of the s according to the of the bridegroom.
It also reflects a certain price attached to occupations of different status. The dowry system under these values therefore takes the form of a commercial transaction which is different from what existed in the past.
Emphasis on Dress
Emphasis has also been given in some instances to the dress of the partner sought. Among the female advertisers about (35%) emphasised that the partner should be European-dressed. This reflects to some extent the continuing cultural Westernisation in the country. The dress of the partner is, however, not an important consideration which can be generalized; it only shows a point of preference when a choice has to be made between several prospective bridegrooms who respond to attractive marriage advertisements. The emphasis placed on horoscope in matching partners is also important. The traditional marriage relied to a great extent on the horoscope. If the horoscope of the prospective bride and the bridegroom did not match each other, a marriage could not have been arranged. The importance attached to matching of horoscopes in the case of marriages arranged through newspaper advertisements is considerable. Of the sampled advertisements 67 (57%) gave information on the horoscopes of the prospective bride or the bridegroom concerned and expected responses only from those who had matching horoScopes.
The characteristics of the prospective brides and bridegrooms who advertise in the newspapers suggest certain tendencies towards a change in traditional marriage practices. The information on the type of partner sought and the emphasis placed on caste and religion is particularly significant. It leads to the conclusion that strict considerations of Caste and religion in arranged marriages, among the middle classes tends to change in a context where traditional norms are being modified in a society that adopts to changing economic situations. These advertisers come from different parts of the island and probably many of them have their roots in the rural areas with their parents probably coming from a lower class than the applicants. In this sense, at least some of the advertisements will reflect the aspirations of a rising class and their desire to 'buy' status, a phenomenon common all over the world.
Sudatta Ranasinghe
11

Page 14
If the bridegroom is a professional meaning a doctor (person with Western medical qualifications), engineer of an accountant (those who possess professional qualifications in the repective fields) whose monthly earning capacity is above RS. I, ooo-, the price offered in the form of dowry is generally higher. A Compromise in regard to this price can be entered upon, depending on the occupational status of the female if employed, or on her family background, meaning the connections of the prospective bride's family to various power positions in society. The quantum of dowry and in what forms it is offered, therefore vary according to professions and status attached to these, and qualifications, income etc. of prospective bridegrooms.
According to Sinhalese traditions, the offer of a dowry was justified on the grounds that the Kandyan laws of inheritance did not permit the females who were given in diga to inheritancestral property; thus, dowry represented the right of a female member of a family to share a certain portion of ancestral wealth. It was also considered that the dowry would not only help a female given in diga to establish herself economically but
would also be added support to main
tain her dignity within the kin group of her husband. If the union ended in divorce, it entailed the restoration of dowry. This practice was legally ensured by the Marriage and Divorce Ordinance of 1912. V
The dowry was also a dominant feature of Tamil and Muslim marriage practices. According to the Thesawalamai and Muslim laws, the dowry given in the form of property is subject to restoration. On divorce, but the donation of cash (known as Kaleuli in the Muslim law) made to the husband's party Once the marriage is finalised, is not generally returned even on divorce. The mechanism of dowry among the Tamil community is interesting. The marriage practices particularly among the Jaffna Tamils appear to be more rigid in dowry transactions. It is evident more in the case of middle class marriages, where the bridegroom is obliged to provide the bride with jewellery worth a few thousands, and in turn the bride's party is obliged to make a donation of cash (amounting to several thousands) to the bridegroom's party after finalising the marriage. The dowry
12
given in the form a transaction that marriage. The Taj cover the cash dona disposal of the hus some instances thi vested in the educ band's family meml be converted to a frt the husband's famil marriage of a fema husband’s family ta
The rigidity of specially in the cast actions among the implies a severe b well as economical where there are fe reached the age of r girls are born to father has to devote life to raise funds fo marriage of his dau sure which is made of unjustifiable trat to the unfavourable tailing the matrime some people. Th where young femal to get married at th to the inability of make a substantial d to the family of th posed or otherwise
Generally, the CaS far more seriously b the Sinhalese and rigidity of tradition tices has undergone in the South. In on cumStanCeS amOng marriages not conti arrangements accor social standing; an essential.
The practice of ir and giving of dow
embedded in Mus
law; and to man marriage law is reg law. Among Mu still persists where. ing to marry, app maade to the bride's
for their consent'; 'S of such bride be de make his intentions latives of the brid to obtain their coi consent has been custom that the bric interchange some
however, are recip:

of property etc. is comes after the mil Law does not tion, which is the pand's family. In is donation is inlation of the husess or it can even Sh donation from y to another if the le member of the kes place.
marriage practices 2 of dowry transfamil community urden socially as ly to the families males who have narriage. If more a family a poor : the Whole of his r donations at the ghters. The presby such a system sactions, has led
situation of curnial prospects of oe 25o 11h Siča fin. CeS es find it difficult Le proper age due their families to onation or dowry eir partners pro
te system is taken y the Tamils than as a result the all marriage pracless change than ly exceptional cirTamils are such acted by parental ding to caste and i where dowry is
terchange of gifts ies is most firmínly lim custom and 7 Muslims their arded a religious lims the custom *A person wishlication must be ather and mother hould the parents ad, the man must known to the re
's sent; And after btained it is the e and bridegroom presents which, Ocally restored if
and endeavour
the marriage does not take place'; "The parents or nearest relatives of the bride shall then with the knowledge and consent of the bride enter upon an agreement with the bridegroom concerning the marriage gift, called Maseavien' (i.e., Mahr).
Under Muslim law a valid marriage is constituted by declaration and acceptance, with the proper stipulation of dower (mahr) payable to the bride, in the presence of two competent witnesses.
Following the religious ceremony is the civil ceremony where the registration takes place. The register is signed by the bride's father and if he is not alive by the grandfather or a brother or male next of kin on her father's side. At this stage the sum of money that the bride should receive as "mahr is stipulated and entered into a column in the Official register. This stipulation becomes a key factor in the event of divorce. The practice till recently was to state the amount of “mahir” in gold, but today the value could be denoted in rupees. It is compulsory that the column in the register for “mahir” is filled. There is also a column for dowry, where the amount to be given by the bride's family should be stated, but filling of this column is not compulsory.
The impact made by norms and values behind the institution of marriage on the employment market, education and also on job aspirations of youth is considerable. Although it is not empirically tested a few general observations on such implications could be made. The characteristics of the present employment market are such that there is a greater demand for professional skills which are in short supply. Thus the price of these professional skills also go up as the demand increases. The gaining of professional skills involves a substantial investment in education and it is only a limited number who could afford it. The place for these professionals is open not only in the domestic employment market but also in the employment market abroad, All these have contributed in raising
their professional status and in turn raising matrimonial prospects.
Although there is a short supply of other technical and professional skills vital for national development, society has not recognised the dignity of such
EconoMic Review, FEBRUARY 1977

Page 15
labout (technicians, construction workers, para-medical workers etc.) by placing such skills on a higher point of the wage structure. In the case of agriculture too the same situation prevails as there is no proper recognition, monetary or status-wise, for those Scientifically trained in agriculture. These peculiarities of the employment market have had adverse effects on the economy on the one hand and on the formation of social values on the other.
Social Valles which aire also con ditioned by the class characteristics of society, attach discriminatory prices to labour skills falling to the upper and lower system and have used the institution of marriage to maintain this discrimination more firmly. Here one can find that wealth transactions in the form of dowry (which also takes different forms) are being regullated by these social distinctions and in some instances it implies a transfer of accumulated Wealth from One family to another, forming family phalanxes. The professional skills (gained mostly abroad) have been of greater use in the accumulation of wealth over several decades. This is largely true in the case of the medical and legal professions. The marriage alliances of some of the professional families in the early 20th century would have laid the basis for some of the present norms regarding dowry. The educational system in Sri Lanka is still largely geared towards examinations and certificates. Passing higher examinations, securing stable employment and settling down with of course a good dowry have become goals of society. The whole educational system has been conducive to these goals and patticularly those who had access to better opportunities of education, have been able to achieve these goals entering reputed professions and other power positions in the administration. The prospects and status enjoyed by those in certain professions have also created an unnecessary burden to society as the education system, after taking up a substantial portion of national income has apparently been able to create fewer successes than failures. Theincreasing demand for higher education from those who wish to enter a certain type of employment compel the system to orient itself towards examinations and certificates. But the number
Scoxotic Review, February 1977
WEDDINGS:
Weddings are coming together traditional Sri L period of playing Coming together making. Within a or less laid down festivity and infor The kith and kin were invited. An tem, as friends t from kith and kin Sonnell at a Weddi
In European W air of informalit number of partici wedding today is of the breakdown Further, within t often used in We degree of inform ence pre Vails. T Western wedding of the deep-going occurred over the
The middle cla takes place today Such public place. the country's up| rally tend to ho either one or the c hotels in the city. hotel is in Sri La the coming of ne five years, the pref in this group հ: changed. For the or the lower mid hotels and places of various religic men’s Organisatio are used. Spec Colombo, weddin halls or with the station tourist hot
The middle clai a wedding are t of their relatives. made it in the ne Thus the number large, as the par groom make this their new status to and kin, as well as imposition of at Government it wa spending and was ding ceremony h so-called poflach American Indian status depended o property destroyed Those who attend themselves, if they dresses etc. and the are reflected strong mass communicati fashions have sp country easily. Of a tendency towarc in those that atten hotels, as well as,
dings in outstatio
The dress of the w
times were sarees,
ciated closely with

REI LANKA MIDDLE CLASS STETYLE
raditionally a time of and festivity. In the nkan village it was a of raban, of children eating and speechformal structure, more by tradition, an air of mal interaction existed. of the bride and groom l, in the traditional sysbo were largely drayn. the majority of the perng were relations.
2ddings too there is an y and festivity. The paints in such a Western generally small because of the extended family. ne formal attire that is stern Weddings a high ality and even irreverhe present day type of is of course, a result social changes that have last 200 years or so.
ss Sri Lankan Wedding cither in a hotel or some
The Colombo elite of per middle class geneld their weddings in ther of the two leading As what the leading Linka has changed with W hotels over the last erred place of weddings as also simultaneously
middle-middle class ille class, less expensive of gathering like those Dus organisations, wosins, private clubs etc. ially in areas out of tgs take place in town advent of the new outels, sometimesin a hotel.
ss that can afford such hose who in the eyes are those who have aw competitive World. of invitees tend to be ents of the bride and an occasion to show the less fortunate kith , to others. Before the lsterity rules by the Ls an occasion for high te. This type of wedas similarities to the ceremony of certain tribes where one’s in the amount of one's lin front of on-lookers. weddings today dress r are females in Sarees, recent fashion changes gly. With the spread of ons, as well as travel, read throughout the he sees therefore today is similarities in dress d weddings in the big those that attend wedn halls.
women which till recent were therefore assothe traditional culture.
This dress therefore had an organic growth with the traditional culture, The middle class men on the other hand dressed themselves in trousers and coats or national dress (for the rural middle class). However, recently the trouser and coat has specially for the younger become the standard uniforn. But this is an imported dress (specially the coat, not having any functional value in a hot climate like Sri Lanka and not generally worn everyday) and consequently the men wearing these in such gatherings appear uncomfortable and often have the appearance of stuffed animals. Further the suits tend to be dark in colour, reminiscent of Western fashions decades ago and of present day Western funeral parlours. (The imitative culture is always a few decades behind the imitated).
Whereas in the village wedding or in the wedding in the West there was a high degree of social interaction, the formal middel class hotel Wedding has only limited social interaction. One sees therefore, Women and men seated in circles (quite often in separate circles, one for men and one for women) rarely talking to each Other and very stiff in appearance. It quite often seems that everybody is Watching each other about their dresses or social cues. An addition to the middle class wedding over one or two decades ago is the Western band. At the time it was introduced the bands used to play outdated western music, but as the outdated western music was melodious it sometimes fitted into the spirit of joy in a Wedding. The present day Wedding bands also play outdated music, but since it is outdated music of recent years which was basically to be played in pop groups and such surroundings, a high level of inappropriate noise is developed,
With the coming of recent pop groups Over the last 20 years Orso, a phenomenon in such weddings is the institution of dancing. Dances originally in the West were those of the ballroon as well as those associated with the sway and beat of largely African derived rhythms. The new middle class, specially the younger groups take part in dancing in many such weddings today, even those held in rural areas. Males Outnumber females in such dancing contrary to the imitated Western pattern, in the more urban areas the female participation being higher. However, the amount of female participation is increasing rapidly. When such dancing occurs, there are, depending on the social class represented in the wedding, a large number of onlookers who look upon it as a form of cabaret.
In some weddings there is also instituted an informal bar, where alcoholic drinks are served. Sometimes the hotel bar is converted for such use and a selected few (almost exclusively males) are secretively given a drink. This of course is a practice emanating from the village where village morality decreed that drinks be not indulged in but was done on the sly. In weddings nearer the rural areas the bar is more surreptitious and males retire almost in secret for a quick drink
to reappear later in the larger gathering.
3

