Page 1


Page 2

Σ . -
The Building of a Dam and Hydro-power Project on the Maha weli
The focus of the Accelerated Mahaweli Development Programme will be the construction of five major reservoirs, which re due to provide both for the regulation of a greater part of the water resources of the Mahaweli Ganga and the base for the development of the balance irrigable areas in this project. Perhaps the most significant of these five, at this stage is the Victoria reservoir where work is now in progreSS.
This reservoir will submerge the entire Teldeniya town and adjacent villages; while a new town is being located at Digana to provide for various government buildings and offices, including schools, hospitals etc. which would be Submerged. The township will also provide land to affected families who wish to be resettled in the area itself and new buildings are now being put up to house personnel associated with constructional activities. When they leave, these buildings will be made available to those families who were dehoused.
The dam for this reservoir is located between a confluence of the Hulu Ganga and the Mahaweli Ganga and the Victoria Falls. The Dam being constructed is a Double Arch one as smaller quantities of excavation and concrete could be used, resulting in lower capital costs and a shorter construction programme. The tunnel intake will be situated on the Right Bank of the Mahaweli Ganga. Two intakes will be provided, both with six metre diameter tunnels. Both intakes will be constructed in the initial stage together with a short length of the second tunnel for later additional power development.
The tunnel will be approximately 5,200 metres long and concrete-lined. The power station will be located on the Right Bank of the Mahaweli, and will consist initially of three sets of 60 MW each. At a later stage, when power is required for peaking purposes, the second tunnel could be constructed in order that an additional three sets of 60 MW each may be installed. The Victoria Reservoir will have a Storage capacity of 500 million cubic metres (approximately 400,000 acre feet).
The Mahaweli settlers look on in hope.
(Picture: Courtesy Mass Media Division, Mahaweli
Development Board)

Page 3
EKONOMIQ talia.
LAA a S SSSS YY SS S S S S S S S S S0SS
es a *ad Cíce Sir Chiarpatar A. Ga* リs。 Coion:ho 2 Sリanka
THE ECONOMICREVIEW is intended to promote knowledge of and interest in the economy an economic development process by pany sided presentation of views : epertage facts and debate.
service project of the People's Bank Its contents however, are the result of editoria consderations only ging de not necessary reflect Bank po cies a the officia viewpoint Signed feature
rice also are the persona views 。 նից autors and do na represen the
SLS SLS S S SSaS S S S S S S S S JSSS S JS comments and viewpoints are vecene. S SSSSS S SSY SSSS SSS SKJKSS S SaSS SS SSLL LS S S SSS S S SS S SS S SSYSSS SS S S S S S SLLLLS subscriptici ai că ce sale.
Volume 4
Devanesan Ne,
Susan Linn
John Kuriers
Readers Pe We have comt up on our bac our contro. annial subscri
NEXT ISSU
) The Ch children (S) Sri Lan
O) Myths
COWER
The Mahaweli Upasena Goor
 
 
 

Nembers 8 and 9 Nov./Dec. 1978
FÈATURES
siath 24 Sri Lanka's Brain Drain
29. The Malaysian Brain Drain
31 India's Fish Economy - Part II
SPECIAL REPORT
3 The Mahaweli Ganga Development Project
The need for acceleration; Enormity of the task; Errigation and drainage systems; Equipment and materials; A. Critique; Agriculture; Settlement; Regional development; Trading patterns; Infrastructure; A Railway for the Mahaweli; Environmental considerations; Financial implications; Manpower and skills.
COLUMNS
2 Diary of Events-December 1978
23 Foreign News Review-UNCTAD's one-sided
negotiations
I-sa
ase Note
bined two issues (November and December 1978) in order to catch klog in printing which had arisen through circumstances beyond We assure all our subscribers, however, that the validity of their ptions would extend over 12 separate issues.
* اے
ild and Development-an International Year for some
.ܲ - - ട്ട് ka's economy-How it fared in 1978. 亭
* and Realities of Education in Sri Lanka.
:=
e o ۔ Ganga Multipurpose Development Project-an impression by Arewardena. T

Page 4
Diary o
Oet.
1.
12
13
18
20
31
A minimum price of 70 cts, per pound for the purchase, by factories, of green leaf tea from small holders was introduced.
Postal rates on overseas aerogrammes went up from Rs. 1.25 to Rs. 1.75.
Import duties were modified on a wide range of commodities and some new sub-categories introduced.
The National Water Supply and Drainage Board has signed an agreement with the Engineering Science Incorporate Consultants of US for a sewerage project, covering areas from the north of Colombo to the south of Galle, stated a press report. The approximate total cost of the first phase of the Project will be about Rs. 58.45 million with a foreign component of Rs. 27.15 million. Phase II is estimated to cost Rs. 204.20 million with a foreign component of Rs. 40.88 million.
The US dollar and pound sterling hit record lows for the second consecutive day on the West German currency market; the US Dollar traded at 1.8598 marks and the pound at 3.715.
The President of the World Bank Mr. Robert S. McNamara, on a brief official visit to Sri Lanka, observed some of the projects in the Mahaweli Ganga Scheme.
A Master Plan for a Rs. 151.5 million Sri Lanka - West German fertiliser project was presented to the Ministe of Agriculture Development and Research by the Ambassador for the Federal Republic of Germany in Colombo.
The Ceylon Electricity Board announced that, effective from December 1, 1978, tariffs and charges for the supply of electricity will be increased.
The State Mortgage and Investment Bank, with ar initial capital of Rs. 200 million, was established for the granting of loans for the purchase of land, building and construction of houses.
A Government Gazette Extraordinary announced a serie of concessions to enterprises operating in Sri Lank under the Greater Colombo Economic Commissio Law No.4 of 1978, including taxholidays and exemption covering royalties, dividends, import and export dutie and harbour dues, and the exchange control regulation pertaining to foreign transactions and remittances.
Noy.
The National Milk Board raised its purchasing an selling prices of milk; the increase in purchasing price will range from 38 cts. to 1.29 per litre; while the increas in retail consumer prices of liquid milik will range from 52 cts. to 88 cts, per litre. -
Annual licence duties on private and hiring cars, applicabi for the licensing year 1979, were increased from 50 t. 300 percent, depending on the first date of registratio) and the gross weight of the vehicle.
The rates for local telephone calls were revised wit effect from November 1, 1978. For instance, local call were up 20 percent from 25 cts. to 30 cts. The new rate are estimated to yield an additional revenue of Rs. 1. million in 1979, Tea ëxporting and importing countries met in Brussel to begin negotiations to draft a new international te agreement. The Government raised restrictions placed on a numbe of items including sugar, fertiliser and corriander seed
 

Events
These items had hitherto been the reserve of the government sector. Other items transferred to the free market, where the private sector too could trade in, included safety matches; plywood (for export packing); and engines and cylinderblocks for motor vehicles.
Sri Lanka will purchase kerosene oil and diesel from China and, according to official sources, oil may replace rice in the rice-rubbertrade pact between the two countries, states a report in the Asian Wall Street Journal.
The inland postal rates were revised with effect from November 10, 1978. For instance, letters (per ounce) were up from 15 cts, to 25 cts, and postcards from 10cts. to 15 cts. The new rates are expected to yield an additional revenue of Rs. 31 million for the year 1979.
Heavy cuts in Iran's crude oil exports, affected by strikes since September, can have a major impact on world crude oil supplies, according to forecasts in the London Financial Times.
The Government's second Budget, which covers the fiscal year 1979, was presented in Parliament by the Minister of Finance and Planning. Revenue has been estimated at Rs. 11,429 million and recurrent expenditure at Rs. 10,534 million with an estimated current account surplus of Rs. 895 million.
Sri Lanka exported 8,700 metric tonnes of rice consigned to the West African Republic of Mali valued at Rs. 27.8 million.
A U.N. report on shipping in India, Pakistan and Bangladesh has revealed that the multinational conference lines serving these countries are indulging in outright exploitation of its users. It has commented on freight hikes, the mode of negotiations adopted for such hikes, and the servce conditions including the age of the vessels employed on these routes, according to a report in the Bombay Economic Times.
France is devising a strategy to deal with the economic competitive threat posed by rapidly industrialising countries including many in Asia, reports the Asian Wall Street Journal. The measures include the stepping up of export efforts and creation of big trading firms to oversee foreign trade developments.
China has departed from another long standing policy by indicating its willingness to allow direct foreign investment in the country provided China holds 51 percent of the equity in any joint venture, states an Asian Wall StreetJournal report.
Parliament enacted the Sri Lanka Credit Export Law which enables the setting up of a Corporation to offer insurance cover against commercial or non-commercial risks associated with the non-receipt or delayed receipt of export proceeds. This Corporation is also empowered to offer direct financial assistance for promotion of exports and re-finance those institutions granting credit for such purposes.
The Consumer Protection Law passed by Parliament provides for the regulation of internal trade, for the protection of the consumer and for the establishment of fair trade practices. This law repealed the Licensing of Traders Act No. 62 of 1961 and amended the National Price Commission. Law No. 42 of 1975.
The U.S. trade deficit widened by more than $ 400 m. in October to $ 2.13 bn. disappointing for the time being the Carter Administration's hopes of improvement of one of the fundamental factors that have contributed to the dollars weakness, states a report in the London Financial Times.
10
14
15
16
23
25
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ECONOMIC REVIEW, Nov./DEC, 1978

Page 5
The Mahaweli Proje
The Mahaweli Ganga Multipurpose Development Project is the largest development project to be undertaken in Sri Lanka. With the Government's proposal to telescope the earlier time-table of 30 years to 6 years, the project now becomes far more important and more complex. Therefore, its success depends on a clear discussion of the issues involved, issues that could get clouded under the cross-fire of both those Who un critically adulate official pronouncements and those Who un thinkingly attack any official pronouncement. This issue on the Mahaveli Project is aimed at presenting the basic data on the project
EconoMIC REVIEW, Nov./DEc., 1978
as well as so viewpoints e. Subject which the following we record offi 720thCentent S
with a pievi” i picture of the gramme. W caution that even at the h kept changing been contradi that there are own factors o ress of the pro The figures W. have judged t accepted fig. The Subse Sent discussia
 

ඉද්ර්ණික්‍ෂ
!!ti} }፲፭ YW ̇ ፫፻WA
bct
me of the major xpressed on the are arranged in sequence. First cial data and proon the project to giving a total anticipated proe must, however, official figures ighest level have g and sometimes ctory. The fact is Still many unknin which the progject is dependent. 2 give are what we o be the currently Ilré.S.
quent pageS prens on the project
بہ چیخ چیخولیہ ویکیپیڈیخ XCFCA
語sみeリce
it ANI}i:SIGAi: ,
ఇతణ్ణా జిలబెర్రీచిggeడ్లెష్ట్రాక్క్వట్టి?్క2 4%'%:e Z(
මුංජිර් ඛාර්‍ය්‍යන් ඌණපූරක්‍ෂි NEABURA ÇAY'A RESERVOJİK 懿
.[ටල්ෆිනීශිය ఇస్రుండరీ
firit Y.A. : SE} \{ it:
{39 రలిజం పట్టత
', .
NISI St: 'Atity. As
{ డ్రైaురి ప్రకటిdు ప్రాణ
ギー - - - - 1.{උෂ්බර' B-Not Fifi Atilisi ...-- SA A YA {3లేట అప్రత 2
RS
ター。Fリ
The Minipe anicut pictured here will once again play a historic role in the diversion of
the Mahaweli waters. The ancient Minipe anicut was first built by King Dhatusena around 459 A.D. This anicut helped, however, in the diversion of the waters essentially to the left bank of the Mahaweli Ganga. Now the new reservoir at Victoria will regulate the flow of Mahaweli waters from the source upto the Minipe anicut and from this point the waters will also be distributed to the right bank of the Maha weli and taken right up to the Ulhitiya Oya reservoir and then on to the Maduru Oya, irrigating the areas coming under Systems C and B in the present plan
(see map inset). (Pix-L. Samarawickrama)
and include existing research Studies and other es Says commenting on Some of the underlying themes in the project. It needs to be emphasised, however, that our treatment, is not exhaustive and that our Selection has been guided as much by the availability of studies and considered conments as by the importance of the various subjects.

Page 6
A major part of the Maha weli Ganga Multipurpose Development Project is due to be completed by 1983. By this date a total of 1.5 milion people are expected to be gainfully settled on the lands coming under this Development Project: five major dams and related works are due to be built; and 90,000 acres of existing land and 320,000 acres of new and should receive water for cultivation, while five major new reservoir's should generate 381 megawatts of power and 1,291 g whof energyall at a total estimate di cost of Rs. 1,000 million. The magnitude of this undertaking can be visualised from some of the figures in the Master Plan of the project.
The Maha weli Ganga, basin covers a total area of about 4,000 sq. miles of the country's 25,000 sq. miles and
has been estimated to discharge
nearly 6.4 million acre-feet of Water into the sea. This volume of water represents approximately one fifth. of the total discharge of all the Island's rivers into the sea. The
Master Plan prepaired during the
period 1965-1968 proposed to utilise 4.3 million a c. ft. of the flow of the
Maha weli Ganga, in an area of 900,000 acres in the dry zone of
the country, while 0.9 million a c. ft. of water availa, ble in these areas were also to be utilised.
The Maha weli Development Master Plan which is a multi-purpose scheme in its basic concept was originally intended not merely to irrigate 900,000 acres of land but also develop 5 multi-purpose projects, 4 trans-basin diversion canals and several power stations with a total capacity of 500 megawatts, and settle over half a million people who would earn their livelihood in the area- all at a total cost of Rs. 27,000 million (in 1977 prices). According to original plans the project was divided into three phases, each, including several projects for step-way implementation over a 30 year period. But, the 30 years over which the work on this project was
to be spread out will be considerably reduced and the entire plan telesco
ped by the Gover ment in order
to complete an Accelerated Pro
gramme within the next five years.
The need for acceleration
The significance of the task ahead ~
becomes even more challenging when
we realise that a project are covere undeveloped lands
respects starts from aims at building society that will be importance for the whole and the entire more, all that com
rated Programme i within the span of
The question of rated Mahaweli answered thus by charge of the sub seminar: “ft is be. ployment potential
to create hydro-ele
propensity to irriga thouisands of a Gres the inferina period ployment in vario numbers of unemp we decided that w implement the N Schene over the
Other Freasons tha
this decision were
that the population was bound to incre million by the turi
and the fact that sm Sri Lanka, were v
national whirlwind.
said.
The more pressing the economy by 197 the urgent need foi harness all possible the shortest possib end of 1977 nearly 4 countryʼs impOʻrt bil on food imports whi be a heavy burder
balance of paymen
the entire developm country has been heavily on agrict frona abroad such flour, sugar, milk all
-and the total ran
change resources f these commodities amounted to nearl lion. Equally press problem of unemple the end of 1977 w
have exceeded 20
ormal workforce.
ber unemployed h: milion and the aan the workforce is est
 

ge parts of this ther
i by completely and so in certain nothing and yet
comprehensive of considerable economy as a nation. Furtherprises the Acceles to be achieved less than a gene
why an AcceleProgramme was the Minister in ject at a recent aise of the em
high propensity
ctric power, high te housands and of land and in
to pia Gvide ennis fields to large
loyed youth that e callinot wait to 1ähawei Gaga,
30-year period.
t contributed to
the realization of this country base to about 23 h of the century all countries like ictims of inters of inflation, he
problems facing
7 had resulted in
r the country to
resources, within By the 10 percent of the
le time.
I was being spent teh has proved to
on Sri Lankas
its situation and
ent process. The
dépending very
Łlturał products
as rice, wheat,
id milik products
ge of foreign exDr the import of 3 annually has y Rs. 3,000 miliing has been the by ment which by as estimated to
percent of the
The total numas exceeded one nual addition to
imated to be in
Authorities have also wained that Sri Lanka’s power and energy estimated as
available and usable could be suffi.
cient to meet power and energy demands for only another 12 to 15 years. In this context, it was pointed out, in its entirety now the development of the Mahaweli could play a very important role because the power and energy obtainable from the Maha wedi accounts
for about 60 percent of the total that
could be developed in Sri Lanka. Moreover, the requirements of new and existing industries and the
country's rural electrification programme and overall rural develop
ment would need more intensive development of power and energy
sources, particularly as only 10 per
cent of our rural areas are electrified teSet. ܡ
The raipdily rising rate of inflatioa also made it clear that the further back the completion of the project was taken the higher would be the ultimate costs. One estimate revealed that the delay in implementation, resulted in a doubling of costs
of construction over an eight-year period. The Master Plan, which was
estimated, by the authorities,to cost
Rs. 6,000 million in 1968 will ܡ
i Costi
over Rs. 25,000 million at current costs or over 400 percent more, mainly because of the
steep inflation after 1973. It seem,
evident therefore, that the imple
mentation of this project could not be spread out over a full 30 years.
which would in fact have taken us beyond the turn of this century.
With the completion of the first
project comprising the Polgola
Diversion Complex, which inclu
il des a diversion dam, a tunnel five,
milles long and power station of 40 mW. as well as the Bowatienna, Complex with a reservoir, and a tunnel five miles long; 30,000 acres of
existing lands and 90,000 acres of
new land are being developed. This leaves a balance of 6,000 acres of
existing lands and 564,000 acres of new lands stil to be developed. from the 900 000 acres
provided ܓ . for in the Master Plan.
After a review of the financial reSO Աi:CeS needed and the technical
. Economic REVIEw, Nov./Dec. 1978
resources of hydro

Page 7
persom Fiela
I development in the first sta
watts and the development of 320,000
acres of new lands. This stage will also benefit about 35,000 acres of
existing lands for double cropping. The construction of these five major
reservoirs will previde for the regul
lation of a major part of the water resources of the Maha weli Ganga, and is expected to provide the base for the development of the balance irriga ble area in the succeeding five year period.
Enormity of the task
The Accelerated Programme thus envisages the development of a total of 340,000 acres of land in the Mahaweli Basin below Mahiyangana and in the Maduru Oya basin. In addition, a further extent of 56,000 acres are now being developed in the Kala wewa basin. This development will require 225 miles of main canal, 2,550 miles of distributary cana, is and 200 miles of road. This will mean that in the course of these developments the infrastructure facilities will require the setting up of about 350 townships, 1,600 village centres and 8,000 hamlets. In order to supply regulated water for irrigated cultivation five major reservoirs, viz : Kotmale Reservoir at Kotmale, Victoria Reservoir at Teldeniya, Randenigala Reservoir near Rantambe, Ulhitiya-Ratkinda Reservoir at Ulhitiya and Maduru Oya Reservoir near Pimburatitewa are to be constructed.
The construction of the reservoirs are to be undertaken under aid schemes, and the finances, according to the Chairman, of the Maha weli Development Board, will be 'extended by friendly countries on bilateral aid with the concurrence and blessings of the World Bank.
While these reservoirs will be constructed by foreign agencies using machine-intensive methods in order to achieve the targets set for completion, much of the downstream works of providing the irrigation and infrastructure facilities such as roads, canals and buildings are to be undertaken by local groups using more labour-intensive methods designed to
CONOMIC REwEw, Nov. IDEc. 1978
. construction capacities available it was decided to confine - age of five to six years, to the construction of five major reservoirs with a total installed capacity of about 400 mega
The original plan the Maha weli Basin ar posed to utilize 4.7 mil of the Mahaweli Ga
development in an ar.
as indicated in the map large extent of land in investment cost of th all plan was divided it phase consisting of se lands to be benefited
14 irrigation systems
The implementation spread out over 30 yea plan has been telescop where it is intended to structure of the origin quence some of the are are left out as indicate
 
 
 
 
 
 
 

)
of development of ad adjacent areas prolion ac. ft. of the flow nga for agricultural ea of 900,000 acres, above. In view of the volved and the large 2 proposals, the overto three phases, each veral projects with the being grouped under designated A to M.
period was to be irs. Now the 30-year ed into a 6 year plan build the basic infraall plan. As a conseas in the original plan 2d in the map below.
།།
provide more employment to appro
priate skills. The hope of the Maha
weli Development authorities is to
create an opportunity for every strata of society to participate in the development of this project.
In the view of the Chairman of the Mahaweli Development Board Mr. D. D. G. P. Laduwahetty the quantities of work to be executed within the next six years may stagger the imagination of most. If one were to analyse it systematically, the first item of construction should be the roads and the main canals which will help to gain access to the presently undeveloped areas. In forming the 225 miles of main canals, the quantity of earth and lock to be excavated is on an average 40,000 cubes. Working in a 4-year period of a 250-day year, the daily output has to be lo,000 cubes.
In order to facilitate manual operations if the earth, which varies in hardness, is loosened by mechanical means such as rippers, the Output has been found to exceed one cube per man-day, except in the case of rock excavation. The employment potential therefore will appear to be 10,000 persons directly employed in this operation'.
In addition, to this a proportionate number of skilled workmen will be required to construct the hydraulie structures, blast the rock in the canals, transport materials etc. This number has not been found to have exceeded 30 percent of those engaged in earthwork, which should work out to about 3,000 skilled workers.
By virtue of its sheer magnitude and scope the Maha weli Development, Scheme will therefore need to receive the most searching and allround development efforts that could be commanded in the country.
The acceleration of the project would mean that instead of sequencing the programme of financing the construction, maintenance and operation, settlement and agriculture, hydro power generation, a distribution, community development and infrastructural services, the government has decided that the major a spects should be carlied out simultaneously. This implies that a very large concentration of resources such as men, money and materials need

