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EKONOMI |R. A||A||
It is ill-E.
EH1 -.
Fi Frar
Paul Stre
NEXT ISS 타 FEIE" .
|-արեւ որովերքեւ երբ որ բոլոր իր M երրորդ եւ -երրո- երրորրեր C שם חסוחחחחEEםחקEui|חה. לוחשדה = (Bikitaחליזם.
EN EEEEEE| Andre O. P.
THEEE HEE" ----m O G
PE הם חושבתח הח THה חדשיהיום והחותמוחרם פוח
Eclini's
ETT ם דחום חE חח } PER AR
N | || LIE ETEE TEE ET BET Hij
ներկար եղելը Niրի իր երբ իրերիքել P STILLA||||||| Կաn=ր =րը եւրոլեր բի-բուռ, 6 2 Ill
THE CFE"E", Titull i ilir
 
 
 

NLITıber 3 Јшпе І975
CONTENTS
FEATURES
"(TyralvrTrthority 2 Women of Sri Lanka :
OPP Tessed or Emancipated ?
"FFFF 3) A Priller for Aid
Recipients
-
COWER STORY
3. THE AGENCY HOUSES
COLUMNS
Diary of Events
The Economy
TOLIITis II
Banking and Finance
IS Foreign News Review
교} Technology
I Agricultшге
Commodities
S S S S S S S S D DD D S
SUE
liik Food – Necessity, Scarcity and Self-sufficiency. ath breakers in Third World thought,
lobal Reach - Multinationals.
ST
StorThabandhu Widyapat hy has exhibited in Colombo, Moscow, king and Washington. He is a leading designer for ballet, ma, film ad classical dance and among his better known - Tals are those that adorn the walls of the International Buddhist Lication Centre in Burma.

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May 2
1.
19
DIARY O.
Bank of England increased its minimum lending rate from 9.75 по 10%.
I Ith annual assembly of the African Development Bank opened il Daka T.
UN EconOITIC COITIThission for Latin AII merica (ECLA). comಕ್ಲಬ್ಗCed its 16th Session in Trini
El
General Assembly of the OrganisaLion of American States met in Washington.
First session of the World Tourist Organization COTT1ITienced in Madrid.
Foreign Ministers of the Association of South East Asian Nations (ASEAN) Inet in Kuala Lumpur.
U.S. Federal Reser ve Balık cut the discount rate from 6.5 to 6%.
Deputies of the Group of 10 met in Paris.
Bangladesh formally changed the exchange rate of the takar against sterling from TK 18.9677 to TK30, än effective depreciation of 58%.
Ministry of Planning announced that the Government of Sweden will give Sri Lanka Rs. 55 million in aid for the year commencing July 1975,

F EVENTS
May 20
2||
고{I}
27-30
UN International Tin Conference opened in Geneva.
Switzerland cut its bank rate to 4.5% from 5%.
1st Plenary Session of the South Asian Housing Ministers' Conference commenced in Colombo.
Saludi Arabia and other oil producing countries pledged S 500 I million in Rollic to the S 1 billion International Fund for Agricultural Development.
Hong Kong agreed, in principle, to the creation of a commodities exchange, the first in the Far East to deal in internationally traded co IIII (dities.
Oficials from 26 Countries and heads of the World's main organisations met in The Hague to formulate ways of implementing UNS Call for al new, cc00| Illic: order.
Co-operative Conference attended by over 1,200 delegates from the country's co-operatives network opened in Colombo.
1st Teeting of the Iran - Sri Lanka Joint Committee for Ecoomic Co-operation began in Colombo.
OECD Council held is annual meeting at Ministerial level in PES.
Italy reduced its bank rate from 8%, to 7%.
- CGN CHIC REIEW JUFE 1975

Page 5
THE AGEN
their past, present
L STTLLl uuHTS TL LLLLLL TTTGLSTGLLLHS S HLLL HTaLLLL LLL LLL TT TTT HHC TLS TmGTu CLGLL LCH Ta LLLGLGLLLLL LLLLLL LLLLLL GuuTTTTGT HHTHH LTLLLLS LLLLL S LLLLG HHHS LCHLLL HLL THCCCLHTLT T TCT 00L TGHL CCClL LLHHLHHLSk THS Y LaLLLLL L0LS HCLT LLLuLmT T LLTT S000S0S JCH TTS CCCCL LCC TGLL TT CHHuuHGHH TT TTT LGLlLL T Cu LLT LLLLTLHHLLTTHL H TLLT TTuHS YLLY T HLGmCLHu TS LTGCCTS 0L L LLLLLLLTHC C TuHHL GmLmm TTLT LLY LLLLLL lLL LLLLLL GGLLGTCmL LtCL TCCHHTmmH LHHL LCGa GGGG TLLLLlL LLHLH LLLLLLS GCLL CCLH CLLHGaT uL HH C TT CuuHHC LLLLL CLLL GLTT LL LT CCG TLLT CLLLL LLLLTTGGLL T uCuuHLLLL LLLLLS TLLLLLaLLLT S LLkCCTL GGCGCTTT T LLL L0 CTLTTS S SCYTT TLL T S LLLLL LLLLLlLLLL LCTHL HLHLLK LtGtLT TT LT TLGLLHHLHHLGLLHHLT TaaTTTCGTLL YGCLLTS HLHHLLT TT LESLS S0YY0S S LHHLHHL HLH CL HH GLTGGaCu TLT LS CL LCCCHCCS LTLLLLLLL LLL LLTLL LLLLLLLTLG Tu HTTu LCCLL LTTTYS
The report decifieri is in detail, the Working of the plar LTGLSL LCHS LLuLLTLT TT LHHGHLHCL HH LCL H LLLL LLLLCL LCLTLL T TLTLGLGLLrSS S SLLLTLT LHGGGT LT LGL GHHHH LLLHHLHu TH TLTLCC HGGL LLGL LLGGGLS T TL CHLGTT T S LLLLLLLHHL LLHLH LGHHL LLLH LH HCuHGu HH LCT TCL TT TT S GmLT LLLLTCCLLLL SS LY LLLLLLS L HLHHL LT LL LTGGLlL LHCLCLaLGTTT THT a TTCL aGHaH HHCCC aT CCL LTT TGGrTTL T LT TGS S T L CCCCLuulS SLLLHHHHHHHHS LLLL CHCHLLLLHBT TLLlLLLCCu uu LHTTT LLL HL LCCL LLLT LLuLLLu LLL best la performierad ir The fir TErre.
Black MLIG BLITde
The Europeans first came to Sri Lanka for comercial and buginess purposes, the Portuguese alını d l'OLitchı = being more interested in commerce rather than in agricultural production. Thus the spices such as
companies. In th fe"Wy f:11ilie:S häc | il the service of L I lent, the planta trade they bought the cultivation
Libber. Thus in the 19th century
cinnation were gathered and transported to Europe in order to make their food tasty specially in the long Winter Iloits. It was the British who first conquered the entire coultry including the Kandyan area and the situation in which Sri Lanka finds itself today with reference to the plantation ecolony was determined by British rule during the 19th century. Britain replaced much of the traditional agriculture With more profitable plantation crops. Wast a reas of land in the hill country Were taken over by British planters at very cheap prices with the support of the British Govellent, Hulldreds of thousands of thers this passed from the explicit or virtual ownership of the people of the country, specially the Kandyan peasantry, to the British Plantation
ECTION FOR HIC PALEWITHEW || UNE 1975
lielāti ūūk. enclos LITE movem Il Teflor 15 TE With Sile of the froIII this carlier | the Ina Tginalizatic indigenous popul
Coffee WEI 5. Li hile ! introduced in this El 1870, 5 i eWeLin more profita tea crop. The E Este for Lea, quality black Lea produceso Well. areas of Tubber Pola Inted teit was a today nothing call. for the Ceylon Britis II - Sri Lälkä order that the

SY HOUSES
and possible future
or of the Corristo the public, The ited report. The coppleted 3 years he largest gaps, hert, if the history of the giry s fr sролуїүe a їїалd ћу rprising. Speculaeased. The cynics fe Agency Houses, pit out for sale all even though it was : public de Farid for
I fiori secor of Sri alled by the Agency חשיוr?!ger!i:Irie!, to grow. Speculacon inte as the Tre αματήέrr: Sο ηπιει le) et past and It's series of
|c Low Country a Boccolic rich cither le British Governtions cor through up many acres for of coconut and the second hillf of a large scale land place, a sort of 2nt. The present Il :fi:TL to del problems resulting and takeover and in of the pourer átion.
first crop that was manner, but by
given Way to the ble and successful British acquired a particularly good
that Ceylon can Even though large ildə C0C0Lut yere favourite and even xustits importance conomy for the
relationship. In British housewife
could regularly serve and enjoy her four o'clock cuppa, this country had to produce the tea leaves while sugar would come from the colonies in the Caribbeans. The imperial power was also used for bringing about half a million labourers to the plantations from South India. In 1827 there werc 10,000 Indian Tamil estate population in this country. By 1946 the figure stood at 666,000. We nearly had a large influx of Chinese populations as in Malaya because it was cheaper to get down Indians from South India. The plantation industry also built new roads and railways, a modern Harbour, a colonial administration and health Services in the estat: regions. Thus even today the system of roads and hospitals is far better in the Central Province than North Central Province or LOWer. UWE.
While the plantations gave Sri Lanka a regular source of foreign exchange and developed certain skills of cultivation and Illa Imagementitalsu distorted the economy by making us dependent on foreign countries for the import of essentials such as food, textiles and even light industrial consumer goods. An economy that was earlic fairly self-sufficient, though at a rather low subsistence level, was rapidly opened up to the World market economy,
Need for Agency Houses
The form in which British enterprise was established in the plantations was that of private companies, ioint stock companies and individual holdings. The management on the estate was entrusted to the superintendent and Officials Subordinate to him. Between the owners who were often absentee landlords residing in Britain or in Colombo and the Superintendents on the estates, it was necessary to have some authority co-ordinating the running of the estates and disposing off their produce. This was the reason for. Lhe Agency Houses to develop.

Page 6
"The first agencies of the plantation industry in Sri Lanka were the coastal agents residing and operating in Colombo, who performed various services required for the developing plantations, which the pioneer planter in the hill country Could lo attend to con his OWTh. The processing of coffee, sales, the arranging of shipping facilities, procurement of supplies and the provision of credit were the early functions. With the accretion of larger functions around these coastal agents in Sri Lanka, as il Malaya, and With the development of a closer identification of agents with the planting interest, there came into being the first and the corporate bodies, the Agency Houses".
i. The system set up was one in which the whole InletWork of relationships from production to consumption was owned and controlled by the British, the brokering, accounting, insurance, banking, wholesaling and retailing in Britain, and for there to the rest of the World. The British were superintendents of the estates, their Agency Houses in Colombo and London made the major decisions regarding management, buying and selling of tea. The economic system was one in which labour was very poorly paid and the management was top heavy and highly rewarded. The owners obtained high dividends. The consumers themselves in Britain got tea at a relatively cheap price whereas goods imported from Britain were realitively high priced as British labour was paid much better Wages.
Colonial System Continues
After Independence in 1948, apart from the ownership of some estates, the While chain of control over tea continued as before. The Government has bicien able only to break into sections of it as in insurance, banking, shipping or packeting.
Since World War III and particularly after Independence and the socio-political changes that followed, the position of the Agency Houses have undergone considerable change
(a) There has been a withdrawal of capital from Sri Lanka over a period of time.
(b) A Ceyloniz some CFLE Houses has
The foreig il Britai
in Sri Ltd. Agency of nationals, 5 ing as corp
Developme the new gli Ըalled "tiu: *''Illirket i "meti-tolomi a wide next the inter II Te Wärded li eign capital obtain the
more Lhan
(c)
(d)
Significance of the the National Eco
In alsScissing the II Houses in the pla it is also necessary Sri Lanka, despite strides in the direct tion of Crops and til of "non-traditional dependent for a l; natitյոal wealth a! foreign exchange
Significance
Total produced Produced by i est: managed by Ag Houses 2 as a percentage o Gross National Pri contribution by e under Agency H. Total Acreage A circa ge under Age
Houses 2 as a percentage ().
three traditional ci and coconut. The can be said, in coi their activities Lake ercise a great influe1 important sector economy. "Mono ed in the Agency H through mergers, Lh liates and subsidiäri tion of inter-locki according to the
Agency Houses and

ion of capital of The large Agency Houses have inprincipal Agency posed a unifornity in practice on uken place. 蠶 the smaller agencies. N
in significantly on account of the levers created throughout the entire estate a through the sector by inter-corporate share purri Liika's own Chasts Iliade through captive investmetimes operät- ment companies, the Agency Houses rate bodies. together with the Brokering Firms have reached a position of well-nigh
in the 1950s of total control.
bal phenomencon
mercantilism', Over the years, a concentration of perialism" and economic power has grown among a lism". Through few Agency Houses which control of controls and over 60% of the tea plantations. liary of a well George Steuarts control 17.6% of cal elite the for- tea acreage managed by Agency sts were able to Houses. Whittalls 14.7%; Carson same returns or Cumberbatch and Leechman 14.9%:
even eta Tlier. Consolidated Commercial Agencies 8.5%: Harrisons and Crosfield 6.1%
Agency Houses in and James Finlays, 5.9%. These
ດາy six control over 23 of the estates
A. ole of the Agency under Agency
ntation economy The table below from the Agency to remember that Houses Commission report shows several important the position of the Agency Houses in ion of diversifica- relation to the total acreage managed he encouragement by them and the quantities of Lea exports, is still and rubber produced under their arge part of her Imanagement in 1970 and also shows ld much of her the significance of the Agency Barnings, on the Houses in the National Economy.
of the Agency Houses in the National Economy
Teä Rubber | Coconuts 468 milli lbs. 35).9 mill lbs. 2,447 Emi T. nuts 1t:5
:IlL:
... 291 mill, lbs. 965 Iın il. IbS. . 86 11il., nuuts Ճ2.1 27.3 3.9 duct it :it:ԱՏ
LISS 5.2 O)
597,499 568,960 lcy
279,845 119,207 - * 1 46.8 20.9 - ops, tea, rubber The figures given in relation to the
Agency Houses Gross National Product although sideration of all sufficiently high for the purpose of together, to ex- this argument, are nevertheless rece over this most latively less important. It is in ref the country's gard to foreign exchange earnings bly has develop- that the position is one that has a puses hemselves lārge significance. In 1972. out ofa : creation of afti- total of Rs. 1,942 million earned by sand the forma. Sri Lanka's exports the earnings ng directorates,' from tea amounted to Rs. 1, 154 Comission on million and from rubber Rs. 265 Brokering Firms. million. Although the days of the
ECCNOMIC REVIEW, l'UNE 1975