Page 16
succeeding is relatively few compared to the number competing for such qualifications.
The job aspirations of youth who join the labour market after getting Some educational qualifications are also geared towards certain types of jobs. Those who join the workforce after some years of formal education as well as those who join the work force with some 'certificates' generally expect 'wage earning, stable jobs. The more educated aspire to jobs that have white collar status, but hardly anyone aspires to jobs in agriculture or related fields. These aspirations reflect the value system of present society, within which today’s youth leaving schools and higher educational institutes exist. According to these values a youth if not in wage earning, stable employment will have meagre matrimonial prospects. Many studies on job aspirations of youth reveal that they expect jobs which ensure a stable income, security and future prospects. One can also observe a relationship between these criteria and the values by which the price of a young man is assessed in the case of present day arranged marriages.
Marriage also plays an important role in Sri Lanka's political spheres. Tue family relationships developed through marriage contracts particularly among the elite families of Kandyan as well as low country origin have been used as an entry to politics by some while there are other instances where the relationships developed through marriage have been used to strengthen the political position of those already involved in politics. There have been some studies of the genealogical background of present day leading politicians and it strongly suggests that marriage relationships tended to operate as a as a hidden force of solidarity among these politicians. In some instances these relationships have also been of use to mitigate the ideological differences between some of these politicians. These facts have also been widely discussed in many forums including the National State Assembly. The nepotism arising from political favours has been a characteristic feature of the ruling elite groups not only in Sri Lanka but also in many other ex-colonial countries with and without parliamentary democracies.
'14
In several such
under this politic the elite classes decendants of ol the indigenous c Social and politic these countries ha their elites to ent their power to sat rests. In this proc marriage has beer the political as we rests of this class.
Present day mar
by the growing ec
Sri Lanka. Amo. youth unemploym as a most crucial likely to have a si marriage. It wou to say that youths the age of marriag as they have no s ployment. Thus t employment have
postpone marriag Sinhalese traditior the means to su: family before he ge past, self depende Concerned was cc fication for a man
riage, and this v
bride's party on
bridegroom’s ance present day norr emphasis to man's income, although i traditions are stillb
The present u lation is estimated: which over 5oo,oc About 75 percento are youth in the a years and they cc number of males majority of these ceived some sort cation. It is also si who are married very small propol employed. Amon, majority are femal unemployment am rural and urban se employment oppo in agriculture as w sectors. This prol
dous significance
socio-economic it postponement of r social consequen
various economic

stances the rulers system came from consisting of the feudal chiefs and pitalist class. The 1 environment in been conducive for r politics and u se sfy their class inteis, the institution of used to safeguard 1 as economic inte
iage is also affected nomic problems in g these problems, nt can beidentified problem which is nificant impact on ld not be incorrect who have reached e are yet un married elf-supporting emne problems of uncompelled them to 2. According to a man must have pport a wife and ets married. In the nce where food is onsidered a qualito contract a laras tested by the their visit to the stral home. The ns generally give s employment and in the villages early eing practiced.
nemployed popuat nearly 8oo, Ooo of Do live in villages. f these unemployed ge group Of I 5-24 insist of an equal and females. The south have also reof secondary edugnificant that those constitute only a ction of those ung those married the es. The increasing long youth in both :ctors suggests that rtunities are limited ell as in other wage olem has a tremenon account of its mplications. The marriage can be one ce coupled with factors.
Cashing in on Marriage
Sri Lanka has increasingly attracted attention, in recent years, of Westerners seeking Oriental marriage partners. The latest exposures on this sordid business came out recently in the West German tabloid “ Bild an Sonntag” and the Swedish newspaper “Afzenblade/. The Swedish paper described how a girl from a rural home in Sri Lanka had found her dream of a Scandinavian paradise turning into a nightmare.
The lure of an apparently comfortable life, free from financial stress, has emboldened many Sri Lankan girls to answer advertisements in the local press with the hope of wedding
men from affluent western countries.
The principal motivating factor in this type of marriage is money. The applicants apparently believe that the middle aged men who seek Eastern brides will not merely honour their marriage vows but also elevate them from their humdrum, prosaic existence to the glittering life of the rich world. This seems to be a reversal of the present dowry system; the Western man here provides the money, while in the normal Sri Lanka case the woman is the money giver.
An analysis of the socio-economic backgrounds of many of these girls and their partners has revealed very wide differences particularly in social and cultural backgrounds. The girls are often from families where the fathers are not in a position to give a dowry and settle their charges as they would wish to.
For these tourists, mostly from the Scandinavian countries, a marriage in Sri Lanka is a novelty. There are, however, instances of foreigners marrying Sri Lankan girls and living happily thereafter. Reports reaching our shores from time to time, however, reveal the plight of many girls doing all they could to escape from their country of adoption.
The parents of many of these girls who have scoffed at the mere mention of their daughters marrying an outsider from their selected social circle and backgrounds, readily respond to a suggestion for a proposal of marriage from a foreigner whom they hardly know. The lure is in easy money. They believe firmly that a well settled daughter would bring financial stability to the entire family including those members who are yet to be settled.
Not many of these parents would
have read of the German papers exposures of the lucrative trade carried
on by a Scandinavian marriage agency’. The agency called for photographs along with specific details from Sri Lanka girls who wish to
marry European bachelors. This data was collected by the agency and issued in catalogues to prospective customers for a fee. The interested males fly over to Colombo to take back a willing partner to Europe.
tECONOMIC REVIEW, FEBRUARY 1977

Page 17
The last few years marked a declining fertility trend in Sri Lanka. The rate of growth of population has dropped over the last two years from 1.8 percent to 1.6 percent. This is attributable to factors such as the extension of family planning programmes and rising trend of late marriages among the females as well as males. This is a direct consequence of the postponement of marriage which can be explained in terms of increasing educational attainments of females and an increasing labour force participation among them compared to the past. As mentioned earlier a large number of youth join the workforce but remain unemployed. They are therefore unable to fulfil family obligations which involve not only attending to domestic work but also contributing physically to family income. The increased family burden among the poor communities (in terms of income over 8o percent of Sri Lanka's population falls into the poor category where real incomes are less than Rs. 4oo p.m.) has changed the role of the female from one of "houseworker” to 'income earner'; thus a female youth is now expected to find suitable employment after leaving school. It has been revealed that preference is given to teaching, nursing, clerical and similar jobs by those who have reached G.C.E. (O.L.) or above; and spinning, weaving or similar school work, have been preferred in the case of those who dropped out at the middle school level. The modern norms in regard to marriage such as preference given to employed females with a fair level of education, late matraige etc. reflects to some extent the impact made by growing economic changes on marriage. These changes can be seen even in a village context.
In 1953 the average age at marriage for females was 23 years in general and 20.4 and 18.7 years for Kandyan and Muslim females respectively. By 1968 the average age at marriage rose to 23.6 in general and 21.6 for Kandyan females, while among the females
of the Muslim cor age at marriage significant chang I97 I reveals th: marriage among f further and is ove
In the case of Countries the pos riage and the dec been a phenomer Currently as the from a less develo stage. These char. graphic transitions buted to rapid increasing opport ment, advancement logy, education, c Other factors. In th however, a sim change appears to State of under-de also a manifestatic responds to a si under-development Cators of social education and lite a satisfactory stan indicators of econ such as employm have not.
Conclusion
An attempt has preceding discussi institution of marri Society in its early forms. It is appa nomic rationality o marriage had their economy while the have their roots it nomy; though they characteristics inhe feudal socio-econC importance attache and ethnic different fluence of feudal society while oth such as family st skills and incomes to which the value class distinctions in tutions of marriag
MEAN AGE General Kandiyan
AT MARRIAGE Maler - Femaler ÄMaler Fezzzale I959 - 28. I 22.7 27.8 2I.5 I960 28.3 23. I 27.6 2I.5 1961 28.8 23. I 27.8 2I.7 1962 se 28.o 23. I 27.7 2 Ι. 8 1963 era 28.8 23.2 29.2 2O. O. I964, . 3 23.8 29.4 :" • • ه I.2 24.5 1965 29.6 24.7 23.7 26.7 I966 27.2 22.4 28.5 2.I.8
EconoMIC REvIEw, FEBRUARY 1977
 
 

munity, the average 'mained without a The census of average age at males has increased
24 years.
present developed ponement of marine of fertility has on occurring con
economy moved ped to a developed cteristics of demoare generally attriiconomic growth, Inities of employof science, technoDmmunication and e case of Sri Lanka lar demographic be emerging in a relopment. It is in of how society ulation of partial : Were some indidevelopment like racy have reached dard while Other Dmic development ent, incomes etc.
been made in a on to survey the age in Sri Lanka's as well as modern ent that the ecofearly practices of roots in the feudal modern practices l a capitalist ecostill preserve some ited from the old mic order. The i to caste, religion es reflects the insalues on present ær considerations tus, professional reflect the extent of a society with fluenced the insti
Muslim Males Females
27. I I8.3 27. I Ι8.5 26.5 I8.4 26.8 I 8.5 28.6 I9.5 26.5 I8.5 27.5 I9.7 26. I I8.3
The socio-economic transition in Sri Lanka started with the influence of Western powers had a considerable impact in changing the characteristics of certain social institutions, among. which was the institution of marriage. But these changes (for example monogamy taking the place of polygamy) did not occur as a result of evolution but as a result of changes introduced from outside. Thus the institution of marriage by itself did not change entirely. It preserved some of its feudal norms and values which justified, within the old social framework, the economic rationality on which the institution of marriage was based. The growth of the capitalist economy in the 19th and early 2 oth century took place through the plantations, but it had only a little influence in changing the life of peasants who remained isolated and not directly integrated into the plantation economy. In this context the pace of social change among the peasants was notas rapid when compared to the changes that took place among the urban communities. The distinctions between norms and values behind the institution of marriage among peasants and urban communities would also reflect the distinctions between the economies within which they operate.
The socio-economic implications of present day marriage practices would point to the fact that existing norms and values governing these practices are nothing but a manifestation of a “social cost with little returns to society as a whole. The consumption patterns of the elite, which are generally conspicuous, are formed according to these values. Further such values also promote some form of social and cultural dependence on the West. They also limit the possibilities of integrating various social groups for common goals. These norms and values also tend to maintain social inequalities through a system of unjustifiable transfer of wealth. It appears that some of these practices attach a commercial value to the female and thus undermines the role of woman in present Society. The impact of present day criteria, by which, marriage contracts are entered upon is considerable in areas such as the employment market, education and in the formation of people's aspirations. These factors have all compelled society as a whole to pay a higher price than it should.
15

Page 18
.*്:
Land Reform and Co-operative Farming
The Janawasa Law passed by the National State Assembly marked another step in the country's recent agrarian reform. This law which provides for the registration of certain societies as Janawasas, and the establishment of a Janawasa Commission to register, regulate and supervise Janawasas is a significant move in the history of collective farming in Sri Lanka. This law marks a phase in the transition from private ownership to collective ownership and fostering of a collective management and development of agricultural land. This may be considered a progressive step towards socialized agriculture. Cooperative farming in this country is not a recent development. Attempts at co-operative farming date back to the early fifties when this system was tried out on settlement schemes in the dry zone. Such early attempts were introduced mainly among peasants from the wet zone who were settled in agricultural settlements in the dry zone. These did not meet with much success and had to be abandoned. A fresh attempt was then made in the mid and late sixties. This time it was among the employed youth who were settled in youth settlement schemes. Although ambitious plans were drawn up to establish, 23C Co-operative youth farms between 1966-70, only 43 were established during this period with a membership of 2,739 youths as against the target of 25, 5 co,
Land Reforms
Co-operative farming reached new grounds following the Land Reform introduced in 1972. Provision was made under the Land Reform Law for the establishment of co-operative settlements (Janawasas). For this purpose a separate unit (co-operative settlement) was established within the Land Reform Commission. With humble beginnings in 1973 today Janawasas have grown considerably within a short span of three years, amounting to 183 in 14 districts, covering an acreage close to so,Ooo and a membership of 18,ooo. In addition to the Janawasas there are also the Samupakara Gammanas (Co-operative farms under the Ministry of Agri
6
culture) and the D farms (under the Pl Thus co-operative f key component oft cultural structure.
There is no doubt farming is finally way to safeguard t poverty, land, hung and oppression.
The ideal policy viable holding to ea feasible in view C expansion of cult Current population The total cultival. country is estimate Io min. acres of wh cent is already ul A case has beer) argi tive farming on te as well. For instan Abeyratne, the Di culture emphasised:
*The % 0% bežbeen environmental tems of Small bola current social demands dant difficulties of se αήd έθε ηore θα έβγή /abour-intensive collet systems which are envir
In socialist coun farming is a politi co-operative farms with the rest of the rative farms are thi part of a socialist co-operative transfe culture is not just a nisation which can separated from th social order and c p OᎳef .
Even in these co formation of co-ope gradual process. I for instance, the tra place in about 15 on the other hand, the war, started O. gramme of collectiv quently decollecti
 

DC Co-operative
anning Ministry.)
arming today is a he country's agri
that co-operative he only realistic ne pea Sants from ger, backWardness
of allocating a ch peasant is not f the limits on vable area and
growth trends. ole area in the d to be around ich ab Out 5o per nder cultivation. lued for co-operaschnical grounds ce aS Dr. Frnest rector of Agri
lice before ius is lly tumbalanced Syslings, dictated by και νέέθα// έββαίίρηrvicing and support 01രged, large-001e', five or co-operative onmentally stable”.
tries co-operative cal necessity and are in harmony :conomy. Co-opeLus an in separable 2conomy and the ormation of agriquestion of Orgape carried through e nature of the haracter of state
untries the trans
native farms was a
in East Germany
risformation took
years. Poland immediately after In a massive proisation but subsevized them arid
today 8 o'9, of the land in Poland is under private ownership.
Co-operative settlements in Sri Lanka are just a segment of the agri
cultural sector of the country. Out
of the total lands vested with the State following the Land Reform, only 7% of it has been alienated for co-operative settlements while over 20% of the lands vested have been redistributed as individual holdings to landless peasants.
While it is important that co-operative settlements are given a prominent place an equal amount of Consideration must be given to organise production in the lands distributed as individual holdings. The mere redistribution of holdings to the landless should not be the sole objective and every effort should be taken to bring these lands under an appropriate production plan so that these would give the recipients a reasonable in
come and could make a major contri
bution to increase agricultural production of the country. Excessive attention on Janawasas could result in mutual jealousies and rivalry between the villages and estates which would also lead to problems in inte
grating the two. *ം
Time for Assessment
In Sri Lanka collective farming is
stillin its embryonic stages. Although
we do have naany co-operative farms.
which are managed successfully we cannot yet say that Sri Lanka's expefierce in collectivisation is a com
plete success. There are many prob
lems yet to be classified and it will be a long time before we could evolve a system based on our own ideologies.
This brings us to consider the present position of co-operative farming schemes in Sri Lanka. Is the time ripe for us to increase the number of co-operative farms? To what extent
have Sri Lanka's co-operative farms been successful? Have we evolved a system based on our own ideologies
and aspirations of the people? Thus it would be useful if
Lanka and identify its obstacles for
its sustained growth before further expansion is made.
EcoNoMac R.Ev Ewr, FEBRUARY 1977
ould now make a complete assessment of the co-operative farming system in Sri