Page 8
ෙවdගේ නිහාණික්‍ෂණිණිණිමණ්රිෆ්රන්ට් | AcCAZARA7AFJD AZAAWA WAFA / PAROGRAMA
| බෑබ්
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|
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eఊజాe జీశశిgఆసag9 శిణ USGALA SIYAMBALANGAMUTFA Task ۳۔ ھے ۔
♔ർജ്ജ് ( - ̄ DAMBULA OYA RESERVO
Ge (
*ORAGAHAKANDA RESERVOR
BOW ATEN NA RESERVOER
n&&ം set. f
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4ሥሥ%ናòXሪቋሪፉፖ﷽ 4&ÆA AA/ ፆ፳ዶ፧ ሥmeኋፏቋፋ4፭ልታ፭o
έν இது --$දීද්
N
VICTORI
Sപ്പ
:' - 63:eడ్డి 4 RANDE * ಅಜವ್ಲಿ බර1. tko† [[နွှဲ†ါ’`6¥ A භ්‍රයන්ජින රතු,
斉 李&リ受
伦er丝
System C - The main river from Minipe to Kalinga forms channel and the proposed Ulhitiya reservoir form the right boun through the Minipe Right Bank channel and the Ulhitiya reservoi
System B -- The right and left bank channels of the Madu from Kalinga to Kandekadu forms the third boundary. The righ to be irrigated is 125,000 acres.
System A This area is the actual delta of the Mahaweli. the boundaries of this system. 100,000 acres will be irrigated in S --- System D - The ancient Elahera channel going up frcm
from the Parakrama Samudra to Kandekadu and beyond that to 4 in System D.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

TRing coMALEP .
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KARAL.A.E TANK
බෑණී
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壁翠為
RXA. HÖL İLLÂ TANK
இலஇ
MiNiN Ef3 YA TANK
s
在夏蕙
MĩANAMPFFFYA
فيي؟
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MADURA OYA RESERVoIR
ಎಲ್ಲಕ್ಷ್ ర@ళపైడరీ
ti Lii": EGYA RESERVOR
- ൈ
HORABORAWEWA
జ్ఞత9ణ డోలిటిలపుత్తిత్వ
EXISTING PADDYLAND { ඊරිණිණි ජෙරුණු 4
൧മമ് EXISTEg, RESERVORS -
UMA C}YA ( ( 。
62( మ్రిత్రతో " **
RANTEMBE
ක්‍ෂිරපල
NIGA LA
PROPOSED RESERVOIRS
s@夢みaっ ം €శ39) స్త్రపై //4 శ్రీ శ్రీశ్రీ A Afifa
Zerá: گاهی چیرگی از مرگ Š ̊ሪ2ዳፈፊ ̊
the left boundary of this system. The proposed Minipe right bank dary. The Mahaweli waters will irrigate 73,000 acres in this system
ru Oya Project form two boundaries of this system. The main river t bank of the Kandekadu channels forms the fourth boundary. Land
The left and right bank channels of the Kandekadu anicut will form System A.
Minneriya to Kantalai forms one boundary. Another boundary is he Kandekadu left bank channel. 130,000 acres will be irrigated
ECONOMICREVIEW, Nov./DEC, 1978

Page 9
available over the shortperiod of six years to meet the re
quirements or this project and a vast complex of activities. But the timing of finances and resources availability are still not fully within the control of the authorities, and therefore attempts to rationalise the sequencing of these projects within any of the broad areas do not seem to be possible. Many problems are bound to rise in this context, relative to the accelerated project and probably
more so to the nature of the settlement and colonization within this project. It appears therefore that an important aspect of the planning and implementation of this project is to leave room for continuous adjustments. At the same time a consistent monitoring and review is vital as apart from the constructional activities and the targets, undesirable social outcome would have to be corrected before they became insti
tutionalised.
RRGATION AND DRANAGE SYSTEMS
The Accelerated Programme is expected to supply water to a vast region along the course of the river, mainly to the Mahaweli plain stretching from Mahiyangana to Trincomalee. This regionis described in the Mahaweli Development Plan as the Systems, A, B, C and D and is indicated on the map on page 6. Several big irrigation engineering works comprising five major dams and related works will supply the Mahaweli water to the 320,000 acres of new land and 90,000 acres of existing paddy land coming within this region and a majorportion of the estimated Rs. 11 billion required for the accelerated project will be utilized for equipment and materials for this purpose. Irrigation and the drainage systems are fundamental to the project although there are a wider range of objectives.
The “Master Plano for the development of the resources of the Mahaweli Ganga Basin was formulated with the following criteria in view :
(1) Utilising all the available water re
sources of the Mahaweli Basin for irrigation and hydro-power production;
(2) Utilising all available land resources within the basin for irrigation development;
EconoMic Review, Nov./Dec. 1978
(3) Trans-basin diversi
able waters of the the adjacent basinf
(4) Utilising the wate adjacent river bas the diverted flow f B sin to maximise nant in those basin
The Director of A. Maheswaran a UNDP–FAO tean their report in annual yield of the M at the lowest point Kandakadu, to be feet. They pointed construction of rese) sion structures it w to obtain a regulate 000 acre feet. T catchments as well the service area w contribute about l,3 making a total wate 5,600,000 acre feet
The design of an a of irrigation and dr. such a large extent many problems. Ti tems, which are alı extent of 246,000 ac under cultivation, corporated in the channels.
Discussing the in of the Mahaw eli ( ment, in a recent pa of Irrigation drew various factors th attentionin older to water drainage and tems. Here he stal matic and soil co Lanka, are favoural vation of a variety irrigation. Uptc rec was the sole crop g gation. Sugarcane plantation scale w the 1950-1960 peri and Gall Oya, irr Cultivation of subs like onions, chillies tised in the well-il. in the North of Ce time and late intr irrigation schemes the country. Expe. far, has shown that grow a series o throughout the yea of the dry zone,
 
 

on of excess availMahaweli Basin to orirrigation;
r resources of the ins to supplement rom the Mahaweli irrigation develope S.
Irrigation, Mr. rgues that the estimated in
968 the mean
Mahaweli Ganga, of diversion at 6,400,000 acre out that by the voirs and diverould be possible di flow of 4,300,- he intermediate as catchments in uld in addition 00,000 acre feet, er availability of per annum.
dequate network inage canals for of land causes he irrigation syseady serving an bres of land now have to be innew network of
trigation aspects janga, Developper, the Director attention to the at would need provide efficient distribution systed, that, the cliinditions in Sri ble for the cultiof crops ur der sent times, paddy rown under irricultivation on a as introduced in cod at Kantalai igation systems. idiary food crops , etc. Were pracrigation schemes »ylon for a, lon
oduced in 'lift' in other parts of rience, gained so ; it is possible to crops, almost jr, in most parts
The soils in the Maha weli project area can generally be classified, according to their drainage characteristics, into three general classes; namely well drained, moderately drained and poorly drained. The first two classes are generally known as "upland soils' while the third class, which occurs in the low parts of the valleys is called "lowland soills”.
The well-drained soils are well suited for the cultivation of 'dry' food crops. Paddy cultivation can also be done but large quantities of water will be required. It is generally accepted that paddy will be cultiwated on these well-drained soils during the Maha season under 'non-puddled' conditions.
The moderately-idrained soils can be utilised for paddy in the Maha season and other upland crops in the Yala, season. As continuous puddling can alter the texture of these
soils, even here, it has been re
commended that puddling should not be resorted to.
The poorly drained clayey soils are ideally suited for paddy cultivation in the traditional manner. Even here, it would be possible to grow high value upland crops during the Ya, a season if adequate surface drainage is provided.
In addition to paddy the other crops contemplated are cotton, soya, beans, varieties of pulses, vegetables and groundnut. The crops to be grown in any season will further be determined by the national demand, market conditions and the capacity of the farmer to grow any particular variety of crop.
The water requirement for a crop will vary with the season, type of crop, soil characteristics and finally on the application and efficiency of the farmer. The gross water duty for a crop of paddy has been found to vary from about 3 acre feet to about 8 acre feet. The duty for other crops have bean of the order of 3 to 4 acre feet. Methods for determining the irrigation potential of this Project and canal capacities have been worked out. For instance, the canal capacities are determined by the water needed by crops that have the heaviest demand in times of peak water requirements. This is because of the fact that the farmer should b8 able to switch his crop from one to

Page 10
the other depending on market forces. As paddy has the maximum demand for water, all canals are designed to permit paddy cultivation.
Among the commonest methods by which irrigation water can be applied to the farms are flood irrigation, infiltration (furrow); slinkler inrigation; and trickle o drip irrigation. In order to economise On the use of water and also on the cost of a canal system, a rotational system. of irrigation is being planned by the authorities. The smallest channel, called the field channel will carry a constant discharge of one cusec. Each such field channel will irrigate about 40 to 50 acres. Irrigation issues will be to two farms at a time. When the required quantity of water has been delivered to the two farms, the farm outlets will be closed and the next two farms will be irrigated in rotation until all the farms under the field channel receive their supplies. The distributary channel will be designed to serve all the field channels (under it) at the same time. The main Channel Will have a constant supply, duling any particular period, in order to be able to supply all distributary channels. During low irrigation demands the supply along the main channels would either be stored in strategically placed service reservoirs or in the alternative the supply could be reduced.
In implementing the irrigation procedures outlined above the Director of Irrigation has cautioned that several factors would have to be closely watched. Proper laid preparation will ensure an efficient use of water. Therefore, the land preparation techniques adopted and the resultant variations in Water demand will have to be kept under constant surveillance. Further, the cropping patterns adopted by the farmer are a cause of concern. A reluctance on the part of the farmer to grow crops other than paddy has been noticed. If paddy is grown in all areas, for both seasc ns, it would not be possible to meet, the demand for water adequately in all years, according to the Director of Irrigation. Also, the water table could rise at times to dangerous levels. A continuous monitCI ing of the water table will
8
therefore be nect quate drainage provided.
Farm water r fore, means not water; there is all in and thern the pl there are three di: engineering, soils and plant grow Typical of the en ject itself, water need to have an approach.
EQUIPMENT Al
This programın gation, hydroand infrastructure require an invest Rs. 1 billion, the which is due to b ment and materia these requirement the Chief Engine of the Central Ei tancy Bureau. Mji dane and he lis as the major pli to be given prior rated Developmer 1. Maduru Oya D
Power Tunnel, P. Tunnel;
2. New Minipe anic
basin Canal and
3. Kandakadu, Ani
4. Victoria Dam, Power Station;
5. Randenigala. Da
6. Kotmale Dam, Power Station:
7. Moragahakanda Station and
8. Irrigation faciliti areas A, B, C and
Most of these w to be completed V five years; but as t fied as major pro construction peri three to six years, t material requirem jects will run conc
Several enginee big and small, will
t fore the Maha wel
plied to the 410, within the Accele areas, where abo settler-families wi half acres of irrig each. Adequate therefore have to
 
 

essary so that ade. systems could be
management thereonly the issue of
lso the soil coming ant. "Thus, in fact, isciplines involved: studies and control, ing and nurture. tire Maha weli Pro
management will inter-disciplinary
ND MATERALS
ne of massive irriower, agricultural vl development Will ment estimated at a major portion of re spent on equipls. The extent of Is are described by er, (Hydro-power) gineering ConsulP. G. G. Jaya, warits the following rojects which are ity in the Accele. at Programme.
Dam, Irrigation and ower Station and Link
ut, Right Bank TransUlhitiya Reservoir; Cult;
Power Tunnel and
m and Power Station: Power Tunnel and
Dam and Power
es and Settlement in
D.
orks are expected 7ithin a period of hey all' are classijects requiring a Dd ranging from he equipment and ents for the prourrently.
ring Works, both be carried out bei Waters are sup100 acres coming rated Programme out 140,000 new ill get two and a rated paddy land recautions would e taken to ensure
that better techniques tribution and on-farm irrigation and water management are observed. The preliminary work on the projects will consist of surveys and geological and material investigations for engineering design and the provisions of access roads, camps, and
construction power required for the major construction works. With the present available data the preliminary works for the projects are approximately estimated as follows:
Major roads 100 milles
Minor roads 35 milles Permanent quarters 175,000 sq. ft.
Camps ... 200,000 sq.ft. H.T. Power lines 50 miles L. T. Power lines 30 milles Telephone lines ... 55 miles
Most or these works are expected to be executed during the next two years, and carried out by the State Corporations and the private contractors. The works will be distributed in the various project areas.
The equipment requirements for the preliminary works will be bulldozers, motorgraders, metal crashers, concrete mixers, road rollers, farm tractors and trailers, lorries and light equipment including spare tools. It is anticipated that these equipment will be available with the liberalised import scheme.
The material requirements for the preliminary works will be factory products such as cement, reinforcement, bitumen, blasting powder, drill steels, petroleum products, light steel sections together with the laumerous fittings and materials that go into building construction and locally available materials such as crushed metal aggregate, sand, fimber, bricks, blockwork and tiles, etc.
Electricity distribution will require
aluminium conductors, insulators. hardware and transmission posts of timber, concrete and steel.
The construction of the preliminary works and the supply of materials will be carried out mainly by local contractors. The Engineering Bureau maintains that considerable savings on materials could be effected by using prestressed concrete items and exploited timber from development areas. Due to the very nature of the works, its distribution in the project areas and the short mobilisation periods required by local contractors, shortages of equipment and materials that will delay
EconoMICREVIEW, Nov./DEC. 1978
f water dis

Page 11
works is not anticipated.
he main and branch channels,
and the distribution system will form the Irrigation system while Land Development will require clearing of land, land preparation and settlement. Settlement will also involve the provision of basic social
infrastructure facilities like community centres, schools, medical institutions, post offices, police stations and roads, water service and communication facilities.
The equipment, and material requirements are expected to be similar to those of the preliminary works except that the magnitude of the requirements will be much larger. The work will be distributed over the development areas and the construction period would be extended upto five years. The construction works
A CRETIQUE
A recent critique of the Maha, weli Project, particularly the MasterPlain has been put out as a booklet by a former public servant, Gamini Irriagolle, who had the responsibility for negotiations with an IBRD Mission in 1969 on the agricultural development aspects of the Mahaweli. Irriyagolle's tract contains several deficiencies with the flow of arguments sometimes, fragmented and the presentation lacking coherence and clarity. However, in this booklet certain strong features emerge, which require serious examination. The trend of his argument and some relevant extracts are presented below: -
In irriyagolle's view the Master Plan is only an outline (i.e. preliminary) set of proposals and a decision to implement this 'outline' must await the necessary studies and not vice versa. According to him 'nobody was or still is in a position to know What has to be di OII e or the economic, social and political implications, or the costs or benefits. Many of the assumptions in the Master Plan, he maintains are incorrect, but most thinking he says appears to be based on this set of proposals. His conclusion is that 'far from constructing dams, bridges, canals and houses now, the government should forth with
EconoMICREVIEw, Nov./Dec. 1978
he construction of the preliminary - 乏 deal with those a on the disastrous
instance . . . . and
principal decision
In his publication submitted in Nove Dutch consultants N. that “if such an unde weli Programme) is : in all its details on learned from past in situation may arise'. disprove the possibi the Master Plan, that acres spread over 4 area in the country, the Mahaweli waters the effect of withdraw flow from the Mahav on the ecology of the has also to be studie
ie ādds: 'f the a large-scale irrigation withdrawal of flow i tributaries are soun. present form must t alternative would be dium-scale projects, t ment and use of grour out, for instance, tha the UNDP/FAO stud quirements of the y correct. 'The requil absurdly low ... it ca. doubt that the irriga for the proposed crop lands are too low'. . with detailed figures that the total extento be irrigated and di 354,100 acres and in 'envisaged' in the N proclaimed in all pro Subject. His view is that ultimately could ingand new lands wil acres only and not 90 made out to be. He all general assumption ha available would be u crops and that the req tic water supply and including industry in areas have been ignoi
An IBRD mission March 1978, which als note and comments cations of the Maha quoted in his conclu “ . . . . if careful planni parts of the economy resources, and the fl Mahaweli would be i the heavy investment that would be incurred struction work begins there is a lot of feasibil neering work to be water supplies becom plete command area nor will commensurat be realized, unless a SI cultural policy action
ద్రా
 
 
 
 
 

dvisers who put it s path in the first are misleading the t-makers',
he quotes a report mber 1978, by the EDECO, which warns rtaking (as the Mahanot properly planned the basis of lessons listakes, a disastrous . He also attempts ts Eities, as estimated in a net area of 900,000 0 percent of the land could be irrigated by . He maintains that fai of largeanlounts of veli and its tributaries basins of those rivers
rguments against the of the dry zone and in the Mahaweli and d, the project in its be abandoned. The to have several mebetter Water manageld water'. He points t the assumptions of y of the irrigation rearious crops are inrements assumed are in be proved beyond tion duties assumed ping patterns on new He goes on to argue, which he provides, f new land that could eveloped would be ot. 654,000 acres as siaster Plan and still nouncements of the
that the maximum be irrigated in existlibea total of 600,100 10,000 as believed or so indicates that the as been that all water sed for irrigation of uirements for domesthe various services the newly developed CC.
report submitted in ostrikes 2 calitionary on the likely impliweli Project is thus usion by Irriyagolle ng is not done, other would be starved of ow of benefits from insufficient to justify or to service the debt i. Before major conon the new projects, ity and detailed engiione once irrigation e available, the com
cannot be supplied e increases in output eries of further agri
“... The Government will also need to ensure that it does not pre-empt resources that could be much more productively used elsewhere. There are, for instance, numerous minor irrigation tanks in the dry zone which, with modestinvestment, could contribute substantially to output in the medium term. These smaller schemes have much lower unit costs (Rs. 7,000/- to 10,000/- per acre as against Rs. 25,0004to 30,000/- for Mahaweli), a relatively low import content (15% as against 40% for Mahaweli) and much greater labour intensity’.
*“Government also reeds to be aware of a number of concerns that relate to an ambitious project of this kind. If the employment potential of the project is one of its primary attractions, immediate attention will need to be given to the choice of techniques. Atight implementation Schedule would greatly reduce the flexibility of the Mahaweli Board in the choice of abourintensive techniques . . . Government must also guard against inadequate technical investigations or supervision leading to non-optimal project selection designs, cost overruns, and poor construction standards. Construction costs could be inflated by a much greater dependence on imported inputs... technical resources will be spread thinly over for many projects thus tending to cause delays across the board and significantly postponing realization of benefits.
“Water management is by far the most challenging obstacle to output increases. Given the impracticability of volumetric pricing in most irrigation schemes, the simplest way to enforce efficiency in water use is through physical rationing. This is likely to be popular with beneficiaries at the top end who tend to be politically powerful vis-a-vis the field staff of the Irrigation Department and who are currently used to practically unlimited supplies. Further there are few safeguards against tampering with the water distribution system. . . . It is not uncommon to see an irrigation Scheme completed less tham a decade ago put forward as a candidate for major rehabilitation . . .'' -
S is taken . . .
and the supply of materials will be carried out largely by local contracGors and organisations. It is probable, that most of the equipment required for jungle clearing, excavation and transport would be obtained under foreign loans and grants.
The main construction Works consist of the construction of the headworks such as dams, spillways, main canals, tunnels and power-houses. Quantities of major items of work in the various projects as estimated at
the present state of development of
designs by the Central Engineering Consultancy Bureau is summarised in the table on page 10.
Large quantities of cement, reinforcement and building materials