Page 7
"Planter Rai" are over, there is littie doubt that the private sector Agency Houses cope Til ting in Sri Lanka today and exercising an influence Over this large area of the country's CCOOnly represents. El concentration of economic power in a few hands.
BRITISH AGENTS
The Agency Houses were established by the British in Ceylon during the heyday of their imperial TLlle, for the Benefit of interests in Britain. The maximum profit was to be obtained by transforming the clinics of the colonized cities for the advantage of the "Mother country" - Great Britain. TE: natives in effect were to be given a minimum in return for their labour all resources Whilst the British were to benefit from the control of produc
iom and distribution.
Fictions
The Agency Houses were set up in London ald Colombo II lild Tesponsibility for estat e Illa Image:The IE including .
(a) control over the budget, cultivation methods, Ilal. In Lil flicLuring processes, the appointment and supervision of the higher grades of the plantation hierarchy. (b) secretarial and accounting services, credit and financial policy, (c) procurement cf. estate sup
plies. (d) advice on taxation, handling of exchange control matters, remmi Lta Ilces of dividcild 5. Hindi Head Office expenses to Bri[ish II h [ereSt.s. (e) as insurance agents for firms.
(f) as shipping, transportation
and storage agents. (g) IIlanagement of Estates of rupee companies. Which asked for their services. (ii) other services to estaltics: in engineering, legal and technical problems. While each of these functions was а песessary service, and there was an advantage in grouping them Lgether under ne "HOLLse,' the Ta II. Eller and purpose for which they were rendered Was to benefit the
Caritin tirdi. ÇTI PITE A
ECONCMC REWIEW, JUNE 1957
INTERLO
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id Feligi',)

Page 8
().
- Vale.
The Minister of Plantation industries, Dr. Colvin
LLLLS LL LLLLLLH H H aL L aH G LLaS aa S S LLLLLLLL REVIEW on the Agency House. Commission Repor TT hade the following points :-
Agency HoIIse interests have expressel the wiew that the report of the Commission of Inquiry on Agency Houses is it very biased doctrinent. How far would your disagree with then
LLaa KLLLaaLLLLLLL S SSS S LLLLLL aL HLaLLaL LLLL LLLS The research embodied in the Report is extensive, thic analysis of the researched facts is incisive, the opinions expressed are direct and the recommendations made are radical. All this has been done from a consistent point of view, namely, that the plantations are di mational asset Which Inus be LLLLLL LL LLL LLLLL LLLLLLLLS LLLLL LLLLL LLLLLL This is what the word "bias signifies in the mouth filterests whose governing purpose is the generaltion of private profit and whose basic purpose hals been and is to serwe skorcign interests which have through the plantation system exploited this country for ole-and-a-half centuries, Will they lean really is that the report is not written from the point of view that exploitation is latural and right but is Written from the point of view that exploitation IT List be sought to be elded through public control. That is not bias in this. time and age; for, after all, that is the perspective of the Government itself.
What is your view of this report?
I believe the report to be quite thorough. It has dug reasonably deep into the latters it was coilaLLLLLLLa LLLLLL LLLL L LLLLLLLK L LLLLaLLLLL LLaaLLLHlLaLLaHLLLL LLLLLL flow from the facts that they have found. The Planters' Association characterises as "charges' the criticisms made in the report which to normal people would indicate a bias on the part of the Pla Enters’ Association. However, I do not see much point in entering into a developing conroversy about the report and its recommendations. It is far more important to observe that We have in this report a valuable conspectus on well nigh all matters that concern the Agency House System-its development, its functioning and its relevance to the contemporary perspectives of c) Lur country. I should also add that the report Was produced in the face of considerable non-cooperation.
Whit repercussions have there been following the release of the report
I am told that certain recommendations in this report hawe had a depressing effect Lupon share
Were there aily:1pprehensions atout the release of
the report 1

PLANTATION INDUSTRES
A. The Cabinet considered it important that we publish the report inspite of some suggestions that, in view of the sensitive nature of the findings, We do not. The report could have been kept unpublished thus depriving the country of some Very valuable information. It is necessary for the HKaaL S LL H HHH LLLL Laa LLLHHLLLLHH LLLLLS LLLLLL and this goes even for those interests abroad when could gin a wrong impression by distorted versions leaking oLT E Li nofficially.
2. What Are your views on the possibility of implement
ing the recon III lendations in the report ?
A. As for implementation, this report is unique in that it expressly sets out a plan of implementation showing that the Commission always had in mind the practicability of the proposals in framing the report. The part on the replacement of the Agency House Systein is a Lovel feature,
J. How Elecessary are the Agency Houses
A. The Agency House is a product of the foreign wnership system. You do not talk of an Agency House systein in Britain. It arose historically as I necessary link in the chain of institutions to serve the plantations in Sri Lanka whose ownership and owners lay abroad. Even the Ceylonese companies harded over the running of their estates just because there Was #1 Agency House system.
2. A possible nationalization of the Tea Industry has evoked as Inuch interest recently as the question of the Agency Houses. What relationship and eventLalities do you foresee
A. If the State becomes the owner of plantations, the
State's concern Will be to find an appropriate for of organisation for running its own plantations. . The organisations we have already developed in this country for running our publicly owned LHHLLLLLLL0 S S L S LS S aHaLLaa S SLHHL S LLalLlSS OLLSS veral for Fins exist — for example, the Corporation form, the Government Department or the Co-operative. In this respect, we can say that the State Plantations Corporation is the Agency through which the State runs its plantations. The State Plantations Corporation had only 12 estates when I took over this Ministry, today it has over 90 spread over the entire plantation region and produces nearly 1 || Oth of the tea exported. It is establishing seven or eight regionall offices from which the plantations in each demarcated region will be directly run. It is not so very difficult to fit a nationalised plantations SysteF 11 into s Luch a fra Illic Work. The somewhat glaborgte framework suggested in the Report flows from that it contemplates the situation arising from the existence of a predominantly private sector in the plantations. This it does rightly because the question of nationalisation of the
ECNOHCREEN, JLJNE 975 "

Page 9
MINISTER SAYS . . . . .
Q.
g
HaLLLLLLLa S S LaLLSKS aL S LS aaa S SSSS LLLLLLLLS reft: relict:.
Iп the case oПінmpleппепting the Agency Hoшse 1 port and/or nationalization of the entire Indust can you guarantec existing criteria of efficiency
On the contrlry such IIleasures will end ) i prove returns, Let The explain. With owners in the State à thorough going ration:lisation oft LaLL aaLLLLL 0 0 LSLaLH aH00HuLaa LLLL aLLLLLLL Will result. We cat achieve a higher level
LLLLaHC L HLaLaLaLLaaLLLL CaHa L aCaaLLa a S LLL aaaa niques titiltil in building up at it preserwing thit aaLLLLSS LLLLLLaLL LLa0 HLaaLa LLLLaa La Laa L aaaLLL
The Static Plantations Corpora Lion's regionalis ficon schenne, for example, sayes transport cos and by regrouping estates under a colli stilte o WTiership, we will renove il rificiall bolin airies. For example, the Estates-WedELIT Lilla. LLLLaaaLLSKLLLaL aL aaLLmmaS aaaaLS HHCHGm over 4.000 acres, car novy be regroupex :ls il sil : LLaS LOLLa SLLLLaaaaLaLL LHLHHLLLaLLLL LSLS respect the There :ct of taking over Treig II own LLaaLLLL LaLLLLL LLLLLLa LLaHLH Laaaa aa SLLLS LLLLaLLLL LLLLHHaaLLaH LLLLLS aaaaS L0S SLL HmtH in mediately from less to profit, Why" Becal repatriation of Ilonies for Head Office charges London will ther Tot be necessary. Metreforci LLLLLLLC LLm0S aaHHa aLLL aaaaaLLL HaHLLS S S La Office charges th:In is divideinds of plantatio
Tkac report c:a 45 foT SYYift action on is recominent tions. What are your views on this
Deep going charges as envisiged in the Teil cannot be done suddenly. The col IIIty sho. have time to discuss the problem.
Whil I would you say is the next step
There is a tremenմeլIs body of tծրimit Hi Title) uLaLLaaaaL LLLLLLLHHLaLLLL aHaLLaS aaa LL aHK aaa stof is to nationalize. Since Noveniker, 1973, LLLLLL LL LLL LLL LaLLLLLLLaLLaH aaaLLH K aaLLLLLLLaaa g LSLLL K HH aaa HHLLaHa LL LSaaH HHHLLLLLLL aaaaHa SKS S SKK aaLLLaLLLL L aaLLLLS a LLLLaLaLS a aaaa Ha profitable. Whe was in London in Decerit Est yeHT, I sit in F. B. B. C. interwic w Hill We: : Tjeeling. Rs. 625 milion inte. Lhe ea indus. The Interviewer asketi ne "Why don't you t: Իl tr": "",
What was your reaction
LLLY LLLLLL LLLLLS aaLLCHaLLLLSS S S a TTL LL SLSL LL LHHL GLLL LLLL LLLTCaL 0 HHHHHLLLLLLL LLL HLaLCaLS decisions of Inly colleagues; and to carry changes in such a minner as not to interrupt LL L L L L L L H HaLLLL LLLLLL aaLLLLLLLa K S La LL Hill like."
EGFACET REFEE''. LIFE 7

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A.
aHCTCCL CC CLC a LLa aLaaaLL TLLL LLLLCCCLLLLLCCCT LLL reaction do you foresee in the event of such a step'
I do not think the British government or people L aHLaH La LaLLLLLLLaLLLL HLLLLLLL LLaHLHLaKaLaa LLLL LLL surprised if this gover Ellent took it decision to lationalise. What is in Llucir minds is adequite, HHHCHaL LLLL LLLLLLaHL LHaaaCCaaLaaHHS La ClLaTLS of this government has been nationalisation. With compensation and noi outright confiscation, Perhaps the current thinking if sterling interests then selves is, being manifested by the ing Felsing sales of their estates to the Ministry of Plantations. I welcomic this new development because it GLCamCLHLHHLL gaaLaLaaLHaa LLL LLLLLLLaaLLaLLLLL aLLLLaaLLL LHaa S LaCK LHLLLaLLLLLLLaLLL LLaL LLLL LLt L La LaLLaLaaltLL interest. As a matter of Policy sterling est: [cs will gradually be bought Liր by a րրtitless of negoLiti.
In the event of implementation of the Agency House Report and for nationalisation what will happen to those in empley Henr Tow. "
My Ministry is taking over estates als going eenCCLLLL LLLLLLa LLLLL a aSaLLlaaa LLL LLLL aL aHHaLLLaa LLL LLLLLLL LL LHHaaaLLLHHLS L LLLLH SLLLLL La total body of those eployed. The latti Li Force La aCCLLLL LSCLKS 0aL LLLLLaLLLLS aaaaaaLaa S L LLL aLHaaLLLL LLL LaLLLLLLLaS L LLLS LHHLa a LSLLaaaaLSL
HGL aLLLLLLLL LLLLL aLLLLLLLa LaLa L SLLL LLLLLL aaaaS
We have even re-elıployed persich Els Tictricreiect by Լlit private owners or by Agetity Houses upon their estates coming into our hands. We would LaLaLS LLLLLLaa a aaLLLSS S S S S S Laaaa LCLaLaLmGaLS aaaaLLLLL S LLLLL LaL S YSLLa aaLa sector a whole body of skills and cxpertise which OLLaaLLL La SLaLaLLLLL LS S HLLLaLL aa LLLLL aaLaL S S LL aLaS LLLlLa LLaaLLLL LL LLL LLLLLLaS LLLaaLLLL SLLLLLLL as the plantations theiselves. 髻
In thei Implement: tiun of crit hermcaisurco, do y oii forcLaC C LLLLLLLLmTL T LLCCCCaLLaLLCCC LLLLL a LLLS dictio ?
In the way contemplate the process of flationalisation, there will be no interruption whatsoeve in the producti H1 Process. There Will. HUt. Hic eye il shortfall in production or a disruption of the LLLLLLCaK HmLLaaaSMS LLLLLLLLS LLLLLL aaaKaaL KLS a KaS LLLL LtaaaLS LLLaLa aaaaLLaa LLLLLLLLS
At Yılı:at Stage:tre ve now 'un Ilıcı repılır: "
Concrete proposils tre low being Prepared FF consideration by the Plapping Collicit before they arc submitted to the Cabinet.
The people affected are Yondering what will happen."
M:ay be, they hope : illud believe that what will happen will not hippel.

Page 10
foreign owners. Hence they levelopei methods or modes of exploitation in regard to each of these functions. Exploitation was their goal, these services were means for it. As good businessmen they performed these tasks Well to their maximum ad
vantage. Being British "gentlemen"
hey måde the exploited feel that their agencies were really serving the colonized people. They built up an educative system, a means of advertising and life styles within the Country which softened the sensitivity of the native elite to the ԸNրlnit:1- Ion. The entire economic, political, legal, educational and social system of the country was adjusted to sit their priorities.
We call thus see how the power and profit of the Agency Houses and their masters increase with the combination of these functions under one House and a group of interČIIlected HOLISes.
F state Management
The Agency Houses and Tea Companics have been responsible for the setting up of the rigidly Pyramidical Hind hierarchical systen of the stilles Eind in the industry at large, This is a pyramid of wide disparities F. Wages, life styles, Opportunities trid relationships The plainiation companies built up a highly stratified soci: system in the ColIIliry. At the base of the pyramid was TITI POTLcd cheap labour from South India who were in semi-slave condi. tions, in labour camps. The abouret's Were paid a subsistence WageJust enough to survive work and ferreduce. The indian labour was
brought in and controllied by El class -
of Illiddle Ellen Karkal's who were paid according to the number of workers reporting for work on an estate, Who thus had it wested interest in making the harsh system
Above them are the subordinate Stil fit of Tea-Thiaker and clerks who hic a do Wer Tiddle-class status in the estates. They had | JETECrs separa tcd from the “lines” of the abourers. The supreme Lithority in the estate was the Superintendent helped by his assistants. His if style was that of the upper class in the country, his income El Tong the highest of earned incomes. The
Caritinuel ür jera IF.
l
(2)
(3)
(4.
(5)
(6)
Tile Agency Pilt:Eston Wisse despatched a s Iii Illul On May 2) reft "charges" пНde the CCT" Titel: Agency Fi Tmi.
1.
Hc List:
The mello is SVC pils ls 11 alde againsLA London Princi
They a Tu Пlanaged. They per foreign ex Iceeds X's. It by the C. change.
TEt i TH THIS
ut prטוח t0 dertilitiդs : Lic int.
RE:I]], [[:de: 1ek fic bel give at thit titist
CH: il: deiect :: lopment pլ
No free LOTIcon, A sive :lction and buyer
With tille Linkin's sist let WOL ed il EL TF || licji Sri Llık
Monopoly
in tlit: Ag through IE ing CF i fiil. diaries ind Filter-ic Agency H With Birke, Tehed Lp. I ligh ԼւյLH!
pl:IIItatioIl c
Taking up each charges the lenic the following poin
SSLSLLLSS