Page 19
OOCONUT
Trends in Production and Export
Sri Lanka's coconut crop in 1977 is expected to be one of the lowest in recent history. The Coconut Marketing Board in its Annual Review of Coconut Products for 1976 has stated that the adverse Weather should continue to affect the coconut crop in 1977 and a marked decline in the crop is expected particularly during January–April 1977 and for the year as a whole the crop is estimated to be below 2 ooo million nuts, which is one of the lowest crops in recent history. The review points out that coconut production in Sri Lanka in 1976 is estimated at 2330 million coconuts compared with 25.85 million in 1975. This represents a decline of 255 million nuts or nearly Io9% in relation to 1975. The decline in the crop was primarily a result of adverse weather conditions and the shortfall in the crop was most prominent in the months of May – June and October - December of 1976.
The export surplus (in the form of fresh nuts, Copra, Coconut oil, desiccated coconut) in 1976 amounted to 794 million nut equivalents representing some 34% of the total crop. The export surplus in 1976 was lower than in 1975 by some I2O million nut equivalents or about I 3 %. Table II gives further details.
Table
Estimated Export Export Coconut Crop Surplus Surplus
as % of the
Ονοβ
Y βαν Million. Nuts
I 97o 2445 887 36.3 Ι97 Ι. 2668 IIo9 4 I.6 Ι972 28重8 1.23 I 43.7 1973 1946 5旁马 I8.o I974. 2030 495 24.4 I975 2585 9I4 35.4 1976 I 330 794 34. I
Domestic consumption in the form of fresh nuts (food nuts) absorbed 53% of the coconut production in
1976. Calculated on the basis of an annual per capita consumption of
9o coconuts, the total domestic consumption of fresh nuts in 1976 amounted to II 236 million nuts, an increase of 1.2 million from the corresponding level in 1975. Copra Pro
EconoMic REVIEw, FEBRUARY 1977
duction in 1976
I 5 I, 382 metric ton sented a drop of Ox 25% from the prey Copra production 33% of the cocon
EXP{
Product
Coconut Oil Desiccated Coconu Fresh Nuts
Sub Total: Kernel
Coit Fibre Produc
Coconut Shell Pro
Coconut Ekel
Sub Total: By-pro
ΤΟΤΑΙ ΑΙ I PE
The production a products (coir fibr products and cocon considerable impro previous year’s leve productionis estima representing an 28,4ρο MT Or 369 level. Coconut sh duction is estimate an increase of 85 oC relation to the 197, ekel exports were 58 2O79 MT in I975, a.
18o06.
As seen in Tal total value (f.o.b. product exports Rs. 5 o7 million in Rs. 5 o5 million it product exports (f oil and DC) account total export earning in 1975. The larg bution came from 38% of the total cl DC with a share of
ducts contributed ir
total export value. ings from coco)
amounted to Rs. 118
presented an increas or over 20% in rel year's earnings. In port earnings from
 
 

is estimated at nes which reprerer και ο ορο MT ΟΥ rious year's level.
absorbed about ut crop in I 976.
at Rs. 388 million recorded a drop of
Rs. 1.8 million of 4.5% in relation to
1975 earnings.
Desiccated coconut production in
1976 amounted to 46, I86 MT which represents a decline Ofnearly 5396 MT
or II.9% from the previous years.
level. Desiccated coconut absorbed
Table II
DRT WALUE OF COCONUT PRODUCTS
(Rs. Millions)
1975 % of Total 1976 % of Total
219.0 43·3 I 91.6 37.9 世 I 72.2 34.0 I82. I 35.9 9.3 I.8 7.8 I.5
Products 4ဝ6.4 8o.o 388.3 76.6
tS 84.5 Ι6.7 I OO. 5 I9.8 ducts II.9 2。4 I3.2 2.6 I-5 O... 3 4...4 O.9 ducts ... 97.9 19.4 II 8. I 23.3
RODUCTS 505.3 IOOO 5ο6.6 3. OO. Ο
und export Of bye, coconut shell ut ekel) showed a veinent from the ls. The coir fibre ted at Io6, 5 Oo MT improvement of (, from the 1975 ell charcoal prod at και 2,5 οΟ ΜΤ, ο MT ΟΥ και 5 % in 5 level. Coconut 383 MT as against n increase of over
ble III above the ) of all coconut amounted to 1976 as against n 1975. Kernel resh nuts, copra, ied for 77% of the gs as against 8o 9, est single contricoconut oil with osely followed by 36%. Coir Prolearly 20% of the The export earnnut by-products : million which ree of Rs. 2 o million ation to previous contrast, the exa kernel products
13% of the coconut production during the year.
TEA
Prospects of Further Upward Movement in Prices
Attractive advances in prices of all grades of tea have been recorded at each successive auction during the opening two months of this year. This trend has in fact been noted in all auction centres in the World. As a leading Colombo broker states: “The most popular question in the trade today is When is there going to be a checé in this persistently upward suing in prices?'. A very difficult question indeed to ans wer but at the mOment there is no evidence that points towards this in the near future. Tea continues to be the cheapest beverage and as in so many other countries, the U.K.’s most popular retail packet is now around 2o p. per I/4 lb. while the same weight of instant coffee is between 9op and I oop. Further increases are an immediate prospect for both commodities but the reasons for drinking tea are becoming more forceful. World supplies in 1976 increased by 1.7 million kilogrammes of which 15 million kilogrammes was taken up by India for internal consumption. Internal consumption in
17

Page 20
India is expected to show a further rise in the current year. There is no immediate prospect therefore of export supplies meeting with the continued increase in world consumption and we are happily confident that we will not see prices again similar to those of a few months ago. On the contrary, all indications are that there is every prospect of further price increases'.
Sri Lanka teas sold at the London auctions on February 21, registered substantial price increases ranging from I o p to 2o p per kilo. Brokers’ forecast that “perhaps, with these fantastic price increases in London, coupled with the very limited offerings in Calcutta, local auction prices could well move up further'.
Tea prices in London are reported to have moved up by approximately 3oo% during the past year and the basic reason for this is that the forces of supply and demand have begun to work in favour of the producers. Stocks in London have been extremely low and at the end of December 1976 the figure stood at Only 20,450 tons as against the normal average of 23,ooo to 25,OOO tons.
It is a common belief that the world consumption of tea has increased considerably, at a quicker pace than during the past so many years. It is also believed that there will be only limited quantities available for disposal at main auction centres of the world for the next few months. These factors will play a very important part in the world price for tea and everything points to a further upward movement in price for this commodity. It is hoped that production, which does not appear to have increased over that of January and February in 1976, will pick up in Sri Lanka from about April onwards; for unless crop increases are forthcoming Sri Lanka will not be able to take full advantage of the upward price spiral.
RUBBER
Heavy arrivals at auctions
During February there were continued heavy arrivals of crepe and sheet at the public auctions. Values were thus marked down with the easier conditions. Slack overseas markets aggravated the situation. Buying was very selective and defective crepes met with very poor demand.
The extreme drought conditions experienced during the January/February months
had affected the production of qualtiy rubber. -
18
sasan
TRANS
eagramusammassassassassa
Electrifica
The Governmei ahead with an ele of the suburban approval of Rs. 2 project is the ultim in this direction : years ago. The cas for part of our rai sented competentl by many advoca Wimalasurendra ij recently by A. R. P
Wimalasurendra posal to the Engin of Ceylon in 1918 ''The Economies or in Ceylono. After c Sources of energ domestic and tracti tifying about 25o N of non-storage ri power he argued:
“Power derived frc these Sources col Operating SOfile SeC system electrically, section, and that For the purpose o select for considera
Polgahawela to Ba the branch line fro1
His selection o Section in his cor was because of Source of power, a of using descendin grade to generate of their breaking plenish power to t in the same papei also showed the us
"an electrically oper vice in Colombo Colombo, Kandy railless traction (tro to tram and train’.
Wimalasurendra his knowledge first ration of electricity fuels) is more effic generation at each second that the wat ran down from mo of any cost whats drew on his immel world development cluding electrificat

P O R T
ion of Sri Lanka Railway
it's decision to go ctrification project railway and its So million for this ate result of moves nitiated nearly 6o e for electrification bway has been prey and consistently tes starting with n I9I8 and most
• Wijesekera.
presented his proeering Association in a paper entitled EPOwer Utilisation iscussing available y for industrial, on uses, and idenMW (93.ooo Bhp) lin-of-river hydro
Om one of more of ald be utilised for ctions of our railway especially the hill
most economically. f this paper, we will tion the section from ndarawela, including m Kandy to Matale’.
f this upcountry nparative analysis roximity to the ind the possibility g trains on down electricity as part effort and so rehe line. However : Wimalasurendra efulness of:
ated urban train sertramway services in
and other towns, ley buses) as feeders
was motivated by that central gene(even using fossil ient than separate place of use and er of this Country untain to sea free
Oever. He alsO
nse knowledge of is at that time inion of railways.
Wimalasurendra was scoffed at then by his British colleagues in the Association who had neither Wimalasurendra's knowledge of the world or of electric science, nor any intention of upsetting existing ways by electrifying the railway.
But the question arises for consideration as to why railway electrification escaped commitment, let alone implementation, until 1977. The chief advantages from 1900 until now have remained basically the same, namely:
I. flexibility of primary energy source (and hence the chance to use nationally available and/or renewable resources in any country).
2. possibility for regenerative breaking.
3. less moving parts on the train (especially reciprocatively moving parts) and hence less maintenance, longer life, and greater loco availability. 4, comparative silence and smoothness
of running. 5. complete absence of air pollutive ex
halusts. 6, easier scheduling because there is no
need for refuelling or watering. 7. greater instant availability of enhanced
power. 8. opportunity to place tractive force on
all axles of the train.
9. better accelerative and decelerative capability for the same cost or same weight of machine.
These are among the reasons which have impelled both coal surplus countries (Britain, Germany) and oilsurplus countries (Romania, USSR) to electrify their railways. Indeed today two countries most intensively engaged in rail electrification are OPEC members Venezuela and Iran. Moreover USSR and China, both reputed to hold enormous reserves of oil, are both electrifying railways just
as vigorously as are Germany, France,
Holland, Spain and Italy.
How is it then that other countries, such as Britain, were painfully slow in this advance, and still others, such as US and Canada, not only failed to
electrify but even de-electrified some
lines? It is interesting that in USA the big privately owned railways
EconoMIC Review, FEBRUARY 1977

Page 21
were disinterested in electrification even after 1973, whereas the State Governments of Massachusettes, New Jersey, New York, Pennsylvania etc. which had taken over the urban railways and the federally controlled
AMTRAK (passenger trains) are all committed to and urging more electrification.
An even more intriguing question is why successive governments of Sri Lanka, (and even successive railway administrations) until now have opposed, or parried proposals for electric power. In this the CGR could be the only railway outside USA which has of itself opposed electrification from 1918 until 1976. Most state-owned railways (such as British Rail) have pleaded for electrification but have been refused money by their governments.
In this country electrification has had various excuses put forward for postponing this measure. They include such arguments as:
I. alleged shortage of power (which could be self-fulfilling if the same agents postpone hydro development).
2. Corrosion of overhead catenary and masts along the sea coast (a minor controllable problem).
3. necessity to raise bridge decks for electrical clearance (British Rail raised nearly four hundred bridges in 183 miles of electrification from London to Manchester in the 196os; the number of bridges we would have to raise is comparatively negligible).
4. interference with colour light signals and with telecommunications. (This is a matter of the cost of adaptation, yet the first aspect could have been avoided by installing “non-interference’ colour light signalling in the first place).
The chief factor delaying railway electrification in some parts of the world has been the apparent cheapness, and hitherto assumed inexhaustability, of petroleum. Another factor has been the attitude of bankers and of economists brought up in the banking philosophy, who have tended to judge enterprises, and investments in them by the narrow measure of their internalised book-keeping profits or losses. They have not counted social benefits, or social disbenefits which are external to the railway. And they have been reluctant to visualise benefits lasting into the future. . . .
EconoMic Review, FEBRUARY 1977
The electrificat the Colombo area tara to Veyango pressed that it
etter to have go: gala which is a s city in NWP and but so long as si extensions should Likewise the restr to local suburbar gretted. Once the it should be used under it by mean at the electric lim too can follow lines are commis
Germany and what are called of electrification, long term commi and survey and move on from or Without disbandi tion is done. Thi benefit by such would be inher starting now that proceed over til Kurunegala, Mat chikalde and Mat initial Start up se Lankan technolC and trained in a first foreign con Over the plannin continuous elect mille Over the ne
It is not worthy duced the cost of elec High voltage (25,ooo is cheaper than the fication proposed E cause the higher the needed (and theref weight of copper wi. the same energy. Th known to Wimalasui there were no easy se down and converth. current on board th DC or three phase motors. Many other controls are making more feasible and saving in energy, all sekera with good 1 more robust technic as long as hydro pc conditions.
The short-term tric trains is not five years time th rail travel wou With its charac the electric train giving faster, mo1 comfortable trav
 