Page 12
QUANTITIES OF MAJOR ITEMS OF WORK IN HEA
Maduru RandeniItem of Work Oya Victoria gala Kotim, Project Project Project Proje
ಅಜ್ಜ sation 700,000 173,000 383,000 417.
| {CU. y Ci. Rock ಟ್ವಿಟ್ಗtion 240,000 475,000 160,000 1,285.
cu. yd.) Earth Fil ... 5,258,000 29,000 75,000 2,853,
(cu. yd.) Rock Fill -- 350,700 8,000 74,000 6,190,
(cu. yd.) Concrete ... 102,250 617,000 1,220,000 191,
(cu. yd.) Cement . . 24,500 103,000 164,000 30,
(ton) Steel (ton) . . 850 2,300 1,800 8,
will be required for the major works A great deal of p.
and several corporations and factories will have to plan production of the additional requirements for this purpose to ensure no shortages. The harvesting and processing of
Ordination, with t and factories pro reinforcement and materials to ensure
of materials require
the large volumes of metal aggregate, in addition to the is sand and material required for the quirements, will b graded zones in dams will be critical as these projects ge
activities in the construction of the headworks. It is on proper material investigation, selection and appropriate equipment, realistic planning and efficient organisation of the works however, that will depend a successful execution of these programmes.
Even to service the personnel engaged on the various preliminary works, main construction works and land development, an infrastructure will have to be established to provide food, clothing, housing, consumer goods, transport, schooling, health facilities and entertainment. These services are expected to be provided by government departments, corporations, local contractors and individuals. The equipment requirements will be mainly transport equipment and light commercial equipment.
The main construction equipment and other equipment to be installed in the permanent works is expected to be financed by foreign loans and grants. While the main equipment will be imported there will be opportunities for the local firms to fabricate and manufacture the medium and small size equipment required for the various projects. Opportuinities will also exist for the local contractors to supply large quantities of local materials required on construction works.
There are severa apart from the irri struction aspect, important role in Project. There are agricultural devel settlements, infrast skilled manpowel finances and envi siderations.
AGRICULTURE
Several specialis been carried out which show that of crops can be gro weli Development paddy cultivation important. The Ag. weli Development Vigna rajah mainta paper on the sub will continue to b crop and the se up to rice cultivati will be due to the bi produce, and be cal familiarity with th crop. Also, the su for rice production, keting are already V
It is expected tha consumption of ri mainly due to ther imports and consu, flour. This ther, qualms about, over
 

DV ORKS
Moragalhaalle kanda "ct Project
200 1,030,000
500 698,000
000 1,120,000
000 975,000
000 552,000
000 91,500
000 730
lanning and cohe corporations ducing cement,
other building : the production d by the projects
land’s normare
eCOrne 2eceSSary tunderway.
I other aspects, gation and conwhich play an the Maha Welli a the aspects of opment, human ructure facilities
requireinents, ironmental con
ed studies have in recent years a great variety Win in the Mahaarea, though will be the most romomist, MahaBoard. Mr. N. ins, in a recent ject, that rice e the dominant titlers will take on readily. This g demand for the se of the settler's Le culture of the pporting services storage and marwell-developed.
ut the per capital Lee Will increase eduction in both mption of wheat e should be no broduction. How
e Ver, rice could be exported if We have a surplus. It is not difficult to breed varieties suitable for export.
He warns, however, that adequate measures must be taken to ensure
that rice is grown in appropriate soils so that water would be economically used, production of other crops is not adversely affected and the problems of salinity, alkalinity and poor drainage do not mar the overall productivity of the land.
The choice of crops and estimates of the extents of land that will be brought under these crops have been regarded as of crucial importance. These two aspects are being determined mainly by the demand for the produce from these crops to meet local needs. The Mahaweli Boards Agronomist lists the following seven factors which have been considered in choosing crops. 1. Economic consideration, mainly
national demand, import substitution
and export potential; 2. Agronomicfactors such as soils, drainage, status of soils and Water conSumption Climatic factors, particularly rainfall regisse 3 Response to intensive cultivation and ability to provide high returns; Adaptability by farmers; Insect pests and diseases and Nutritional and social factors. Tentative estimates of production and a creages of major crops that could be accommodated in the scheme to meet projected demand in 1995 are given in the following table :
Production Acreage
Crop (103 m (103 m.
tons) асres) 1. Paddy . . 77 511. 2. Sugar . . 289 16 3. Pulses , , so 55 12. 4. Cotton . . 0, e 46 75 5. Chillies . . o nil nil 6. Onions . . nil nil
Source : W. H.K. Kuijpers, Economist,
NEIDECO.
Among the other major crops selected for cultivation, as indicated in the above table, are pulses such as cowpea, and greengram, vegetables both traditional Dry Zone and Upcountry variety; sugarcane; chillie and onions; groundnuts; fruit crops such as citrus, banana and papaw; soya, beans ; sesame (gingelly) and tobacco. The emphasis to be paid to the various crops will depend on the popularity of each. Factor's such as a greater demand or higher
ECONOMIC REVIEW, Nov./DEC, 1978.

Page 13
through new varieties could result greater increases in production;
while a fall in demand or lower
prices or pest attack of a crop could
lead to a reduction in a creage and
production. Many agro-industries based on these crops have also been identified.
Subsidiary food crops
There is still a wide gap however, between the stage of planning and final achievement and it is generally recognised that the main reason. for this is, with the exception of rice, that there are gaps in the supporting services in the sphere of agriculture in this country. Research and extension services would need to be reorganised to cater to the new priorities while proper marketing facilities will also be crucial for the farmers in this area. It is apparent that in order to ensure that every farmer can get the best results on his land, earn a good income for his family round the year and also increase national agricultural output, he will have to be provided with all his requirements. Credit facilities, seed, fertilisers, pesticides, additional labour, buffaloes and machinery (such as two-wheeled tractors) will have to be available on a much larger scale and reach, the farmer more efficiently than ever before.
Numerous other problems have been listed as regards agriculture in the Maha weli årea. There is, for instance, the strong tendency for farmers to grow some rice irrespective of the season and other considerations, since they had to give up their rice ration books on receiving an allotment of land. Also they generally lack experience and confidence in growing other field crops. Furthermore, if such a farmer's plot happens to be in the upper levels then it would flood-irrigate and this could cause serious problems to the cultivation of crops such as chillies at lower levels.
A survey carried out by the University in three blocks of the Maha Welli area, showed that although theoretically II5 in a sample of 218 people should have cultivated subsidiary food crops, approximately 85 percent had instead cultivated paddy. He points out that this can have tremendous implications for Water manage
ECONOMIC REVIEW, Nov./Dec. 1978
prices or increased production
ment and is goin,
big problem. The
why farmers we
cultivate subsidia these areas were fa ticularly because to cultivate būti Imr a farmer cultivate crops the marketi. be very efficient, system was not.
There was also protection which be considered ver mers felt that no stealtheir paddy Cl fields were locat from their homestic hand, subsidiary f have to be protec farmers would hav homesteads. This implications for th planning scheme.
An interesting ex problems of mark by a scientist at : where he related tucky wonder bea. about Ris. I/50 Colombo market, for even 35 cents in Two reasons for th that no propermar available and the transport systems adequate. Conseq. are not paid and f tant to grow the choice of crops de they wanted to gro it paid. Studies that pricing poli Vation in many O' instance, import results in the lowe of locally produce crops, while the gll rice has continued attraction for rice
Water managemen
Poor water mar been a regular pro farmers. It genera excess use of wat difficult for the cu crops. In some areas already set found that the lac levelling and an e distribution syster issue of water were water managemei
 
 
 
 

to be a fairly easons, he added re reluctant to cy food crops in irly obvious, paraddy is far easier Lore important, if s subsidiary food !g system has to and the present
the problem of would have to carefully. FarOne was going to "ops, even if their ed a mile a Way ads. On the other ood crops would ted which means e to maintain two problem also has Le new settlement
ample regarding eting was quoted recent seminar how good Kenns which. fetched per pound in the could not be sold the projectareas. is situation were keting system was axisting road and
were far from ently good prices armers are relucse crops as the pended on what w and how much have also shown sies affect cultither ways. For policy sometimes bring of the price di subsidiary food taranteed price of to serve as an cultivation.
t
tagement has also oblem among our ally results in the er and makes it tiltivation of other of the Maha weli tled it has been k of proper land fficient irrigation n for control and resulting in poor it. Studies have
found that in the major settiement projects in the Dry Zone the actual annual use of water per acre is nearly twice that of the estimated requirements. The most severe constraint to proper water management in Sri Lanka, was the inefficient use of water in our traditional agricultural practices. These studies have also found that each settlement project area was not fully utilised as planned; and also there was a lack of a realinvolvement of settlers and settlement organisations.
SETTLEMENT
This raises the wider issue of the need for an efficient human settlement plan and adjustments in the Project's plan to encourage settlers to reach the highest possible levels of productivity and at the same time enable them to reap the maximum benefits. It is now agreed that settlement plans that will be adopted in the project area would be quite different from those of the old colonisation schemes. In the old settlement schemes such as Galoya, and Walawe the layout of settlers had not provided for the growth of social life in well-knit communities. In these sehemes families were either placed on a 'ribbon' type development arrangement along the irrigation channel or they were scattered within the command area. Settlers lived on highland allotments arranged in long rows as it were, making social contact difficult. Also access to their paddy allotments was not easy. This type of ribbon development has only added to the cost of providing various services such as water supply, electricity, transport and road maintenance, in addition to slowing down the growth of community life and mutual self help. The Maha weli scheme has now adopted the principle of “cluster settlements which means a grouping together of well-planned hamlets into a village. Several villages in turn will be linked to a township. About 100 settlers and their families will live in each, ha Hamlet on half acre allotments of highland. Their paddy lands too are expected to be within easy reach. Four or five hamlets of 100 families each will form a village or cluster. In areas where there are existing hamlets, they are expected to be incorporated

Page 14
into the cluster with the necessary adjustments on both sides.
According to plans, every hamlet will have a primary school, a cooperative and other minor civic amenities. The village centre, will be within three or four miles of any homestead. Here more advanced facilities will be made available, such as a junior secondary school, a branch co-operative, a public health centre and a sub-post office. It is expected that the settlers will, by their own efforts, set up other facilities such as a shopping centre, a weekly fair (pola) and a community centre with a playground and reading rooms. At the township, there will be a secondary school, a primary co-operative rural bank, central dispensary and materinity home, post office, farmers training centre, paddy store and so on. Locations will be set apart for shopping centres, cinemas, markets, medical institutions etc. so that these facilities can be provided at a gradual pace through private enterprise or public investment. These town centres are expected to have facilities to serve each group of 2,500 to 3,000 families or approximately 15,000 to 20,000 pers Ons .
Problem areas
Settlement planning in colonization schemes has always been a very sensitive issue and in this Project particularly, where colonization on a scale never before attempted is due to take place, effective settlement planning Will have to be a vital consideration. The Maha weli Board maintains that the settlement policy planned has been evolved after detailed study and while it has been enriched by past experience in colonization, care has been taken to avoid the mistakes of the past.
Many problems, however, have cropped up in the areas already settled. For instance, in the System Harea, where there are many existing settlements such as purana villages, lands under the Lands Development Ordinance and the old colonisation schemes it has not been an easy task to resettle the farmers already living in the area and to integrate the new settlers being brought in from outside. Modifications are going on where neces
sary to fit plans t the settlement al.
Some fundame been raised by the Department the Peradeniya. U two of his collea Perera, and Mr. V study, in three b economic aspect, terns of the H are project. This stu. during the Yala Maha season c Siva told a re purpose of this identify certain p cropped up for the implemental grammes and pol farmers who had facilities that ha
*I would like problems into the gories. Problems Board has to face a have been faced by area. The first pro has had to face or the future is th persuade all those cated land to occu Theoretically speak who has been given also been provided stead. Butour stud up to the end of Ma 70 percent of the pp to reside on their la Cent are either on t still in their old villa The question is, h. these people to mo Steads. In the case the location is fairly, of the people who fields would like to plots. But in the villagers, the probl difficult because in villagers feel that t in their puran la villa to what they would were to build their stead. Now, this is problem. How do puran a villagers W cated land to come area?'
**The second pro and that has been easants has not be retically, as I said
given 2 acres of la have snown that approximately 40 p. lation in our sampl entire 2 acres. No lem. We give reasor technical, in the ser say that they haven adequate amount
 

63S. ntal problems have
Dr. Percy Silva of
of Geography, of iniversity, who with gues Dr. Jayantha Wilson carried out a ocks, on the socios of settlement pata of the Maha weli dy was carried out season of 1977 and of 77/78. As Dr. cent seminar the exercise was to roblems, that have the Board, in ion of their proicies; as well as to to make use of the ve been provided.
to divide these Se two broad catewhich the Mahaweli ind the problems that the farmers in the blem, that the Board will have to face in at of trying to who have been alloLpy the homesteads. ing, every individual 2 acres of land has with acre of homelies have shown that ha. 77/78 only about pulation have begun and. About 30 perheir paddy fields or ges, purana villages. ow do we persuade ve into their homeof the paddy fields, alright, because most live in their paddy remain close to their case of the purana em is a little more lost of the purana he facilities enjoyed ges are far superior have to enjoy if they houses in the homegoing to be the first you persuade all the ho have been, allointo the settlement
blem is that all the given over to the 2n cultivated. Theoearlier, each man is ind. But our studies only 38 percent or ercent of the popue have cultivated the w this is a big probis for this. Some are se that some people it been able to get an of water and some
o these realities in people say that there are other physical
problems like alkalinity in water. So, therefore, they are not in a position to cultivate their plots. Besides these there are also other problems such as inability of the farmer, a man who has got the . allotment, to work on his own because Very often two or three people in the
family have been given land so that the father finds it difficult to cultivate the entire 2 acres. In some cases people find it difficult to get the cash. Whatever the reasons are, less than 50 percent of the people cultivate 2 acres of land though the entire allotment of land has been given over to them.
The third interesting problem concerns the question of subsidiary crops. Now, if we take our sample of 218 people. Of them 115 were recommended subsidiary crops for Yala, so theoretically for 1977 Maha 115 of the 218 people should have cultivated subsidiary crops. But of the people to whom subsidiary crops were recommended approximately 85 percent cultivated paddy. Now this has tremendous implications for water management and in Maha, 41 out of a sample of 128 were recommended subsidiary crops even for Maha. Out of this 83 percent cultivated only paddy and another 7 percent paddy along with some subsidiary crops. This is going to be a fairly big problem. The question is why are these people who have land reluctant to cultivate subsidiary crops. It is fairly obvious that farmers are used to irrigate agriculture and paddy is a crop which is very easy to cultivate. You just spend some time in cultivating the land, then you have a long slack period that you can attend to other things and you are busy again with the harvesting season. But that was not the only reason. The second reason is the question of marketing. Because, if you cultivate subsidiary crops, the marketing system has to be very efficient and people feel that the marketing system that has developed upto date is not very efficient and they did not wish to take this risk of cultivating subsidiary crops.
There is another important problem and that is the problem of protection, which has to be considered very carefully because people always argue that when the farmer is not there no one is going to steal their paddy crop. Their crop can be located a mile or a mile away from the homestead and still they needn't worry about it. On the other hand, if you grow some subsidiary crops like chillies or pumpkins and various other crops, it has to be protected like a chena in which case they have to maintain two homesteads. This has implications for settlement planning and should be given consideration if we are to encourage people to grow subsidiary crops. Should we have a different settlement plan in those areas in which subsidiary crops are being encouraged? Now the next problem which again the Board has had to face is the question of the cropping calendar. Now our studies have shown that the terms Yala, and Maha may not be very
eaningful, in the Mahaweli Settlement area, because if you take the ploughing period the first man in our sample last
ECONOMIC REVIEW, Nov. DEC, 1978

Page 15
Yala started ploughingin the fourth week - of May. The last man in the sample finished his ploughing in the first week of August. Now let us take Maha. The si first man in the sample last Maha 77/78 is started ploughing in the first week of October and the fast man finished his
ploughing in the first week of January. This too has tremendous implications for water management. But apart from that, it also affects a farmer in different ways, because if he doesn't start plouging in time he is not in a position to harvest his crop. Lots of farmers have complained that because they were not in a position to start ploughing at the correct time they couldn't harvest their crop and even when they harvested their crop they couldn't thresh it because of the rains, because they were coming into the next rainy season. These are problems that the Board has to face'.
The Malha, weli authorities have drawntip their plaipestomaintainthe egalitarian basis of the settlers on these lands. The main basis is to be 2 acres of irrigable land and a . acre plot for a homestead. They
Would all therefore, start On a base
of equality. But the experience of land colonization in the country over the years has shown that the situation has never remained the same as when the settlers originally moved into their lands. In some cases the original allotments have got smaller and smaller while in other cases they were becoming larger and larger. In the smaller plots some have become andle-cultivators of the larger holdings. In other cases they become landed labourers of their own nominal holdings and
work as landed labourers inder a
new landlordism which has been emerging.
A research study, for instance has shown that in one of the earliest colonisation schemes, Tabbowa, that there Were tivo traders con
trolling 35 acres of paddy although
on paper the schemes allow only a paddy a creage of 5 acres. This same
researcher, found in his sample that
there was 8 landless labourers who nominally had plots of land but who in fact were not holding any land. Againin another scheme Rajangana he found 33 acres of consolidated land, 22 landless labourers and the pattern repeated. This situation is common akso in several other major land settlement schemes. It is also known that people who get into this type of land consolidation are predominantly the traders and other Imiddle mei, stică, as tria, ct Gr Gwiners
and even goveraliast officials. The
ECONÔMIC REVIEW, Nov./DEC. 1978
original aim of equal share of
mitigated and f that skew the sy,
There are which are co phenomenon. F the revy schem diction of the and associated credit, water, and extension carried out both otherparts of the that the new tec to skew this sy those who haven incursion of mas; that are introd controlled also of the system.
Although the ments in the H seasons old these in operation. indicated the en tenancy in the N well as the par ande citivators had tractor loan tors are similar cies to landlordis is allowed to ga. ginal egalitariai reversed and ov there would pos ຫຼື Gre B. pg S. Q1 20 some and a nosome others.
En viewing som of settlements, we tain allotees had
occupy their hom
problem does hê: cations. A leading M/Ar. Lo cana, Guar cent semainaire foi Kala wewa, many
even living in the
their homesteads
infrastructure at locations have bee He argued that
failed to anticipa but rather attemp conceived notior through their plan 'expensive and u. on paper, and bu people’’. Lo cana ( on these a spects
lopment are repre
 
 
 
 

giving settlers an land is thus being orces are emerging stem.
other factors too intributing to this actors connoia to es are the intro
new technology
inputs such as fertiliser, tracter services. Studies in Sri Lanka, and 3 world have shown. shnology also tends stem in favour of ore. An additional sive external inputs iced would if not result in a skewing
Mahaweli settlearea, are only a few factors are already Thus studies have nergence of hidden Aahaweli region as alle emergence of Those vyjno nave is and bought tracly showing tenden
sm. If this tendency
in ground the oriprinciples could be e-bout a decade sibly not be a 2. 5 perhaps a lis-acre acre situation for acre situation for
he of the problems observed how ceg?-- jo be perstaded to stead blocks. The ve deeper impliRegional Planner, peratine, told a reinstance that at settlers were not lands identified för and investments in
such planned snutterly wasteful. the planners had te the real needs, ited to impose prels of their own is which have been nrealistic exercise teden some On the Guneratine's views of regional deve
duead here :
REGONAL DEVELOPMENT
“Regional planning, being planning work related to specific areas of land, has an inherent concern with the spatial aspects. That is to say: It is not good enough for a Regional Planner to talk in aggregate terms about the number - and size of primary schools, or health clinics or fertilizer stores required for the development of a region. He must simultaneously be concerned at least, about, where these are to be located and how they will be linked to and
impact upon the settlement and transportation systems. Therefore,
Regional Planning becomes very much an activity which is concerned with infrastructure, and spatial location. It cuts across and attempts to integrate 'sectoral activities. It indeed encompasses the concept of "integrated area development which is popular today amongst planners concerned with rurai developmenti. But, Regional Planning is not only related to rural areas. The idea of a rural-urban continuum is also very much a part of it.
The Maha weli Project is a maassive undertaking by our Sri Lankan standards, and a large one by any stiandards. The engineering and agronomic aspects alone are very complex and necessitate a high degree of technical competence. Financing is also extremely complicated. And, in all these complexities we can very easily lose sight of the main objectives of the entire exercise. The design and construction of dams, and the channelling of water to irrigate fields are of fundamentalimportance. But, these are not ends in themselves.
The Maha weli Project is in fact a substantial part of our national
development strategy of: (a) the
local substitution of imports (especially food) and perhaps also to a lesser extent the promotion of ‘nontraditional exports, which are all attempts to offset and overcoine the national balance-of-payments problem; and (b) the distribution of incomes intended to achieve equity and social justice. The project area, is in the Dry Zone which, in comparison with the Wet Zone, is underpopulated and under-served with infrastructure. Therefore the ultimate objectives of the project cannot be achieved without the settlement and for resettlement of people on the land in the project area along with