Section of the Iciation of Ceylon ("CIl-Ige Teno: Prime Minister Iting stillic of the
il the Report of
of Inquiry or 5, and Brokering
illed the follo Wiig the main charges էclicy Hat IStos բլու:
als.
Tot eficiel Lly
it the retention of change froll sile
för periods in he til The stipulated introller of Ex
Velopment proare geared only witte profit consiAld I the N
St.
profils arī CKCSEs have Il priority even
of not incurring of expenditure 3ęILią| Tof deveIIPւ35E8,
mpetition in the шctions: Collцbct Ween brokers
alleged,
i Fri:Lct of Sri El lineasures uphley llad endicaTo ind til Te. Lis rits outside ha T 1 WFL hii i
his developed է:Tlւ: Hւյլ չէ: trger, the LTւatLLCS 1 silisithe critic ing director: tes. LSs, together ring irtis have CSition of Wellcitri (f the Cill I 10 tilly.
of these sity ra cum minkes
2
AGENCY
II efficielt Management, The specific charges on inefficicat managertuen L rcferred to shade trees, fertil Zer applica Lion and accountling systells. The estatics Wr acting oil the advice of the T. R. I regarding shilde trees. Regarding fer tiliz cris the Stilte Ferilier CIJFPOTältiin hus not been uble it Provide supplies, Regarding accounting sys. tellis the Company's ic Clinting systems in prepair ing caiff esti Tlates te cover The “basie cost“ with an element of Profit- this was donc in exceptional cascs,
Accounting policies applicable to estates managed by In Agency, Heise varie froIII coinբany it ÇAPI 11, P: Ily.
Wiel: Lion CFL hic 4 millonths rul Ind delay in Femitting Լեւ Տalt proceuds within this prid or Vilin a I day period after payinent his been made at the London end. "Where delily's have occurred in regärd til Termit Lace of sulproceeds within it specific րeriod, it should Իւչ իւրոց il mind that such compalies that had not complied With the terms of the Indertaking myhe had vid Tliet: Issibilis Li i ii illier li lilldelay. The report states Thill i a large III Tiber CF instances the account stiles hād Ilot been certified by El 11 AFTE') Ved ALIGditor delspile the undertaking given by the Agency Houses in behall of Sterling Pintatitol C5H1 Philinies that there W Colled be certific: Fil. The Suggestion was made by the DETETT I ment of Exchange C F trol that ther should b: such cerificati buti WIS 12 i riple Tientic Fe
:: LIsto Ĉi " the goty & L. FLet Ir...
Development Programmes. It has to be understood that
ECDF"HJ F! III REAFIE"i"y, I LJ HE gir

Page 11
a significant pCrcentage of companics have not been able, over the past few years, to dcclare any dividend owing to losses incurred by them consequent on falling commodity prices and increased prices of input in order to maintain their holdings at reasonablic agricultural levels and also provide for such lewies as export duty which had to be paid regardless of profitibility. Within these rather restricted and confined limits a detailed exa II ination of the perfor Tı:Ince: cof these companies would show that they have perhaps in a greater degree th: I even the Rupee Collpå nies Lundertaken fact. Ty Clevelopment prograin IIncs as Well as replanting programmes. The failure tc.) keep to the percentages Tcquired of themm in certai CSL:s : Luld. Il do Libt, b: examined individually and explanations offered,
RCIIittances. I would be pertinent (o point cout that thic total of Head Officit CxpÇTıses, taxatiÖrı arı d ddiyide:Ills should be considered I10 as B. PCTCeltage of met procccds from sale of tea by Sterling Companies managed by the Agency Houses, as this would represent only the volume of Leas which have been sent to the London Auctions but rather as a percentage of the total turnover front these Companies. Expressing Head Office expenses as a proportion col London sale expenses (as done in the report) distorts the picture by excluding sales at other centres. Head Office experises which would be a little over 2" when considercl against the total turnover, had necessarily to be incurred as long
HOUSES VIEWPOINT
as Sicil were: per The III bee:E1 qilcoIII Control a the due GoJ wç:IIıImi
Referring to 7 thic i Liliemorar cal do no betti il-depthı Teport of Tea Illade by Qn Tea Market the Consultatiy the Planters Ass The report was 1975 und dicit the fu Ircticolling al, r1d LoIdor1 Tc:
Referring to COTipoctiti Il al . tion the memo StLlly team is Di [[he: w:HTİQLI5 chlığı LLIde-selling COrAlIT LI Tications fo Llındati. Il åld of the Techani of Sale through
Referting to Ill:Igls ind in Loratics hic Illeri L: Il fluid lo international rhills. It to 01 tile Colt Ti e viderice: Lihat int prices fLLInction, would expect in titive II lärkcts fact, the aucti an international of auctions) rep. natura larld fair : ind that it was to strengthen t thiri to find alter
The P. A. quot
Nearly two p: quotes the Cent back up their States: “It wil place to refer Report of the
ECC. OFT; C. R.F "I":'E''Y'', JUNE F7;

ing Companies Initted to exist. ies Temit Eed have s: with Exchange uthority and with observance of all cnt RegulatioTs.
Charges 5, 6 and durill sta Les “W: er thatl gUdte an on the Marketing a Specialist Team ing appointed by
C: Cor Ilitee & jociation i Ju India. made in Jarl Luary, analytically with of the Indial 1. Auctols.
the lack af free the Londırı HucSlates th:LL the the opinion that .rges of clusive: ly broker, buyer էլ I : withigut refect igi Tallice: cs of the systeil
*, Luctions,
honopoly th Tugh ter-locking direc. States that the eviderice cf Lly :igging arrangeprices down and ry fold aimple: Crnational market Tmuch as theory ter-linked competo behave. I ons (particularly lly linked system resented the lost system of disposal more: important lis systerTn rathcr latives tc it.”
is the C. B.
liges of the meru al Bank report to :ase. The Inler 1 not be ott of
t) the AW al Lull Central Balık of
Sri Lanka for the year 1974 which irrer-alia states as follows:
"The decline in output in het planta(LLJIL sciclor is a natter that needs urgent can sideratiot. It could have very Scrius long-terill ilplications for thic ili Wailability Luf füтсign exchange in particular and for economic growth, because at pocscrlt the Tost sericuş hindrance to a higher ratic of growth is hic s hliðTlăge Lof foreign exchange. There is nil doubt, that the Iraajor plar lations will contin Lic Lc bl: the l:rge3. potential. Ilct earner of the foreign exchang: for a very long iTic to comic, Thor age no indications that non- [J'äditio [1:1 I exp () rts, cvcn gcuts, will cliffectively display <g: tica, Tubber and cochr1L as the thre: major sources of forcigil :xchange, The country has hadi no OTO blir il sellirg || he: ea. Tubbar äIld CLL nut hat it can produce. Thg difficLulty is thal, it has not been ble t I) di LIÇ: ITT.
'The Fatic Is thai contributed to the decline in production recently necds to b: a fully studied and reviewed in thic shortest possible titlic, Although it is dirticult at this stage Lo clearly literrin: all this factors site of thern ar: Tui Te obvious. What jis gviçm Ilir: significal T1 is that the majcı' factors hill have affected the fall in productivity have becn strictly outside the purwick, of the industry and the industry itself has been relatively hcip|(53, SiCC tille Carl Steventi: 5 3 || LIlla c: of Corsiderable Linceriainty has preWailed in the planation sellor with tihr::ı. 15 of rb3 {iJ[halis3.tiorı and to 3 :lc3 E } this, chilidity prices hal: also becn in a ioprešŠel statc, A5 il sesulo os his. Lilhieri: has bic: Il arm clicment of rnegiect irLHHCLL CLLaLaLLLLL LGGLLCaaLLalE taLCCGCaa aa aaHaL a LLELaaaLaLLLLL LL LCaLLL LLtL00L pro- peil Lies ir, gairid r:Ionditicil has declined. When prices rose it 1974, the: iTnlll Istrics w circ not irn a possiliorh to stEP LE [Tod Lucil very Sharly in rifer to 13 x illi 5 fe Ebenefits from thic hr. II, ll the igli I if this, the iII plcmentation of the La Ricfor II programme wer i sih Tt period of time of two yearš, has had thị: Illošt (1ỉwerse repereussions from thic point of view of export earnings.
"The scrail decline in the pili) [alior rcp set it could, therefore, be attributed to the sharp curtailmen in expenditur: d t h : clille of Luc Tality ha has prevailed in the last three years since their plcIlentation of the Land Refori 11 SchÇllt.
The productivity in the plantation industries in the past has been very l: Tgc d to g di TangcIlcInt and these was little doubt about the quality of Illanagement of these estates ill earlier yc4 T5, FLIrthicrmore, si iš in a climac confidence and certainly that th: ; lartalion irdListry would hic in positi to plugh Falk Infit 5 - - cfel: their Lagital investments I. E:Tough C:éciëls frr:F11 lending ingencies'-

Page 12
THE COMMISSION REPORT
I Financial Transactions
and Series
The Agency Houses Commissign Report concludes that the Fianner of keeping accounts though quite useful in some regards does not permit an evaluaLion Uf Ehe services rendered by the Agency Ho Lises as such. The report suggests that the very high emoluments paid to DirecLors of companies and Agency HÜLIEEE IS THT in EXCESS Lif the services rendered by them. The same is said of the Head Office charges for Work in London.
The charges levied by the Agency Houses front li public f'Lupee compilies work out to about 6 to 7 cents foT EL PCLind of Talde tea. The expenses incurred by these principals by way of salaries and allowinces of the Illa Tginal staff on the ESES Works Lit I aboLIE 10 - 12 cents per po Lund of tea. The agency charges are as much as half of these charges. Yet it is the Tianagerial SLas on til est: Les Willio da hic by Lilk of thC Work. The Commission is of the View that the Agency House chargest ire exorbitantly high in relation to the services they perTIT. This Eccles Werge WHE compared to the poverty of the Workers.
"In the Tidst of the general wail, a bot it both i reduced imargins EL LLIFJFC fitability on the part of the estates ir respect of tea, the Agency Houses halve not been slow to final Tiew Ways of illCreat sig thicit ea rings. A In Limber of Agerity HC Luses have Telcently taken to gemming. George Ste:LuArt & CO., Ltd., levics a haldiling charge of 12 per cent CNT the alielä tical of gemming lands of their principals. In the course of years il has come about that the agency charges have grown proportionately higher and hair. Electile inst an inct bills of the financial structure of mility a plantation company. When the total position is considered, the small liber of shareholders of the Agency Houses a Te seen to be
armong the print (If the plantati STI LI käTT.
普 Mariagement ant Agency Houses
The Report ci. mអngeTal effi Agency HOLises. which has rep estate5 Td 20 fa esEl EEs and 8 Էլյուtlլլtles: "TF Tյr tat:ll tյի Լիt է: the investigatior LITH I Gimel techni the estates in th in Lensive is it c Several witriesst: dence before y and others who ramida Have refč sighted policies Agency Houses Liller theit Til Hlavye: Städted thill these firls is remuneration a profits and that and improvenile have been by an and that they h; I detETidor Te fill
SoIII le of the pe Ceiðill Illissil are 9 La still:53
E53 :
: hid its been d cen Ililch CLIT clearing, desilti CT di Tails. On operations had
hree years, con last 5 years. O shade trees had fiTE1*ւյլ էl fլյT tillէ: replaced. This good stant of til Teas of it i Te W
In eight of tl application of f satisfactory. Nit was wery low :ılı SEVĽIl of thčIT1:HT the years.
Forking and Էstate - \Vert Teբ,
O

ON . . .
cipal beneficiaries thm iIItiլIETTIլ: thT
Hists doubt on the ciency of the The Collissin te II || E. ctorie:5 || Liber
CDTI LI t lest: te: te above samples rops are shall but of the agriculcal col ditio 15 of le 5: Tiple was as ould be possible. s, who gaye ewiOLIT COITimission submitted Ilered to the shortadopted by the towards estates agement. They Inc . Cicer CF nly in their own ld the in Lil the Illi intenance E. Esite, d large neglected ave been allowed
tET.
ints made by the six of the bil čimber Wäl til Teportcici LC) be: Terracing upkcep ole. THerg liäd tillent Lill Lille էg and recutting Gilo est:ite LH-Sc L beetle for Elnot het for the 1 One estate il
been Felled for factory and not estate required rees Since Severa indswet.
15 || Teil Estlé5 ertiliser WaS urlrogen appliction nd inadequate in ILI HНd Tallen čover
ruiting in the 19 orted satisfactory
except in three of them. In Colle estate no forking had been done for several years and at present it iš placed on a phased basis to be done when finances are available. In another estate forking had been suspended for the last cight y el TS.
The rate of replanting has been reported inadequate or slow in respect of 9 estates of the total of
Reporting on the condition of tea estates, the Commission concluIdes that considering both ag Ti
i cLLI ELITal conditions and manufac:-
Turing facilities, only six out of ||9 estätics, co Luld be describiči HS being agriculturally sou Irld with Well-equipped factories. In two of the estates agricultural conditions were good but manufacturing facilities were inadequate. Since inadequacy in factory cap:l- city could be corrected quickly through capital investment these two estates Lld be added to the KLLaL SS L SS LLLLLL S CS LLLLLLa aL S0S good estates which could be said to be in al goed condition.
Of the remaining 11, four estates were in a very poor condition since they are poor or neglectled in agricultural aspects and in I Imam Li facturing facilities.
Some of the points made by the CITTLLee (IL1 the | | Flbher est: Les ex: ITillet1 : Ie :
Nearly half the number of rubbe estates examined adopted the short-sighted policy of intensive tapping which is detrillental to long term yields, an understand4 ble practice Linder boo Fill condiLions, When prices :Lre Lulusually high. The result of this policy, was 3 slowing down of the Fate of increase in yields, and its eventual decrease which may have in turn contributed to the interests in the cost Of production per Init. In the face of adversity, the estates see II to Have Wit Hir Elvy T1 liit C. ä.
purely defensive position and
adopted a legative approach towards the problems before them.
ECONOMIC FEWIEW, LINE 1975

Page 13
MARKETIN
Four big international Britishbased combincs control the plurchases at the London Auctions and the retail sales in Britail and elsewhere. LondoIn a Llictions a Te the most important wholesale market for tea. Here the buyers act mainly through the 9 hellbers of the Tea Buying Brokers Association, S. S. Smith account for 50% of the purchases principally for Brooke Bonds, Meldan Tea Co. 18% for Typhoo, G. Harrison & Co. 18 - 20% for Lyons. Together they account for over 85% of total purchases. There is no free competition in the LOld I Luctio 15 due EO Such a paucity of buyers in whose interest it is to reduce the buying price, Four major buying brokers operating on the London auction handle close on 100% of all teas bought at the auction. London prices influence in a very large Way the World prices of tea.
The big buyers also control the Tetail Illa Tkičiti Britai, Brook Bond OXO Ltd. owned by the giant multi-national corporation Brooke Bond Liebig Ltd. had an estimated Ilarket share of 42%, of all täisales in the J. K. Typhoo owned by Cadbury Schweppes Ltd., Lyons Telky Ltd. owned by J. Lyons Co., Ltd. and the Co-operativi Tea Society, 17% and 14% respectively. These foLIT firms accounted for about 88% of the British market. There is a similar oligopolistic situation in the retail U.S.A., France, Australia and Japan. Liptons Unilevers control 44% of sales in the U.S.A., 34% in France, 33% in Japan. Bushells
Brooke Bond control. 59% of
stiles in Australia, These are further inter-related with coffee Eind cocoa marketing. The net TESLJIt is tha L. These fiTTTS have the power of keeping down the price paid to producers of tea, while they charge a high price to
TT :FILIITETS
As Edith Bond says in the "Sile if T
"It is not surprising that the
ECCOECREWIEW UPI
Lea IIlarkets of
real price of tea is declining signi 1961 il 1972 || auction price Lankan tea in L. from 50.9 per k per kilo, and : creased marginal per kilo ta 'Rs This liլ: Էյբլինի who pay a little tham they did 10
Tria de or Aid "?
Although Brit exploit Lea and Sri Lanka, she Srī Lāk is by giving it aid, ai ded'' Sri La L5L E A4 Illili payments of E3 ties a country to : Irid Lil Wic fi wo Lurable L, LI Social, political The concept Br Lanka. With "a illusion when the price paid t the tea, it produ IF ST LIE receive the pгice it5 tël, then i WO) L1ld have recei Tillion in vall, cha Inge. Over th years from 1963 of foreig II eXcha culated on the s price received in mately Ell0 mi Häd CơIltỉTitled T. the same price 1962, it would extri i 38.7 mi Lälkä, te beLWE Figures for Bri Lillkil are 10 3 but between 19
iT * ailed" Sri II million. Only a Wuyi || E. SIT living wage to Eccle for the f in development
On the OtheT price of fea Fe Rs. 8- to Rs. 5.