ion chosen now for extends from Kaluda. Views are exwould have been he as far as Kuruneignificant and focal also to Negombo, Dme part is started, be able to follow. iction of the scheme trains is being recatenary is installed, by all trains moving s of loco switching nits. However, this once the suburban sioned.
France both have “rolling programs' That is to Say a tment so that design construction teams Le Section tO anOther
ng, when each sec
is country too could a commitment as ent in government t electrification will me all the way to alle, Badulla, Kochara. Once the first egment is ready, Sri gical teams set up Ll aspects under the tractors could takeg and execution of rification mile by xt few decades. that technology has reitrification in real terms. volts) AC electrification 2,400 volt DC electriby Wimalasurendra bevoltage the less current ore less diameter and re to carry it) to convey is Was of course not unrendra, but in those days plid state devices to step igh voltage single phase e train into low voltage Current for the traction devices such as thyrister regeneration by braking less costly, with great though A. R. P. Wijeeason tends to favour ques for the time being ower is plentiful in our
h advantage of elecsolely economic. In le whole quality of ld have improved. :teristic advantages
will be capable of
ce frequent and more.
vel which will be
attractive for off-peak as well as peak riders, and should be properly catered to by CTB feeder services to rail stations.
But the chief future advantage for which our descendants will have to thank the present decision-makers relates to energy. The world has approximately 98 billion tons of proven petroleum reserves which even now it is using up at the rate of 3 billion tons per annum. Other things remaining unchanged the oil would be over in 33 years time. Today's most hopeful optimists expect another I 4o billion tons of oil to be discovered, but then they expect world oil consumption to rise to at least 7 billion tons per annum. The increased use will partly come from persistent profligacy in OECD countries, but also from increased “reasonable use in socialist and some Third World countries breaking through the poverty restraints. The net effect, according to forecasts, will be increased costs of extracting oil from deeper wells or less accessible places, and even more persistent pressure on prices due to demand acting against the increasing desire of oil producers to keep their stocks on the ground for future disposal at higher prices.
For Sri Lanka this may mean in terms of these estimates, an unbearable price of CIoo (1977 dollars) per barrel of oil by the late 1990s as against a mere (I 2 today. Hence any viability comparison done today need to be based on a realisation that oil prices may increase up to eight times as fast as the general level of prices under inflationary conditions.
In this context it has to be noted that although the cost of hydro turbines will also go up somewhat, and the cost of electric rail equipment, and other associated costs, and indeed the cost of such foreign experts and contractors as we may need with the flight of our own talent to take up other countries challenges , although all these things will go up, the cost of the water precipitated on our hills, and the cost of gravity compelling it down to the sea will remain zero, with one qualification.
The qualification is that trees are maintained in the hydro catchments, to serve as the first and largest water retainer.
19

Page 22
FEATURES
Principles and Policies to Prom Sri Lanka's Milk Production in
Earle de Silva
The glaring shortage in national mile supplies and an inability to satisfy even the minimum needs of the most sensitive groups in our population has been highlighted in melangy previozas discussions on this subject. In this paper, which is an edited falé given by Dr. Earle de Silva, Deputy Director, National Planning (4griculture), Developzeni Planning Unit, Ministry of Planning and Economic Affairs, on the first day of the First FAO Government of Sri Lansea National Dairy Training Course Seminar arranged by the Regional FAO Dairy Training Centre in the Phillipines, some of the reasons for this situazion are discussed and many constructive propio Sals are pia fi forpard for an effective policy on the development of millé production and the supply sization in Sri Lanéa
Policies are a dangerous subject because they are framed by the Political Executive and some are more sensitive than others about their policies. But policies are not permanent. Policies enter the statute books, some to be alive, others to lie dormant for varying periods of time, some to be forgotten and others to be changed by succeeding governments. Paradoxically, some even defeat their own objectives. However policies regarding milk and milik production have a serious impact on the daily life of the entire population of Sri Lanka.
The views I express are my own. But I shall treat the subject from the broad perspective of National Planning and not from the parochial view of the Milk Board of its sector. The facts and figures I quote are from authentic documented material.
The People's Bank Economic Reviews of July 1975 and March 1976 dealt with the Milk and Nutrition situation in Sri Lanka in the cover stories of
20
these issues wher tein-calorie malin amongst sensitive was identified. A
with us for nearly
press has perio critical shortages.
tion on the urgent policies in regard the Milk Produ Sri Lanka.
The basic ec
which are universa
influence and gov
in regard to the
dairy industry I. r and Secondary sec I. The objective to
2. The policy of di essential food its
3. The principles
supply and disti objectives at (I) 4. Pricing policy.
The principle ut policy on milik at undoubtedly be televant Social po tion of milik as a food, particularly siderations are of tance in a situat Supply both locally sources under ba constraints.
SATISFYING D
This is un doub objective of any production progra gramme, distribu pricing policy. i which, there are of dairy developm internal demand.
Nearly all LDCs of dairy products. inevitably Develo the world popula these LDCs carry But out of the wor of 42.32 million these LDCs proc

ote dustry
e the serious proutrition incidence groups of children milk crisis has been a decade. Our local lically spotlighted I Will focus attenneed to review the to the Milk and ction Industry in
onomic principles l; and which should ern policy making dairy industry (by nean both primary ctors) are : satisfy demand. eclaring milik as an CÍTAN. underlying efficient
ibution to meet the and (2).
inderlying economic national level must demand, and its licy is the declarain essential item of if nutrition Conparamount imporion of inadequate 7 and from external lance of payment
EMAND
tedly the primary
development and mme, import protion scheme and in all LDCs of 161, the objective nent is to satisfy
; are net importers The exporters are ped Countries. Of
tion of 43 billion
• over 33 billion. ld milk production metric tons (II 973) luced only 84.93
million metric tons, i.e.
significant.
only 22% of the world milk for 78% of the population. -
Nevertheless, the LDCs continued
to be net importers of milk products
and cows to satisfy consumer demand and promote milk production respectively.
In the developed market economies, demand for milk products is more or less a direct function of income and prices. The population effect is less pronounced. But in many LDCs it is not such a simple function. Demand is also linked with traditional consumer habits, levels of education and even religion; and also government controls via import duties, import զuotas, prices and distribution SyStems. The population effect is itself India for instance, is a country where demand for milk and milik products is traditionally high in relative terms of demand for other essential food items. Sri Lanka on the Other hand is traditionally backward in this respect. Daily per Capita
consumption in India with a popu
lation of 6oo million was Io's gms. in 1975. In Sri Lanka it dropped from 56 gms. in 1963 to 41.4 gms, in I974, according to the Consumer Finances Survey 1963, of the Central Bank and the Food Balance Sheets of the Department of Census and Statistics.
In most countries which were former colonies of a metropolitan European Power demand for processed milk products has been derived through the consumer habit of dependence on imported products. This is particularly true of export economies such as Sri Lanka where a part of export earnings from primary products was utilised for the import of popular consumer items from the metropolitan country or its trading partners. Bit the demand for these products was invariably restricted to urban consumers, the upper income groups and the educated segment of the population which copied the cus
toms of the metropolitan immigrants.
With the gaining of independence, widespread education, rural development and emancipation of backward areas, development of provincial
EconoMIC REVIEW, FEBRUARY 1977

Page 23
towns and the increasing mobility of the population, the consumer habits such as use of processed milk foods spread to a larger section of the population. This spread-effect has been further accelerated with the increasing incidence of female employment and the consequent decline in traditional breast feeding of infants.
Thus the derived demand through imports ultimately created the local market which became the precondition essential for promoting local dairy development and local processing to achieve import substitution,
These historical origins are still evident in the marketing system of Our own National Milk Board. Its products are predominantly geared to the urban populace and the income groups which could afford them. Derived demand as in Sri Lanka. Or traditional demand as in India could be utilised as the goal in the promotion of local milik production and dairy development. The demand must be assessed.
But neither the import statistics nor the expenditure in Family Budget Surveys give a true picture in the
situation where imports are severely
restricted, local production is far behind our needs and supplies are not accessible to various sections of the people either because of bad distribution or inaccessible prices and because a section of suppressed demand exists in the country.
In the situation where supply is inadequate both from local production and restricted imports, governments have to decide the policy whether milk, and then which of the milik products are to be accorded the prioriity status of essential food items, on the basis of nutrition considerations, for the sensitive groups in the population.
MILK NUTRITION
Milk is considered a complete food. In the mammalian world all young are nurtured exclusively, on milk from birth up to various ages of development until substitutes are ingested. The human baby has relatively a long period of growth up to maturity. During this entire period of growth and development of the skeletal structure which may be up to about the 18th year, milk will provide the essential nutritive elements in proper balance despite the ingestion of all
EconoMic Review, FEBRUARY 1977
other food. Milk
in the early years
the brain and mer nOW known that im under nutrition at
cause mental ret Thereafter milk still despite all other fo I oth, year or so. child's growth a until puberty. The grows rapidly an
again it is a critical
is the only food it necessary essential in a proper balance easily assimilable therefore four milk of growth. The 1 considered are the These are the sensi the population.
Apart from this there are three oth groups. These are invalids and the ol
Therefore a polic essential item Of fic meet the needs o groupS.
Requirements for
These sensitive sented in every c SOme Variation. most sensitive grc groups of childrer numbering 5.5 9 mil1 demography; and mothers Who toget of the population This is high for a SCarce resources; es adequate supplies C to ensure that the S large sensitive segn lation at a price W
The daily minim ments for these grc for children I-3 ye for the age group 7 I gms. from I 3those over 6o years for pregnant and On a rough calcula requirement for the 1,58o,ooo pints. T average to about liquid milk a day Board products of milk, sterilised mi] milk are taken into with all the imp
 

is absolutely vital for the growth of tal powers. It is ilk starvation and this stage would rdation for life. l remains essential 3ds taken until the from this stage a icelerates rapidly
skeletal structure it therefore once stage because milk em which has the mineral elements :d ratio and in an orm. There are essential stages of 2ast that must be first three stages. cive age groups in
group of children her milk-sensitive
lactating mothers,
age groups.
icy on milk, as an od, must seek to f these sensitive
Sensitive Groups
groups are repreountry but with in Sri Lanka the lups are the age up to I5 years lion as at the 1975 37 I,Ooo lactating her comprise 4.9% of 13.6o 3 million. Lny country with pecially to provide if milk foods and upplies reach this lent of the popuithin their reach.
um milk requireups are 227 gms. ars old, I 42 gms, S ef 4- I 2. y cars. 5 years and also old, and 90 gms. actating mothers. ion the daily milk se groups alone is he supply in 1975 65 o, ooo pts., of when all the Milk Lakspray, Vitak and pasteurised account together rted milk food.
Of the National production of 65 o,ooo pints or so a day, about 425,Ooo pints of milk not collected by the Milk Board were locally consumed. The total national supply was therefore in the region of about 1,200,ooo pints a day.
The implication is that the supply was short by about a 4oo, ooo pts. a day to satisfy the minimum needs of the sensitive groups in the population in 1975. Let us look at the supply position On a per capita basis. In 1963 the per Capita consumption with a population of Io. 6 m. was 2 Ozs. per day of which I oz. was imported milk and milk products. The national milk production was 6oo,Ooo pints a day. By 197O consumption had dropped to 1.6 oz.S. and a production of 540,000 pts, according to the Socio-Economic Survey of the Department of Census and Statistics. By 1974 it had dropped further to I.48 OzS. on the basis of the Food Balance Sheets of the Department of Census & Statistics. The MRI recommendations are 5.5 ozs. per head. On this basis the daily supply should be 3.74 m. pints of liquid milk or 27.5% more than the present supply.
In the light of this situation could there then be an effective policy on milk production, development and supply in Sri Lanka?
What are the ill-effects of this situation? The ill-effects are vividly identified in the People's Bank Economic Reviews of July 1975 and March I976.
The MRI has repeatedly warned of the increasing incidence of first degree protein-calorie malnutrition, especially among the most sensitive age groups in the population. The incidence is at least a million children more acutely among the urban poor and mostly in the poorest 40% of the population with an income under Rs. 200. The least expenditure on any form of milk is in the income group under Rs. Ioos- shown in the Socio-Economic Survey of 1969-79. The increase in expenditure rises lineally but slowly until the income groups of Rs. 6oo-799 is reached. It shoots up from this income level. Even Marasmus and Kwashiorkor which are the severe clinical conditions of protein-calorie malnutrition have appeared in Sri Lanka in recent times. The severity of protein-calorie malnutrition is that at 12 months 1st
21