Page 16
the provision of adequate infrastrugture in an economically viable, socially harmonious and eeologically balanced manner. These latter aspeets fall generally within the scope of Regional Development activities and are part and parcel of the Regional Planning "brief'.
Given that the need for Regional Planning in the Maha weli Development Project is recognised, what are šo ne of the major prubens that may be en counteredo ? li, luhay be best to start by looking at our past experience with work on the Maha - weli project, as well as Dry Zone development work in general. There is the very obvious fact that the areas earmarked for development are at present very sparsely served by infrastructure. If infrastructure is to serve most of the people of a region, and, if it is to serve them efficiently and in a manner convenient to them, well-recognised theories suggest that infrastructure should be provided in an ordered hierarchy of multisectoral packages. The task of the Regional Planner in this regard will be to anticipate such a system as would be called for in some detail, and plan for its provision. The underlying Regional Planning concept is not new to our Dry Zone development work. The concept was present at Walawe. It was embodied in a crude form in a Land Development, Circular in 1969. It was in fact explicitly proposed in the 1972 Mahaweli Feasibility studies for Project I, Stage II (MDB Sogreah Report, Vol. VIII). True there has been some progress over the years. But, even as it happened in the last case, the 'packages and hierarchical levels” as identified were most unrealistic and lineconomic (predictably so even in 1972 for any professional Regional Planner of moderate competence). Consequently some serious problems are already
surfacing in the Maha weli Stage III
area, and more problems are likely to emerge with time.
Furthermore, it is apparent that the spatial aspects of Regional Planing in Dry Zone settlement work has been very poorly dealt with in the ast. Locations selected for the development of urban areas where urban-type services were thought to be necessary for the settlers have remained bare for the most part, while towns are struggling to materialise
irn, more suitable lo ea At Kala wewa many even living in the lan their homesteads. investment in infrast planned locations a ful, Rut, who is at settlers or the planne that in most such planners have been have failed to anti needs, but attempted pO Se SOIne pre COI), Ce their own through the plans have been sou had very little stati implementation. T such plans have been unrealistic exerciseg one way or other, a people.
The problems ide. are mainly technical or legislative matter overcome without te culty. However, soi difficult, but noneth problems to be faced tive Regional Develo do with the Settlers th best can new settle How may they relat tants of the purana and to what extent sh villages be integrate How can we promote the participation of development activiti some of the questions answered, and they socio-political in cha and technical perse fight shy of such issu these call for politica planners must not a,b responsibilities. The tify and present po. clear, orderly and tin decision by relevant
rities.
A massive develo Such as the Maha w give rise to a maj "squatters'. Throug World, development ted squatters and o almost universally attempts to eradicat is evidence in the old areas that the schen heritance imposed ment, and also the m agricultural and othe are given, are at val
 
 

ions elsewhere. settlers are not is identified for Needless to say
ructure at such
e utterly wastefalt here, the is ? It is evident
instances the in error. They bipate the reali - instead to imved notions of irplans Where ind, these have tory basis for huis almost all expensive and on paper, and in burden on our
tified thus far organisational . These can be o much diffime of the more eless important for truly effecpment, have to emselves. How es be selected ? a to the inhabivillages? How ould thepurana d in the plans?
and encourage the sett Jers in. es ? These are $ that need to be are essentially racter. Official innel generally Les. No doubt, ldecisions, but licate their own by should idenlicy issues in a hely manner for political autho
pment exercise Ji Project may or problem of hout the Third v Orkhas attracfficialdom has responded by e’ them. There er Colonization les of land iny the governanner in which forms of credit iance with the
systems that persisti
amongst our rural folk, and that many complicated problems are stir
facing as a result. Similar problems
may occur on a greatly magnified
gcalle in the Maha weli development region even within one generation. These issues should also be given due recognition and become subjects of in-depth and on-going studies, so that realistic and humane policies may be defined, adjusted
and re-defined if necessary from
time to time, if found to be necessary.
We need to study our experiences, avoid our past mistakes and
reinforce and improve upon our
good policies. The Maha weli settlement work already done at Kalawewa is disappointing. The lands still to be settled are more thana, tenfold increase in extent, approaching nearly a million acres of land. We simply cannot afford to repeat the errors. We are now committed, and far too much is at stake.''
TRADING PATTERNS
The settlement of persons in the Maha weli Project areas are largely for agricultural production. This agricultural produce will hopefully provide a surplus after meeting the immediate consumption requirements of the farmer. For this purpose an efficient marketing system can be of crucial importance and a People's Bank sponsored research study has helped surface some of the initial problems that have arisen in this regard. It also brings into focus other aspects of trade such as the supply of goods to farmers.
A visiting researcher, Dr. Jan Lundqvist of the University of Bergen in Norway together with rescarchers from the People's Bank carried out this study recently on the trading patterns in the Maha weli area. It was conducted in Region three of the H area of the Maha weli Project during September and October 1978 when construction, and inauguration of the first township in the area, Galnewa, was on and shows that the structure of trade (i.e. location and type of shops, turnover etc.) has been drastically affected by the change of the settlement pattern, communications and economic patterns of the area.
The basic political economy of the already developed Maha weli region
ECONOMICREVIEW, Nov./DEC, 1978

Page 17
that emerges from this study em.
phasises the importance of unplanned developments which run
counter to the models of planners.
As the report states:
“The pirana villages are no longer of central importance and the roads which used to link the villages and outside areas have now been supplemented by new roads passing through newly created townships and villages. There seems to have been no efforts to link the existing road patterns in the new communication network, though some of the old villages have been included in the new structure. The socio-economic situation has changed and the existing structure has broken down with people from “outside' coming into the area (in principle on a equal basis) and new agricultural practices being introduced. Through these new practices a new economic rhythm is being introduced,
In addition to the agricultural economy there are also a considerable number of salaried personnel, working for the Mahaweli Development Board and banks and other service institutions coming into the area. The purchasing power gathered in the region and the variety of items demanded are thereby bound to increase significantly. The impact of the new system has not matured fully and only intermediary structures are now in existence. It may therefore be premature to predict the potential economic capacity of the region, and likewise it is not possible to estimate the amount of economic surplus which will be spent within the region and how much will be “leaking out'. It has, however, been found in the case of most developing countries that the region as a whole from which the leakage takes place does not gain anything in terms of economic return or in terms of increased influence.
The “extra' resources transferred to a backward region implies, on the other hand, a relative decrease in the influence of political and Social power structurewithin the region, since such transfers come from the Government, powerful corporations or organizations. To what extent the transfer affects the economic return of the region as a whole depends on the magnitude of the transfer and the changes in the rest of the economy related to it. With a massive transfer or resources, like in the case of Mahaweli multi-purpose project, it seems obvious that the existing social and political structure within the region(s) will be disrupted and the economy will grow and change. Under these circumstances, it would seem logical that the existing production system within the purana villages would stagnate and that growth and diversification into new agricultural systems and new blanches would flourish.
There are several situations which could lead to problems, that are highlighted in the report. For insstance : -
'It was found that there were certain persons involved in official decision-making in the area who had been given land and embarked on contracting and other eco
ECONOMIC REVIEW, Nov./DEC. 1978
nomic activities. T conflict of interests position for what v 'Both positive a wards the MDB Settlers. In general have lost land whic farmers who have positive, which is na that people were n certain aspects oft) vision of water, til operatives, transpo problems and simil having an overall
“Concern is ofte water situation. Fal have mentioned th; water to the fields be located lower than
The study shov economic and so boutiques and could play in the mutiities. Sumr pect the report region. Three H. weliProject;trad tant sector, 11e among the settle ployment and in hundred village about 3,700 fami features chara, cí of villege boutic * They are, with family enterpri bour to run the * They (92%) ar of the owner. * They sell a lir required consu * They (90%) s. taking any for * They (97 %) ob sale) on casha 9* They (79 %) bu the farmers. * They (92%) do individual bas * They are not trade associati them have de' tions with the * They (78%) ha as farmers; be the present boʻ They are first g * The boutiques usually until a as The shopkeep
(9 %)。 : Prices and pro ded. Profit ra up to almost 3 * The boutiques along the mai township. * Very few shop on their plans * The boutique points where chat, drinkan
 

his was a clear case of a and the use of official ould be private gain'. d negative feelings tore expressed by the it is the farmers who are critical while the been given land are ural. It is also natural ore preoccupied with e project like the proLe functioning of cort facilities, medical air aspects rather than iew/**
expressed about the mersin different places it is it difficult to get :cause the channels are some fields’.
7s whata significant cial role the village paddy marketing life of these comtling up on this asreveals that, “In area of the Maha, eis the most imporxt to agricultures rs in terms of emcome. About one boutiques serve lies. The following zerize the majority |ԱՐՑ.
only one exception, ses, without hired la2 boutique. e located in the home
nited amount of daily mer goods. all on credit, without m of security. lain their goods (wholeld not on credit. y or barter paddy from
business on a strictly S. organized in say any bn and only a couple of eloped some connecwholesalers. e prior experience only sides shop-keeping and tique is their first one. eneration traders.
are open on all days, bout eight p.m.
rs are largely Sinhala
fits are arbitrarily decites vary from 3 percent 00%.
have grown particularly road passing Galnewa
keepers could elaborate for the future.
serve as social meeting people (i.e. men) meet, i exchange information.
* They are not financed by bank loans
taken for trade purposes.
* None of the shop keepers expressed problems due to competition with neighbouring boutiques.
Four nearby towns, Kekirawa, EppaWela, Galgamuwa and Galewela, together with the Negama fair on Tuesdays and vendors, supply the items sold in the boutiques. There seem to be very few special relations between the wholesale suppliers and the shopkeepers. Anuradhapura and other large towns, so far, play an insignificant Tole in supplyirg items.
Besides the supply of consumer goods, the boutiques serve other important functions in the region. By bartering and/or purchasing paddy even in amounts of one measure, they provide the settlers with ready cash and/or urgently required consumer goods at almost any time of the day and all the year round. The Co-operative and private traders coming from outside areas to buy paddy are not able to compete on these terms. To some extent, the boutiques also provide the services of a bank. Instead of selling all surplus production of paddy at once after harvesting to the co-operative and putting the money into a bank, the farmers keep a certain amount of paddy at home which they can seli or barter and thereby solve the problem of their daily requirement of cash. This gystem is convenient for the farmer but costly. In this type of trade the farmers are paid as low as Rs. 25/- to Rs. 8/ - per bushel as copimaired to Rs. 40/- which is the fixed price of the co-operative. They are also deprived of any interest they could earn on the money.
Farmers are in this respect not left, with a free choice as to whom they could sell their paddy to . The co-operative ard P.M.B. do not have the capacity to receive all the paddy marketed. Last Maha, the co-op bought only about 85,000 bushells directly from the farmers in region three, out of a total marketed amount of at least 200,000 bushells. The balance is bought by private traders coming from outside the region and by village boutiques. Through this orgarisation of marketing, both the farmers and the region as a whole lose a considerable amount of money. A rough estimate shows that the farmers lose around Rs. million or more and the region Rs. 650,000/- (the difference is taken care of by shopkeepers in
15
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Page 18
the region). In comparison the total eost of cultivation and harvesting is some Rs. 6 million and the cultivation loans for last Maha were Rs. 1.7 million while the amount of unpaid cultivation loans was about Rs. 800,000/-.
In summary, therefore, the one hundred boutiques play an important economie and social role. From a social point of view they seem to be efficient, and by and large well accepted by the settlers. From an economic point of view they are less efficient: they are not adequately organized which means that transport costs and wholesale prices are higher than they have to be. They have not been able to compete in the sales of more expensive non-daily required goods. They do not sell agricultural implements or other farm inputs and they do not sell constructioneouipment or material. Trade in Galnewa Township
Shops in Galnewa are just about to be established (mid-October). According to the present trade attern of the area, it appears that the planned number of shops will have great difficulties to be viable enterprises. The cost of running these are much higher as compared to the village boutiques and they face far more severe competition. For the settlers this would result in a lowering of prices and perhaps a better service.
For the future development of Galnewa, it seems important to identify its role as a centre in a regional system where, on the one hand, we have all the village boutiques and on the other hand we have nearby established towns like Kekirawa, and Eppa, wela. It would seem that not only the supply of goods but also purchasing of agricultural produce is important for Gallnewa to develop its own identity and to gFOW.
NFRASTRUCTURE
The vital importance of basic infrastructure facilities is fundamental to the success of the entire project. If as happened in the past those facilities are allowed to develop on their own it would be a long process and would take some time before the full benefits of this scheme are obtained. A typical example is that of schooling. In many undeveloped areas the people are not bringing in
16
their children bei facilities for the are living elsewh there are either small schoolis soli teacher. More brought in beca children and this circle. If this pa continue in the M. is the possibility lords with people lies some where el cultivate and tr chena.
The Maha Welli me has thus plan lities including a (see box), agricult storing facilities amenities. A spec need for close services was giv Dr. U. D. Vitara nar when he deal health problems this project.
IDF. Vitarana, the objective ofth development is quality life to a people and sincet the project itself come are depend beings, the heal beings involved is success of the pro Maha weli area, at one of the least health point of vi adequate curative preventive and pr services. The hes faced was that of patterns of diseas patterns of diseas to occur when nes up. The immedia would be that the health services a ther strained due of construction new settlers woul cupational health from the constru. tural pursuits wł purana villagers psychological prc of the changes mental conditio requirements for health, in his opin vision of properh safe water supp
 
 

ause there are no
n, Their familie are and therefore. o schools or very he times with one teachers are not se there are few works in a vicious tern is allowed to ha, Welli areas there of absentee landhaving their famise, coming here to ating this like a
Board's programneed for these facitransport network ural processing and and other basie ific example on the ttention to these en by a scientist, ia at a recent semiwith some of the associated with
argued that since e Maha Weli Basin’s to give a better larger number of he performance of as well as its outlent upon human h of the human very crucial to the ject. He said, the present, is perhaps developed from a bw with totally inservices and poor imary health care lth problem to be controlling the old e and also the new le which are likely y lands are opened te health problem already inadequate e going to be furto the large influx workers. Also the di have to face ocproblems arising ction and agricullilst the displaced would have to face blems arising out to their environas . The primary maintaining good Lion, were the proousing, sanitation ly and se werage.
These are really technological prob.
lems and he stressed that these as
pects should be given siue consideration at the planning stage.
He concluded “In the light of such a big project, involving so
many people, and the existing health hazards, and the possible future health hazards, the degree of planning and thinking that has gone into the initial stages upto date I think is not quite adequate. Considering the fact that we are normally very good planners buit poor implementors, there is always a big gap between the two. I think, much more needs to be done before we can be satisfied with the study of health in the Mahaweli project.
ENVIRONMENTAL CONSEERATIONS
All forms of regional or physical planning would have to give close consideration to the environmental aspects in the Maha weli area. The main consideration in this regard would have to be the conservation. of soil and water and this could be most effectively achieved by maintaining an adequate natural forest cover. At a recent seminara leading University scientist, Professor B. A Abeywickrema, indicated that main taining a natural forest cover was not practically possible because of other demands on these lands. He pointed out, however, that it was necessary to preserve the forest as far as possible and also to embark upon a programme of re-aforestation to restore the environment. In the natural environments the basic unit, the ecosystem, are integrated systems and are self-sustaining and selfregulating. In this instance he showed that the purana villages which existed in the Maha weli area were also of this class of systems, but by present standards the productivity in them was low. In the course of development, therefore these systems had to be suitably modified to increase their productivity. But in doing so, it was necessary not to put the system into a state of instability by exceeding the limits of resilience of the system. New systems of management had to be devised to organise the physical environment, the fauna, and flora, health and recreation, socio-economic and cultural aspects of the environment. Moreover the environment would need to be continuously
EconoMcREVIEW Nov./DEC, 1978

Page 19
A. Railway for the Mahaweli
A. Denis Fernando
The Sri Lank2 Railway network has been at a standstill since the British packed up their bags and went away. In such a context it sounds almost heretical to suggest that an additional Railway line should be opened up to link Walawe, Lower Uva, the Gal Oya Valley, the Mahaweli to each other and the metropolitan centre.
One of the chief constraints to the development of the two major schemes namely the Gal Oya. Valley and Walawe, has been due to the lack of a good communication system. The roads are the only means of access. As a result the farmer has to pay more for the fertiliser and other inputs he needs and also accept a lower price for his produce, which has to be transported to consumer areas at higher cost. This main deficiency has resulted in very low productivity and abysmally low standards of living for the majority of the farming population.
If one considers the reason as to why substantial returns have not been yielded from all these areas it could be fairly and squarely pinpointed to inefficient and inadequate transport for the movement of both inputs and outputs to and from the areas mentioned.
Today in the context of the accelerated programme of the Mah?, weli, new areas will be opened in the areas falling within Systems A, B, C and D. This area comprises in physical terms the area. East of the Mahaweł i Ganga from near Mahiyangana to Kandakadu and thereafter both banks of the Mahaweli Ganga from a point near Kandakadu (or SomaWathiya) right up to the mouth of the river. This area comorises nearly 340,000 acres of new lands that will be brought under irrigation and around 90,000 acres of existing paddy lands.
Even here we have caled for the development of only highways and no consideration has been given for the development of railways. The question that will again be asked is whether the proposed system of roads would be in a position, economically to compete with the haulage of inputs to these areas (both now and later), unless we want to repeat what happened at Gall Oya aniYWatawe.
The development of railways to serve the above mentioned areas could easily be done, with no serious engineering problem. What I propose is that the present Kelani Valley line that is to be broadgauged be extended to Kahawatta, then it could be extended to Walawe, then to Telulla to Siyambalanduwa to Ingin iyagala to Padiyatalawa, thence through the gap between the Ulhitiya and the Maduru Oya Reservoir and then to Welikanda and thereafter along the Right Bank of the Mahaweli into Kandakadu and to Kadiraveli. This in short should be the Master Plan.
The Master Plan link firstly for the Accelerated Mahav later to the Gal Oy Uva area, the Wa Sabaragamuwa are: prise the Developr does not have railwa
I have recomment railway to link up areas be taken up a public necessity. T I have drawn up en miles of new railwa to be taken up in t
Stage 5
a) Welikanda to b) Welikanda to Stage
a) Colombo to K
(broadgauge b) Kahawatte to Stage EE.
a) Padiyatalawa b) Inginiyagala, 4
landuwa, c) Walave to Te d) Telulla to Siy My preliminary total of Rs. 780 rolling Stock and ac of the different stag a round figure of R and the cost was as
Stage I 62 in Stage II 94 m. Stage III 104 m Totali 25 m Stage II of the pro
affects the developm area and its immed would reduce by 8. transporting const the different sites o
One of the prelin in favouring Stage would be the only a the Accelerated Mai sent road access, b and Manampitiya is would hinder the fi materials to the Wo
Another import that the single brid weli at Manampiti, (except the 17 hair Kandy to Mahiyang men and materjalis. will necessarily cau transport of goods from the area of cc and motion study favour maximising for railway transpo serves both the ra motor highway.
The third conside quantity of timber out of the projecta bridge will play an these consideratien
EcoxOMIC REVIEW, Now:/BEC, 1978
 
 
 