G OF TEA
for the producer ficantly. Bet Ween 1L 1vLTHge Irull Jer kilo of Sri ÖTldern det-Teased ilo to 45.5 pence in Colombo illly from Rs. 4.25 4,39 per kilo. Lited the British. more - f3 til Dlg) W
yČEl TS. El gCP.
ail con till Lles to he tea pickers in recognises that :yelloping COLI TI try | I | 972 Britain ka. Lo the SLIIIl of OI less icial reCDC, OCDC). Billi L aid tertail C3 Il ditios 1 a Te not al Ways էլէ: COLIITILITY EAS . El JT (EOIIIT It LIIllt, italin helping Sri d' Eccles. Il bric realiscis that g Sri Lanka for ices is declining. ld citiltilīlled to paid in 1962 for 17O at L. yed an extra 24 Eble foreign exle period of mine to 1971, the loss Tilge ea Tinings CallEl'Ille h:15 is Of the 1962 was approxili. Briti o pay Sri La Inka that it paid in have to pay in Ilid I or its STi In 1997. tish Aid to Sri rgilible IլյI | }F3 4. In 197 BLanka by E. 24.9 fair price for tea Lanka to pay a i[5 Workers and irst time par Ellers
With Brital".
hand the scilli Ing Lil Waries frill or Rs. 16-in the
different countries. The working of transport, blending and packeting is Timuch less than the production. Yet the producer country gets only Rs. 2-3 and the actual plantation Workers about 80 cits: per lb. of tea.
Another device by which the country is deprived of valuable foreign exchange is the sending of tea from Sterling companies in Sri Lanka to Londo istead of selling at the Colombo auctions. The prices at the London auctions are surprisingly lower than at Colombo auctions. Some Agency HOLISes Buch a Whitta || Estites & Agencies have been scriding much Lea LOLOIdol AlcticiðIS ÕIl the i Tilstructions of their London Agent, Putney Produce Ltd. Here the Agency Houses Commission estimated that the country lost Rs. 49,755 from Jan-May 1973 con a LLLL S S S LLLLLLaLLLL S S LLLLL LL aaLLLLLLLaaS LLLLLL further study of 109 invoices of teas sent to London from Crosby Hoi LIse Group by Whittall Esta Les & Agencies during Jan-May 1973 i Tylwedi a lass of Rs. 33490 I il foreign exchange. The average loss was about 80 cts, per lb. of tea,
From these the Commission drew the conclusic is that
(1) There has been a definite foreign exchange loss suffered by the coLIIntry. The objective served by What is happening now is the building up of profits at some point outside this country rather than within it.
AS LHC resuIL Lif 1e Wer price fetched by the estates companies the profitability of the circurs has been fälsified.
(2)
(3)
(4)
de prived of the tax revenue HS Well 5 FEEC lo TETT III:II):5,
The reduction of the liquidity of the companics has increased the dependence con local borrowings and Overdräfts.
(5)
The Government has been

Page 14
Gover II Tuent Corporations Tepligcing
functions of Agency Houses Over a period of years some of the
functions of Agency Horses have heen taken over by the following State Organisations in Sri Lanka.
TE
Ribber and Coconut Research Institutus.
Ceylon Insurance Corporation - takes over insurance work. Fertilizer Corporation - has FOW a Inonopoly of Irport of fizi. Shipping Lines - a parti the transportation by sea. Freight Bureau - distribution of freight. - Bank of Ceylon and People's Bank - Banking, foreign excharge transfer. Consolidated Exports- enters Facketing and sa les in foreign Cities Io. (In 1973 accounted for nearly 18 of Sri Lanka Tea Export.) Petroleum Corporation - supplies oil and agro-chemicals. Building Materials Corporation arid State Engineering Corporation-handles building operations State Trading Corporationimportation. Plywood Corporation - Tea Chess. State Plantations Corporations —Management of Estឲ្យes.
f
CCITTTally directo House Directors irarld ԼgndոII, I perquisites were is than that Fibo Ina Le 5 tail.
THE: CUI III liksi rigid class di. On the E:tä le; . 1105 ti drad The Littl: T. displarities in th ed to the Lal: and the Worker is identica || III conforms to thi Lërl LLITy class st Wäs i TitToduced The pa Etern of “il Till Illige Tleilt, "", Lälf and “Hilles* has been preser and Agency Hou any attempt to a policy With rega Being the Wör LTalider :lıd explor септшту Britain bui Polił Til ting, finallicii blending, packeti firls which came World's trilde in te of Ilctions inds Lip by the "Giant tions industry thr work of Holding Agency Houses. Sool perföTTTed : the plantation in geographical sprea Initely associated, the Principal Brotl
T H E T E A ED ER A
When Independen Sri Lanka 4 Id Iridiä began til Lake i F1 IT CONTE Es tĘixes, and When the Companics Telt in secure in these Countrics they began to m (we assets to EELATIC
A effort was made by the sterling interests, principally those engaged in the industry in Sri Linka, to develop plantation assets in East Africa. Soon after the institution of Exchange Control in Sri Lanka it was noted that sole of the profits repatriated by the British estate owners from Sri Lanka and held by Sterling Companies in the U.K., were being employed for plantation develop
file Lil Elst Africa on this natter by proved fruitless. Capital occurred, the transfer of II Troll the säle assets here - 5 being considered profitability. It als of a transfer of Ft. Hlave been COInsider of Working capital the replacement E IOCHT EH nk overd Tal of British concerns tea plantation indu and Sri Link hy with the ea plant i ELS I Africa.

Ts and Agency led fro11 Colombo Their salaries and everal times Flore ITËTS : Ili subordi.
Il reported-“The
ision that exists in be seen in the orn in the glaring e housing providgellent, the staff. $. The pia LICETT all estates, and a traditional IւյլH ratification which
by the British. bLI Fng:ılowsʼ for the Juarters' for the
For the workers Wel III al est: Tes ises have of Tide
ter this traditional
rd to housing". ld's leading tea ter for nearly a lt up à complex of 1g, transporting. "lg :lndi Tetailing to diliate the a. This complex Erwitus werւ Էլլilt so in the PlantaյլIքh a wide netCompanics and These Agencies services wil: for dustries and the it interests intwith Agencies into Icing centres elima
N
1. Neger til tions this country
The flight of 3artly through oney's realised CF plan tätið time (if Illust: to be of low took the form Inds That could ed to be a part employed here. eing Ina de by t5. А ПШmber linked with: Istry in India Fe Strong links ation industry
bled them to gain wide control over the World's production and marketing of these commodities. In the case of tea, for instance, this has caused problems where the Agency Houses acting as representatives of tea estate Complies had also to act on behalf of overseas buyers.
The activities of Agency Houses in this country, over the years, have Te Wealed these Säule tendencies. The Agency Houses CoTTi Tnission Tħas gone to the extent of showing how these Houses have attempted to increase their profits at any cost (see Box page 10). Even in he actual sales of the end product the prevailing system has resulted in foreign exchange losses to this country (see Box page I / ).
With the field appearing less open for British interests, the migration to East Africa was also stepped up (see Tea Drain). Meanwhile Sri Lanka has kept adjusting to the situation and encouraged as many of its OWI State Institutions to hide the services performed by the Agency Htյլեւ:Է.
In recent years the feeling has kept gTOWingstronger. particuläTlỵ Hmong the two IIIajor producer countries, Sri Lanka and India, that the World's tea trade is not as competitive as it is generally made out to be. They were convinced that the producers have not realised the prices they would have in a more competitive market. Interwention by the F.A.O. a IId al resultant Co Ti modity AgreeIllcIt has somewhat eased the position but efforts at arriving at a "floor price' where producers will receive a minimum price for export teas has yet not met with the co-operation of the East African producers whose relationship with the Agency House interests is very clearly interlinked. Once again, the Inigration of Lea to East Africa is proving a blow to Sri Lankas iILICITESË5.
The whole issue has surfaced strongly in recent weeks with the findings of the CoII mission of Inquiry on Agency Houses and Brokering firms being made known: Witt the exposures on British T. W. showing the living conditions of teal estatic Workers al Tid With fresh pressures from trade unions pushing the Government towards. Lhe Lakeover of the estate sector as envisaged in its progra Thrille.
ECCIC*IIC RE''IEW. JUNE 1975

Page 15
THE ECONOMY
Consumption Expenditure
Some important changes have taken place in the level and composition of household coristiliption expenditure in recent years, Historically, the private coils Lilitics expenditure in this country has been heavilly iimport-orien[ed. Eve El Kis late as III: Inid-sixties nearly
le-third Cid the CCISL 11 til er, plenditure was on imported goods and services. Today, the import component lEls fallen to : LITELJIl 13-14%. This marked shift in the consumption pattern took place in hic background of: reduction i Ti thic import volume of consumer goods in the fice of a deteriorating foreign Exchal Inge si Lillil Liðill al Tid the eXp: IsiCJI of import substitution in industry :Ind agriculture. During the lust five yeHirs alle tille i Filipiert Volume CF can stiller goods has fallel by about 40% On the Other hånd during the same period the private consumption exp:Editure oil legilly produced goods and services his Il cite that doubled. The decline in the illport conteit in local consultin would LLLa LLLL Laa LGLLLLLLL L LLLLLL aLLL La subst:Intial forcigh leiðH FIS-SIT di Hild that floweri into this cÇILII try si rice tւիլյլ է Լիլ Tiliti-sixties. These Ti:- source flows have pillarily served the purpose of raint:lining the csstantial food imports at socially accerted l'evcls.
The fact that over 86% of the consumption expenditure has now begin directed to Wills cally productcal goods and services has some important implications for the EcongTy For one thing. E given inLLu aa LHHLLaaLLLaamL L aaHLLLLHHLHCLL expiriture will now lead to it greater increase in ITJ Iney inco Illes than in the Past, since the amount Lihat Teaks abriaid (thre Ligh i Timports) 3 LI E DIT I givel il Thl. Tilt Col Carls LITTEtion expenditures is now considerably lo WE: "This :alsey Ticilis Lhati II perts ca TI FT ECHTnger ble LIS: ELS :: IL ii TIPICTIat Euler Ic absorb inflationary pressures generated by such interial factor Fisi : s, budgetary deficits.
WIIIlւ Լlit Intill trol15ւImրtithm has sheo VIII : Imilarked shift : Way from inորոtitւI goods, tht total imրer I hill hi : Eee Il s'imc'What sluggish in
ECCRE FECREVIEWILIFE 775
Iյlowing towards
Consumer good: for nearly 50%, i. קוווסט 1974 חbIII I IIT Elle Ilid-sixties Live col til Licki t. of the Lill LCI5III Hñel || His. CüTIf TT118 typical die welcoFing
Na TL Pro TT1 til there has also be In the intra || | } Surinpligt expen yÇELTS. IE lill:15, III el the last five years particulairly shäi 1972 rising froIII in that year to Rs 1972 — EL T1 i Illere:
piE lsis, expendit LIre h:15 | El Rs 17:47 || iրtrւ:Isւ է: ՃՃ",- |Hւr:HEL with thr: However, th: it Tcl lccts. Tierely III tary termis (the ri: of consume Til gioco increase in phy (in real terms. CECILI- LILI1igris ... - Pri: grössly LIII dC'est Frice increases) |Increase of only period, The con ture of locally pi
ass Tibirdell sli: rily dle to the Ti LICLE | CCTSLITET E cally proclLIced ri. 1 TC Rs. | R | R || 11 intrease tյT 2()()", I L'ILIS El Til Els shı:CyWI : II i ICE
NWESTMENT
Hill. 1:s. SII regard to invest Titi Liri fort LIlitely thi "51נושrehקוחטט ind: Illenningful issus: try's perfor Ian The oily availabl II:ltio Ilal iTicille Centri| Balık, however, only re. there is every rea thuչ լյուterestll li: cuprill för Tlaltic 3:

Where cupit: Il fɔ TETELTIC II taikę5 till: forTil of linբorted բltinէ, ոltichinery SSTL S aaLLa aamTamHLLLaS LLaaLL aLLLLLLLaL LLLLLL Lis Lally possible. Hic Weyer, illa Eleccimlony where the Tural sector predomi}f the total imporլ :cs: sizeable amount of capital ared with 55-60%. formation takes place in the form of Food and drik inprovements to Agricultural land.
LLLLaLaLL S aaaaaLLLLLLLaaH LaLLLLS aLLLLLL S LL sorts of other ways which arc di fiiLILLIE. Li esti mELLIC: Til hellCC :: Te TfL. Lully Ticllected in Elle capit: I fit-TITLUtion figures. Hence, the available a LLLHLHtLH LaaaaaaS LLLLa LLLLL LLLLL LLLLCaL LHLLLLH K in a sharp increast Activities which use imported capital K LLLLLL a LLL S aaaHHHHLLLLL aLLL LaLLLLL LL LLLLLL LLLLLLLH S LaS a aa S S SaaLS aLLLLLLLaLLS aaaS LLSLaL S LL LLLLS rly doubled during Evailable figures reveal Thc gross LS LLLLLLLLu LLa Laaa K S LLLHHLLLLLLLa LLL aaaaLLL LLLLHHLLLLLLLS T increase since (it current prices) has riscil by about Rs. 9,773 million 35, during the period 1972-74. 6,700 million in This increase Was, however, it large se of 71%. On a part a result of the risis in the prices the consumption of investment goods. The import Laaaa LLLLLLS LLS 000 S LLLLL L LLLL L aaaLaLLLLL a LLLL L0S iring 1972-74, an risen by over 70% during this three In 1974 alone the year period. While the Five Year LL LLaLLLL S aa0KS LLaaL SS000SSS00LS HaLaaaa aLL0LS LS S LLSS LaaLaaa S aHLaaLLLLLLLaL LLLLLa L 00SSSSKSSSS LLLLa LLLLaLaaaa L aa S LLLaLa0 S L L mHaaSLLa LaLaaL LLLLLaK aLLS se in the Price level Pla F1 period, the LLI: Il perToFillds) rather than an ange during 1972-74 (of the basis sical consumption of the available data) has ranged The Colombo from 5-7%. Inwestlerints, il pla FILe Index (whichi ing, replanting, la 1 development, imates the actual machinery and pilill in particular LLLLLS S LLLLLLLLS S S SLLL SLLaLLL LLaaLLaLaaL S S LLLLLLa KaaLLL LLa 23", during this investimen in transport equipment LLLmHaLLL HGaaaLS LLLLL LLtttLLLHHH LHHLS LLmaaaLLL LLaLLLLLLLaLaSS roduced food items. The reasons are found in the decline rp increases prima in the rate of replanting o Flea, rubbe Se in Prices, The Hind Coconut lands and the degline SHHaLLTLLL HLL L S LL HHCaaLaL LLLLLaLLLLLLLaLLLL aaLLLL LLLLHmaaS e, for example, has to the foreign exchange crisis. The LLL0 LLLLLLaL LLL S000 H S LHH LL LLLLaaHLHHLLS S HLLLLHHLHHLLL
LL S L S S000KS SaSLS SSS S L aa LLLLLS LLLaS LaLaL aS S KS aaaS The expenditure 1972-74. This clearly shows that other food crops substantial Toreign capitial Illud illid ease of over 50', flows that Sri Lanka has received in revent years have not unabled [ht country to raise the level of investLanka fared in ment through greiter in Forts of ent in recent years' investment goods.
To T: lo Tellble we dilital to Iriliike H. Of the total gross taրital It) InlaLLaaaL aL a LaLLLLS LLaL S0000SS LSLL S000S L L0S LL e in this sphere account of building till other consaSaLLaa aLaL LLLLLaL a S aaLLaH LLLLLS La LLa a aaTTLS estimates of the culture, fisheries, forestry and all LLLLLaL LLLLLaaS LLLS aLLLLaHmHmHCCHLLLL LLLLg LLLLL SS 0S LLa tigh estimates and public sector (the government and aaat LLLLLL a S LLLaHHLLLLC LaaLaLLLL aaaLS LLSSLLLLaS LLLLL S S S Ka0S SS LLS S LLLLm aamL L mLLLLL
in the country. In 1971.
E si Tila i pall të ITT. , lllWe : LC LITT tetti
| absorb over 60's, mրtion exրentliture La Lluc patterliini CCK) 10: Tilly".