Page 24
degree affliction is 47%, at 2 years
61%, at 3 years 71% and then gently decreases. This age incidence is clearly on account of the lack of milik and milik substitutes and supplements. Surely the decreasing supply in the last few years with 1974 as the worst year on record must be a contributory factor.
The need for a review of policy I believe is therefore most urgent. If the policy objective is primarily to supply the sensitive age groups and most needy in the population with essential milk foods, then the matter of demand is of secondary importance. Such a policy is justified when local production is inadequate and imports are restricted by balance of payments problems. But this sort of selective supply policy is very difficult to implement because it must be supported by a well developed marketing System and a strong noncorrupt administration and bureaucracy to implement controlled distribution of quotas and the accompanying subsidised pricing policy. Otherwise corrupt practices would emerge and some part of supplies will find its way to meet suppressed demand among the more affluent, The poorest and most needy will be denied supplies. Only strong governments capable of eradicating Corruption with severe punitive measures could succeed in effecting selective distribution.
An alternative is a health welfare distribution scheme to the sensitive groups through schools and maternity and health clinics. But here too, in order that all in these sensitive groups may be reached, the schools and health infrastructure would have to be well-developed and widespread. For the last 15 years Sri Lanka has had a Ministry of Health Milk Distribution Scheme assisted by CARE. But the problem of malnutrition described before is so large that this programme seems to be too small. The Ministry of Health and CARE have just established a Cereal Products Factory at Kundasale to prepare Thriposha from local materials for a larger distribution programme of this milik substitute. To be fair, such a programme still cannot substitute a normal supply of milk food. It can only supplement the requirements of the most needy it can reach.
In both supply systems proposed,
it is necessary to have population
22.
statistics broken groups, Schooling employees and so quired supply is basis of daily needs
gories recommende
The third altern to assess demand adequate and at a of the low income g lation, as the crite for all. Only wh generate adequate imports and also su consumer at a pric would be an adv tunity cost, relative important essential reach the largest needy and sensiti population through This is the basis C mains a relatively food item in Dev
PRICHING IPC
SUBS
In the World ciri prices the prices rose for instand the case of skimir between 1970 to prices of milik prod rity of LDCs thus income gains. O imports were restric of payments proble of LDCs. On th slackened due to These two factors h of a balancing ef equilibrium positic reached because of of essential milk fo this element if acc ments as a matter of policy which woul fied in these circu consumer subsidy system to reach th most needy. Still a a consumer subsidy will improve real purchasing power the very poor and the subsidised pro price to a third par the Cash for the 1 bulky but less nutri some other urgent fact, has been hap spray in this count
If instead, cons kept down by subs

down into age groups, female On. Then the reestimated on the ; for different cate:d by nutritionists.
ative of supply is and make supply price within reach roups in the popuria of accessibility en a Country Can supplies including bsidise milk to the e which to him it antageous Opp Ore to the next most item, would milk
segment of the 7e groups in the the open market. in which milk recheap essential eloped Countries.
LICY AND DIES
sis of inflationary of milik products
ce by 350% in med milik powder 1974. The c.i.f.
ucts for the majos rose faster than In the One hand, cted due to balance ms in the majority he other, demand
the price hike. ave had somewhat fect although an Din could not be the large element od demand. It is 'epted by governnational nutrition di need to be fortiumstances with a and a distribution
e majority of the
major problem of is that although it income and the of the recipient, destitute may sell duct at a higher ty in ordet to use purchase of more tious foods or for
needs. pening with LakΥy. sumer prices are idising the cost of
This, in
production, it would on the one hand increase effective demand and on the other it would stimulate production, both because of the viability of the enterprise and the marketing opportunity which would be created. Unlike consumer-subsidies which are difficult to remove once introduced under democratic systems of governments and the trends of continuous inflation, producer-subsidies can be reviewed and manipulated with greater ease from time to time, commenSurate with market fluctuations. The producer subsidy could be selectively applied, on one or more factors of production. It could be a means to promote improved techniques of production and could also be an incentive for development. This would be the more valid policy to adopt in most LDCs because it could achieve several
important objectives. It makes dairy
ing profitable and promotes development and production. The ex-farm subsidised cost of production can be further manipulated if necessary selectively or uniformly at the point of the consumer in order that milk would reach the large majority of the most needy. Thus the nutrition objective would be achieved while simultaneously a rise in the cost of living would also be curbed by some amount. In effect real income and purchasing power of consumers would increase.
Pricing policies may also be extended to situations of unrestricted supply where, by imposing duties on the c.i.f. price, the market price could be raised and demand curtailed resulting finally in reducing imports. Reducing imports via duties and restrictions are necessary protective steps for nascent local industries of milk products and for their promotion. In this way a pricing policy can play an active and positive role in the country’s development. The producer can be subsidised to the extent of making the industry profitable and attractive for new investments and expansion while duties are placed on imported products to raise the prices of such competing products, significantly above the local products. However, local production should be nearly adequate for basic needs. If not, if a selective distribution system operates because supply is inadequate than the imported product or the part of it channelled into selective distribution would have
·* බ්‍රේ.
EcoNомпc REviвw, FЕвRUARү 1977

Page 25
to be subsidised to the selected con
SՆl111Շi -
Perhaps the remedy for Sri Lanka is both a supervised producer-subsidy and a selective consumer-subsidy for the most needy.
The government now provides three subsidies. A pasture developments subsidy of about 5 o'9% of costs; and a subsidy on the price of imported cattle which at today’s prices in between 5 O-75 percent of the c.i.f. cost. The third is the consumer-subsidy via writing-off of National Milk Board losses up to about Rs. 8o million a year at the present time.
These policies also need to be reconsidered.
Pasture Development Subsidy
The pasture development subsidy is out-of-date because:
I. The ceiling on land ownership does not permit economies in raising large breeding, multiplication and dairy herds on developed pasture. If at all this is now only possible in the small groups of wet zone coconut estates of 25-5o acre holdings. Here too, on account of the present comparative price advantage of daily milk sales as against raising calves for 3 or 4 years before the production phase is reached, farmers would concentrate on milik production herds only.
2. In the rest of the country milk production is exclusively off small holdings and in mixed farms and home gardens. Forage is exclusively off cut fodder from small plots and not off grazing. The future for dairying in the dry zone would certainly be based on small irrigated fodder plots on small mixed farms. Besides, as the type of animal improves with the admixture of exotic breeds of dairy animals, dairying will shift more and more all over the country to stall-fed systems with cut fodder supplemented with conCeilt fateS.
3. A once and for all pasture development subsidy does not benefit the small farmer who does not have adequate land, but produce i 95 % of the national milk production. It is only relevant for the small number of estate dairymen on coconut i estates. They could in any case obtain development rebates off income-tax. The biggest beneficiaries are the state lesees of coconutestates under the Land Reform. This is only a book transfer of capital because these state institutions operate on government capital grants for development, their losses are continuously written-off and they do not operate on the commercial basis of profitability criteria with commercial capital.
4. In any case a pasture development subsidy is meaningless because 25 years of pasture research, publications of learned papers on the subject, foreign training of Sri Lanka officials and the 'Aid' and foreign experts obtained, have to no significant extent promoted the development
ECGNOMIC REVIEw, FEBRUARY 1977
of improved pastu management and
use is a developm is no systematic m No state livestock research findings vate farmer would COCOnut poonac ar. and cheaply availa
Stabilis ing Produ,
Therefore a pro One or more imp factors, specially t production under tuations, would be ful for this indust subsidy as a follow development subsi consistent and ha Out of tune for rising import costs not relevant for Oui should be grown incentives to prom of fodder and th sillage and hay fror the stabilising of and rice bran pric the future policie lopment.
The subsidy on Only supporting fa large majority of C dairy animals in raised because of three to four years prefer to sell milk loose the calves. gramme therefore policy. The strate dies proposed will to SOme extent. B are in urgent need pay out to farme: for quality dairy this country. Tine i of pregnant heife under the IDA S cost about Rs. 6ool not pay our farme price?
Milk Board. Los
The consumer su Off of milik losses t inefficiencies in The Board has ru year since its in one year, (pleases July I 975). The lo 75 million. The C ed at the Meeting of the culture and L. that with ever

1re and its systematic utilisation. Of What nent subsidy if there anagement thereafter? farm demonstrates the by example. No pritake the trouble while
ld rice bran are easily tible.
lction Costs
ducer-subsidy on ortant production O stabilise cost of severe market flucfar more meaningtry. The fertiliser 7-up to the pasture dy has never been is been invariably ong periods With . It is in any case reconomy. Fodder with cattle manure ote the cultivation e conservation of n grown crops and
coconut poonac ces must Surely be
s for dairy deve
imported cattle is rmers abroad. The alves born to good Sri Lanka are not high costs over s. Small dairymen to obtain cash and
The import prolacks development gic producef SubSireverse this trend but in addition, we of a new policy to rs incentive prices animals raised in very recent imports rs from Australia, Sri Lanka project, o per animal. Why rs at least half this
S CS .bsidies via Writingends to perpetuate the Milk Board. In at a lOSS every ception except in ee Economic Revieny SS in 1975 was Rs. hairman proclaim
Capital Budget Ministry of Agriands for 1977 y additional pint
of milk collected and processed the Board's losses keep mounting more rapidly. This is really unique for any industry anywhere in the world. How can any economy, least of all a poor country, bear such a burden? This apart, the principle of a consumer subsidy based on writing-off of Milk Board's losses is obviously not conducive from the point of view of the consumer and least of all from the point of view of policies discussed before, where “Milk is an Essential Food Item for the Most Needy’. Hence the price inaccessibility of milk products to a large cross-section of the most needy children in this country despite the heavy subsidy (rather losses).
Clearly a new pricing policy is necessary based both on producer-subsidies and selective consumer-subsidies under controlled distribution for the most needy.
The implications of a pricing policy in Sri Lanka's context has other ramifications. If a producer-subsidy is to be an incentive, to develop and expand milk production, it must reach the largest possible cross-section of dairy farmers. But to be justified all milk produced must then flow into the controlled distribution scheme for the most needy sections in the country. But the total national production now is only about 44% of the minimum needs for the most sensitive groups. Therefore to operate an effective distribution scheme, imports need to be increased to meet the deficit. First, there is the foreign exchange constraint. Secondly, the c.i.f. price will have to be heavily subsidised. In effect we would be subsidising farmers abroad.
The next question is who is to handle such scheme. The Milk Board has been given the monopoly for milk collection, imports and distribution except the small quota of special brands of infant milk foods still in the hands of the private trade. But the Milk Board is only handling about 40% of national production and less than II 3rd the minimum needs for the sensitive groups in the population.
Future Policies for the Milk Board
If the Milk Board is to be the focal point of National Policy to promote dairy development, maximise the collection and national milk production and launch a national scheme to meet,
23

Page 26
say the minimum requirements of the most needy in the population, then the Board would have to adopt a completely new ideology and thinking, new policies as its goals and new principles on which to achieve these goals. The Milk Board would have to be reorganised by Government fiat on lines suggested below if we hope to achieve these main policies. The Milk Board will have to be
I. Responsible for the effective supply and distribution of milk to meet the national goal of adequate supplies for the sensitive groups in the population. Surely by virtue of the monopoly vested in the Milk Board it cannot entirely absolve itself of this responsibility
and the milik nutrition crisis of
the children of this country. The authority and financial support should be given to the Board to maximise milk collection and to process and distribute milk to meet this objective, to import the deficit and to control the distribution system. There should be no room left for Some Other unconnected authority to decide import requirements and for some Other party to take the blame for poor distribution.
2. Responsible for maximising milk collection as a further commitment of the primary goal. But then it will also have to ensure that the children who may be deprived as a result are provided with adequate substitute milk at an accessible price. Besides the milk collection objectives should be in harmony with the dairy development objectives so that as at present valuable calves will not be lost due to milk starvation, but instead would be raised to maturity to maintain and expand production levels.
3. Authorised to re-organise the structure of its dairy factories and accordingly to produce the type of products most essential for the community and diversify its product-mix in order to obtain industrial economies through diversification.
4. Totally responsible for promoting
the production of milk and development of dairying in this country. Surely, some other non-commercial authority with other multi
24
farious respo expected to g Board's comr now a Well ei needs no ela E the Departim which took O dairy develo and virtually Board from S been able to dairy develop the Milk BC cities up to t let alone nati there been c merS COsts Of industry as a by the 20%, re try during Is the increase duction by 3 had the mos effect on the e of the Milk
COnverse gen the price hik ducts and th efficiencies to butory factor
By virtue ponsibility ca by the prope surely be the sible for dairy country. It authority to all services ir cluding credi services, vete factories,purc of dairy anim
. Responsible f
the pricing p to the nutri1 underprivileg groups and structure for producer-sub quate 1ncome dairying prof tion for in employment. ponent of this stabilise the c nac feed pric incentive prie and raise goo pose heifers cattle breedin end to the loss quent depen cattle.
 

insibilities cannot be ear itself to the Milk mercial needs. This is stablished fact which oration. Since 1969 lent of Agriculture ver responsibility for pment in Sri Lanka 7 banned the Milk such activity has not gear the country's ment to Supply I/3rd Dard's factory capathe end of last year, Onal needs. Nor has :Oncern for the farproduction and the whole as evidenced 2cession in the indus)73 and 1974 due to in cost of milk prooo% at least. This t serious deleterious !conomy and finances Board, although of teral price inflation, e on imported prohe Board’s own inDo have been contri
S.
therefore of the resst on the Milk Board psed policy, it must premier body responI development in this must then have the operate and control this connection init schemes, advisory rinary services, feed hase and distribution lals etc.
of the operation of olicy both in regard cion policy for the ed and low-income
the general price its products, and the sidies to ensure adees to farmers, make itable and an attracyestment and self
An important coms policy would be to ritical coconut pooe and also tie in an ce scheme to breed d quality dairy purthrough a national g policy and put an of calves and conselence on imported
If therefore, at some future point in time the MilkBoard were to be reorganised, to achieve the proposed national policy goals it must become a national body with authority and freedom to carry out its responsibilities. Its orientation would be towards national service and development. Its functions would have to be financed by Government grants. It should not be subject to FEECs and parochial administrative and financial bottlenecks which would defeat its objectives straightaway.
Unless such a single national authority is established it would not be possible to programme dairy development tied to milk collection and factory requirements of the Milk Board, geared to achieve the goals of import Substitution and self-sufficiency, and to make the industry highly profitable for farmers, attract investments and provide large-scale employment. It is the only way to remedy the present diffusion of authority for this industry, which is spread over many institutions under half a dozen Ministries, and the consequent parochial and professionally sectarian interests which today predominate and override national interests.
Finally, to Carry out such a huge national task the future Board of Directors would have to represent the vital areas of authority relative to the special functions. For instance, the following representation seems essential.
. The Commissioner, Co-operative Development-in respect of farmers organisations and collection of milik and distribution of milk production. . .
2. The Price Controller-on account of the
far-reaching pricing policy.
3. The Director of the Nutrition Programme of the Ministry of Health because of the alarming incidence of protein-calorie malnutrition amongst children.
4. The Director, National Planning-in regard to national policy, capital grants for development and co-ordination of activities,
The Director Supply and Cadre, Ministry of Finance-in regard to financial provision. 。、
s
6. The Director, Agricultural Development, Ministry of Agriculture to co-ordinate the Board's activities with other institutions wander the Ministry. ܢ ܼ ܝܥ
Economic Review, FEBRUARY 1977.