 

envisages a railway areas covered by the veli Programme and 'a Valley, the Lower awe Basin and the a. These areas corris ment Frontier which ly facilities at present.
ied that the proposed the above mentioned is a matter of urgent he Master Plan which visages a total of 263 by and was proposed aree Stages.
Padiyata lawa (HG)
Kadira veli (HIH)
ahawatta :onversion) (AB) \Voławe (BC)
to Ingimiyagala (GF) o Siyamba
(ΕΕ) lula (CD) ambalanduwa (DE)
survey indicated a million exclusive of auisitions. The cost es was worked out at s. 3 million per mile
متحت :follow*ys
les RS. 186 m. illes Rs. 282 m. illes Rs. 312 m. illes R.S. 78) m.
posed railway mainly hent of the Mahaweli liate implementation ) percent the cost of ruction materials to f the project.
inary considerations is that the railway st-weather access to haweli area. The preëtween Poonara rubwa subject to floods and free filovợ of men and rk sites.
ant consideration is ge across the Mahaya is the Sole access pin-bend road from
This single bridge s3 a bottleneck in the and Services to and Bastruction. A time at the bridge would the use of the bridge rt. This bridge now ilway and the main
ration is that a large as to bà transported ea and even here the
important role. All s point to the imme
diate need to extend the existing railway to cater to increasing traffic, totransport materials to the areas in Systems A, B and C and also to remove the merchantable timber from these areas for farther processing, in other areas.
The cost of Stage on the revised estimate is nearly 214 million rupees. The benefits would accrue immediately in the transport of materials to the construction sites on this route which will
90SED NAAA
EYEkగ్రీనీktAME SA リA毛藻茎&ぎを。
Exgఅపకీjత్రs--- ========ع== ,yےيهtختé_6&gعچessنهتيPR#
be reduced to around 20 percent of the road haulage costs. Further the capital investment cost on rollingstock per unit of pay load is also appreciably less compared to road haulage, saving further on capital costs.
This railway would pay for itself within a few years, if we consider the difference in cost of transport by rail as against
road (as these would now be available for
investment). In addition to the social and economic benefits that have been listed we have to consider the fact that this railway would serve the poorest of the poor of the country who live in these regions.
The poorest of the poor of our country
live in these areas and their poverty is gana) for transport of y
mainly due to the transport barrier. The railway would the bring the inputs required for production at reasonable cost
and at the Same time also enable the får
mer to obtain a reasonable price for the food that is produced. It enables more traders to come into the development scheme and offer a competitive price for the farmers produce. It could not only be an incentive for the peasant and the colonist to produce more but also assist in reducing the sirling cost of living in the country to a great extent, and bring about a general economic 2nd social upliftment of the nation,

Page 20
monitored as development goes on in order to maintain a check on detrimental developments in the environment such as in soil conditions, insect and plant behaviour. Professor Abeywickrema stated that, :
“The success of this scheme would depend on a regular supply of water. Now, in the Mahaweli, the upper catchment area, the most important tributary of the Mahaweli lies in the central hill country at an elevation of 4,000 to 8,000 feet. Some of these areas receive a rainfall of over 200 inches per annum. The upper catchment above Pogolla covers only about 11 percent of the total catchment area, but it contributes to over 30 percent of the total runoff. Now most of this area has steep slopes with high erosion patterns, and effective soil and water conservation in this region is an essential requirement for the development of the project area. If there is high erosion, there will be filtering of the water reservoirs leaving aside the other evils of soil erosion. The reservoirs will be filtered in no time. Secondly, the rapid run-off will make the water disappear in no time after the rains and the dry weather flow will be reduced and this has to be guarded against.
Maintaining the natural forest cover is the most effective. Unfortunately this is not possible because the upper catchment area happens to be the most productive and economically important region in the island. Already about 80 percent of this is under cultivation or under some use. Only about 8 percent is now under forest and about 10 or 20 under grassland. But the forest area is said to have been 22 percent just a little over 20 years ago in 1956 and, according to the Conservator of Forests, from 22.2 in 1956 it has now come down to about 8 percent and now this is a serious thing. Fortunately for us during the last few months there has been a ban on the deforestation of this area.
Here we are going to have agriculture under irrigation on a very large scale. Practically all this area was under cultivation and it is now under secondary jungle or unproductive scrub. Very little will be gained by keeping it in this form. Proper development of the land should provide new opportunities for both agriculture, as well as reforestation. This is really a very good opportunity to introduce rational land management which was non-existent earlier. Agriculture development should aim at optimum use on a sustained yield basis. This is, to get the maximum yield you can, not for a year or a few years, but for all times on a rational basis.
Even with the most careful planning in our operations With a project of this magnitude unforeseen changes can occur. The opening up of 90,000 acres for intensive cultivation and providing water round the year into an area which was seasonally dry,
can bring about many changes in the en
vironment. First of all you can have changes in soils. It is not only the irrigation right through the year, but the agricultural inputs, fertilizer, pesticides and so on that will be introduced. These can
18
bring about change. changes in insect an these affect man. introduction of new Cause With the lon certain plants and a there earlier may co have to guard again because of these fac continuously moni conditions in all th Such monitoring cai warnings of any unt if we find that somet it is expected that
neaSures to correct Two aspects of th I would like to me salinisation and the tensive deforestatio the water contains minerals and when area, to an area whi dry, evaporation ca. cape, leaving a certa if this accumulates too saline or alkali pletely unsuitable f fortunately for us, t rainfall during the Kala wewa area you rainfall in the year, during a few month mulates during the c under natural condi ditions are alright,th the rains. We have ture for many cent of the area is stilluns in natural condition there is very little ad There is no progi Another fortunate t as far as alkalinity cerned. Now this is But the effect of sodi or counteracted by m Our Waters are rich the high content of can stand a certain. the water and inspit poor and water-log the soils can be affec
We were told that started with roughl the area or so abot total area was foun line. This would han result of poor drain. that the cultivator allotment cannoti ta will have to see thi properly drained an avert any problem The next thing I that in this area, del of all forests over have adverse effects if you take even her soil temperature will grass or vegetation degrees higher than tree. Now in the M the same order wou
The exposure to and removal of for increase the dessic: So the heating and
 

, Then you can have di pest behaviour and Then you can have pests and weeds; beg period of drought nimals which were not methere now, So we st some of these. Nowy tors it is necessary to or the environmental e development areas. provide us with early oward side-effects and ning is happening then we can take remedial
them. ese side-efects which ntion is the possible effect of the Over exn. As you know, all a certain amount of it is supplied to a dry ch is dry or seasenally uses the water tO eS= in amount of salts and it can make the area ne and make it comor agriculture. Now his area has very high rainy season. In the get 50 to 60 inches of most of which comes s. Even if a little accuourse of the dry season tions, if drainage conis gets washed off with had irrigated-agricuLuries and a good part table. This is because is with good drainage ditional accumulation essive accumulation. hing We are having is development is conmainly due to sodium. um can be neutralised agnesium and calcium. in these and because of alcium magnesium, it amount of Sodium in e of this, if drainage is ging does take place, :ted. even before the project y about 10 percent of it 35,000 acres in the i to be saline or alkaZe developed there as a ge. This is something by himself in his small ckle and the planner at the whole area is dif we did that we can regarding this. wanted to mention is orestation or removal tery large areas could on the soil. You see } on a hot dry day the hout any plant cover, can be almost 20 or 25 under the shade of a ahaweli area, I think, d be there.
tery high temperature est cover Would also ting effect on winds. he exposure to winds
could cause changes in the soil and degradation of the soils. It is true that this area was cultivated either under paddy or under chena cultivation, for many many centuries, but we have to remember that in our chena cultivation, the tree vegetation was not completely removed. It is only a recent thing, the removal of trees comipletely. In the old chena cultivation, the undergrowth and similar shrubs were cut down and the larger trees all remained. They gave a certain amount of shelter to the chena and when the chena was abandoned after about 25 years, the undergrowth developed and the forest trees that were already there gave protection to the soil. Now, if we completely remove our trees over a very large area there could be an unfavourable reaction on the environment specially, the soil. We will have to guard against this and then we will have to have in addition to this, forest belts at intervals which would to some extent break the force of winds and so on for general environmental protection to a certain amount of wild life protection, for food. in order to develop the vast area coming under the Maha weli Project it wou'd obviously be necessary to clear large extents of forests in the dry zone. But a careful planning would have to be carried out to demarcate what areas could be cleared and what areas will have to be conserved or re-forested. Foresters are of the view that this is probably the first time in the history of a major irrigation-cum-hydro-power project that the total value of forestry, as one of the necessary inputs to maximise and maintain gains from the entire project, has been recognised and incorporated into the complex build-up. This appears to be a radical change from the past when forestry as a key factor in maintaining a favourable environment was not given due consideration.
According to the Conservator of Forests Mr. W. R. H. Perera, forest cover could produce aforest floer which actiig as a mighty sponge, helps in protecting the soil and also provides controlled excess run off, captures a large part of the rain water and gradually releases this as a stable dry weather flow of good quality. Forest cover was therefore the natural and best form of protection for streams. Mr. Perera, gives as an illustration the case of the Horton Plains where the soil level had dropped many inches as a result of potato cultivation, thereby reducing the soil capacity to absorb and retain water mainly because adequate soil conservation measures have not been taken. He maintains that this would happenin
ECONOMICREVIEW, Nov./DEC. 1978

Page 21
all other Eatch ments if SUch forests were to be replaced by indiscriminate cultivation. Also an improved micro-climate will be more readily perceived by human population whose timber and fuel wood requirements too have to be met as a matter of bare necessity.
It is not generally known that 300,000 acres have been set apart already in the original plan for environmental reasons. The Maha weli Board adds that the Government also ready to set apart, if necessary the entire Wasgamuwa Reserve and half of the Somawathiya, Reserve which were to be cleared for human settlement in the original plans.
FINANCIAL MPLICATIONS
The MahaweliProject, the largest multi-purpose river basin development, ever undertakenin Sri Lanka, is based on a Master Plain prepared jointly by a UNDP/FAO team and Sri Lankan engineers in 1965/68. The team estimated in 1967 that the total cosb of the Maha weli project would be about Rs. 6,078 million or US $ 1,278 million at the prevailing rate of exchange (1 US $ = Rs. 4.75). Domestic inflation, currency devaluation, fuel price increases and the general rise in import costs have pushed up the rupee costs of the project by about 350-400 percent in the subsequent ten years. The Maha weli Board estimated the total capital cost of the project at current (1977) prices to be about Rs. 27,000 million which is equivalent to about US $ 1,740 million at the current rate of exchange (1 US $ = Rs. 15.50). The breakdown of the costs estimated in 1977, according to projects, is given in the table below.
The original
included all these wise implementa, year period. The began in 1970 at Mahaweli Gang on the Amban a 40 Megawatt ki at Polgolla. Thess 朗trücted 豆量 f from the World with assistance Development Ba 40 megawatt hy at Bowatonne. provided an impr to a bott, 130,000 irrigated land a supply to 90,000 : Work on the des gation systems, c settlements on agricultural exte services have bee. assistance from in collaboration
Netherlands and
When the Go on the desirabili the programme a Strategy Study w the Netherlands tants (NEDECO) EF AO Master Pl and the implica alternative phasin projects were exa. fic action plan rec into account the fi mic, technical, in power aspects.
The Accelerate gramme thus ha on the irrigation systems A, B, C, to the settleme
Total cost of Mahaweli Development according to its ma
Project
Victoria Multipurpose project ... Moragahakanda Multipurpose project Maduru Oya Reservoir project . . Taldena Multipurpose project Kotmale Multipurpose project Kalu Ganga Reservoir project Rotalawela Reservoir project Pallewela Multipurpose project .. Malwatu Oya Reservoir project Yan Oya Reservoir project
Randenigala Multipurpose project and paτι NCP Canal
Balance NCP Canal project
Cost of activities resulting from the project
Total estimated cost
ECONOMIC REVIEW, Nov./DEC, 1978
 
 

plan as we saw projects for stepion over a thirty initial construction
Polgola, on the , a, Indi. Bovvatenne Ganga, including ydro power plant e Works vere connancia assistance Bank together from the Asiana. rakk for a second dro power plant 'hese head works oved water supply acres of existing ind an irrigation veres of new land. Pelopment of irriinstruction of new these lands and ision and support a undertaken with the World Bank with Canada, the U.K.
vernment decided y of accelerating in Implementation. as undertaken by
Finance Consulwhere the UNDP) an was reviewed tions of various gs of the 12 major mined and a speciommended, taking nancial and econostitution and man
di Maha weli Pros its major focus and settlement of and D (in addition it in system. H)
Ci projects
Estimated Total Cost
(Rs. Million)
3,017
1,590
1,758
566
1,542
1,192
477 es 1,036 499 521
5,707
4,463
4,800
27,173
--s-s-s-s-orse-res
development,
covering five major projects. Included in these works would be the irrigation systems, land social infrastrʻtT, eប្រែe, settlement. agricultural extension and support services for the benefitted areas in System C (74,000 ac) and IB (118,000 a c) in the right bank of the Maha weli Basin, System A (100,000 ac) in the Maduru Oya Basin and System D (46,000 ac) in the left bank of the Maha weli Basin (see map). The cost of these projects, including land development, social infra
structure and settlement, has been
estimated at Rs. 9 billion (US $. 600 M) at 1978 prices, or Rs. 12 billion (US $ 800 M) at estimated current prices, of which about 50 percent will be for foreign expenditures. These five projects are expected to be substantially completed by the end of 1983. Based upon preliminary estimates of available resources, both domestic and foreign, tae Government has tentatively earmarked about Ris. 8.0 billion in 1978 prices, or Rs. 11.0 billion in current prices for these projects over the next 5-6 years.
This works out to an average annual capital expenditure of Rs. 2,200 million which is the equivalent of about 50 percent of the total capital expenditiure of the
government in 1978. These cost
estimates are at 1978 prices and hence the actual cost would be higher when account is taken of the price increases that are likely to take place in the next five years. The foreign exchnage component of this total cost is expected to be financed by various aid donor countries.
The Government of the United Kingdom has agreed to finance the Victoria Project and the development of the 75,000 acres in System C.
The Government of Canada has agreed to finance the development of the Maduru Oya Reservoir, and the irrigable areas of 118,000 acres underit.
The Government of Japan has agreed to finance the Moragahakande Project, and the development of 40,000 acres under it.
The Government of the Federal Republic of Germany, has agreed to finance the development of Randenigala Reservoir, and the irrigable areas under it.
The Government of Sweden has agreed to the financing of the Kotmale Power Project. Several other countries are expected to finance other projects of the Accelerated Mahaweli Scheme.

Page 22
If wye vyere to algssume that the foreign component in the total cost is around 50 percent and that this amount would be financed by aid forthcoming from various donor countries, it would still be necessary to raise a substantial amount of local resources to cover the balance Gostis. o cal resources equivalent to about Rs. 1,000 million per year have to be set apart annually to finance the local component of the t tall costs over the next five years. Tulis a mount is equivalent to about 20 percent of the total government capital expenditure in 1978 or about 10 percent of the total government revenue in that year. The burden of raising local resources will be reduced to the extent that the government is able to raise foreign aid resources to finance part of the local costs. However, it appears unlikely that entire local costs could be financed by aid and hence the government cannot avoid the question of raising local resources to finance a portion of the Accelerated Mahaweli Project. How these additional resources are going to be raised would be a fundamental question in the fiscal operations of the government in the next five years.
Whatever the source of financing, an important consequence of capital spending of such magnitude, maintained over a period of five years, would be to set in motion a multipier process of income creation. Such capital expenditure should begin to bear fruit in the form of higher output of agricultural and industrial goods only after some time lag. In the meantime substantial incomes in the form of salaries and wages, profits and other returns will be created which will get translated into a demand for various goods and services. The bulk of the wage incomes are most likely to get spent on wage goods such as food, clothing, shelter and other mass consumer goods. An augmented supply of such wage goods (goods on which wage earners typically spend their incomes) becomes crucial to restrain the inflationary pressure emanating from the expaided consumer demand.
A part of the increased domestic demand will be met by increased domestic supplies. The Mahaweli project itself will, after a time lag,
lead to a subst in food productio of the economy pected to respondi to meet this inc demand for good However, it is als a part of the incre lated into a dem: This would parti the context of the sation. This hig imports unless mat ponding increase i or import, saving tution) could lead in the balance of context of the f rate system that adopted, such a lead to a further ciation of the S vis-a-vis the foreig only by expanding ings or by substant that, such an aid payments situatio The Mahaweli pro however, result, it port savings wit production of rice crops and other as sugar. In the ba problems, therefo ment would be wh of the project, in savings, would ens tude that they are problem of trying country's balance the context of spe amo Units, could i that extent of the a chieved.
Fiscal reasures
o come ba, ck implications. Siph of the increased inc or borrowing bec portant aspect of during the next fev up a part of the il. by the governmer the inflationary economy as well sources jin the han rnet to finance t} the Project. One threeways of sipho of the expanded i existing tax syste amatically mop uit but the amount r stantial. Hence, the
 
 

untial expansion n. Other sectors
will also be exin varying degrees
reased domestic ls and services. b very likely that se wiliget transand for imports. cularly be so in 2 import liberalier de mand for
ched by a corres
n export, earnings s (import substitCj a, dieterioratiOHn. payments. In the loating exchange
Sri Lanka, has
នigation could round of depreri Lanka, Rupee in currencies. It is our export earnial import savings verse balance of a cara be avroided ject, itself should, a SUbstantial imha the increased , នbsidiary food food crops such lance of payments Pre, a critical ailether the benefits terms of import Ure on the magniexpected to. The g to manage the
of payments in inding such large be contained to 2 import savings
to the budgetary oning off a, jpart Ormes via taxation omes a very imthe fisca policy v years. Mopping a creased incomes it will help ease pressure in the as put more reds of the governhe local costs of
could think of ning off a portion acomes : (a) The em would autop some incomes may not be subi government may
| have to devise à more broadbased :
tax structure (particularly for indirect taxes) to mop up a portion of the incomes as and when people spend their new incomes, (b) The government may have to think of getting a direct return from the massive investments it has made in the development of irrigation, land and infrastructure, in the forms of charges for irrigated water, land taxes and charges for infrastructure facilities. (c) Finally, since the Maha weli region is bound to become a very important sector in the total economy, the savings generated out of the new incomes created in this sector could become a very important source of government finances.
The timing of these measures,
however, would depend on when
they become most feasible. But if we consider how the budgetary, picture would unfold in the future, with such a large quantum of expenditure being in curred, it is obvious that the government would then have to resort to one or more of these measures. ܡ
Institutions such as the National Savings Bank, State-owned com. mercial banks, and the Insurance Corporation could play an important role in promoting such savings. These institutions (in particular the National Savings Bank and the Insurance Corporation) have tradionally functioned as important leading sources to the government. The resources available to the government could be considerably increased to the extent that these institutions succeed in promoting and tapping the savings of the Mahawei sector.
It is thus clear that siphoning off a portion of the Maha weli incomes via taxation, charges for services, and by promoting saving will turn Out to be an im Ortant a Spect of the government's fiscal operations in the next few years.
But there are many factors on which the entire financing of the project Plan and the overall economic impact of the Project would depend. As one of our leading economists who raised many of these issues on the 'Financing of the Mahaweli at a recent, seminar, stated 'there are lots of ifs and buts and this is why this is really
EcoNOMIς REVIEw, Nov. Dec. 1978

Page 23
the point that makes crucial not
merely the financing of the Plan, but the physical work that is involved in
the Plan crucial, whetherit be requirements in terms of extension services
or whether it is requirements in prosecuting the Plan in terms of the skills that are required, and the quickness or the speed with which such things are really translated into action. This becomes rather critical even to the financing of the
MAN POWER AND SKILLS
The need for integrated planning and utilisation of all physical, financial and human resources is therefore a vital factor. As observed above the financial and economic implications of the Plan will be largely dependent on the available physical and human resources. There is no doubt that a vast reservoir of manpower and skills will be required over the next few years for prosecuting the Plan. It is the intention of the authorities to select settlers regarded as 'progressive farmers receptive to new types of crops and new cultivation'. Earlier experience has shown, however, that the "progressive' farmers who got the most benefits from the new technology and extension services in their areas were often those who knew the Officers dispensing these services and who had access to the power structures of the village. An awareness of this trend when selecting settlers will be helpful.
In order to attract persons for employment in this area, which is sparsely populated, the authorities are conceiving of forms of compensation to be made to those who pioneer in these undeveloped areas. No specific systems have been formulated yet, but it is the view of
the authoritie
who contribut
. velopment sho
to land or si development satisfies certai another perso. the presently e cheri on other
In the plan ment of the authorities ho skills that will integrated co from those w. in the develop
Among thos most in need trained perso seminar, a sc D. A. Senarna The need for trained person to the possibili fall in trained said that it was that should ca. the quality. Ac training schem critically and provide the n suit this dem survey conduct fied in about 3, the agricultura for fully train Lanka. The fo of requiremen cultural sector Development from this surve
Professor Sei that the firm di personnel over 850, whereast the present rate shortfall of 32 the un filled n
ANNUAL AVERAGE FOR AGRICULTURA ILI Y PERSONNEL OVER THE PERIOD 1978
Type of Personnel
Avera
ή
Post Graduate-M.Sc., M.Phil., Ph.D.
B.Sc., Level Agriculturists Diploma Level Agriculturists Farm School Level Trainees Rural Agents
NA - Not Stated
EconoMIC REVIEw, Nov./DEC, 1978
 