Page 16
TOURISM
The Loss of National Treasures
In our May issue we drew attention to the serious problem of the loss of our antiques. In the Teanti Ille, a three-I11a, I1 coTm II nittee has been for led to draft changes in the Antiquities Ordinance. This consists of the Commissioner of Archaeology, the Director of MLIsellins ind the Commissioner of Nationa | Archiwes, The “pli I Ender of antiques has now become a major national issue. It is worth reviewing the question from a historical view-point.
The destruction and the Left of historic works of art for III a long chapter in the history of the colonial encounter, Extensive damage do Ile to sacred places and In:l tional Timon LiTelts in Sri Lanka, especially in the Haritime region, by the Portuguese Ild the TILItch is well-Tecrdeci in our anals - as well as in those of these foreign invaders ! This inct āmid de 5 EITL Liction als Well as Cher atrocities, are stil fresh in the բgբular memory int, I'ven the Ligh they happened centuries ago. Pieces of sculpture and parts of old sacred buildings Carl be found ernbedded LL LLL LLLLLS SS a S S LaaS aHLDS S L LLL other "colonial structures.
| Punderers from the Past
The British, on the other hand. seen to have a different reputation. Liellt, Fagar is supposed te hawe *'''discovered"* Polğınlığı TL, Wall, GoYFernor William Gregory is said to have had an "enlightened policy about antiquitics, Hugh Nevill collected Sinhala folk poetry and many other things besides, such as sculptures and Pälm leaf man Luscripts, and H.C.P. Bell is considered by some to be the "father" of Ceylonese archaeology.
14
When We go be of all this, howe somewhat differen carrying out a "p paign in the North soil after the Wa gory's collection () Lics and its Subší is LTI COLLEsta Il di Ing q researching. We kn predecessors, C Brown rigg, had th of icing the Tian the great master bronze-casting, the OLL. L. of Sri Lanka, nearly 5ft, high in F1E ESLE II Britis; H MLIG LITTI, El forme Keeper M,LI5eLI[1i b55Er","E5, been found and pic Trigg "in the juli Ingle: still lear Trini Hugh Nevill it is Lihat his collecti: sculpture and pal för Isithic Lilk TLE Collections of C3 The largest Ceyl Outside the COL Intry Museum. the Wic MILIS: LITT Eind the CTF ATLES, MIC Tilt FTլյlts tյք "el11: activities,
H. C. P. By for over 20 years Illent is considered af Ceylonesc al Tch: assistant John Stil a dangerous destr tevidele līd lābi: LICETIIT terms: * hunterl Wallising the patriot, who w the major conser W.

neith the surface ver, the trith is L. Fagan Wats acification” ca IIICent Tail Pro Willcc r of 1818. Gref Ceylonese antioquent dispersion Liestion 1hat Teods OW that one of his Overlor Robert 3 di Liblio Luis hornio Lur Who Lok Ile of pickes of Asian great Tara image. This magnificient, läge is, today. Ce aste:Tpieces Cof the As a book by of the British this stattle Häl kad Llp by BTE WIl
Tälce”. As foT Sifficient to Ote Il of Ceylonese leaf manuscriբts le British Museum ylonesc material. Olese collections are in the British tri in A:TL Bostol MLISLIIrı of this represents ghtened" colonial
irke il Sri Lailka
and his achieve
the CTIler-Stole cology. Yet, his | considered hifT1 yer of historical lled hii i Ili * a litttitutl Ալյրitյble Harischia Indra, is the architect of ationist project to
declaire ATILIradhapura a Teligious and archaeological reserve, spent Inuth of his life fighting H, C. P. Bell. He occ brought a case against LL LLL LLL LtLLLLLLL S L S L aLLLLLLLaLLLL of Stone remains from AIT LI Tadhapura to be sent to the Public Works Department to be used as road Illetal
Beli’s work in Anuradhapura, Polonnaruwa and Sigiriya is typical of many such colonial archaeological campaigns - large-scale. ** sensational" and highly destructive of valuable archaeological material. A good example of this is Bell's Tesponsibility for the destruction of the Tivanka Temple murals at Polonnaruwa. These 12th and 13th century wall-paintings were the largest collegtion of ancient paintings in Sri Lanka. They had been preserved in perfect condition for nearly 700 years when Bell excavated the shrine. Within years careless exposure to sun and rain had destroyed the paintings completely. In short, the record of British colonial policy with respect to Ceylonese antiquities cal be similarised in the Words of a Tecent study of colonial archaeology by an Asian historian : “On balance, they destroyed more than they preserved, and what they preserved they mostly carted away : that, in brief, is the history of colonial archaeology".
Current Export Wave
The current Wave of the "export' of antiquities is a new chapter in this story. What is un fortunate is that this traffic now depends entirely On those Ceyloncse Who a Te involved in it. In the past those who helped the British could at least plead that they Worked Linder the compulsions of colonial authority. Today the monetary rewards from the high prices which our antiques fetch in foreign circles and the persistence of
ECONOMIC REWIEW, LINE 1975

Page 17
111 Cli ide 5 frori coloniati Iles about out historical relics, art the main factors which encourage a handful of our people to play a LLLLaatLLLHHLL S HLLLS LaaaLLLLL LLLLLL arguments are put forward by those who are either apologists for the traffic in antiques or who refuse to օբբose iւ :
-there are more important social and economic probles in our country than the loss of a few old bits and pieces, so why bother about it:
–arly Way, the Ilost important pieces have already been sent out and what is left behind is almost Worthless ;
—COLIIT People do III’t appreciate the value of these things and don't look after them properly, so it is much better that they are Selt abrOäd because in those foreign countries they are preserved and well looked after
-antiques earn foreign exchange and en Courage foreign visitor5.
It is obvious that these arguments are spurious, But even if they had some validity, the overtiding consideration should be the long-term da II lage to our Cultural Telics and historical resources. The damage that has already been donc scarcely justifies continuing negligence.
One of the principal reasons for the indifference of many who should kilow better is colul T fail Li Te to Take al correct appraisal of the cultural and historical remains of the last two or three ceILLITries. It Wäs ofte LundET colonialist influence tlat. We Wete encouraged to think that the richness and brilliance of our civilisation was a thing of the distant past. Out scholars have perpetuated the theory that what followed after Polonnaruwa in the 12th century was "a period of declinic'. Thus, almost all our research and investigations have been concentrated on the early periods and little or no attention paid to the Works of the 8th, 9th and 20th centuries. Since Ananda Coomaraswamy's Mediaerial Sinfra
ECONCMIC REVIEW, JUNE 1975
easily
large Affrir in 1990) stLIdie5 of oLur Iliy; have appeared. theses by olur. Schc of this subject lie shelves of foreign
The Illain fields of antiques is very and brassware, Cripts, coins. iv jewellery, old plat Lure, Sculptured a Work and finally,
Programs for Act
The problems
fields are slightly regard to so IIle of ble ite IIIs 5 Luch : jewellery and Ila and Value of the recognisa is III Llich Illo Te di easily be carried as Suitclse Gr häld C[]|lditiữr18 []f | 831 publicity campaig tres against illega billed with the re; modern Teproduct p0ra Ty a rEs and
abGLIE a fu dale present situation CCOLI TSC, The of al II all small antiques.
Other tells slic glass, foreign coin are all of foreign oi can be fully contra a flexible policy Iment of local ë fields. Thus, ther Cast to be made altic export of wint which cannot be Eiled Here. It is retain a selection t- Ta Insport min LusseLl II selling off the res reflect their real Wintage car marke Ween local prices a SaleSTDolls constit in potential foreig ings. The positic old plate and gl very different. T antiquities, they

8 no substantial ing arts and Crafts A Li les L two Ph.D. lars on the history un published on the university libraries.
in which the loss serious are bronzes Jäl#1_leaf Till:111üs= Dry carvings, old e and glass. TuTiind painted Wood
wintage cars.
O
in each of these different. With the smaller portais bronzes, coiris, nuscripts, the age objects are fairly Էյlt but t(introl ficult. They can way in a "tourist's bag. Only strict le and Sistained
ls in tourist ce
trafficking, coinady availability of ions and conte IIlcrafts, can bring 1 tal change iTul the - which is, of open passage for
has old plate and s and vintage cars rigin. Before they Jlled We Ilec{1 both and the developxpertise in these e may be a good It for the systemage cars, many of properly mainessential that we of ITC dels for a in while perhaps t at prices which value in foreign Ls. The gap betnd those in foreign Lutes al HCL La lo55 In exchange earnin With regard to Elı55 : Eld ci il 5 il 5 Though no local 1ElVe. Elm in Ill:ISc
historical value in that quantitative studies of such material are very useful in determining past trading patterns and coll Inercial relations. Thus a policy of keeping the best items and releasing the rest for export is scarcely helpful.
Furniture constitutes a special case. The OSL Sensational losses (and prices!) have been in this sphere where control is relatively easy. One of the most obvious reaseins for Ehe fäilure to Control Lh3 trafit has been the Failure of historical appreciation. The attitude preValiling among solle Schola, Ts, that furniture was brought to Sri Lanka by the Portuguese and the Dutch, is is Tisguided as the views of those who believe that these are all dispensable as they are foreign colonial relains, Ceylonese Lra di Libris Of furniture and woodwork go back in a doculeited form at east 500 years. The fact that our carpenters brilliantly adapted European models or skilfully initiated them in the last few centuries of our history is only a testimony to their skill and craftsmanship. Moreover, a great deal of purely Ceylonese design concepts remain submerged in this "colonial" fu Tinit Lure, While quartitative s ELI dies of the furniture of all kinds provide invaluable historical insights into living բatterns and stյcio-economic structures right up to the early decades of the 20th century.
Clearly a very broad policy, on antiques must be evolved. This should include not only new legislation and tighter II lethods of control but also a complete re-appraisal of What is historically valuable. The development of popular awareness through education and propaganda ild the establishment of local antiqui ties registers are wita lly necessary. The registration of dealers, the eil COL.IIagellent of local collections and the formation of small provincial In LISELITT15 should He Lombined with I renewal of craft skills and the reproduction of antiques for sale and export. Incipiently, much of this is already being done. It only needs systematisation and encouragement. In the final analysis, the preservation of historical relics is itself a historical ՎսEstlön,
15

Page 18
Banking
Barak Nationalisation
Natforialisiiiig the cor1ı IT"leTicizıl banks, is come of the ITV:liIl el CICLICHT Fledges of the present gov. Til II lett, Hd 1 his co III mitment his been It knowledged and recognised from time to time by Ministers and other responsible Government spoksil.
Even though the Government has lo Lria Licialised Lie Banks as yell, it is clear from statements by government spokes Ten that this commitment is expected to be honeured within the next 2 years. The Goveril Tilent appears to be actively engaged in reThekwing the economic and political constraits which have so far held up this measure. In the circumstances, the Crucial questio II With regard to bank nationalisation is not whether it will take place. It when, but whicther the Gover Hitlent has made adequate preparations to ensure the success of the takeover When it colles. This question is Worth examining in some detail.
First of all, it Illust be appreciated that banking and finance constitute the very life-blood of any econolly, be it planned or free-engerprise, socialist or capitalist. Therefore, the takeover of this sector should not be at tempted in El hiphazard Ila IIIICT
Secondly, the objective of bank nationalisation is Ilot simply One of transferring the ownership of banks from private individuals or groups to the state. Banking is a highprofit industry, and there is no CLub Lihat ole of the desi Tell benefits Jf" I hationalisation is al LITEA Ti sfero of such profits from private pockets to state coffers. However, the Illain objective of bank nationalisation is U täke direct control OWer The entirety of this vital sector so that its TESCOLIITces cai be used singlemindedly for the realisation of the Gover II ent's economic policies by Ising its full potential purposefully to bring about the radical cha Tages in the econolly lecded to II like the ETHInsition Lo Socialism,
If
Thirdly, it is lic e Le Fiji banks takes place it the tail-en if
el CT office. HITI ble portion of til ugմոմոդic prմgr: |:1LInCloti. IF ci per Titted the G3V Hiւ:Ilt its բrւ3քrtiոll Tier dicta Led b) maxi Timising ret LITI 1: static)||15H10 Lillid 11 a Wiki eä Liices L II leasi Te5 ti
THis Was Illot to be:
very little time left sa Lion to make it furthering the GC onic objectives. T be overcome by El planning of the c Whic T1 liitionalisiti
Well integrated II ing 3, E IL CLLUIT: C3 T1 i LP a IId activa Ted. first few years aft Will be taken Lip
viable banking : GOWETTIT1Ent”: te:TI have expired befo Li Coldihy:
ԼHe economy,
Transition
Tissi i5 lott Lilit Out il detail the of the preparatic Ill:Lidic to CISLITE EL träIlsition from Oli free-enterprise bill nationalised bank geared to supplyi meeting the chill omny which is LITI transfor Timation Li That job in List be petent task-force Line for the purp proposed to only
Ini Ercils which attention of such
It is important the concept of El ing strLIELU Te is The concept of a st system. As ob: Ilationalisatioi Os