Page 27
Policy for Farmers Organisation
The Milk Board Act, No. 12 of 1954 and subsequent amendments of I955, 1957 and 1964 provide the Milk Board with necessary authority to carry out most of these functions.
Finally, if the Milk Board is to Carry out this huge task its aspirations, success and economy rests ultimately on the dairy farmers in this country of whom 95% are small farmers who produce nearly half our national milk consumption, the other half being imported. Of the three massive areas of responsibility one would be dairy development and production on a scale not even contemplated yet. Roughly three times the present national production of 7ooooo pints a day would have to be the immediate medium-term target. This would require the mobilisation of about 175,ooo more small farmers and their resources of small mixed farms. It could add 28oooo cows and heifers to the present elite herd of about 7oooo out of the national population of about 1.9 million cattle and buffaloes and employ about 45oo persons in new jobs between the farmers and the consumer due to the multiplier-accelerater effect of new development. If development on this scale is to be launched and sustained over a long period of time the farmers must be insulated against economic hazards and bureaucratic impediments. No Government body could on its own provide such safeguards. The farmers themselves must fashion their own institutional safeguards, the Milk Board being the instrument to Organise them.
Dairy farming is the most personal economic activity in the whole agricultural sector because of its biological nature and involves private initiative and individual decisionmaking every day. Milk is highly perishable. The physiology of milk production is closely linked with management. There are also environmental risks. Logically the responsibility must rest with the farmers until the milk reaches the Milk Board's points of collection. Hence the organisation and institutions needed to be fashioned to satisfy these unique conditions. Invariably they fail to be so oriented when their origins and motivations have been purely political and parochial. Bureaucrats over
EconoMIC REVIEw, FEBRUARY 1977
seeing their empi towers have neither they see and unders needs and problem lopment phenomena they have worked a frontier.
While there are private and public se arrangements in the sally the most succ doubtedly the Pro rative. This is the in the majority of a countries in Europ. trally Planned East tries and in India th dai ying country an loped Counties.
Briefly the framew follows. Dairy farm into producer co-or on the basis of vill trative districts org sheds. Each society committee of vote provides milk collect Other services such etc., according to th situation and the ac the industry. Staff gories may also be er ter of such societie rated into a co-opera handles milik process ing. The unions ar into a single body a which is the voice Of try in the country ai in the Governmen which the dairy in The Federation of Government policy policy and passes the the Unions to the CO ties and its dairy f The Federation is th the industry and the controls the size, c nomy of the industry the unions. The uni Federation through tation and also ma Unions operate their and management aud the employer and technical services ar
The reasons under of this co-operative the dairy industry all are the following:

"es from ivory the feel nor can and the farmers and the deveinvolved unless t the production
7arious types of ctor institutional industry, univerIssful one is unducers' Co-opestablished order lvanced dairying 2, Oceania, CenEuropean coune most advanced hong Less Deve
ork would be as ers are organised erative SOC1etles ages in adminiseographical milk is managed by a di members and ion facilities and as inputs, Credit e genius of each lvanced stage of of various catemployed. A clussare then fedetive union which sing and markete then federated ut National level the dairy indusld is represented t’s body under lustry is placed. Jnions translates into operational se down through -operative Sociearmer members. e arbiter between Government and ontent and ecoand activities of ons make up the their represenintain it. The dustrial activity, it and function as provides the ld vital inputs.
lying the success organisation in lover the world
I. Dairy farming is one of the most personal economic activities and involves private initiative and individual decision-making every day. The true co-operative safeguards this principle.
2. The co-operative of producers provides an institutional framework of strength in numbers of pooled resources and greater bargaining power. For small producers, specially, and in LDCs such as Sri Lanka, this is a great economic advantage. The Federation of societies into a Union provides the parallel institutional countervailing power against damaging market forces and even damaging activities of state administrations, The Federation of Unions at the level of Government policy-making is the safeguard at the apex of the industry.
3. This institutional arrangement allows the necessary commercial flexibility for the market operations of the Unions; and in turn for the farmers to adjust production and costs, and to optimise the economic activities of the former since an equal share of benefits are distributed through the societies to each farmer. These may be in monetary terms as dividends and in kind, such as, better marketing facilities for milk and animals, advisory services, veterinary services, feed inputs at advantageous competitive prices and so on.
This co-operative ideology has been propounded by the F.A.O. for the agricultural sector and also small industries and rural development since the launching of the UN's Second Development Decade. With the economic upheavel in recent years it has gained even more meaning as an institutional arrangement to safeguard farmers and to fashion collective effort and collective responsibility. Countries which still value individual freedom and social welfare and economic emancipation of farmers and also positive objectives and not mere slogans are finding in this institutional arrnagement the means to mobilise farmers and their resources for rapid development.
25

Page 28
same multinational
THE TRAFFIC IN
TECHNOLOGY
Philip Maxwell
Philip Maxim'ell, a research fellomy af the Science Policy Research Unit, Sussex University was one of a team of researchers woréing on the transfer of technology to developing countries.
The Package Deal
Already this year two major technology scandals have shocked the British public. First came the news that a major part of Britain's North Sea oil wealth had been taken over on the cheap by American companies. Soon afterwards came the announcement that the secretive Swiss-based drug company Hoffman La Roche was charging the National Health Service £407 and £IoI4 for the active ingredients of Librium and Valium which could be bought from Italian manu
facturers at £9 and £2O respectively.
What do these two scandals have in common? In both cases the companies concerned had something which Britain needed-advanced oil exploration technology in one case and vitally needed medicines in the other.
But the American companies were not interested in Coming Over only to find the oil and then go home again. Instead they sold Britain a package deal which involved not only finding the oil but also helping to exploit it and becoming 'sitting tenants over a large area of the North Sea oil fields.
Similarly Hoffman La Roche were not selling just one piece of pharmaceutical technology. For each bottle of Librium or Valium pills is in itself a complex package, including the Hoffman La Roche tranquiliser production knowhow, the trade marks Librium and Valium, the patents for their key chemical ingredients, and the company’s extensive sales network.
The key fact in all this is that neither Hoffman La Roche nor the American oil companies were interested in selling the elements of their technology separately. They are in the business of designing, producing and selling package deals.
*Commercial lock-ins are standard practice between two branches of the company, and in this case 'lock-ins’ do not even require a contract-just a memo or a telephone call from head office. This was exactly the game played by Hoffman La Roche and its British subsidiary Roche (U.K.). Roche (U.K.) was commercially locked-in to buying several ingredients of the Librium and Valium packages from Hoffman La Roche in Switzerland.
“The technology whi ές καινβαν κααρ έβρη, ή Zechnology is freely a of development to g
For years this hope in poor col
But the prophe that technology i but to make the much of modern the rich nations selling it to the conditions which efforts-Nepi Infer
So having forced buying more than h him into buying it a also make him pay bargained for.
Multi Channel Pa
The next potential most damning. The lish as many separa ment for your techr you possibly can. customer separately On patented produc ingredients which m for a share of cent. and research costs, profit and dividendr foreign subsidiary. ment of the country legislates a maximur upper limit of profi country, you simply of the raw materials for research costs. the total remittance not how much is individual channel.
This system, comin accounting, is nov with many multinati cluding Hoffman I Roche (U.K.) Ltd., of £3 million on the Valium between I 96 accounting had bee from Britain E2I flated ingredient pri high charge for ove costs. So not only ha stung the British tax by selling Librium National Health prices, but they had British taxes on a lar, they made in doing
It is difficult en developed and fina country to police' . payment and impos witness American a aches with exchange country which lac rience and trained power cannot always adequately. And pc

h the rich countries have developed over the last fuo hundred years "ich-and the great advantage of the developing countries is that this vailable to them non without having to go through no hundred years
?/ ; /**.
argument has prevailed. For years it has been a source of intries and complacency in rich countries.
cy is not coming true?. And now it is becoming clear s not primarily being used to make the poor less poor rich more rich. The fundamental reason for this is that technology is not “freely available-it is the property of and multinational companies who are now engaged in
poor world at prices which are often scandalous and on are often damaging to a poor country development
mafionalist.
your customer into e wants and locking Il from you, you can much more than he
yinents
abuse is perhaps the technique is to estabite channels of payhological package as
You invoice your for royalty payments its, for sales of the lake-up the product, ral office overheads in addition to your emittances from your Then, if the govern7 you are selling to m royalty rate or an ts going Out of the increase the price or raise your charges Obviously it is only 7 ou are interested in, paid through each
nonly called “transfer v standard practice onal companies, ina Roche. Whilst had declared profits slaes Of Librium and 6 and I972, 'transfer in used to sluice Out million through inces and an unusually rheads and research d Hoffman La Roche payer for £21 million and Valium to the Service at inflated also avoided paying 2e slice of the profits SO.
Ough for a highly incially sophisticated ll these channels of e limits on themind European headcontrol. But a poor ks financial expe
commercial manpolice every channel licing only some of
the channels of payment is of limited usefulness. It is like a man trying to plug eleven holes in a dyke with only ten fingers.
Colombia Investigates
In 1968, the Colombian government spotted a strange anomaly in the behaviour of American investors. Why did American companies operating in Colombia report such low profits and at the same time show themselves so desperately keen to expand their Colombian operations? The government invited a young Greek economist, Constantine Vaitsos, to investigate.
Vaitsos came to Bogota, Capital city of Colombia, and was given access to the customs Office files. There one of his team worked for II months, tabulating data on I, 5 OO imported intermediate products, recording the name and quality of the products, the names of the importer and exporter, the volume Of the imports, and most important of all-the price of the imports. The prices paid by Colombian subsidiaries for imported ingredients in technology packages were
compared to the international prices pre
vailing for the same products as quoted in European and American markets. The differences were staggering. In the pharmaceutical sector, the average over. pricing of intermediate ingredients imported by foreign-owned subsidiaries was I 55%. Vaitsos worked out that, together with adjustments for royalties and con-, sultancy fees, this meant that the profit rate earned by foreign pharmaceutical firms investing in Colombia was not the 6.1% average which they declared to the Colombian authorities-but actually 79. I 9%. The trick employed was exactly the same trick that Hoffman La Roche played on Britain with Librium and Valium-transfer pricing. It is interest
ing to note that the two worst cases of
overpricing uncovered by Vaitsos and his team concerned the products “Diazepam' and “Chlordiazepoxide’. In Britain these two pharmaceutical products are marketed by Roche (U.K.) and are none. other than Librium and Valium. In Colombia, the over-pricing on “Dizaepam' was 6, 47.8% and on 'Chlordiazepoxide a mere 6, 15.5%. Perhaps we in Britain should count ourselves lucky. (New Internationalist, July 1973). -
ECONOMIC REVIEW, FEBRUARY 1977

Page 29
ལྟ་
Technological
Dependence and
international Pharmaceutical in
-A Case Study
Sanjay Lall
In its efforts to improve the understanding of problems faced by the developing countries in acquiring advanced technology from the developed countries (ONCTAD commissioned a series of studies on this subject. In the field of pharmaceuticals, Dr. Sanjaya Lall of the Institute of Economics and Statistics, Oxford University, did much researching on this subject on behalf of UNCTAD. His findings have been published in several recent reports and papers which are proving of great significance to Third World countries. He has shown that the features of the World pharmaceutical industry have major implications for the transfer of technology to developing countries. They not only raised the direct financial costs and indirect financial costs, but also create important structural constraints upon the establishment of pharmaceutical industries in developing countries, primarily through the control of the required technology by the leading transnational drug companies.
The pharmaceutical industry today is one of the most international of all the industries emanating from the developed world. The leading fifty or so drug companies, which account for the bulk of drug production in the non-Socialist countries, are directly engaged in the production, formulating and sale of pharmaceuticals in practically every developed or developing economy, and have been among the first firms to undertake
import substitution in countries which
used tariffs and quotas to encourage such activity. Though these firms are not exceptionally large by MNC
standards (only AI firms had drug
sales Over $1o billion in 1970, and
the largest, Roche, had sales of $84o
million), the degree of multinationality
of their operations, the social impor
tance of their output, their pervasiveness and their political economic
strength makes them an ideal subject
to illustrate the nature and conse
quences of technological dependence.
The basic characteristics of the drug industry highlight the inherent features of all multinational industries, albeit in a form clearer and somewhat
more exaggerated than other indus
tries; it has, moreover, the added
Economic REVIEW, FEBRUARY 1977
advantage that rec its practices has led valuable research countries.
Industry's Backg
Before starting C us briefly descril background:
(i)
(ii)
(iii)
(iv)
The total world ceuticals has bee $1.5 million in Ig accounted for 3. countries for I : countries for 43 countries toget) A later estimate billion in I973. author (Lall, UNCTAD, calcu duction to be $ which the devel tries accounted f pean countries (ir and less-develo whole for the rei
Production is hig few firms. Of th of about $ Io bill nearly 5,Ooo fif (around 5o) pro 8o% of the totall of concentration loping countries data.
Though these fi. national in tern their ownership t in their countrie developing coun local participatic as India this ind ones in the leas equity and conti.
The drug indust intensive, with th ing around I o % their turnover of lopment. Most o e Ver, Concentrate origin, and pra worth the name developed count tration is also re ship of pharmac are heavily dom national compan well as less develo in the UK less th patents filed in p: national, while
countries as Indi this ratio is pro the total stock
patents. The ex in R and D exper.