 

s that the person es most to the deuld be better entitled milar benefits in the areas, (provided he In other criteria) than who is selected by stablished land Kachselection systems’.
ning of the developMaha weli area `the pe to develop all the be necessary in this mmunity, primarily ho have participated ment programme.
e skills that will be will be agriculturally
nnel. At a recent.
entist, Professor, Y. yake in a paper on
more agriculturally nel, drew attention ty of a serious short
agriculturalists. He not only the numbers use concern but also cordingly the present es should beevaluated suitably changed to ecessary training to hand. A manpower ed in late 1977 identi5 different sources in l sector, the demand ed personnel in Sri lowing is a summary ts of the total agriand of the Maha weli Board, as extracted y report.
nanayake pointed out emand for B.Sc. level the next 3 years is he possible output at 3 is 527. This leaves a 3, without including eeds of new organi
Y TRAINED -1982
age Demand per annum
rom all from sectors MDB
72 NS 245 38 315 85 804 455 282 NS
zations. Two other areas where there are likely to be serious shortfalls are those of Farm School trainees and Rural Agents. The Rural Agents are defined as those individuals who received 2 years agricultural management training after Grade 2 studies. Much of the demand for this category is in colonization settlements, village expansion, rural youth programmes, coordinating of supplies to small farmers (agrarian services) and rural credit (Banking). The bulk of the demand is from the Mahaweli areas. In this category a shortfall of the order of 103 individuals per year is anticipated and there is no institution in the country offering train. ing of this type.
More than half the demand for the Farm School Level category is from the Maha weli Board. The Department of Agriculture has 8 practical Farm Schools with a capa - city of 450 trainees per year and the Department has plans to increase this to 12 with a total output of 650. This would still leave a deficit of 150 per year during the 1978-82 period.
Apart from the trained agricultural personnel and other mar...-- power required in the constructional activities of this project there will also be a need for large resources of man-power to assist in the planned agricultural activities of the Mahaweli areas. A study of the H area of the Mahaweli Project, where settleInent has taken place, shows that the general pattern of la bour utilisation in paddy cultivation was affected by the size of the family, their ages and education. The size of the families in these areas range from l-l0 members and though it was expected that the total of three acres given to these farmers could be cultivated with family labour, it was found in the Yala, and Maha seasons of l977 that only about 7.5 percent had cultivated with family labour only. One reason why family labour was not available was that the location of the farmers residence made it inconvenient for farmers to utilize the labour of all members of the family units. As a result of the lower availability of family labour many of the farmers had to use hired labour, particularly during peak periods of land preparation, sowing, harvesting and post harvesting. It was observed
21

Page 24
that during the leak period there was a shortage of hired labour and
farmers had to bear heavy expenses
by way of providing the hired labou
rers their meals and lodging. This study also reveals that the youth present in this area were generally not prepared to do agricultural work and though most of them were skilled they did not like to go outside their own area for employment and therefore a correct orientation and motivation of settlers is an issue to which the authorities will have to give serious consideration.
On the engineering and construction side too, a possibility of a manpower shortage has been commented on. One of the country's leading engineers, Mr. A. N. S. Kulasinghe, recently expressed the view that we are short of skilled man-power because we have lost Our men to other countries for better salaries and for better working conditions, and we are now compelled to import skilled
personnel at rates of pay up to fifty
---
times the salary that can be paid to the indigenous or local counterpart. Mr. Kulasinghe emphasised the need to provide the necessary incentives and conducive working conditions to attract the engineers and other technically skilled personnel who would be required for this project,
if the skilled man-power factor was
not to be come a constraint to conStruction.
An official estimate of the manpower requirements On the project covering specialist engineers, administrators, qualified technicians, skilled and unskilled workers have been listed as follows:
In 1979 as man sons will be requi force for the Acce Programme. An persons will be req ing year with the pected to increas 1980, when work o Programme is due According to the workforce is gradu shrink to about 7 1982 when the A gramme, it is hope its final stages. Wh these estimafes ist 600 engineers and technical personne while nearly 9,000 will also be need there will be a, dem specialised personi weli authorities : gettinguinskilled W nistrative personné difficult, but spe and high grade tec be moved in On se Other state institu into the project th foreign firms invo sections of the O project. From the alone 317 engineers technicians, 147 a.d. sonnel and 8 ski to be brought in work fill time to menting the Projec programmes. The ments had to be foi a problem for all t
The experience and development o structure and Soci
ESTIMATED MANPOWER REQUIREMENTS FOR F
WORK IN 1979 1981
重97奕 1981.
Engineers 599 699 Middle Grade Technicians .. 2,553 2,806 Administrative Personnel .. 1,705 1,762 Skilled Workers 8,978 12,926 Unskilled Workers 117,168 139,061
Total 131,003 157,254
 

y as 13,003 perred in the worklerated Mahaweli additional 26,250 Lired in the followtotal number exe to 157,254 in
in the Accelerated
to reach a peak. Se estimates the ally expected to 2,000 persons by Accelerațied Prod, will bereaching at is significant in hat, in 1979 almost 2,550 qualified I will be required skilled workers ed, and in 1980 and for stil more nell. The Mahahave found that orkers and admiel were not very cialist engineers shnicians had to scondment from tions or brought rough the many lved in various veral Maha Welli local institutions s, 615 mid-grade ministrative perled workers had during 1978 to assist in implet’s planned work balance requirend and this was hose concerned.
of construction firrigation infraall infrastructure
PROJECT
Additional ing
重萝露量
100
253
52 ー3,948 -21,893
26,251
The
facilities during 1978, in the area designated 'H' in the Kala Oya
basin, has shown that there exists a shortage of experienced staff in engineering, accounting and allied fields at all levels. The procedures for recruitment of skilled and semiskilled personnel such as drivers. mechanics, etc. have also proved to
be a constraint.
The Ministry of Plan Implementation reporting on progress of construction workin the 'H' areas has pointed out that the contract rates offered to the contractors do not appear to be attractive enough to attract contractors from Colombo and other towns to carry out work in the development areas.
The other constraints have been found to be difficulties in co-ordination among the various state institutions; inadequate machine capacity of all types with state or private contractors-this is felt most acutely in excavation and crushing, and machinery and equipment for road work; shortages in transport facilities for materials and personnel; intermittent shortages of all types of material, especially cement, roofing materials and explosives; a most acute shortage of timber; and delays experienced in land acquisition due to the protracted procedure required to be adopted for this type of work.
One result is that out of a total provision for capital expenditure by the Maha weli Development Board, of Rs. 592.4 million in 1978 actual expenditure during the year totalled Rs. 453.5 million. Minister in charge of Maha Welli Development has hopes that a successful implementation of the Accelerated Programme could change the economic picture of the country from one of heavy dependence on imports of agricultural products to one of self-sufficiency and possibly surplus for export. It has been aptly described by him as 'Sri Lanka's most challenging programme.
The challenge lies in overcoming constraints such as those listed above. The authorities will have to give close consideration to these constraining factors if construction and settlement targets are to be maintained in the areas coming within the Accelerated Mahaweli Development Programme.
EconoMic REVIEW, Nov./DEC, 1978

Page 25
FOREIGN NEws REVIEW
| UNCTAD's ONE-SIDED NEGorij
Is the Third World slowly being pushed into the realisation that it really has no soft option, and must rely on itself even to provide the horizontal linkages that would strengthen its bargaining power with the North? This question is posed bluntly by Chakravarthi Raghavan, in a review of the UNCTAD Scene, in the FDA. Dossier of December 1978. Raghavan shows how the North, whether of the East or of the West, holds different views from the UNos mandate to UNCTAD On cooperation within the Third World. This he says, was brought home recently when UNCTAD was asked to organise and convene several meetings on Economic Co-operation among Developing Countries. (ECDC) during 1979. These meetings were to involve secretariats of groupings of the Third World, multilateral financial institutions of Third World countries, and sub-regional and regional economic groupings and government experts of Third World countries. A programme was drawn up and budgetary allocations for this programme was earmarked. UNCTAD's Trade and Development Board, whose approval was sought, had remitted the detailed examination to the Committee on ECDC and at this meeting in October, both Group B (Western European and others) and Group D (Eastern Europe) countries joined in blocking it. They argued that the UN and its agencies were 'universal in scope and could not service or convene such meetings. This really meant that there could be no ECDC or TCDC, or any other, unless the North had an opportunity to be present and participate and shape it to ensure the continued dependency of the South on the North. It appeared therefore that UNCAD did not have the necessary mandate to convene the preparatory meetings at regional level for the UNCTAD V Sessions in Manila, in May 1979 ; at least UNCTAD finds were not available. The Colombo regional sessions in early January therefore had to be spon
EconoMic REVIEw, Nov./DEc. 1978
sored by a priva sation. With funds
SOԱi:CeS.
ECDC was ent General Assembl in 1977 when it, Secretary-Genera activities withi. through the AC{ given the lead r launched several General Assemb specifically urge agencies and ot
of the UN syste.
With their esta and practices, to of economic ct developing col secretariat sup other suitable facilitate the ho by the develop pursuance of the nomic co-operati ing countries.” Il North seenned di Confronted w the Group B ai refuge in the wo with their estal and practices. conclusions, Rag meant that UNI service or provic various group me of Group B or take place in U fora. Also, the N presented at th membership leve gional commissic has no represent Therefore, ECE; financed or ser revenues. In effec Alice in Wonder World was that it TCDC, ECDC o so long als “wo) meaning we assi:
The message across to the Th and when the min of 77 meet, at A. in February 1971 TAD V, they ha
 

ATO NS
e research organifrom various other
lorsed by the UN y in 1976 and again. alled on the UN to co-ordinate the UN system C. UN CITTAD) was ole in ECDC and
studies. A UN ly resolution has the specialised her organizations m, in accordance blished procedures
support mea, Sures -operation among untries, including port services and arrangements to lding of meetings ing countries in
objectives of ecoon among developBut, the view of the fferent.
ith this resolution hd Group D took rds in accordance olished procedures Carried to logical ghavan remarks, it CTAD should not le facilities for the etings . . . of the 77, Group D . . . that INCTAD or other North is already ree secretariat, and ls, in the various reons. But the South lation in the ECE. should no longer be viced Out of UN t; the message (as in land) to the Third could have NEO, r any other concept eds shall have the gn to them.
should have got ird World by now, listers of the Group pusha, in Tanzania, } to discuss UNCve the opportunity
of reviewing the position. Or at least working towards a collective self. reliance. Raghavan concludes the Group B appeared anxious to get a commitment from the 77 that they should meet again in November (negotiations bill death?) and would not raise the issue or force a solution at Manila. The fear of Manila, perhaps is for the technicians at the negotiating conferences that their political bosses might yield under pressure and might not understand the technical issues for safeguarding the real transnational power structure.
The Economic Review has commented on more than one occasion of the indefinite character of such UNCTAD sessions. Most often, we said, the only agreement arrived at seemed to be that the conference reconvenes . . . The North will go along but not concede what the Group of 77 demands. The Third World Nations will ultimately have to go it alone whetherit be the Common Fund or the larger issue of a more just and equitable New Economic Order.
Typical of the attitude North (as we recorded before) was the cornment of the London. ‘‘Economist”, after one of the UNCTAD negotiating sessions in 1977, which interpreted the outcome of the meeting in these words: The talks will go on. And everyone will still be aboard, however reluctant . . .
The Group of 77 will have to come out of the Arusha sessions with a greater sense of solidarity and with a clearer and more concrete programme of action for mutual co-operation, and with negotiating and fall-backpositions, which if translated sincerely and firmly, both individually and collectively in various bilateral and multilateral negotiations, could take the Third World a step forward on the road to a New International Economic Order.
The indications are that some token contributions may come in towards the establishment of a Common Fund. The question is how close these contributions would come to the UNCTAD Secretariat's estimate. The Secretariat has estimated the needs of the Fund at $ 6 billion, of which S 4.5 billion to $ billion are considered to be adequate to finance stocking arrangements for the 10 'core' commodities. For a start at least half of S 6 billion would be required of which the initial paid-in capital would be $1 billion. Anything short of $3 billion will not help to make the Fund a reality and it is up to the Group of 77 to ensure that at least the minimum comes in.
23

Page 26
FEATURES STS
葱
Sri Lanka's Brain Drain
Deyanesan Nesiah
The brain drain from the developing countries to those of the has caused much cuncern in recent years to the countries losing fessional and technical skills. In this analysis of scne aspects of Sri Lanka Devanesan Nesiah argues that the key motive force in has been the absence of satisfactory career prospects, inadequate cognition and lack of job-satisfacticn. A root cause, however, i. in development in the country of emigration and possibly in the c gration as well. But, whatever the motivaticin, it is evident that amounts to a massive transfer of resources frcm the poor to ric a comprehensive paper on "The Brain Drain, Internal and Exte) in November this year to an Asian Seminar on “Employers, Select ment, Manpower Development and Education', he viewed the pri torical perspective and made a detailed analysis of the magnitu and direction; individual motivatic n: cost and benefits of the bra situation in Sri Lanka with suggested policy alternatives. Here situation in Sri Lanka and some possible alternatives for polic Nesiah who is at present Senior Assistant Secretary in the Ministri mentation, in charge of the Subject of Scoial Overheads and Po has had wide experience in the field of employment and manic Director, Employment in the former Ministry of Planning and Ec as Secretary to the Dudley Seers ILO Mission in 1970 and in the dis ment Agent in Mannar and in Batticaioa.
technical education : of the new Minis Education. The ment has training cc
The situation in Sri Lanka
Manpower Planning in Sri Lanka, is still in the embryonic stage. Till
recently it was not listed as a subject or function of any Ministry or Department. "Employment and Manpower Planning was gazetted as a function of the Ministry of Planning and Economic Affairs a few years ago. Manpower Planning” is now a subject of the Ministry of Plan Implementation, “Employment Planning a subject of the Ministry of Youth Affairs and Employment, and Employment, Employment Information and Unemployment a subject of the Ministry of Labour.
There has been inadequate coordination between different public sector institutions engaged in technical education, and training progranaes, and virtually no co-ordination with private sector institutions. Consequently some skills are overproduced and many skills underproduced; the leveis of the skills produced may also not match requirements. The Ministry of Edi:- cation has been responsible for university education and the programmes of the various technical colleges and other educational institutions. University education and most of
fields, mostly at the to those self-employ in the private sect other Ministries, D public corporations courses exclusively
own reeds. Some
private sector instit training programmes own requirements.
The National Board (NAB) set ago under the Minis and Scientific Affair tioning under the Mi Affairs and Employ some progress towe this circumstance. done some research supply and demand with both public an agencies in some On, mes for the produ, Much of the effort training programmes mined by the brain ( 3ot been taken into
In the Universities different faculties are ing to the manpowe country not accordin
 

more developed heir scarce prothe problem in the brain drain professional reS the imbalance ountry of immithe brain drain countries. In nalo, presented ion for Employblem in its hisle, composition in drain and the we focus on the makers. Mr. of Plan Implepulation Policy, Wer pianning as onomic Affairs, ricts as Govern
Rre now subjects try of Higher Labour Departburses in certain. craft level, open ed or employed or. Generally, epartments and have training to meet their of the major tions also have largely for their
Apprenticeship up a few years try of Industries s and now funcinistry of Youth ment has made birds remedying The NAB has into manpower and is involved i private sector going programction of skills. to rationalise has been underrain which has account. the sizes of the neither accord}r needs of the g to the choice
of the students. The rapid expansion
of secondary education in the 1950s and 1960s had led to the build up of pressure for the expansion of higher education. In the ease of the medical, eragineering and other science courses, the intake is determined largely by the capacity of teaching
facilities e.g. the sizes of the labo
ratories and the teaching staff. The intake into the engineering degree courses was stepped up sharply in 1972 with the unplanned upgadring of Katubedde Technical College to University status. This has now led to the easing of the shortage of electrical and mechanical engineers. The shortage of civil engineers remains acute on account of the brain drain, but the annual output of civil engineering graduates is to be doubled. The intake of medical undergraduates is limited by the shortage of teaching staff as well as teaching hospitals. Till recently only Colombo and Kandy General Hospitals were recognised as teaching hospitals. With the upgrading of Jaffna and Galle General Hospitals and the establishment of the Jaffna, Medical College and the proposed establishment of the Galle Medical College, the shortage of doctors should ease in due course. Since the medical course is a long one and there is a shortage of doctors accumulated over many years, the shortage is likely to persist right through the 1980s.
In the case of the Arts and Oriental Language courses, there is greater freedom of choice at the University level but in effect even this choice is restricted on account of the limited range of subjects taught in most schools at the senior secondary level. This pressure has resulted in the disproportionate expansion of the Arts and Oriental Languages faculties. The proposed new Universities in Galle and Batticaloa, and the new campus at Polgola are even more heavily weighted in favour of the Humanities. Acute shortages of skills may therefore continue in many scientific and technical fields while thousands of graduates in the Humanities with uncertain prospects of employment enter the labour market every year.
EconoMIC REVIEW, Nov./DEc. 1978.

Page 27
TABLE 1 -
DEMAND AND supply
OF HIGH-LEVEL MANPOWER TECHNICANS AND SKILLED WORKERS
(1971-1978)
Category Demand. Supply
Engineers .. 1,489 1,880 Architects 40 90 Technicians. . 7,950 7,200 Skilled Craftsmen 18,409 19,200 Doctors - - 1,800 1,950 Dentists 240 270 Nurses - 3,620 3,620 Agriculture Graduates 470 450 Agriculture Technicians 1,000 1,000 Veterinary Surgeons 160 160 Science Graduates 7,920 3,150 Teachers - 26,500 28,250
Source : * Data on the Demand and Supply
of Skilled Workers, Scientists,
Engineers and Professionals'.
Employment and Manpower Plan
ning Division, Ministry of Employ
ment and Economic Affairs 14-11-75.
The brain drain has made the situation much more difficult, in that it is mostly for those skills which are in local short supply that there is overseas demand. Particularly where the training is undertaken by a Ministry, Government Department or Corporation to cater to its own staff requirements, the flexibility required to expand the training input to meet such factors as the brain drain is lacking. A comparison of Table I showing the projected (domestic, in some cases departmental) demand and supply of high-level manpower skill levels (1971-78), and Table 2 showing the numbers of trained personnel who left for employment abroad in the period. May 1971 to June, 1976, explains the shortages that have arisen in the case of doctors and engineers. Many other skills are in short supply for similar reasons.
The administered policy in respect of conservation of essential skills in short supply is largely a sum of ad hoc measures introduced and modified over the years as particularly acute skill shortages surfaced. These measures, though essential in particular situations, have no long-term perspective and are designed to temporarily ease rather than solve the problem. Some foreign governments have been prevailed upon to refrain from poaching skills from Sri Lanka's public sector
ECONOMIC REVIEW, Nov./DEC, 1978
without cleara ment. The Co
Vice Act No. Passport (Regu mit Act of 19' designed to rei doctors, engine cal persons whic supply and to tances from o' abroad.
There has be tive relaxation. mostly some medical person by the Compu Act. The rec foreign exchai) exit permits h; with altogether garding signing country after abroad are cont culars and fina ment regulatior
TRAIN
Occupation/Catego Doctors Engineers Accountants University Teache Other Teachers
Lawyers Technicians . .
Total
* Da Source : Mi We, of H
contained in thi cular Letter No concerning offi study or trainin leave and the Es Letter No. 17. cerning officers pay leave, su. more stringent
gulations on bo Circular No. 1 celled by the
Administration, I70 is still in fic effect of this cir period of oblig
 
 

ce from the Governmpulsory Public Ser9 of 1971 and the ation) and Exit Perl were, respectively, trict the outflow of ers and some technise skills were in short :nsure regular remitir citizens working
en some administraand at present, it is medical and paranel who are affected lsory Public Service uirements regarding ge remittances and ve been done away The stipulation reof bonds to serve the scholarship or leave ained in various cirincial and establishLs. The instructions
study training abroad on full-pay leave and also to permit the immediate discharge of such obligation on payment of cash.
Some of these relaxations were the consequence of the report of the Cabinet Committee which inquired into the problem of technologically, professionally and academically qualified personnel leaving Sri LankaSessional Paper No. X of 1974. This comprehensive, liberal and farsighted report by a high-powered Cabinet Committee was the first attempt to take an overall view of the problems of brain drain from Sri Lanka, analyse its causes and work out solutions. The Cabinet accepted these recommendations and decided that they should be implemented with effect from 1 November, 1974. Though an Officials Committee was appointed to work out details for implementation of the recommendations, only a few of
TABLE 2
ED PERSONNEL WHO LEFT FOR EMPLOYMENT
ABROAD
May May May May July July July Total 1971, 1972 1973 and 1974, 1975 1976 Apr. Apr. Apr. June June June Dec." 1972 1973 1974, 1974. 975 1976* 1976
pry
108 171 238 41 243 343 110 1,254 54 113 94. 14 118 498 183 1,074 - - 23 41 88 11 86 162 88 499 rS - 15 24 02 14. 54 32 4. 82 55 52 04 70 279 86 628 08 35 13 02 28 49 25 60 - 20 27 15 228 176 71. 537
275 450 536, 89 787 1,561 595 4,293
a were obtained by examining Embarkaticin Cards.
gration of trained and skilled manpower and unskilled labour to st Asia’, Employment and Manpower Planning Division, Ministry 'lan Implementation, 26-9-78.
e Establishment Ciri170 of 18.2-974 cers proceeding on g on full pay study tablishment Circular ) of 6-3-1975 con
proceeding on noerseded the earlier instructions and re(nds and agreements. 79 was quickly canMinistry of Public
but Circular No. rce. Generally, the ular is to reduce the atory service after
these have been given effect to, and some others have been virtually annulled-as seen by the withdrawal of the Establishment Circular Letter No. 179. Perhaps, it was considered that the effect of some of the recommendations might be to quicken some of the existing skill outflows. In fact the outflow has increased since 1974.
An interesting recommendation in the Cabinet Committee report of 1974 relates to the flow of Imanpower to developing countries. The Committee has recommended the
25.