Finance
I'll, Isley it Hible thit listic of the it will ի րlTitlist Il Gyfrient's LTiF ;q, ecisi He:TEH - Goveles Immits litt: bittm TLITistesid „THEllent to impleThe in the logical y the Theed foT s, bank lationalibec Chile Of thic be implemented. and now the Te is tor baik hatis contribution L. Ver Ilments LLf1his handical Illust reful Tid detailed peration so that, 3 En does t:ikcio place, lationalised bankInmediately be set
Otherwise, the tr Tiationalisation in Working out a system, and the 11 of office would re bank nationaliHad any efect on
: ցը Լ:յsign to stԼ lature and scopic In thit should be smooth and quick present basically king system to a ing system fully ng the needs and :Inges of an econergoing a radical wards socialisII. tackled by a comlevoting itself fullse. It is therefore briefly examine the SECOLld Teceive: Hic | Lisk-force.
to recognise that nationalised banklite dillerent from te-owned banking er wedi carlier, the banking must be
Vicwed primarily and overwhelmingly as one of thc important means of making the economic Era Insition to al socialist society. This cain Tot be äuchliewed by a mere: change in the ownership of the existing banks. This is well borne LI LIL by the experience of the nationalisation of the Bank of Ceylon in 1961. IL WII ble Tecalled that this naticialisation II leasure cle as : surprise announcement in the Budget Speech of that year lild no plans had been made for any changes in the Bank's operations subsequent to Ila tiCJIlalisation, III thiē sevent, it LLLLaLLL LaLa LLLLL a LLLLLaLLLLLLL was merely a take-over of the share capital of the bank by the Treasury from the private shareholders, and the bank continued its operational policies with hardly any change Tor FilIIlost a decade. OIle of the Thost important tasks to be conpicted before the impending national
isation takes place is to Work out,
in as much detail as possible, the post-nationalisation transformation to be made in the operations of the new banking system. If no radical perational changes airc Illicle im Tincdiately after nationalisation, due either to a lack of preparation or the absence of an appreciation of its need, thei1 it is inevitable that the nationalised banks Will not only fail Lo Imake Lici T due contribution tO the implementation of the GovernTent's programme, but will also discredit the very concept of bank nationalisation, and even some parts of the Government's overall pregramme itself.
Organisational Set-up
Another aspect of this distinction between a nationalised banking structure and a set of state-Owned banks is the organisational set-up of the nationalised banking structure. The banking systell we have today in Sri La Inka is al colonial, political :LIld EconoILLicinheritance Which hlas been tinkered with froIII time to time by successive Governments in the post-colonial period. The strictly coIonial elements in this set up - the Exchange banks-ceased to cater to
ECONOMIC REVIEW, JUNE, 1975

Page 19
l9
The Feeds of the country als early als Tiflic': '}}''' [hts, Hind this resultcilli Tı lıcı, agitation which ultimately led to the stablishment of the Bank of Ceylon to eater to the needs of the clerging Cylinese business community. In later years it was found that cell the Bank of Ceylon had failed to adapt itself to the changing needs of the economy in the post-colonial era, nd this realisation led to the estabsilent of the People's Bank with a special responsibility to cater to the | needs of thostscւtors of the economy which had been neglected by the LLLLLLLLS LLLL LLLLLLLLS L LaLHHLLLLK Haaa surprising that the hic Lich-Potch which the banking system is today is quite incapable of meeting the chillenges posed by the radical economic changes that are currently taking place. Careful thought must Therefore ble given to the organisation:Il set-up of the lationalised ha Faking systein which Will replace the present arrangements after the Links haw: Ebce FIFLiCo) Tallised. Il This a TCE WC Hallwc: ITILICI LC) lečiai TIl fT. DIT The experience of India where the l-Arge indigenolis bi niks were Imationalised without adequate preparation in 1969. As happened when the Bank of Ceyllen was mai tionalised, the only change that was in Irediately effected was the transfer of ownership With the official Custodians replacing BETH 5 CF i DiTectors Llt beic.IIC left CL. The links continuel L. operatic as before nationalisation, coil peting with each other and going their own individual ways. It is only Illow that si Ille co-ordinaliticed lational policy is being implemented El the bankingsphere by thematični lised banks in India, Even so, they have still not worked out an organistS LaC LLSH LL LL CGLLLLa LLL aLHHHLLLLSSS bution which a nationalised banking struct Lire cinmake to the economy.
Among the important matters which have to be considered and decided in the organisational sphere is whether the present banks will continue as separate units of a nationalised system or whether they will be merged into a few large groups. It is Well known that the
ECONCEHCFLEVEW TUNEI975
Finance
M1 irhistle of Finali in having competiti LI LI LI I1 iit Withiiii : particularly in th Tiċricore it mill there is no ques it onolithic banking Set tip after milltir lhe question rei number of corps bar:T1 kG E FIELE KILT Extelt 10. Which should be permitt in which such C3 take place, and Wastefill competiti. ELS EI LI, TỰ: are obviously wer supply.
Pie Str
Another aspect w : Tiirledild decide isation is the Tela the Ill tiltilised
III LIL rest of 1 such als LIls Stätt other public institt time now Govern been direct tw: profitability of th tions by enforcin cipline on theil III: tWð 5. Li te bilinks to bčEIl directic foi necds. While II becerlı III icle in tli alck if a csiTI TE the state financing Corporations, :ı IId level governmental le ECTITifie and 5 policy of the Sta has prevented the making their full WWE Tas the Telj5iti Live. The existei: banking systell Opportunity for BaikS TI'll the disci decisio15 o ove economic policy, lyilable financial Government at it THi5, cyn be d'Or thought is given to pre-nationalisation

sees in Lith Illeri o bety7CEIl clifferthe state Sector, I: finitiltill field.
be isSLIled Lhat tical CF i single g instit Litico II being billisation.: BILL 11 i 1 - 18 ta' Lul: ti Tg Thiationalised 1 he set up, the SLIch Empetition d, f the Is Iapetition should
til Whilt Ext:Et in can Be Voided
restյլtrees WHith y Ench il TI
|liցի է իրեld be է:A- 1 եւ:ftյrt HHLitյրH|- Lionship between banking structure the public sector Corpora, Lions and tĪJIS. FOI SIJIllic Ilment policy luas rds erns Lering thc: : State Corporag fira II cilal dişinly through the which they have their fillicii Ich progress has is directico II, the lationship T113 Ing i File:LitİLitið Ils Stilte: the various highHIthorities Which OTTEt ille 5 dCELLE te Corporations, State bi Inks from CLintribution toon of this objec+ if a lationalised Will provide an associating the issions preceding T:ll GoverIIIlent НПН to Tlake expertise to the s highest levels. : only if careful this a spect in the
plans.
Banking
Expansion of Tride
Finally, tillerc is the contribution which the nationalised banking syste III can Imake to the expansion of the foreign trade of the country and the improvement of thic terms o trade, There is a Considerable amount of international trading expertise available in the banks, but until now this source has hardly been tapped by the Government for the flirtierance of its interiaLiCJIlla 1 träding objectiye:5. There arc IICL Imler OLIS ccasions when commercial banking advice taken during the negotiation of Warious tradit agreements and before making decisions on large Lenders for the supply of commodiLics could have resulted in far more favourable terms for the country. SuIch än association of banking expertise with the Govern Irient's trade negotiators and policy-makers has not been possible beca Lise, un til nyw, even though there have been two state-owned banks, they were not considered to be part and parcel of the governmental achinery. Some significant changes have taken place it His Tica il TECēmt tills Luc Ethic pressure of the state-owed banks themselves, and there is an increasing teldelicy for consultations to take place. UnforË LIntely, so far these Consultations have takela place mainly for the purpose of no unting rescue operations. The national interes demands that SLIchi consultitions should take place at a much earlier stage, and the opportunity for the establishment of a nationalised banking structure should be taken to place such arrangements on a regular footing.
As stated earlier, the purpose of these observations is not to provide a blueprint of HTTangeIIIents for the nationalisation of the banking systeni, but to rimäkee al CFSE for thic establishment of a competent taskforce to Prepare such a blueprint. Unless in mediate steps are taken Lo sct up this task-forCE the gover IIIment is bound to be severely handicapped in the implementation of this Vita| ECOIOIInic meaSLTC.

Page 20
FOREIGN NEWS REVIEW
BANGLADESH tal Group for Ind
Bangladesh last month adopted a "Sri Lanka fiscal leasure' by demonetīzing the 100 Taka lite (S. 12.50). Three days were given for deposit in state banks. Those depositing below 800 Taka will be refunded; and between 800 to 1,800 60%, will be refunded. Those who deposit over 1,800 Taka Will receive their money only after an inquiry into their source of earning, but will receive 8' security bonds for the moment. It is expected that over Ta 300 millio 1 Willi Lot be refLI Ildcd thus removing nearly 13% of the money in circulation. The Taka soon afterwards was devalued by 58% against Esterling. The official rate is Ta 30 to the £ as against Ta 18.96%, earlier. The blackmarket Tate is Tau 57.60. The dewallution was in response to IBRD, IMF demands caused by filling jute prices.
INDONESLA
The Indonesial state-owned oil co Ibinie. Perta Illi II. was hithertC seen as a symbol of Indonesian economic prosperity. It was advertised as a weapon in the thrust of the Suharto regille's colliliticit to private enterprise. It led the Way in Indonesia. Ils "ecOIT CITTic Thiracle”. Its chief executive Ibu Suitowo is considered the ai Tchitect of all i Es advances. The complex has a monopoly of Indonesian oil and natural gas exploration-ı Hind distribution, and has interests in steel, aviation petroclericals, feTLilizers and even in rice production. With the announcement that Pertaina was faced with short ter debts of over S 650 Illillion and long term liabilities totalling an even greater figure, the miracle seems to have sourcd. In Circa singly the so-called "Berkeley Mafia", a group of US educated technocrats, who Te considericid the bairls bichild Indonesia's bloody coup d'etait in I965, a re Laking over the Furl III ing of Perta Illina. Perta mina was always dependent of foreign bank credits but IMF and the Inter-Goverillen
8
tiLI I ll of Westerm na loans. The squeezi the financial sqL. countries. The attempting to neul OPEC Els beciale April Paris talks it President Giscard SOILle observers att by US banks to til: type of lavish capit lopment projects th ed did IOL di Tect sia's problems of th The Berkeley Mafia become socialists are keer 1 0 1 cont discontent in the final story will not bLIL the filancia
mi la Which Tode | FOI EL S 123 b3 a Salutary lesson countries planning modermise O si lines.
BRITISHCOMMI
Among the annic CO III 10Il Wealth F Conferece i Ja one surprise. Br. of the EEC, they sa prejudiced Commo This will help th Minište lis referendum Victor People to stay in t flt relis tät Wealth exports t suffered ald. With Commonwealth բ II"י - 1977 טחin Ju affecticd. L-Indic Lil tion (see ER April countries have man some preferential t Such agreement aբ Colliol wealth. ferties is to be generalised system (GSP) but this is . cient compensati Commonwealth COL Asian Countries Out: Weath likendo Fles

Ellesia. El CE150 Ttions, oppose such 2 IIlay be a part of IEEze on OPEC U.S.A., Hälls bee Eralise T disb3ıInd obvio LIS in the litiated by French | d’Estai Ing and ribute the squeeze is tendency. The al intensive deveat Suto Wo favourly touch Indonele peasantina SSes. have not suddenly but it seems they airnirig the rising countryside. The ble Tevyele dW ollapse of Pertahigh on the price irrel appears to be for OL her Asian to develop and milia T LITEālistic
ONWEALTH
uncements at the Prile Ministes Ilaica, there Was itish membership id, had in no Way Wealth interests. Le BTit151 PTIITTE tempt to get a of the British le EFC. But the Asiä Il CollToTC B Titin Häwe the withalrawil golf Te Fercin Llia | tkartiffis Eble gwell furt Hillgr 1E LOITie CGIl Wenissue) the African aged to introduce T:LLI ment, bLIE 10 olies to the Asian The loss of prereplaced by a of preferences onsidered insufion by Asian Intries. However. ide the Collion ia and Philippines
are enthusiastic about the EEC since they have profited from the enlarged
laket.
SUEZ, CANAL
After L i ċ closure: F Lie Suez Canal in the Six Day War in 1967 the number of ships calling in Sri Lanka ports has drastically declined. In addition, the cost of exports and imports have been subjected to shipping SLIrcharges. The opening of the Canal may not necessarily remove the surcharge, or educe rates Tuch, Since the LOls charged will be much higher this time by the Canal tolls but it is nevertheless expected to bring more business to Sri Lankal in the Way of bunker fuel income, repairs, etc. The Ceylon Shipping Corporation
and Dockyard Management Services.
is ideally placed to deal with the new developments but despite the local capacity a self-reliant prograitinne is not very much in evidence. We are planning to collaborate With Hongkong financiers in dockyard building and still intend to import LHHaLLu S S LLLLLLaaLL SLLLLLLLYS aaLLLL S LLLLLL here. Despite all these problems the opening of the Canal Will bring many advantage:S to Sri Lanka.
NAMBA
The Security Council request to South Africa to withdraw its illegal administration in Namibia (South West Africa) by May 30 has been rejected by Mr. Worster. Te South Africa is claim that they are ruling Nalibia with consent of the Naiibia people. They have claimed that they merely administer the territory Inder the UNMandate and Trusteeship Council as distinct from laying clairl to the territory. This distinction b|LITs the Fact that Namibit is one of the richest countries in Africa with Iliassive deposits of iron. coal, gold, uranium and other illportant minerals. The South West Africal People's Organisation (SWAPO) led by Sam Niujorna has challenged this baseless claim by
ECCNOHIC RETIEW, l'UNE 1975

Page 21
Worster and has won many significant battles in Namibia against the South African occupiers, particuTiarly around the Caprivistrip. There is little doubt that the majority of the Namibian people support SWAPO and the South Africas are determined to delay the transfer of the territory to the Namibian people by holding rigged elections with the Collaboration oftribal chiefs,
ANGOLA
The Three liberation Imovements in Angola, namely MPLA, FNLA and UNITA have been feuding ever since the to Werthirō W of the fa50cist regime in Portugal. The conflicts, however, existed even before but have escalated recently with the nearing prospect of independence. The MPLA were supported by the Sovjet Union til 1973. The FNLA is said to be strongly supported by the Republic of Zaire and the USA. UNITA has been a small movement till recently, but has received the support of Algian Whites in addition Lo some of the black Imiddle ClaSSES. It is difficult to say how the conflict will be resolved by November when formal independence is dile, but for Li hemolcnt the secta Tiam aldi El Tibal loyalties formented by foreign interference seems to have Laken priority. The problems are complicated by Angola's massive Wealth in oil, dia monds. iron and gold. The increasing intent in the politics by foreign powers is related not merely to political or ideological affiliations but to the access to the massive resources of strategic Taw materials.
SOUTH WIETNAM
The spiralling inflation in South Wietnam during the Thieu years Was a direct result of a country whose exports consisted of a mere 5% of its imports. The massive doses of U.S. aid: pumpedinto South Wietnam created a totally distorted and parasitic economy. The new regime
ECONOMIC REVIEW, JUNE 1975
will obviously re dence on foreign in Crucial arcis C) the War torII econ the Hanoi examp The South Wien: trying to follow t
ationalise all
France WI || be affected by a n gramme. French production and ex The French also h verages, Tubber : pharmaceuticals terests. FrentՒ South Wietal million francs.
BRAIN DRAIN
A recent devլ brain drain prot interesE foi Sri Lil British Governme. that there is goin on foreign doctor: As the Eiji Com a In earlie IT OCC of the brąim drail developed count caught in the dile expensive profess Various persons w This Tesults in tim i the poor countries The presenti decisi Government is basis of linguistic tests required by E. Call CoLLei I in Brit; Medical Council language difficulti in social structure Hnd Indii, The I the Overseas docto Britain which ri 10.000) I Indian doct ing in Britain: H Indian doctors in annually. The B. Imere 2,600 doctor the introductio. Il Col and the Withdrawa tion for India, P Lanka as a result dations of the Mer it is possible that in