the dustry
ent concern with to a great deal of on it in several
ound
in our analysis, let be the industry’s
market for pharmain estimated at about 67, of which the U.S. D% the socialist bloc %, other developed %, and less-developed ner for only I 4 %. puts the total at $23 A recent study by the 1975) prepared for lated World drug pro2 I billion in 1971, of oped capitalist counor 86%. South Euro1cluding Spain) for 4% ped countries as a maining IO %.
ghly concentrated in a e total OECD market ion in 1970, served by ms, a mere handful bably supplied up to market. The same sort appears in most deve
for which wye have
rms are really 'multins of their activities, :end to be closely held s of origin. Even in tries with stringent n requirements such ustry was among the t dilution of foreign rol.
iry is highly researche leading firms spend(sometimes more) of Research and Devef this R and D is howd in their countries of ctically no research is conducted in less tries. This concenflected in the owner2utical patents, which inated by the multiies, in developed as oped countries. Thus, han Io', of new drug ast decades have been in such developing a, Chile or Colombia bably under 5% for of outstanding drug tent of concentration lditure is even greater
macenticals.
than that in production; in the US, for instance, the 20 largest firms account for 95% of total private R and D, and in the UK the 4 largest firms account for over 70% of the total.
Enough has been said to give a
general picture of the industry’s structure: that of a highly Oligopolistic and widespread industry, with a few relatively enormous companies, mainly from 5 or 6 countries, dominating the entire non-socialist world system of investment, production, and research. There is little need to belabour the facts about the existence of technological dependence in pharWith a few exceptions the developing countries have contributed nothing to technological progress in the pharmaceutical industry, and have relied almost exclusively on research done in the home countries of the drug MNCs. (This is not to denigrate the great contributions to medication made by indigenous systems of treatment; however, the focus of this paper is on the 'industry which produces modern allopathic drugs).
The main channel for the transfer of pharmaceutical technology has been direct investment in wholly foreign-owned or foreign-controlled subsidiaries. While a number of licenses have been sold to locally owned firms in developing countries, the bulk of recent and valuable (and so profitable) technology has been closely held by the MNCs, who have naturally preferred to exploit it directly than by licensing local firms. It should be noted however, that cross-licensing between MNCs is quite common, either because a particular firm does not possess an adequate marketing Outlet in a particular country or because markets can be conveniently divided in this way. This does not benefit locally-owned firms unless they have already established a powerful market position in a developing country, though the Argentinian example suggests that Once a firm does reach this position foreign MNCs attempt to buy it.
What are the economic implications of this sort of international structure of the drug industry? An instructive way to analyse them would be to use the concept of maréef power-the commercial power of firms to dominate a market and earn greater profits than would be possible in a competitive
27

Page 30
situation-and to see whether the drug MNCs have great market power, what the sources of this market power are, and the costs that its exercise imposes on society. In the following sections we shall deal with these questions in turn, and shall also consider the policies that are open to developing countries to reduce the costs of the market power which technological dependence exposes them to. In the final section we shall draw the main conclusions of this
paper.
MARKET POWER IN THE PHARMACEUTICAL INDUSTRY
It is imperative to note from the start that the existence of market power in the international drug industry arises from certain characteristics of its mode of operation in developed as n'ell as les s-developed countries, and its costs therefore apply to both. We shall argue that the social costs in less-developed countries are higher than in developed ones, but this must not be taken to imply that the former are the sole sufferers. This being said, however, we must also note that the operation of the drug industry in developed countries implies a social welfare loss as well as an internal redistribution (within the developed world as a whole) in favour of the large firms, while in less-developed countries it implies a social Welfare loss as well as a redistribution of income abroad (from the less-developed world as a whole). We shall return to this in which it deals with the effects of market power. Let us first describe the indicators of market power and its sources.
Indicators of Market Power
Most of manufacturing industry in the modern world is oligopolistic, with a few large firms dominating production, and the level of Concentration is tending to increase Over time. In such a situation almost all these firms can be said to possess market power in comparison with an economically ideal competitive situation. Furthermore, the new theories of direct investment and the growth of MNCs argue that the possession of some special source of market power is a necessary condition for any firm to go abroad. These general considerations would lead us to expect
28
the drug MNC's te normal level of relation to other
dustry. A glance
of market power, that this is not th MNCs possess ab of maréet pouver, h. manufacturing ind period by any othe a few individual fi tighter technologi some considerable
We may use fou cators of market p industry, concentr price differentials, entiation and mark
Concentration
We have alrea extent of concent duction of phart previous figures convey a true pict ket is not a hom there are several are quite distinct Large firms tend particular sub-gro the major groups account for 6o-8c Furthermore, this tended to remain though there are it a general slowing vations the major out into related li largest drug firm, of Switzerland, acc of the anti-anxiet countries for whi mation; we rema we shall be using in other contexts.
Profitability
This provides (
indications of an power, and certa doubt that the diru, One of the most turing industries
period in all area In the US, for inst a whole earned 2 ployed in 1966, a than 1.3% for : Moreover, it seer firms are significar than small ones, at whole has shown

possess a certain market power in manufacturing inat some indicators
however, shows e case. The drug normally high levels ardly exceeded in ustry over a long 'r industry (though rms may have held Cal monopolies for time).
ir convenient indipower for the drug ation, profitability, and product differeting expenditures.
dy described the ration in the promaceuticals. The do not, however, ure: the drug margeneous One, and sub-markets which
from each other. I to specialise in ups and in each of the largest 4 firms % of production.
concentration has
stable Over time, indications that with down of new innofirms are branching ines. The World's Hoffman La Roche icount for Over 70% y drug market in ich there is inforik On this because the Roche example
one of the clearest industry’s market inly there is little g industry has bee brofitable manufacfor a very long s of its operation. tance, drug firms as 1% on capital emS compared to less all manufacturing. ns that the largest tly more profitable ind the industry as a 2xceptional stability
in its earning capacity Over long periods. In India, medium and large drug firms recorded profits before tax on capital employed of over 20% in every year from 1965 to 1971, as compared to under Io9, for medium and large firms as a whole; the drug industry was consistently the most profitable of 23 manufacturing and non-manufacturing sectors in this 6 year period, with one exception in 1970 - 7 I when mineral oils exceeded it slightly. Roche earned on its leading tranquillisers over 7o% (including transfer-pricing profits) on capital employed in the UK in 1966-72 on conservative estimates Of the MOnOpolies Commission (1973), when its prices in England were among the lowest in the world; on this basis it may well have been earning ISO-2Oo% On its worldwide operations. In India, its declared profits came to Over 65% of net worth and over 60% of net capital employed, well above the average for other drug Companies.
Furthermore, the 33 leading foreigncontrolled drug firms in India were alway. more profitable than the 6 main local ones, and also more profitable than all other types of foreign-controlled enterprises While transfer pricing problems reduce the reliability of these stated profitability figures, an adjustment for hidden remittances would only serve to raise profits, since this is the main industry which appears to use this channel for remission (we shall return to this below).
Price Differentials
The ability of market leaders to higher prices than other producers
and to practice discriminatory pricing
between different markets can also be used as an indicator of market power. Both sorts of differentials are notorious in the drug industry. Brand named drugs, mostly produced by large firms, tend to be much more expensive (up to Iooo per cent) than generic equivalents, and this situation persists, even if there is no patent protection, without affecting the large firms’ market shares. Thus Roche's Librium has competitors in the UK and Italy which sell at 25-30% less without making headway in the market; in India small firms are able to supply equivalents at prices 90% lower. The same drug is sold at greatly differing prices in the same
ECONOMIC REVIEW, FEBRUARY 1977

Page 31
country-thus Librium was sold in different US markets at price differentials reaching 24.3%-or between different countries-Roche's Valium cost twice as much in Australia and 6 times as much in Switzerland, as it did in the UK (before its price was cut to 25% its original level by the Monopolies Commission).
Product Differentiation and Marketing Expenditures
These can be taken both as indiCators and sources of market power: in an industry with homogeneous products large firms would not be able to create positions of special privilege by differentiating their brands and promoting them by advertising. In the drug industry there is considerable product differentiation even among medicines with identical pharmacological properties. In the US, for instance, about 7oo drugs are sold under some 35,ooo names, a very similar situation obtains in all countries in which the international drug companies operate freely. Marketing expenditures are very high in the pharmaceutical industry, ranging in the US from three to four times its R and D expenditures and accounting for about one-third of the value of sales sometimes exceeding the cost of goods sold. The level of marketing costs are somewhat lower in the UK, but still high enough for the Sainsbury Committee (1967) to remark that firms had failed
to measure up to the “appropriate
responsibility’. In 1967 the drug industry accounted for the largest single share 1.7% of advertising of the total of 27 US industries; its sales in the same year came to less than 5% of the total. While data on promotion expenditures are not available for most less-developed countries, some evidence on India, Argentina and
Colombia shows that the pattern is very similar. The scale of marketing
expenditures may be judged from the fact that these expenditures in the US alone exceed the total value of tug consumption in India by over 3 times. :"" : .
on all counts, therefore, the drug industry energes as one with a very high level of market power, con
centrated in the few multinationals dominating it and preserved intact over a very long period in all areas
of their operation. The evidence is,
EconoMIC REVIEW, FEBRUARY 1977
of course, far f only indicative reason to dou clusion or to t repudiated by
Sources of M.
There are t market power industry, techn Other factors, SC2aCe f€SOUCI scale, which m: ket power in o'' little or no sig industry, since used are synti abundant, and production are
TECHNOLO (
We started by
a research-inter leading firms are major innovato. GUlt a Strean drugs, though i that very larg Î6întS a te in Ot a: of innovations and D expendit ones. Be that : bution to the large firms can SOL CeS:
(a) R and D ex firms, whic were very among the
(b) Patents of cesses, or b of product dustry is r research-int difficult to drug is pro to imitate. thereforළ, ද this indust haps the which dep rated mon innovation of marketp they prev from steal also becaus monopoliz. local produ which the in Ot Stailt
-* ܘܲܢ
 
 

om complete and still but there is little ot this general conink that it would be resh findings.
riket Power
vo main sources of in the pharmaceutical ology and marketing. such as access to a , or economies of y contribute to marher industries, are of nificance in the drug most of the materials hesised or relatively sconomies of scale in practically absent.
Y
7 noting that this was sive industry. The often, but not always, is in terms of turning of marketable new t is sometimes argued e research establishproductive (in terms measured against R. ures) as medium-sized as it may, the contrimarket power of the be traced to three
penditures within the
h, as we pointed out, highly concentrated market leaders.
n products or prooth. The technology ion in the drug inlot as in many other ensive industries, very copy, and once a new duced it is quite easy The role of patents is, of great importance in ry, which is now peronly major industry ends on patent-geneopoly to protect its S. Patents are a source ower not only because ent rival producers ing innovation, but e they can be used to 2 imports and prevent liction in Collintries in firm concerned does production and be
decade.
cause the high level costs of contesting patent infringements acts as a deterrent to smaller firms who might have a legitimate case.
(c) State support for research. It is not generally realized that government expenditure on “basic research concerned in the pharmaceuticals is very large, and in the US and UK exceeds total private R and D by 2oo- 33 o per cent. The results of this sort of research are generally provided for free or at very low cost to the drug firms for further development, thus giving the R and D leaders a subsidised input for profitable exploitation. While there may be some rationale for separating basic research from market-orientated testing and development, it is not at all clear that the “division of labour as it stands at present is either natural or socially optional. On the contrary, it has arisen simply because in a private enterprise System the most profitable sections Of research are kept within private firms and official institutions are not geared to producing finished drugs. We shall argue below that the little evidence that exists does not show that state-sponsored R and D is necessarily less efficient than private R and D. As matters stand, however, a part of state research does not contribute to the market power of the private firms.
Defenders of the drug industry often point to the riskiness and lengthy gestation period of its R and D activity to justify its high profit ability. Certainly it must be admitted that many individual research projects are risky and a large proportion of them never achieve fruition; it must also be admitted that due to the state of scientific knowledge in the field as a whole the level of innovative activity has slowed down in the past This does not, however, prove that a large and well-diversified research programme is very risky; in fact, the leading innovators seem to come up with a fair amount of successful results over long periods. Neither
does it provide a justification for high
profits, because both econometric
29