Page 28
xchange of technical personnel with, other developing countries on a bilateral basis. This recommendation has been implemented hesitantly and in one direction onlyflow out of Sri Lanka. Except for some very recent developments, the initiative has come almost entirely from other countries.
In the 68-month period from May 1971 to December 1976, 1254 doctors, 1074 engineers, 499 accountants, 14l University teachers and 1325 other skilled personnel left Sri Lanka for employment abroadsee Table 2. These persons constituted about 15 percent of the total number of professional and technical personnel (including teachers) available in the country in 1971. The proportions are particularly high in the case of doctors and accountants, and in both cases, the rate of flow has steadily increased from year to year. These are skills of which Sri Lanka is short. The shortage is very acute in certain medical and paramedical specialities and University teachers in certain subjects. The migration of highlevel manpower has been predominently to developed countries, particularly, U.K., U.S.A., Australia and New Zealand.
These figures grossly understate the outflow in that they do not include statistics of many of the Sri Lankans who qualify abroad into the professions. There is an increasing number of Sri Lankans undergoing post-secondary education overseas. The monthly outflow of professionals is of the order of 100 (Table 2) whereas the total monthly emigration is of the order of 10,000 (Table 3). Undoubtedly the latter figure includes many students who seek high-level professional training abroad and who will probably stay overseas after graduation.
A recent development has been the opening and widening of new outlets in West Asia, for skill-flows from Sri Lanka. Much of these flows have been of skilled and semiskilled personnel but there has also been a considerable flow of labour categorised as unskilled. According to one estimate about 20,000 emigrated from Sri Lanka to West Africa in the period 1-l-76 to 30-6-78 including 720 middle-level technicians, 2,840 masons, 2,665
Table 3-EMGRAT
PASSPORTS )
Month 1977 December . . 1978 January
February .. March April o May - June July August
Total
Average monthly issue .
Source: “Migration of 7 Manpower and Unskill Asia’, Employment an ning Division, Minist mentation, 26-9-78.
carpenters, 2,197 5,452 categorised Numerous recruitmei sprung up and are : these of doubtful rep instances of financial practices on the part ment agencies as w factory conditions in the country of im been reported, but t abated. A consec emigration is that m mediate and low-lev short supply.
Another important that for the first tim exporting female l classified as semi-skill in significant numbe sophisticated semiwomen from Sri La mestic employment According to one 1660 females have lef employment in Wei period 1-1-76 to 30-6. this has led to so Some horror stories lighted in the local I pressure has built ut export of female la other hand it is evic thousands of womer are seeking jobs in daunted by adverse :
Unlike earlier emig loped countries, this quires the interventic employment agencies
* R. B. Korale in an unpu.
 

N STATISTICS
SSUED
Number Issued
8,499 9,496
9,855
rained and Skilled ed Labour to West Manpower Plany of Plan Imple
mechanics and as unskilled.* it agencies have active, some of utation. Many and other malof the employ'ell as unsatispf employment migration have he flow is un(uence of this any vital interel skills are in
development is e, Sri Lanka is abour, mostly ed orunskilled, rs. Many unliterate young nika, are in doin West Asia. stimate about t Sri Lanka for zt Asia in the 78*. Inevitably cial problems. have been highress, and some p to curb the bour. On the lent that many in Sri Lanka West Asia, unreports.
ration to deveemigration ren of specialised
The Depart
blished paper.
ment of Labour has been function- . .
ing as the largest recruitment agency - for employment in skilled and semi
skilled positions in West Asia. In the period 1-1-76 to 30-6-78 the Department of Labour has assisted the emigration from Sri Lanka and employment in West Asia of 3,252 persons mostly in craft-level occupations. However, several private sector agencies have been functioning irregularly and irresponsibly. The Government of Sri Lanka has now decided to control and regulate the activities of private employment agencies, primarily to protect the emigrant and prospective emigrant. The function of licensing private sector employment agencies and regulating and controlling their activities has been assigned to the Ministry of Labour. The necessary legislation is under preparation.
The concern of the present Government on account of the brain drain is clear from the following extract from its first statement of policy.
"My Government will take measures to relieve the frustration caused a merg the intelligentsia ard other highly train d and qualified persons, resulting in large numbers of such persons who are urgently needed for the development of our country leaving our shores for service abroad, by creating the necessary climate and providing incentives and opportunities for their progress and job satisfaction, not only to halt the tragic "Brain Drain' in the future, but also to attract those who have already left to return to the service of our people.
'My government believes that the people of our country are entitled to enjoy without restriction the best professional and technical services that are available in the country ar di will formulate, in consultation with the
appropriate professional and technica per
sonnel both within and outside the public services, appropriate schemes to make such services freely available to the people'.
This statement has been backed up not only by the decision to expand the training of scientific and technical personnel, particularly, doctors and civil engineers but also by a series of improvements in the salary scales and other benefits. Doctors and engineers have gained most by these benefits which include payment of special allowances, allowance of virtually unrestricted private practice outside working hours, no-pay leave for study/employment abroad, facilities to import cars, and re-employment on satisfactory terms for those who had resigned or retired. (e.g. a wide range
EcoNoMIC REwI Ew, Nov. Dec. 1978

Page 29
ofbenefits including additional allowances upto Rs. 600/-, per months are set out in the Public Administration Circular No. 120 of March 1978 titled 'Exodus of Engineers
from Sri Lanka). In his Budget
Speech of November 15, 1978 the
Finance Minister indicated that the
sweeping salary increases and tax concessions to State Officers were
designed partly to counter the external brain drain.
Government policy in relation to the brain drain is now more positive than ever before. The Minister of Labour visited 5 West Asian countries with large Sri Lankan populations in June l978 and met and spoke to many Sri Lankans working there. He took up the question of their living and working conditions and also the possibility of further emigration of Sri Lankans to those countries. A report of these visits was presented to Parliament.
POLICY
The internal brain drain is closely related to the external brain drain in both cause and effect. It afflicts all countries, rich and poor, but generally developing countries suffer more. Among developing countries, those in which the urban-rural or other regional differentials are sharpest would be most affected. The obvious remedy lies in the social and economic development of the backward regions on a priority basis, coupled with special incentives to skilled persons to serve in these regions. Very few developing countries have succeeded in effectively implementing such policies. In fact it is the reverse bias which is widely prevalent.
Superficially, the internal brain drain may appear easier to control than the external brain drain, in that its solution is entirely within the competence of the Government of the country, but this may be illusive. The base of political and economic power is usually in the more developed regions and the urban areas, and this usually ensures that it is the developed areas which receive priority attention for further development, to the neglect of the backward regions. Coercive attempts to stem the internal brain drain without solving the root causes (e.g. compelling Government medical officers to serve in areas and institutions where
Economic Review, Nov./Dec. 1978.
minimum social
ing facilities are only serve to
brain drain.
Key motive force A key motive drain, both inter the absence of prospects, ina.de recognition, and faction. It is in that technical pe mote outposts h cess to professi relevant scientific necessary to el working in the pe tunities of doing participating in scientific and p They should not compared to the ban centres in appointments al the award of fell
There are b: almost every col economy is sicka from which mos able, the energe enterprising have nity in such reg viving mainly on savings and pen folk, and some their dependents migrated to regi economies. The own can attract, nor the skills req regeneration. V and planned inte side, the vicious continued degrad cannot be broke the state which task. Central to intervention must halt and reverset
Lack of mobil problematic as ex is particularly tr gration. Many C kets of persistent well as pockets C shortage. In a town or a region, occupations for w far exceeds dema which labour su of demand. In S many areas in th suffer severe seas
 
 
 
 

amenities or worknot available) may lood the external
force in the brain nal and external, is satisfactory career quate professional lack of job-satismportant to ensure rsonnel even in reave reasonable aconal journals and literature. It is also asure that people riphery have opporg research, and of the activities of rofessional bodies. be at a disadvantage ir colleagues in ursuch matters as ld promotions, in owships etc.
ackward areas in untry in which the rd contracting, and t of the young and tic, ambitious and fled. The commugions may be surstate subsidies, the isions of the older money sent to by those who have ons with healthier sick regions on their neither the capital uired for economic Without substantial rvention from out3ircle leading to the lation of the region n. Generally it is can undertake this any scheme of state be a programme to he brain drain.
ity can be just as cess mobility. This ue of internal milountries have poc5 labour surplus as if persistent labour ddition, within a there may be some shich labour supply tnd and others for pply falls far short iri Lanka, there are e Dry Zone which onal shortages of
agricultural labour; there are many hill country tea areas which suffer from lack of labour nearly all the year round on account of the repatriation of Indian estate labour. On the other hand the official unemployment figure for the country is over one million i.e. around 20% of the total abour force. Lack of internal mobility both geographical and between occupations accounts for this paradox. It may be possible to clear obstacles to geographical mobility by offering land for settlement, various subsidies and good living and working conditions. Occupational barriers could be overcome by changes in the wage structure and living and working conditions.
Sale of skills
Where the skill shortage is less acute but the training cost or the skill level high (e.g. in the case of electrical engineers and lawyers in Sri Lanka), skills could be sold. There could be government-togovernment agreements on outright payment on emigration, or there could be individual bonds to repatriate a specified quantity of money in foreign currency. Alternatively the skills could be loaned e.g. state officers could be released for a period on no-pay leave on bond to return and serve the country for a specified term. Where the training costs and skill levels are low, emigration can be freely permitted, or even encouraged so as to ease the employment problem at home and assist the development of the country of immigration. In certain cases, skill flows can be profitably tied to reverse aid projects, e.g. the flow of doctors to the U.S.A. to U.S. aid to the medical colleges; the flow of engineers to the UK to British aid to the engineering colleges; and the flow of civil engineering craftsmen to West Asia to West Asian aid for craft-level training programmes. There could also be mutually beneficial arrangements for the exchange of skills, particularly with other developing countries.
The bulk of the skilled personnel will be required to stay and contribute to the development of the country. It is most desirable that they should stay willingly and contribute their best. Broadening of higher educational facilities could
27.
ദ്

Page 30
assure those contemplating emigration of the education prospects of their children in their homeland. In some cases, salary scales may have to be increased and promotion prospects improved. Although salaries in poor countries cannot possibly be made comparable to those in rich countries, these should be structured
to reflect the relative importance
assigned to the different skills. Good working facilities and satisfactory living conditions are important. Access to scientific and professional literature, facilities for higher studies, research and professional advancement, and opportunities to gain the recognition at home and abroad should be provided. Fair promotional prospects and a satisfactory system of appointments and transfers are essential.
The economic and social development of the periphery are both vital to stem the internal brain drain. The rural areas must not only hold economic opportunities but also enjoy the benefits of adequate educational, health, housing, recreational, transport, shopping and other facilities. Underdeveloped regions can be given priority in locating public investment, and special incentives such as tax benefits can be offered for private sector investment in these areas. Public officers serving in certain areas may need to be given privileges such as special allowances, transport facilities and living quarters on nominal charges. Special consideration can be given to those who have put in a stipulated minimum period of service in disadvantaged regions in the matter of transfers, promotions, selection for fellowships and special appointments. At present those in the urban centres, particularly the capital, hold the advantage in most of these matters. This bias will be particularly difficult to reverse.
The policies to be adopted in respect of the external brain drain would depend on such factors as the supply and demand of skills, their elasticities, the cost of production of various categories of skills and their relative prices. Where there is severe shortage (e.g. in the case of certain medical specialities and paramedical services in Sri Lanka), temporary prohibition against emigration may be required as well as incentives to attract skills from
28
abroad. This m restrictions, indiv. agreements with
ments to refrain f these skills. These as short-term eme
The most impo. the Cabinet Com. 1974 was the grant scientific and tec in the public servic for up to 5 years, i. rights and gaining dit. This facility cers to serve abr widen their expe money in foreign port cars and othel otherwise be out c is unifortunate tha, dation, though on by the Cabinet, w ted. Particularly younger, junior a personnel, this pri satisfy much of aspirations withou, manent emigration State would have other countries cou fitted. A similar been mooted but has been given by Almost certainly in even perhaps in til net outflow of scá slowed down if s correctly administ cers keen to do as be willing to await pay leave if they a the scheme is being fair manner and t have to Wait too le In return they wi faction that their kept for them wi preserved and ir The administrativ working Out a sche are not insurmoun
In some fields, th have to be supple to attract back Those who had re in the public servic their jobs back on they would have r not emigrated. of personnel have this privilege. Th income tax reliefi currency earnings special concession

y involve travel dual bonds and foreign governom poaching on are tolerable only .
rgency measures.
tant proposal of mittee Report of
of no-pay leave to
hnical personnel
e to work abroad
reserving pension
incremental crewould enable offioad temporarily, rience and save eXchange to imitems which may if their reach. It t this recommeniginally accepted as not implemenin the case of the nd middle grade filege alone could their hopes and t recourse to per... The cost to the been minimal, and lld also have beneproposal has now no firm decision the Government. the long-run, and he short-run, the rce skills can be uch a scheme is ered. Most offipell abroad would their turn for notre confident that implemented in a hat they will not ng for their turn. lll have the satis
posts would be th pension rights crements added. re difficulties in me of this nature table.
bese mea,SUAires may mented by policies earlier emigrants. signed their posts be could be offered the salary points eached if they had Certain categories already been given ere could also be respectofforeign
brought in, and is in respect of
corresponding foreign exchange re
quirements later for specified purposes such as education. Some pro
gress has been made in the granting
of such privileges. Some relief has already been given in respect of import restrictions and import duty. Some of these policies require the
concurrence of other governments. It is only to be expected that countries which have been able to draw all the skills they require from other countries without cost or strings, may not wish to be tied up in various agreements, or pay compensation for the skills they so acquire. On the other hand developing countries cannot tolerate such raiding indefinitely. Joint action by the 'donors, mostly developing countries, and some hard bargaining with 'recipients, mostly developed countries, may be necessary. Multilateral co-operation in this field is essential.
There are promising prospects of mutually profitable agreements relating to the brain drain between developing and developed countries. For example, a developed country may find it difficult or unduly expensive to produce all the skills it requires within its own borders or amongst its own citizens, and may prefer to finance the expansion of a training programme to develop such skills in a developing country, which could in return export some of the skills so produced to the aid-giving developed country. Bilateral agreements are difficult to enforce in the absence of co-operation on the part of other countries to which the emigrant may re-emigrate. Some framework of international agreement is therefore necessary within which various bilateral agreements could be accommodated.
The scope for mutually beneficial agreements between developing countries may be even broader. At the ILO Session in Geneva, on 10.6-1975, the former Prime Minister proposed the establishment of an international skilled manpower pool and regional co-operation between developing countries in this matter, but this proposal was not adequately followed up. Comprehensive bilateral agreement covering the sale, lease, loan or gift of skills and related import, export and exchange control policies may be possible.
EcoNOMic RiEviEw, Nov. DEc. 1978

Page 31
In addition, there could
ment on a broad range connected with
power planning, education, research, training, technical co-operation etc.
International co-operationin manwčr studies to estimate present indi future (domestic and international) manpower supply and demand may be Hecessary. Agreement on the development of a network of specialised institutions spread over
the region for higher education, pro
fessional training and research, to serve the region would be valuable. This will involve long overdue shifts away from the colonial heritage in respect of the content and orientation of education and training courses towards curricula and training more relevant to the needs of the region today. Mutual recognition of degrees and diplomas and some measures of standardisation, as well as preferential use of training and higher educational facilities in other developing countries, supported by a network of fellowships, grants and subsidies are desirable. The tendency to look exclusively to the developed countries for higher education, and specialisation will not be easily broken. Regional co-opera
tion in the sharing of technology and
the publication and distribution of scientific journals relevant to the needs and problems of the developing countries are essential. Schemes of national and international awards could be instituted to recognise outstanding achievements of persons from developing countries in any field, and to recognise and sponsor any research or other contribution. relevant to the Welfare of the developing countries by any person or institution.
The brain drain, both internal and external, can distort and obstruct the development of a country. Strong, positive remedial action may be required. Some of these measures can be taken by an afflicted country acting on its own; others will require the co-operation of other countries. Most developing counries may find it necessary to formullate and implement clear-cut policies in respect of the import and export, and internal migration of skills. It may be in the long-term interest of all countries that satisfactory international agreement on the braindrain is reached.
EcoNoMIC REwrew, Nov. DEċ, 1978
The Ma Brain D
Susan Lim
The “Brain Dra peculiar to Sri L Asian countries v time under coion cent years been services of their als through emig is also one such lish, by courtesy c zines Ltd's INSI description of hov; dus of young Malaysia is now portions. To Aus 3,500-4,000 find t averaging about
Kuala Lumpur ho me for Ming. raised there, just a and it was there abandoned the le took his first ste ing a successful earlier this year. wife and their two ren tore up thei roots and movi Among Malaysia fessionals, partici Indian. Miingʼs st{ Աnique.
The ‘brain dri Hot, of course, pe
1 findustrialised cortu
tain suffer from
Lumpur it has re officials privately proportions. Th. 1977 were particu many doctors pac leaving that Un Hospital reported majoriteachingpo; Medical Associati that it Cathed on t take steps to sten no avail. The issu for public debate, a crimonious one a sition MPs calling into Why the c{
drained of its be
University and He cials angrily cou, has been no dif posts left vacant
nedics.
 