frain from depenHid except perhaps f reconstruction of Eomy and will follow ble of self-reliance. LITI Go WCTITIMlet il his path is due to foreign holdings. the country most altionalisation pro
control of Tubber port is almost total. äWS interess. In beProducts, tobacco, among other in| investmělLs in կյtil HTլյլIIլ] [[][][]
N *lopment in the lem may be of kill doctors. The TIL 15 LETICILICēc trolחחַgIt ha a c el Lering Britain. Rejoie 1 y pointed out tasion one aspect Is that the Linder1th sturn to be mma of providing onal training to ho then emigrate. El directs Lubsidy of [[] thị: Ich LặIlẽ8. g). Of the British xplained on the and competency T. GT1 MeiI TE GITT
TH IT 5EEI115 3 and difference between Britain love has angered rs":355 (biciati E1 iT1 presents about ors already workld about 1,00) grate to Britain itish produced a
in 1974. With these Tley CLIrbs | cof full TegistralBakistanı Hind Sri if the recomenison Committee, igratory patterns
on the part of our doctors may develop in Africa,
IRAN
The ebullient Shahensha of Iran after successfully bidding for shares in Pan American Airways has now made a bid for a 10% holding of the giant British Petroleum Company (BP), as a part of an attempt to acquire a stake in the British oil industry. BP is the largest company in Britain and the seventh biggest oil producer in the World. Last year its profits amounted to E495 Inillion. Burmah, another British oil company, is also discussing with Iran the sale of a bigger share in a Wo major North Sea oil fields. Burmah has been plagued with financial problems for he past few years. Labour members of parliament are bringing pressure on the Government which already holds 49% of BP to acquire the 20% holding of the Bank of England in BP which is now being hawked to the Shah. The Iranians, however, have more thin a sentimental interest in BP since it was formally called the Anglo-Iranian Oil Company whose interests were nationalised by Mossadeq in Iraq. The chances of Burmah selling 75% shares III its two North Sa mill fields å Te extremely high since it has a project expense of El30 million Over the next three years to develop the two fields. The tendency so far has been for Middle East oil money to find its way to Western European banks for short-term lending. Increasingly, however, there is a move by Middle East countries to acquire interests directly in Western indusEria concerns. The Finlancia contro commanded through the banks is less irksome to European Governments as distinct from the publicity arc) LISled by the industrial acquisitions. The In El tionalist sentiment expressed On such occasions Whel Viewed from the standpoint of developing COLLILLTies like Sri Lanka Seem Tather flippant since the major areas of production and developinent in many developing countries are almost totally in the hands of foreign ITETESIS.

Page 22
TECHNOLOGY
Fuel and Fertilizer
The cost and availability of critis Y KYL LL LLLLLLLaaLLL LLLL LLLLLLLaaLLL LaLLLLLLLaLLLLS to the Asiain fa IImage:F. Morcieu ver, while artificial fertilizers will coiltitle to be used for many years to corne, excessive dependence on the ITI is follTild to Hitlwit i seisiolls effect (III the natural fertility of the soil. L aaLaaLLLLLLLalE S SSLLLL LLLLLL LLLaLLLLLLLaaLaL application of chemical fertilizers WEL III in and With thc: LT ditional utilisation of colpost and other natural fertilizers. In Japan, on LL LLaLLLLL LLLLLS LLLLa LLLLLL LLL LaLLLHHLLL LLLHHLaKL S SLLL S S LaaaaL LaLLLL S aLLLLLLL Ilo W a policy of greater reliance on Organic fertilizers is being adopted.
Our farmers also face a problen with regard to fuel. Firewood is becoming scarce and is costly ind El Conserwaltico Illist Hittit Lidic World Tegal. Tid thie h LI rning of 4 LIT traces for fuel as a Västeful ciepleti II of collir natural resia LIITces. Kercsele is similarly expensive and is an imported cilifIIIIriodity constIIIIIIlg valuable foreign exchangc.
In Asia, clLle dtlig has traditik Tilly becil asco Lirce of citliler fuel cor fertilizer and this dual potential is now being exploited on a large scale in the villages of India by meals of: Mathane Gas Plant. The plant can utilise cattle-dung piggery or poultry drippings, iright soil, animal cartliss and gricultural Waste, converting it into Thailure rich in nitrogel and huni Lis, as well as generating 1 high quility fuel gas. The fully digested skurry has a nitrogen content of Ver 2. A which is list still incris: (cover 25%) con the mitrogen conten of city, Illinure. It is most profitably applied directly to [hic land by Trixing with i Trigation water T ciri be Liset for the rapid ferimentation of coinpost, The Edo titless, in IICCLIC Lus, gais consis Ls (cf 55%, T Llethane and 45% carbon dioxide. It has a higheral efficielcy (60%) s cco II parcid with that cof di Lung cakes (II''}} and call be used for cooking, lighting or rւInning engine.S.
The plant consists of a ferrent:-
die El tank cor digester — a Well of
모()
Illsonry work be LIII i Ille altinig sti: Hike 2.1 LiiLii p iiiiisitle well, collecting
by the digester za H Liccarding te the DLIIllig is: Intı içel : proporLik,3 In 4:5) i all the Illixture ter through a
As the well fills LII of slurry is disc overflow pipe. Tł 18 Telč:18{{l+TüThủ t pipe providetil at i and leading direct energy pointslamps orgas engin
le Sllest
3O CL, it of gas r OF 2 Hel || CF ICELLI daily Ise. Fivi producing a daily af Tresh di LITg. '' plant of60 cu. si cient to provide
family of Elt le (It is estimated
daily consumptio. in a family is at coin hunity kitch of gas may do t: work). Of courst available, the big Metalle G5 Pli clase to al Welli Eneit hero da i Ingero ol there : Ely Liple:ts: II fict, We live IIIIIlediately outsi
This plant is in LITEt in TПti w E HELIS;ält, Colf II :183ist;lce Hild Cri available for colle purchase. Whil րքբլIlation litis recent years, wi arger farm units IIleill of Ilillä tit:wiւէ լtitlt| Էյ: ru ically adapted to The Illin probler ԷքTitւ:Լ Wւիլյld Է: of the Steel III
 
 

lt;W բրույրd level — ::| diri LI El Which IL -
the Toll th of the the gis generated Il risi Lig :: Il filiig
willւIIllu prtitlLicell. yıtlı Willer (İı tlık | El SL rfcg: || To Ligil It ws into the liցus
:CliticLETTg pire. , an equal quantity largetl through an he::Locket III i Lila, teitl g:15, lt: htt:l LIrլIIIl Tiր Հi Is top (gas oll II [ifie) tly to the required kitchell stove, gas le. (See illustration),
plant producing Litš TillIII
11th it is 3 lead UT Little, average of 45 kgs. would feed a gas i Fi W JILI TIL, LITcooking fuel or a ist iy: Ticinibers. that the average 1 of gas per PILT:CHT i) LI U II u II u III e Els less qual Fltlity e sa Tile in ITIOLITIT CH , the Illore :Liimals ger the plant. The Int Tay be logo: Led ng place as there is explosio II, II Cor is F1 til Cod LITTEdLiced. scen it operating ile TLITEl | kitcher15.
W being IT EL EI LI TALhere it is used by I TITETS. Eletchlic; Edit facilities being :Li web lil iiiwilli: e CILI I own Crittle been depleted in I thic growth of
and the develophusb:IIıdry, s Luch :i. adily Id econcil| 13:Il conditions. Li Li Sri Liliki
the Illultire 1 a Ilւ Լիլլ՝ Ill:Illiլու:
*
gais cookers. The Lise of till: Fitr Täterials is Luch as corporicssct wood fibre lid glazed earther war: could also be explored.
About i year ago, Il Metharig
ог SobН (“пашта!", Gas plati was produced in Sri L: Elka by workers officers (Jf. Llic Indus
trill Development Board. They estimule cost of productio 11 to be about RS. I.600 - for gas holder of (35 CL, fit, Çalpicity. This c3 Lild be cut by hall if the Well is sunk in firn. soil, requiring to reinforcement. Thւ բlant, which may be seem TuritLioning i the Behari's premises at : Kali tubedlic, Mir: L LLIWE, is feitlich Epied creepers and other vegetable In latter (b) of waste latter producing 3 cu. ft.), and generates a highspeed giis which cH1 boil H. litre of Water in 5 minutes (i.e. lister than keroselle strave or Wocal fire). THIL: IDB l'ils illsch Tlalnullet Larcil : spiccially claup Eccl. BLI FT1cr for Illere efficient utilisation of the gas, costing in the region of Rs. 2C
The Methanic Gas plant is ideal for øLIT conditions, where Vegel{lble matter Tither than cattle dung is abund; intly available. The plant could realily be adopted by the Ilcw cetopher: tive fir 11 se3" | 11:4de :lv:Ailt ble LLLLS LLLLLLLLS LLLLLLLHaa S LL Sa SaL S LSL credit purchase scheries. A few pilot projects, initiated by agricultuLL LLLLLaLLLLLLLaH aLaaa LaLLLLS tLL S La Ind Listri; | Developmen || | Benard, LLLLLL LLLLLL LLLL LLLLLL aOLOLLLaaS tt the doptico Fl of this ITILIst for:lefiel and efficient recycling Illachine.
Ecorchic Review, Jury E is

Page 23
Agriculture
Imported Wheat Flour Hits the Local Farner
Reports coming in from various parts of the country since last month clearly point to a situation Where the farmers who responded to the call to spear-head the food production drive are now saddled With their products. Ku Takkan, Im:lize, Sorghu T1, s Weet potatoes, etc. are now witnessing a drastic reduction in their prices. This time, it is mainly the imported wheat flour that hits the farrier.
The Story begins with the comIllel cellent of the lassive food drive When everybody with authority went round the country-side pleading and exhorting the farmer to grow more food on every inch of land to face the food crisis which Inanifested itself in the shortage of items like flour and rice. In the face of rising World Ilarket prices for food commodities, shortage of foreign exchange to purchase food, the continuous inability to reach target paddy production due to adverse weather conditions etc., the farTilers response in growing substitutes was almost beyond expectations. Then things took a different turn, when imported wheat flour Was Inade readily available in the city and the village.
The logic behind the LII restricted supply of Wheat flour since early last month (400,000 tons of imported flour at a cost of Rs. 93811. In 1974 a mounted to a little over 25% of the total export earnings for that year) may have been the need to bring down the cost of living, especially in the urban areas. The negative impact of this measure on production has however been felt even in the remotest chena, FLIrther, it has not only tended to discourage the producing farmer, but has also reconyered him to a consumer of this serni-processed easily prepared food.
When flour was in restricted SLIpply, the local substitutes fetched high prices. This not only proved to be #1 i Tceltiwe Lo the fāTITIC, ELI I also paved the way for local food items to enter even the expensive eating houses in the cities and to
DE CHO MIC FREVIEW", U FINE I 975
make some impa habits of the pc. the Cäs Lial Observer the farmer's resp. drive and the de ability to feed suficient incentiv BLI E the LITrestrict flour through the
Tewersed the situa Which fetciled Rs three months ago
Rs. 20- according the guaranteed pr The price of Swi COITle d'OWIl fr0IT1
cents a pound. M beginning of the ye. a bllshel has been duced to Rs. 78 Rs 50 l- and the
is Rs. 34.50 and
or the Paddy N hawe Tot 50 far bol tial allount of th marketeer today. the rate of Rs. 5/-
The let outcolt is that Solle far Inc large extents of lar SOTghum are soll them to perish O. others Wille halwe chernas hawe stopp similar crops. Furt tion in the home g Yards have appare SITC fåte.
Policy choices : bŁlild up to this situ been by no means e ča, 1 ble decidict Lco 5 all People. It is es Lihat 5 LIIc decisions : fully, specially as between consumpti and production in
"Bare-Foot' for the Villag
The CFläĩTT11ã1 Ceylon has recenti officers Illa Inning thi at the AgricultiLI ral Would becOTle bre Willage äTeås. This received with ope

ct on the eating
pulation. Ewen Would have noted ise to the food lonistration of his he nation, given es ad support. distribution of open market has Ei01. KLlrakkal 120/- a bushel now fetches only ; to reports, while ics j; RS 28.00. eet Potatoes has -70 cents to -30 aize which at the arfetched RS. 85subsequently re— and låter EC guaranteed price the co-operatives Marketing Board Lught any substamell. The blackcollects Illic at a Էյլ1ԷHel,
of this situation TS "Wh). CLıitiya tec ld with crops like letimes allowing the fields Eld clearčd läIld for Ed CltivELil F ble T, food P Toluca dels and lackIntly suffered the
presented in the äitið I would hawe asy and no policy uit H || Sectors and isel Lill, however, Ecevaluated careto the balace Oni ili Lirbi T1 : Te: 5; "LIL Tal areas.
Bankers
of the Banէ լի` y stated that his e Balık branicht:5 Service Cenes -fCE bänkers; FOT certainly will be In a Tiniis by the
farmers. The "bare-foot" symbolises meeting the farmer at his level, absence of red-tape and formalities in their relations, in what has hitherto been a strictly commercial transaction. The experience so far has, however, been that the institutions meant to serve the farmer supported mostly the Tore prosperous elements of the village, overlooking the majority of tenants and small operators, The IInore prosperous the farmer is, the less he requires the Service of the bare-footballkers I tJO. Will the new bankers be able to cater to the less privileged and the Timore needy of the village For the latter of course credit alone is not adequate and the role of the balker Will hawe to be a more fruitful and a productive one. The success of the 1ew Ibarre-footbalkers will no doubt be judged by their ability to discover a more meaningful and productive role in rural agricultural developTiment together with the existing TLIral banking machinery under the People's Bank.
Co-operative Farm-the Rational Settlement
Recent co-operative fTIns, where thousands of rural youths have taken to collective agriculture as a profession have proved to be the most progressive for 1 of settlement that the country ha 5 ewolwcd.
Often the private sector estates here are held up as Inodels of well managed agro-business concerns. This is a carefully and deliberately developed myth subtly used to defendi private en Eero prise economy. Although one may justify such a view Oni Illa TTC) Wlly construedass Iriptions it is incorrect to compare these estates with co-operative fa Tims Which are conceived and conducted on an entirely different philosophy unless the comparison on those premises themselves are required.
Sorne of the pernicious features (of the "Testates’’ å Te Tarely focussed. The decision making process in the estates is autocratic. Large numbers of employees hawe inco Voice in the affairs of the estates. The environmetr T of Tanagement i 11 thC estates is oppressive from the view point of large numbers of estate employees
21