Page 32
analysis and an examination of individual firms fail to show that risk is a significant factor in explaining profitability. Furthermore, the pharmaceutical industry appears to have a relatively short period between invention and innovation' (i.e. product development) as compared to other industries, so that the justification for exceptionally high profits based on gestation periods is rather suspect.
MARKETING
The role of marketing in promoting the industry’s market power can hardly be overemphasised; it may well be a more important source of such power than technology. There are three reasons why this is so:
(a) Separation of buyer and decisionmaker. The fact that the actual decision about which drug to buy is made by the doctor and the expense is borne by the patient or a national / private health scheme means that there is no direct pressure on the former to “economise in the normal sense of the word. Most doctors do not in fact place much importance on prices, and it is up to the one who pays to attempt to find the best deal. A private patient, for obvious reasons, is hardly in a position to do anything substantive. National healthsystems do attempt to economise, but not with very great success, either because the political power of the drug manufacturers is too great or because doctors insist on prescribing by brand names. In developing countries with few health care systems, it is the patient who pays and the doctor who decides.
Difference between brand and generic names. The fact that drugs can be sold under brand names means that it would pay firms to differentiate their products heavily and concentrate on trying to persuade doctors to prescribe their brands. This introduces a strong monopolistic element quite separate from that created by patents, and the fact that leading brands (such as Librium) have the same share of the market in a non-patent observing country like Italy as in other countries is an indication of its power.
(b)
30
(c) Lack of othe mation. The tion of new with a deplor provision of mation on th efficacy has profession to the drug firm This is a syst to use for pro not simply ol and it is har doctors are inu literature, fre banquets, vis tatives andallt high pressure highly sophi These are desc in the US Sen (1975) and Co
Furthermore, m like to, or do not read serious literat grave deficiencies thods of pharmaco that the drug firms a in a powerful (and leaving little roo assessment of effic wide scale, ration different drugs o the firms’ claims. gations in the US that hundreds of prescribed lack of iveness. While th attempt to regula government (and in ments) do nothing
In developing co bution of these pi power is even grea loped ones. Not trained along the l countries (or in the tries) and so are l national brand nan strong prejudice in brand names, som reinforced by the fe local manufacturers
These are the s
power in the ir industry. Let us effects.
Cost of Market Pi
The costs inflict the exercise of ma;

sources of inforspeed of introducproducts coupled ble lack of official
systematic inforir prices, uses and made the medical ally dependent on s for information. m obviously liable fit maximising and jective informing, tly surprising that ndated with glossy e samples, gifts, ts from represenheparaphernalia of marketing from a sticated industry. ibed in great detail ate hearings Klaas eman (1975).
ost doctors do not have the time to, ure, and there are in traditional melogical training, so Lctivity fills the gap pleasant) manner, m for objective :acy Or Cost On a all comparison of r an evaluation of Recent investiand the UK show drugs commonly evidence of effecthe US authorities te this, the UK nost LDC governzo check the cause.
untries the contriactices to market ter than in deveonly are doctors ines of developed : developed counised to the interLes, there is also a favour of foreign Letimes justifiably air that some small adulterated drugs.
Durces of market ternational drug now look at its
VS
cd on society by ket power in the
drug industry can be grouped into direct financial costs and indirect costs. Though both categories of cost are relevant to both developed and developing countries, we can indicate where the latter may suffer relatively more than the former by virtue of their weaker bargaining and regulatory position.
DIRECT COSTS
There are three kinds of direct financial costs of the oligopolistic mode of operation of the drug MNCS :
(i) Excessive profits. It is now becoming more accepted in developed as well as developing countries, at least by those who are not open supporters of the industry, that profits in the drug industry are "too-high' and that drugs are 'overpriced with reference to a more competitive situation. The problem of the 'right' level of profits is, of course, impossible to resolve in any rigorous way. It involves assessing the proper reward for risk-taking and such matters, but the recent crop of investigations in several countries into particular drug companies (especially Roche) reveals that many governments feel that the drug industry has been sheltering too long behind a profitable smoke-screen of high risk, uncertainty and social service. For less developed countries the question of profits is rather different: it does not revolve round the right reward needed to induce risk-taking, since drug innovation does not depend upon sales in the developing world, but around the question of how little they can pay in order to get the necessary technology. This will be discussed in the next part.
A problem intimately related to that of excessive profits is that of transfer pricing. The drug is highly integrated in terms of its international Operations, and trade in intermediate chemicals between different units of MNCs is very common. Since the real “technology” of drugi production is embodied in the intermediate products, and since they are not openly available on world markets, their arm's length price is extremely difficult to determine. This, coupled with the ability of the firms to make exceptional profits, provides an ideal
EconoMIC Review, FEBRUARY 1977

Page 33
channel for remitting profits clandestinely from countries with high effective tax rates (taking into account the tariffs on imported inputs), limitations on remittances, political and trade union pressures and policies for local equity participation. Most of the investigations of transfer pricing have used evidence from the pharmaceutical industry, where for instance Roche has been found to be overcharging for its imports in the UK by 4,ooo - 4,5oo per cent (and declaring only 12% of its true profits) and in Colombia by 5,ooo - 6,ooo per cent (and declaring a loss). Again, there are conceptual problems in defining what a correct arm's-length price should be, taking R and D costs into account, but the extent of Overpricing (spread over Io - 12 years for Librium and Valium) is such that no conceivable justification can plausibly
be found.
While the evidence indicates that excessive profits and transfer pricing are applicable to developed and less developed countries, we may argue that the latter pay more heavily because the market power of the MNCs is greater, local competition is usually negligible, the costs accrue in scarce foreign exchange and the checks to transfer-pricing are less.
(ii) Misallocated R and D expenditures. The nature of pharmaceutical R and D aiming at producing patentable products, leads to a great deal of waste because a lot of research goes into “molecule manipulation”, imitative patenting and similar practices for a product differentiation. There are some real medicinal benefits to be gained from new compounds and dosages, which makes it difficult to separate the useful from the unnecessary research, but this does not i invalidate the point that there is considerable social waste involved. We have also noted that patenting practices work in favour of the large firms against small ones, and also enable them to monopolist markets
in less-developed countries without
working the patents.
The major social cost of misallocated Rand D accrues to the countries where research is undertaken, in the sense that the same amount of useful research could be produced in noncompeting laboratories at a lower
EconoMIC REVIEW, FEBRUARY 1977
cost. The cost t countries accrues d of high profits :
various forms disc
(tili) Marketing , costs of heavy m are clear enough, it imagine an alterna formation for doct less, which also firms to earn far S1
INDIRECT CO
There are severa easily quantifiable) industry's Operatio
(i) Suppression A large element i firms advertising ing doctors agains products of small of denigration pre usually quite unfair into markets where pired, or compulsor despite far lower developed countrie more pernicious eff entrepreneurship a important industry.
(ii) Misprescribir cribing. A pheno) recently started cri that of overuse and Ivan Illich in his The Medica / Nezve, that medicines the Come One Of the illness in modern til amply supported by recent US Senate ht mented in medical now well known wasted dollars, hunc of unnecessary ho adverse drug reactio of lives needlessly society pays for excesses of the drug ing to the testimo: Wolfe, Director, Group, Washingtof US Senate’s Subcom
*Some reputable jour. reports written by a independent authors for rewards of one ki equipment, a few dinr

o the developing irectly in the form and indirectly in ussed below.
costs. The direct arketing expenses ... is not difficult to tive system of inors which cost fair 2nabled the large maller profits.
Τς
l indirect (or less costs of the drug
S :
of small firms. in the large drug consists of warnst prescribing the firms. This form vents small firms, ly, from expanding 2 patents have exly licenses granted, prices. In lesss it can have the ect of suppressing s a whole in an
ng and overpresmenon which has eating concern is misuse of drugs. billiant polemic ris (1975) argues mselves have bemajor causes of mes, a prop OS1t1On evidence given in earings and docu
literature. It is
that billions of treds of thousands spitalisations for ns, and thousands lost are the price the promotional industry. Accordny of Dr. S. M. Health Research DC, before the mittee on Health’s
Examination of the Pharmaceutical Industry 1973-74.*
While the drug firms promotional
practices cannot be held solely to
blame, they certainly contribute to the problem by using high-pressure tactics, playing down of adverse side effects (especially in unrecorded talks by representatives), offering material incentives for more prescribing and for based reporting on tests* and generally Creating an impression of greater effectiveness for their wares than is justifiable. In developing countries this effect may be much worse because of fewer controls on advertising and much greater faith in 'foreign technology’.
(iii) Restrictive business practices. The transfer of technology in the drug industry is generally accompanied by a host of restrictive practices, ranging from export restrictions and tie-in clauses to pre-empting the results of local research, market sharing agreements with other MNCs, and "kick backs’ paid in foreign exchange to local dealers. We cannot go into these in any detail here, but the costs to developing countries do not need to be belaboured.
(iv) Inequalities in treatment. The high price of foreign drugs in less developed countries, couples with the lack of social health-care systems and the widespread incidence of illness, leads to a great concentration of the benefits of modern medicine at the top levels of the population. This unequal distribution is considerably exacerbated by the fact that institutional medical and hospital facilities (sometimes extremely modern) are located in the towns, while the mass of the people who live in the villages are almost toally deprived even of simple preventive and curative treatment. The resulting inequities in Social health care may well be considerably higher than those shown by per capita income figures, and are certainly much more repre
hensible. The drug MNCs are not
hals, including for example the British Medical Journal, published ivisers working full-time for a drug company. Many apparently have infact sold themselves to the industry and agreed to do research ind or another, whether that reward be a trip abroad, a piece of ters, a series of published papers or simply money'. Coleman, (1975).
31

Page 34
responsible for this state of affairs, but their pricing and marketing policies do worsen the consequences of an initially undesirable situation.
(v) Effects on indigenous research.
An important effect of the total depen
dence on foreign drug technology is - that very little effective research into local problems and solutions is undertaken even in those developing countries, such as India, which have pharmacological departments at universities and some R and D facilities in local government and private drug firms. Rangarao (1975) notes for India that academic and industrial work on pharmaceuticals are quite divorced from each other, the curricula offer theoretical rather than practical training, the trainees usually become drug inspectors and salesmen rather than researchers, and the total volume of R and D is less than 1% of sales. Furthermore, in some cases where local private efforts are successful, the results states Rangarao, are picked up by the large industrial R and D establishments abroad and converted into technological realities to be imported to India after a few years. These are, of course, classical symptoms of technological dependence and are common to several industries and countries. In the drug industry, however, it should be noted that R and D conducted by government establishments in India has yielded some valuable new drugs, indicating that there is no necessary comparative disadvantage in doing R and D in developing areas, contrary to the expectations of those who defend the heavy concentration of R and D in developed countries on these grounds. If present trends in the international drug industry continue, however, it is very likely that most developing countries will never be able to develop their research potential at all.
(vi) Inadequate regulation. An unfortunate result of the relative laxity of official controls over drug selling in developing countries is that the MNCs are able in some cases to get away with far more potentially harmful sales factics than in developed ones.
This
The case of Chloroi the most widely u today is instructive. I the American multi Davis, has had a run the US authorities C side-effects Of the dr peatedly been accuse for failing to give ad and for Overpromoti out nearly a million ges on this count, ye promote and sell the the US as well as In the US, however, now required to w conditions in which should not be used: developing countrie information i Raphael (II 974 b.).
pointed out that the biotics generally is ol health hazards creat drugs (as mentioned : developing countries be bought without
scription, making the prOmOt1On even m Thus the MNCs may to leave the regulatio to ill-informed auth loping countries wil being fully aware of herent in selling their
A similar problem fact that á large numl ineffective, in the sen not produce the bene them. In the US, the Authority has banned drugs as lacking evi iveness yet a recent that many of them, C several millions of p on sale in Britain. covered in a survey The Guardian and Raphael (II 974 a), W the complaint by son that the only official capable of evaluating ness was disbanded pressure from the There is now no CO in the UK with the pc the effectiveness of m developing countries
* Business Weee, (1974), p. 67. For reports on how potentially harmful cof were tested on poor (and often non-white) women in several LDCs by d see various issues frem 1972-1974 of the American Journal of Obstetric G
32

mycetin, one of ised antibiotics, its manufacturer, national Parkening battle with over undesirable ug, and has red of negligence equate warnings on. It has paid dollars ilin damat it continues to drug heavily in other countries. Parke-Davis is arn against six chloromycetin and in several s none at all. is taken from It should be overuse of antine of the major ed by modern above); in many antibiotics can a doctor's preConsequence of pre dangerous. well be content n of risky drugs Drities in devehile themselves the dangers inproducts.
arises from the per of drugs are se that they do sfits claimed for food and Drug several hundred dence of effectsurvey reveals osting at least ounds are still This was disconducted by reported by
ho also noted
he Labour MPs
body in the UK
drug effective
in 197o under drug industry. imparable body
wer to evaluate
edicines. Most do not attempt
(if we may define dependence to in- clude weakness of technical facilities ntraceptive devices rug multinationals
ynaecology.
to check on the real effectiveness of drugs sold by MNCs. The Indian authorities for instance, seem to be unaware of this problem, and so presumably pay heavily for extremely dubious contributions to their well being. ܖ
(vii) Other costs. There two other undesirable consequences of the drug MNCs' activities which may be mentioned briefly. First, the tightening of controls by developed countries' (particularly the US) authorities on clinical festing of new drugs has 'forced most of them to move a large part of that function overseas. * Since these authorities undoubtedly have sound reasons for restricting clinical testing, the 'overseas countries (which are notably developing ones) have to bear a disproportionate share of the risk of MNC innovation. Second, the promotion of drugs via the giving of free samples to doctors sometimes leads to these drugs being resold in the market for the doctors’ financial benefit. In such cases, promotion' comes very close to profit-sharing with the doctor-at the patient's cost-and creates an undesirably close identity of interests between the MNCs and the medical profession. The social cost of this is not simply higher profits, higher prices and over prescribing, but also a powerful and entrenched elite group opposed to reforms of the present system.
To sum up the section on the costs of market power in the international drug industry, therefore, it seems clear that its present mode of operation involves heavy social costs in developed and less developed countries. These costs arise mainly from its oligopolistic structure based upon technological innovation and marketing, and are reflected not merely in
financial waste (for society) but also in various indirect efects of con
siderable importance. The extension of this oligopolistic structure into
developing economies raises most of the costs etc. ones, and introduces several new ones.
encountered in developed
which arise from the technologically dependent character of the former
to regulate the industry’s practices).
(To be oid)
ECONOMIC REVIEW, FEBRUARY 1977

Page 35
AD AR AES AENT
DAY
CER EMONT ES
The present day values compel the people to have wedding ceremonies; this is especially so in the case of middle-class marriages. Those who have means and accept the element of ceremony in marriage, organise wedding ceremonies in such a way that it adds to their prestige, while others who do not have means but are unwilling to give up the notions set by these values like to maintain status by having a wedding ceremony. The money that goes into such wedding ceremonies in most instances comes through bank loans, EPF or commuted pension drawings (if the parents have retired recently from service) or through the sale of property. Thus the end-result of the ceremony is mostly an increased burden on the family.
The bridegroom is fed a cup of card by his eldest și ter a part of the elaborațe cere zonial at a Muslim marriage,
Part of the ceremonial at a Hindu wedding-ring placed on a grindstone
αre fίίίρα ο η έββ έρer of έθε bride,
 
 
 

e traditional ceremonial observed at a present day Sinhalese marriage 'emony—the fingers of the couple are tied together by thread and water
poured over their bands.
Τθε θriaαι ρομβίe reρβίνο έθε θλer.riηg, of έβεργίες, έή α typical Christian church ceremony.
༢)
Towards the New Society . . . . . Some couples, however, prefer no ceremony. They get oper it with only the signing before the marriage registrar.

Page 36
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