 
 
 
 

laysian rain
in syndrome is not anka. Many of the hich were at some a rule have in re- - steadily losing the ualified professionration. Malaysia xample. We pubf the Pacific MagaGHT, Susan Lim's the mounting exorofessionals from reaching crisis protralia alone, about heir way each year 300 a month.
had always been
He was born and
is his parents were,
that he one day gal profession and ps towards becoinbusinessman. But
Ming, his doctor
school-age childIr Kuala Lumpur ed to Singapore. s middle-class protlarly Chinese and Dry is by no means
in syndrome is Buliar to Malaysia. ntries sueh as Briit, but in Kuala yached what some admit to be crisis e years 1976 and larly bad, with so king their bags and iversity Teaching ly could noti fil sts. The Malaysia. Gin Was so allarmed the Government to the flow. But to e became a matter I aind an extremely
it that, With oppo
for a full inquiry untry was being st medical minds. alth Ministry offintered that there ficulties in filling
by the emigrant
Most of the heat has gone out of the issue now, but the professional classes are still drifting away. If anything, they are doing it in ever increasing numbers. Officials at the Kuala Lumpur embassies of those countries most favoured by Malaysian emigrantis— Australia, New Zealand, Canada and the US-report that there has been an increase in recent months in the number of resident visas granted and in the number of tentative inquiries haradled. Statistics reveal that the emigrant class is made up mainly of doctors, paramedies sueh as radiologists and nurses, engineers, accountantis, stenographers and Secretaries and certain categories of skilled tradesmen. More interestingly, perhaps, is a new groupbusiness entrepreneurs.
Australia's immigration authori
ties define entrepreneurs as those people with experience, technical
competence and capital to provide
new products and services or even
new industries-for the country's economy. Australia clearly values this category of immigrant. In a recent policy statement, the Immigration and Ethnic Affairs Minister, Michael Mackellar, stated that while the entrepreneurs may be few in number, their contribution has been great. Australia, he said, would continue to welcome them as long as they proved they could aid the economy and provide employment.
But what lies behind the departure from Malaysia of people 鞑 Miing—people who live a life of relative luxury, replete with chauffeurdriven cars, nannies for their children, and servants? When asked, they invariably reply that it is for the sake of their children. say the standard of education in Malaysia is declining and there are too few opportunities for higher studies. By extension, they believe their children will not acquire the necessary qualifications for the professions that would normally die ahead. But there are other reasonsall of them equally pressing-for the
exodus. These are job-dissatisfaction, limited opportunities, lack of recog
inition and insufficient financial rewards.
countries and cannot re-adapt to
Malaysia's more restricted way of
life.
9
They
And then there are people who went to University in Western
ܔ

Page 32
ܬܬܐ
universities in Britain,
While most Malaysian parents
have now accepted the use of Bahasa (national language) as a teaching medium, many are concerned that the switch means that certificates issued at the end of the fifth, and sixth forms will no longer be enough for students to gain admission to foreign schools and universities. Increasingly, these establishments are refusing recognition of certificates from Malaysian schools. As Ming
puts it: 'I don't care if my children.
have to learn Swahili in school, provided what they learn is useful and can help them compete internationally, whether for further education or for work.
Falling Standards
Students wanting to further their education abroad now have to sit a proficiency test in English, whereas in the past their 'O' (ordinary) level or 'A' (advanced) level passes were acceptable for most schools and Australia, New Zealand and Canada. Official reaction to complaints of declining standards has been one of curious unconcern. The Deputy Prime Minister Datuk Seri Dr. Mahathiri Mohamad, when asked in parliament, last December about the situation (he was also the Education Minister at the time) replied that people were leaving the country because they were seeking a better standard of living. The exodus, he said, had nothing to do with dissatisfaction with the education system, pointing out that professionals in Singapore were also leaving in large numbes. When asked if that meant the standard of education there was also falling, the Deputy Premier said: I'm convinced that if Malaysia was to open its doors to professionals like doctors, we will be flooded with these people from India and Ceylon who would only be too willing to come and practise here, and they would not question the country's education system, as it is better than many others.
This confidence not withstanding, the criticism continues, and some of it is coming from unexpected quarters. The leading local newspaper, the New Straits Times, which is not famed for its attacks on the Government, had this to say: “Witness our falling standard in Bahasa and English. We seem so intent on
டுே
scrapping this, a programming so little energy left We already have
The debate ol cation apart, it increasingly diff dents to enter universities. Sol a 90 percent q (indigenous) st many others the percent. Even the traditional m enrolled more th putras this year the other places least, and all the situation Will bec with this, the lieve there is onl. to do-emigrate
Frustrations and
For the profes the dissatisfactio summed up by Institute of Med. Dr. Francis de cently at a semin to earn rewards tion, fellowship, are either absent Frustrations and in and they leave at the TMR say language requir officers in govern causing much fri colleagues. He difficulty in taki for language exa those Who do ta fail, making the couraged. He sa 18 vacancies for research scientis IMR alone and government hos the rural areas is The seriousness perhaps reflecte hospital assistan to prescribe rest there are not eno This prompted til to comment: of the hospital appreciated, we they are not te than they are qua lives are at stak
While none o sently accepting

lopting that, crashnething else, there's to consolidate what
standards of edit is also becoming cult for many stu
local colleges and he institutions have
ota for bumiputra
Idents, while for figure is around 80 University Malaya, ultiracial university, tin 80 percent bumiCompetition for is stiff, to say the : signs are that the ome tougher. Faced on-bumiputras beone rational thing
Disillusionment isionals themselves, in was perhaps best the Director of the ical Research (IMR), Witt, who said rehar: ‘‘Opportunities in terms of promosabbatical leave or are far too few. disillusionmenti set . One other official is that the Bahasa, ment for medical ment, service is also 1stration among his says scientists have ng time off to study ns, and, even worse, ke the exams often m even more disys there are at least medical officers and bis not filled at the hat the situation at pitals and clinics in even more critical. of the situation is by the fact that is have been known icted drugs because igh doctors around. e New Straits Times While the vital role assistants is to be should ensure that mpted to do more lified to do. Human
the countries preMalaysian emigrants
is actively recruiting them, the fact that they are making it relatively easy for professionals to gain entry as permanent residents means that
they are not discouraging them. Australia, whose so-called White Immigration policy in the past (until the change in 1971) was not seen as
the most liberal or attractive, at least to non-Europeans, is taking in by far the largest number of Malaysia's emigrantis. According to Roger Shelley, the second secretary at the Australian High Commission, about 3,500 to 4,000 Malaysians find their Way to Australia each year, averaging about 300 a month. Recently, though, the number of doctors going to Australia has dropped. They now have a little more difficulty gaining entry, with new regulations requiring them to have job-sponsorship before they are given permanent residence. This is because Australia is producing enough doctors of its own and can no longer absorb many from external sources. But while Malaysian doctors are no longer being welcomed with open arms, entrepreneurs are being actively encouraged to tear up their Malaysian roots and take their skills with thern to Australia.
Pull Factors
About 150 have settled in Australia since this time last year. While there is no limit on the amount of money these businessmen can take with them to their new country, there is a minimum requirement of at least A$100,000 to $150,000. With this cash in hand, there is no need for any qualifications apart from health and character clearance.
Altogether, about 5,000 Malaysians have emigrated in the last 12 months, and this is not counting the large number of students who do not return. There are 5,000 or so Malaysian studentis in Australia at present and Shelley estimated that about 70 percent of them will not return. The paradoxical thing about the students who do not return is that not all of them are doing work they are trained for. He cited the example of an engineering student who had gone on to a post-graduate degree and had applied to remain in Australia. Asked if he had a job which he was qualified to do, he said 'Yes'. He was working as a chef in a Chinese restaurant.
EconoMICREVIEW, Nov./DEC. 1978

Page 33
India
John kurien
In our lastissue we carried the first part of John Kurien's analysis of India's fish economy and the impact of the entry of ceras into fishing in India. This part continues with the entry o sector and the involvement of the big business houses in the fi: cluding with an assessment of the possible future trends in India
The understanding was that the exportable species would be sold to the business houses. The big houses which succeeded in this used these encouragements to boost their social responsibility image, with all claims of having provided employment and assisted unemployed graduates and so forth. Several big houses also gradually invested in their own productive facilities (often because the earlier methods were opposed by the merchant capitalists who controlled the marine export trade at that time) and set about seriously to undertaking fishing, marine food processing and exportas part of their diversification strategy from their respective monopolies in batteries, biscuits, cigarettes, tea and other products.
The basic features of this ultramodern sector in the making were the very high degree of technological sophistication and the great dependence on commercial energy. The circuit of economic activity was high investment, high cost, high productivity, high depletion and high pollution. This made it almost inevitable that the end commodities produced in the course of the operations had to be sufficiently high unit value or turnover to ensure reasona bly high pay-offs to the imterests involved.
One should surmise that this involvement of industrial capitalists has its own internal logic. Their full-scale and committed entry is motivated by the pursuit of profits which can be had by satisfying the ever-increasing consumption requirements of a metropolitan elite. The mutual interdependence of these pursuiits—profits and want of satisfaction--is essential for the survival and expansion of industrial capitalism in fishing. The tie-up between ultra-modern techniques of produ,ction, and marketing and ultra-modern consumption priorities
EconoMic REVIEW, Nov./Dec. 1978
is easily portraye as being social wholly undertake terests.
THE FUTURE
In the backgrou potentials and th of evolution of can examine mo main issues that lighted, the discu fishing interests, a this fish economy
s Deep-sea Fishi To this ques is in the affir findings giving potential of ol dicate that as million tonnes of lie untapped be zone. In the in performance of th traditional sectol about the need to Zone as the sole p ditional fisherme only by them. T big fishing vessels ticated technolog fish finding, ne hauling becomes context of the traditional craft: small mechanised ground no total re fishing per se is V
The moot que not whether de necessary or not. problem is whethe business or publi trol the deep-sea
& The Indian Exclusi North-West Coast South-West Coast
Lower-East Coast Andhra Pradesh and West Bengal.
 
 

V Part II
study and incisive big business conf the ultra-modern sheries sector con's fishing industry.
d and propagated ly desirable and in for national in
Lind of the resource e brief description. the economy, we re concretely the
need to be highission on deep-sea, ind their impact on
ng Necessary ?
tion the answer mative. Survey the unexploited Ir resources in
much as 2.2 marine resources yond the in-shore -shore waters the he labour-intensive leaves no doubt reserve that whole reserve of the tran, to be exploited he participation of using more sophisy for propulsion. t encircling and necessary in the limitations of the s as well as the boats. On this jection of deep-sea, alid.
stion, however, is ep-sea fishing is
The crux of the rthe interests (big C sector) that confishing operations
will function in a manner conducive to the healthy and complementary growth and development of all the fish economy.
Encroachment on Traditional Waters
Deep-sea fishing operations by our definition is fishing to be indertaken beyond the 50 metre depth line; and if this can be adhered to, the chance of direct competition between fishermen using non-mechanised craft, or small mechanised boats and the larger deep-sea vessels does not arise at all. Catches made in the deep sea do not affect the level of catches made in the in-shore Waters. The question that needs to be asked is whether or not these vessels will restrict their operations to the deep sea.
There are several reasons to suspect that there will be direct competition. Take the case of the shrimp trawlers now being imported in large numbers. Irrespective of whether they are operated by big business houses or public sector fisheries corporations they have to catch, and export prawns worth the value of their import licence in a certain period of time. There is a pressure to show performance, achieve targets and make profits. This means catching as much prawns as possible in the most economic manner of operations.
Authoritative data show that prawns in the deep-sea zone (50-200 mts.) are to be found in abundance only off the SWCR with small quantities of the LECR and UECR.* Deep-sea vessels operating off the SWCR, * stand to initial gain; logically therefore, assuming a commitment to deep-sea fishing, there should be a concentration of vessels in this region. However, it is important to note that the other area, where there is a greater abundance of prawns at present is in the in-shore Zone off the UECR Not, accidentially all the big business houses now engaged in the marine export business have
ive Economic Zone (EEZ) is broadly divided into 4 regions:
Region (NWCR) comprising Gujarat and Maharashtra; Region (SWCR) comprising Goa, Karnataka and Kerala;
Region (LECR) comprising Tamil Nadu, Pondicherry and and the Upper-East Coast Region (UECR) comprising Orissa
31.

Page 34
their base of operations in this region and it is inevitable that their deep-sea trawlers will also, by sheer economic necessity, increasingly concentrate their operations in this region and zone.
In the face of these realities the pronouncements of the Agriculture Minister that trawlers of the large houses would be kept 45 miles (72 kms.) away from the coastal area are tanta mount to hoodwinking. Thisis clear from the fact that the distance to even the edge of the continental shelf in the regions where deep-sea prawns exist is only 37.5 km. in the LIECIR, 68.4 km. in the UECIR, and 83,1 km. in the SWCR.
The likely ingress into the inshore waters will therefore be mainly in the UECR where the levels of exploitation are very low. Present underexploitation in this area will also be used to explain away the ingress of deep-sea vessels as not resulting in too serious a competition.
Such encroachments may seem the more blatant form of exploitation. Juxtaposing the ultra-modern with the traditional spurs the loquacious politicians in defence of the oppressed and the downtrodden. However, this may be a futile and a short-term solution even if it becomes possible to ensure that deep-sea vessels make no physical infringements on the in-shore zone, (by the use of the navy or coastal guards). The real exploitation, more subtle, less apparent and visible, will be the competition in the final market, which is the same for the prawns, cuttle fish and tuna, caught by both the deep-sea vessels and the traditional fishermen on non-mechanised or
mechanised boats.
Conflict of Interests
The three major interest groups in the fish economy consist of the traditional fishermen, the merchant capitalists, and the business houses. We saw in our description of the working of the fish economy how ultimately all the three cater to the same elite metropolitan consumers. The vital difference is that whereas the big business house is part of an integrated production marketing consumption network linked to the
world capitalist economy, the tra
ditional fisherman is a marginal participant linked to it through the
32
aegis of the n who presently d export trade oft nānce in the mai ness houses will merchant capit have its reperc ditional fisherm careful analysis
most vociferous
entry of the big from the spoke chant capitalist
Their battle h; In the early sev tial entry of t talist houses int trade, by using chant capitalists procuring and marine products the old hands had reaped the windfall profits rush of the si. Kerala. Unde. Marine Product ment Authority their control) a ed to the Cent) the need for ar. towards protect the interests of scale entreprene marine product crux of the arg was based on the It said that whe medium-scale er in the develop industry was b deep the big bl into the fishing making a quick actions in impo * no stable or a industry or it healthy lines. mendations vrye' the activities ( houses, the m being that the allowed to pro from the tradi the processors their own dee catch their own
In principle t
been accepted
which in turn p the business ho chasing and pro ducts which their owin ves3:
 

erchant capitalists minate the marine e country. Domiket by the big busiaffect this class of lists and in turn
ssions on the tra
in. Thus, on a more we find that the opposition to the business interests is smen of this merclass. us been long-drawn. 2nties, with the inihe industrial capithe marine export some of the meras their agents for processing of the a great panic struck in the trade who bir millions in the made in the prawn xties, especially in I the aegis of the is Export Develop(which was well in report was submit'al government on ld steps to be taken ing and developing small and medium urs who are in the is industry. The ument in the report question of motives. reas the small and rtrepreneurs interest nent of the fishing oth 'sustained and siness houses came industry only for profit from transat licences and have sting interest in the s development on A series of recorne suggested to curb f the big business bst significant one y should not be cure raw material ional producers or but should employ p-sea, fishing fleet, fish and export it.
his seemed to have by the government aced restrictions on ses as regards purcessing marine prore not caught by ls. Recent reports
that the big business houses have been unable to utilise their own
freezing plant capacities to the fulf
because their own vessels are not in a position to supply them with their raw material requirements confirms
the effectiveness of these restrictions.
The fear of the merchant capitalists is undoubtedly because they
know that the big business houses
have a clear edge over them in terms of finance, control over production, and what is most crucia in this field, the control over the market. Ti'hough the marine export trade of the country, has progressed quantitatively by leaps and bounds (between 1956 and 1976) the volume of marine exports of India increased by 2700 per cent from 0.23 lakh, tonnes to 6.22 lakh tonnes, and in value by 4600 per cent from Rs. 3.9 crores to Rs. 79.86 crores, though in terms of quality standards, product diversification, market strategies and the like it has miles to go. The root cause of this backwardness' has been the approach of those who presently control the trade; bearing no direct responsibility for the production as such, they trade where they can and what they can, the motive being quick current profits by circulation.
The big business houses being directly involved with production and having longer-term profit notives will pay closer attention to the process of social reproduction and can hence be considered more “civilised'. For that reason they may be more acceptable to those who come into contact with itespecially the consumers.
The implications of this are that the big business houses will be in a position to capture the market from the old hands in the trade and thus substantially erode their busi. ness aid their profits. As a matter of fact the process has already begun with the announcement of the leader of a Japanese marine productis importers’association, following some large-scale rejection of exported sea - foods on quality grounds, that they are prepairing a list of names of selected Indian exporters with whom they would advise their members to have dealings. The vast majority of the 'old hands may not feature in this
ist.
Econoxic REVIEW, Nov./DEc. 1978

Page 35
The opposition to the big business houses entering deep-sea fisning operations by the present interests in the marine export trade has evolved in this background. The wider implications of such a setback to the 'old hands are of more crucial Consequence.
In the states where the expor, processing and trade is carried on a a greater tempo —as for example in Kerala and Tamil Nadu—the mer - chant capitalist exporters have built up a large, extensive network of entrenched backward linkages. This goes down to the traditional fishermen in remote fishing villages and to those on the small mechanised boats operating from a few centres, through— hierarchy of middlemen and agents. The dependence of the fishermen on this hierarchy for the sale (most often on part-credit) of all exportable species caught by them is virtually total. Having no alternative sources who will procure their products on better terms (in spite of the numerous marketing co-operatives and fisheries corporations) all losses and setbacks experienced by the processors/exporters are passed down the hierarchy until finally the fishermen (who anyway got it free arguethe middlemen on the shore) bears the total brunt.
It is apparent from this that greater penetration of the ultramodern big business interests can lead to tine total marginalisation of the traditional fishermen. Safeguards to prevent such an eventuality are essential. The role of fisheries corporations to fulfil this task is subject to question because they operate their backward linkages in exactly the same manner as the merchant capitalists, with the exception that they have "accredited agents. The only solution seems to be a large base of genuine, well organised producer co-operatives (comprised of producers alone) who will take the responsibility for marketing all the fish of their members in the manner best suited to the kind of species being handled.
Protein for the Masses
It has been the traditional fishermen using their rudimentary craft and gear who have caught the fish which ultimately reached the rural consumers. Over time this linkage
ECONOMIC REVIEW, Nov./DEC. 1978
between traditio rural consumers
ened primarily h intensive nature mercial energy u tional fishermen butors kept costs and hence price: of the low pur rural consumers production for t Mila,SS6S.
Low purchasin ses is a reality t| mind in any discu the masses. The untapped resour crying protein in therefore crucial nature of operat technology, spatia that will interve sources into cos plies.
Protein for the position of basica of the smaller, les tity species; it m vies, sardines and ference to praw seer. Since such available in our ( tion is whether vessels will fish whether this fish, consumers at a can afford.
The main attra less fleshy fish fishing interests are availablein bu data show. Giv world market p) following the co, vian anchovy, c tion will be focus sources of the sin species for this pu given the intere: deep-sea opera option is betwe earning foreign protein for the is obvious.
To believe tha is an effective m protein for the n of a naive underst and language oft pagate such a p to concealing pursuits by pro desirable objectil

hal producers and has been strengthecause the labour. and the non-comsage of both tradiand small distriof production low within the reach chasing power of -classic case of he masses by the
g power of the mashat needs to be in ssion of protein for linking of the vast ces at sea to the eeds on land will ly depend on the tons (cost, type of Il distribution, etc.) ne to convert ret-competitive sup
2 masses is a proully catching more sfleshy, bulk quanLeans more ancho - | ribbon fish in prens, promfret and resources are also leep seas the quesdeep-sea fishing them out and if so will reach the rural price which they
ction of the smaller to the deep-sea is that such fish ulk quantities,as the en the spiralling of ices for fish meal lapse of the Peruonsiderable attensed on the bulk rehaller lower-priced urpose. Here again, sts controlling the tions, when the en fish meal for exchange and masses, the choice
it deep-sea fishing Leans of supplying lasses is the result landing of the logic ne market. To proolicy tantamounts urely commercial claiming socially "ES.
Resource Depletion
The declaration of 20-mile exclusive economic zones by maritime states the world over comes in the wake, of a global concern for the fast depletion of fishery resources. (There are reports in the world press about the 'disappearance' of anchovies, salmon, sardines, ha libut, cod, erring and haddock. World marine fish landings have been decreasing every year since 1970).
Often the tendency is to attribute fishery resources depletion to inefficient factor allocation alone. This is but the consequence; the cause lies basically in the profit motive which dictates the patterns of production.
In any big industrial fishing operation the basic objective is to maximise current profits. At the initial stages the existence of super-normal profits (because of large unexploited resources) encourages rapid expansion of the industry until profits are totally competed away (when the optimal exploitation levels are reached) and consequently leads to losses when the resources have been depleted beyond revival.
The classic example of this whole cycle operating in a period of 20 years is the case of the Peruvian anchovy. In 1955 the anchovy catch in Peru was 0.5 million tonnes. The fish then was the chief source of food for the guano birds and also supported a small traditional fishery industry. With the demand for fish meal to hasten the fattening of table birds and hogs for Amarican consumers, the anchovy catch rose to an allimeinighof 12.5milliontonnes (20 per cent of world marine landings) in 1970. To achieve this a phenomenal increase in capital investment in boats and fish meal processing factories was undertaken. Between 1957 and 1966 alone the investment (gross in 1963 prices) increased from £5.5 million to £263 million. This accounted for an increase in the number of registered boats from 272 to 1,932 and fish meal processing capacity from 242 tonnes/hour to 7,321 tonnes/hour during he same period. However, after 1970, due to a thorough overexploitation the anchovy “disappeared' spelling catastrophe to the whole industry. In 1973 the catch was only 2.3 million tonnes and in late 1977 IMARPE, the Peruvian marine institute, announced a possible total ban on anchovy fishing which may last forfupto four years.
Encouragement of sophisticated technology and its protagonists will certainly yield enhanced levels of exploitation at present but would spell disaster for the future of both fishing and fishermen.
Courtesy: Economic and Political Weekly.
33

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iew as
romote ind the jective several ized to nity.
implete erative
"esponaspects