Page 24
They are condemned as the human LLHHL L LLLLL LLL LLLL aaLLLLLLL LLLL LLLLL process of production. The economic systemi Linder which the estates exist is exploitative. The economic activities of the estates have by and large blee1 marrowly exclusive il the sense that the ILTal Colllllllities are either not benefited by or integrated With the esta Les. FurtherTillore, the econo Illic ex Illa IsiCT of estates has often been at the expense of the development of the neighbourhood. The dualistic socio-economic environment created by the growth of private estates has led to problems of a Tätional Hild intern ätiola scale.
In the co-operative farms managementis participative, i.e. the members of the co-operative fa TT115 the Tiselves decide Coll the Social and ecolo Illic policies. Initially the Imanagellent committee Will have some represent:Eivics from other institLLI Ëio Iris BLI LI
subsequently the entire committee
will comprise of settlers. A number
of Working committees on Finance, Planning. Agriculture etc, criable the average member to influence the
LLLLaLaLL LLtaLaLaHLLLLS LLLLLL aaLaaLLL managerial hierarchy is absent. Every ember rks i i c -
operative farm on an equal basis and the farm belongs to the Ilienbers.
Socially the co-operative, farms develop commt Inities collectively dependell t on the la Fidi for economie susterhaI1e: aIıd also cLil tLIraliy and socially in Leracting to III:I ke life meaningful. As the members are drawn froll neighbouring villages taaL LLLLLaLaaLLLL S SSLLLLaJS S SL S S LLL S L LLLLLLaLLLL danger of non-integration or conflict With the culties.
On the ecollanlig front 5011 e farlis perform Well and, crcate surpluses. Where fäTT15 Were Started II marginal la Inds or where there hawe been Pla T1 Illing erro T5 Hindi managerial problems the far 115 arc Imaking losses. While laking profit in an Countingseseis not the Only objective of co-operative f:TIs their Social and hurrian Objectives should be given consideration in evaluating theIll or comparing լHս III wiլի էԷtitւ::-
New Export Patter
A significant shif in the patte Tin of STi The concerted effort towards diversificat try's export secto bearing fruit. Aft that of non-traditi Illow beel Eddied to of tea, Tubber and ( the country's econ stad Li Inshakabily / c decades.
Tea, Rubber and accounted for as cert of the COLT1LT
1967. Today til
Pr
T
Rլյիիer
Coconut Products
T In I : ||
Non-traditional produ Total value of exports
R3, плillium
Largely responsi in the non-traditi ings by 1974 wer higher prices rec cum products (i. and aviation file cious and semi-pr. jewellery : spices : of spices; and oth
Sele
IP:t Tulli T1 PITCHLIC"|5, (i
aviaticum fLIE: SLIPPolit:
Precious and semi-pre
Sclected industrial exp
Spices and Essential
 

1. Enillerging
t is taking place La Inkas export5. s, in recent years, ion of the coulappear to be LIIth leg, Illa TTTely anal exports has the famed tripod :CobilluIL OI Which my appeared to wer the past few
Coconut exports IL1 Luch as 90 pcr y's exports up to lese Laditica
colillodities account for only 70 per cent of our total exports. Over the seven y cars betwee El 1967 and 1974 (see Table I) non-traditional exports have COITI: Lo contribute a larger share than either rubber or coconut, With tea colly 9 per cent ahead. The Fall in the share of tea in total traditional exports is not due to a fall in export earnings from tea. In fact, earnings increased from Rs. 1261 million in 1973 to Rs. 1,360 million in 1974. But, the rate of increase in the value of the nontraditional exports (especially petroleLinn products) and also cocon LIL: products were much higher and thus caused a fall in the share of earnings from ca.
TAEBLE I
critinge Composition of total crports 1967-74
1974 - 1973 - 1977 ו 197 []דנין 1969 1968 1967
L0 S u SSSSSSS S0S S S S S i i 0 SSS 00uS LLLS S KS S 00K iב 23 - 14 - 16 בני דוד 16 17 10 16 I고 12 1 14 90 89 89 89 89. 88 77 70 es ... 10 11 11 11 11 12 23 30
1.590 2,035, 1915 2.033 1.947 1.94ը 2.530 3:03
ble for the surge bn al export earTle the very || 11 Lichi civell ir petro1cludi Ing El LinkCTs
supplies): PTCCi Li si SLCJIllës i å Lid Hilde esseInitial pils er industrial pro
ducts, particularly ready-made gärIllerits, batiks, seafoods, fatty acids and edible faits, footwear. Wood products and Portland cement, Table II below shows Lic II lovement in ea F Tings of som le selected industrial and agricultural exports over the last four years.
TABLE III
cited Industrial & AEricultural Exports (Rs. Mn.)
1971 7. 1973
TL'lıIcing bLIrıkers:ırıl - - - -
ST ଝୁଟ୍ରୁ 3S
cious storics and jewellery .. E3
TIL OFICILICIS Th. EE 1.
s I} 구||
ECNOMI. REVIEW, LINE 1575

Page 25
Rising Trend Continues
Sri Lanka's export earnings from tea continued its upward trend into April too. Foreign exchange earnings for the first 4 months of this year were over 100% more than in the first 4 months of 1974. The total of all tea exported in the first 4 months of 1974 was 98 Mn., pounds at a value of Rs. 296.2Mn., as against 109 Mn., pounds at a value of Rs. 625.8 Mn., in the first 4 months of this year. Exports of black tea in bulk were largely responsible for this phenomenal rise in earnings. 98 Mn., pounds has fetched a value of Rs. 564 Min, this year as compared with 92 Mn, pounds bringing in only Rs. 276 Mn., during the same period last year. Packeted tea exports have also increased more than 200% in value and 100% in quantity. Libya which is the major buyer of packeted tea had purchased Rs. 35 Mn. Worth While other new buyers from the oil rich states include Saudi Arabia - Rs. 4 Mn.: Muscat and Oma – Rs. 5. Mänd KuWait – Rs. 1.5 Min. Further details in the table above right.
RUBBER Declining Markets
Export earnings from rubber have decreased considerably in the opening months of this year, as compared with prices fetched early last year. Earnings during the first 4 months of this year have falle to Rs. 160.9 Mn., as compared with earnings of Rs. 268.8 MI. In the first 4 months of 1974. In 1974 the value of exports friðill TubbT Telched the riccord cwel of Rs. 738 Mil. The previous highest was Rs. 592 Mn, in 1973. The 25% increase in earnings in 1974 was wholly due to the increase in the average fo, b. price by 56%. Compared with 1973, when production was 341 Mn pounds, production in 1974 reached a TeCOTCH TOW for the
70's of 300 Mn., pounds. The volume of exports in 1974 fell substantially as a result of this
declining production. The prices of Tlalt Lliral TL.bibert scola Ted With the conset of the energy crisis and the subsequent sharp increase in the price of crude oil. Having reached peak levels in the last few months of 1973 and the first quarter of 1974 prices have fallen continuously thereafter.
EONCACREVIEW, U.NE 1275
SRI LANKA"S TEA EXPORTS
Black tea in bulk Packeted tea lstīt teā
SPICES
Cardam Ons Hold
Of all the spic Sri Lanka only fetched higher months. Other cinnanol, cloves and ginger have in the first 4 non compared with th 1974. Total exp spices from Janu: were Rs. 32.7 Ml. 22.3 MI in the this year.
Total earnings products declined from Rs. 14.9 M. Mn., this year. 197 for cinnation ch pepper and cloves larly which had e Million in the pi brought in Rs. 1. While cloves also fe 1:pוחטט in 1974 as 1 millio 11 in the The export value pepper, cloves an showed larked from 60%-90% pared with 1973
According to
reports cinnamon Llistard hawe be gressively higher p Ver the last L quality No. 1 o Cinnan on Quills ually from Rs. 4. 4th Lo Rs. 5/15 || 21st. Clowes, we have moved up per pound to Rs. moved up from R to Rs.21).

1974. Jan.-April
1975 Jan.-April
Quantity WalLiը Quantity Walule Mn, lbs. Rs. Mr. Min. Its. RS. M.
92.3 276.5 98.5 564.O. 5.5 7.8 10.3 59.7 2 1.9 2 2.
98.) 29(5.2 09.) 525.8
SUGAR
Fir II
es exported from cardal 10T115 hawe rices in recent spices particularly PCPPCT, Illult meg earned much less ths of this year as Le same period in 1rt earnings from iry to April 1974 as compared with first 4 months of
for all cinnamon over this period in 1974 to Rs. 10.7 4 was a boom year ips, cardämoms, Pepрег particua Tiled less than 1 evious two yeaгs 2.9 Mn., in 1974; Ched RS. I.O.T. Min. ed With less thal previous 2 years. pf unit prices for cillamon quills increases varying lore. When Comrices.
"roduce Brokers” guills, cloves and n receiving proices from dealers, o months, for
these products. moved Lupi grad1 pound on April r pound by May this same period, FrcbIIn Rs. 31/50 |-While MLIstard
I/75 per pound
Further Fall Forecast
World marketprices of sugar continued their downward plunge into May this year. By June 3 prices had reached a record low of E 153 per ton. The fall over the past six months, from early December last year to date, has been nearly E 500 per ton. At the end of November last year the World market price of sugar had reached its highest ever point of El 650 per ton.
Sri Lanka has so far not made any purchases on the falling prices. Stocks now being disposed of are those purchased at the beginning of January this year when World market prices were considerably higher, in the region of E 50). A recent United Nations gift of 10,000 tons ofs Lugar to Sri Lanka and local production have supplemented the country's supply upto the end of September, 1975. Ornext purchases are due to be måde in October.
The leading French sugar brokers SUCREES ET DEN REES has forecast a continuous fall in sugar prices over 1975. Their reasons are that in 1974/75 production was higher than consumption for the first time in five years, the result obtained to the detrimelt of consumers, who showed more price resistance than expected because of the general recession. Surpluses brought forward from 1974 were enough to currently depress the market. Together with this there were new crops in South America and unsold stocks in India. The built up stocks caused by inability of Northern Hemisphere cane producers to sell all their crop was another reason. Also, according to marketing authorities, some sellers maybe te tillpted to dispose of their production as soon as possible rather than risk a large beet crop in October further reducing prices.
கொ - TT

Page 26
FEATURES
Women of Sri L.
Oppressed ΟΥ
Kunnari Jayawardiena
...
Sri La Fiskfī.
LLLLLYYL LL LLLLGLLGLLLLSL YLCLLCLS S LCLCLL LLLLL YEr rLLLLS ions that fare been held on the subject have been ric In this article an atterpt is laide to place exploitation of women in Sri Lanka in scientific Kimari Jayairardena teaches in the University of and among her Publications is Rise of the Labout
Are wcimien in STi Länka exploited and oppressed and in need of emancipation ? Or does the questio II of Wo D11cIntos libera tion Inot arise in this country Ecclause of our religious and cultural traditions and because We have the first" WCIII la II Pille Minister II TE World To These are among the questions that WCIllen's organisations and trade Llicis i T1 Sri Lanka hälve been discussing at meetings to celebrate Inte:TI aitijo al WCT idens YcäT. ALtempts to discuss such questions in the abscifice of ccm prehensive Tesearch about the role of WCIT-1 in society or their status can cinly be tentative and impressionistic. Detailed studies must be made into the specific problems of women workers in the urban, rural and plantation sectors and into the role of woman as Wife, mother and worker, before a more definitive analysis can be made of the positions of women in Sri LInkä.
Moreover, in discussing the problenis facing wormen in Sri Lanka, we must recognise the fact that all vycmen do mot as a vihol: beleitig to
24
a separate homo ject to the same f and oppression. differences bēl Wei Workers in the fields är fäCI unequal pay, an Imiddle-class Wo equal pay with economic indept the poorer wolle differences in so Eliso culturaill, Tcl differences betw. example, it is diff secluded Musli II pitiya, the Jaffna dox Hindu fami Sinhall Wolle strong feudal re With the Woller elite aIil the . mil| trade union and I
However, whil limitations whic CLI:ssion on the II One can yet Well patriarchal Ital Lies, WCIT CIl OCC städtLIS 3 Td Te

माता हैं या " ।
anka :
Emancipated 2
Erů dist SS25 ly general the lege of perspective.
of L Movernení
gitt 1:0 LIS class, subTills of exploitation There ire class II LIII skilled wonte plantations, Paddy Jries Who receive d the professional ոitll who ruւլ:1wւ: Ile ind hal, I Il del CE delle t I. Apart from the ial SIT:lta, there are gious and regional eIu Wiciren. Fur cult Lo cc TTpare the W CITI F KiWomen from ortties, and the rural from areas where ationships prevail, of the urbanised lant wgTileil in the olitical movements.
accepting all these
arise in any disosition of women, Te the Wiew EHELE Frl. -domiiIii Lid &jcieupy a subordinate
degrees of discriminator. Exploitatiолт алтай сүрге58fон.
It was Charles Fourier, a 19th century Utopian Socialist who first pointed out that the degree of the general enhancipation of any society can be measured by the degree of the enancipation of Women in that society, and Socialist thinkers from the 1 onwards have shown that the real liberation of both men and WJIThe I Cannot be a Chieved ill. iT1 economic and social system based on the exploitation of the working բeople.
In Writing of India, Ashok Rudra has remarked that "Indian society has all along been a male-dominated society, where the Wollan's place has been primarily confined to the holie, her role limited to procreation, upbringing of children, and catering for the needs of men folk by Way of LrealLITL CCTIlforts . . . . . וון טיולEח*s_ position was considerably higher during the Wedic period. ... but di riigi Fir) liris Tūrī" period dics HFE) Fier Erjoj" Equal position ard Start. Vili
FFEF"
This picture would be broadly true for Sri Lanka with the addition that the influence of Buddhism made for a greater degree of freedor for Women. But, in spite of periods When the country was ruled by queens, and in spite of the liberating influence of Buddhism, society at all stages of history has been latedominated; working women toiled LL LLa LLaLS aLaaaL a LLLLLaLLL a LLLS ruling casses lived ide and parasitic lies.
El:NJ MIC. F. EVIEW. ILINE 197:

Page 27
The advent of Imperialisi II to Sri Lanka radically altered the c::Unofnic structure of the country, imposing capitalist forms of production on a feudal agricultural cc, nortly. The growth of plantation capitalism after the 1830's.
Colombach as the coIII il cricial Ceiltre: of the export economy had reperCLissions Til the Ticilic CF WEDIT: F1. The expansion of education, including female education in the 19th a #1 di 20th cen Luries also lect to the entry tL LLLLLaLLLL LL LLLLLLaSLKLaL LLLL LLLLLLLK LLL professions such is teaching, nursing and secretarial work. With the transition Lo capitalism in the 19th century, Women and girls who had carlier labolire il semi-feud: il collditions as unpaid family workers
began to be recruited as a source of
cheap wage labour for the tea and rubber plantations where they earned 25 cents a day, (men Teceived 33 certs), for work on the roads (2-36 cents a day) and in plumbage stores ELI1d cocoil LI [ fibre Thills. LA Iri di Elis unskilled Workers in shops and factories or 50 cents to Re. 1- El day, and is dollestic servants (for ford und a pittance of about R5. 3|- a linth). It was a transition from on form of exploitation under feudalism to a new form of exploitatil as wage libour under capi Lillism. HPWc Wcri, Wolle: ToT; the first time entered the lahtur market als Wage werkers, ea Thing their living in File:Fley terms. Lillcreby gali ining : certain degree of economic independente and sharing (as Angela Davis has pointed oul) 'the deforied equality of equal oppression".
The question of the extent of the exploitation and the nature of the oppression of Wolen in Sri Lanka to y hals to be considered in the context of a society where there is LITT Even economic development and varying degrees of social progress. In site of the existence of El public Sector spread Over Inany i re:5 (31 eitrinomic activity and the implementation of land reforn, the ceonority of Sri Lanka is primarily I capitalist One with certain rei Tant senili-feudal chiricteristics. In the plantation sector which is still closely linked to interialist interests, labour-Illin: g:- Tleil relationsare selli-feudi. Il Lhe indst til SecLør. Which is stil Telttively weak. There is a work force of
ECOFIN-P-EC FLEWEEW, LI LI INF 1 775
the development of transport and the emergence of
Wage workers sol links With the co triditional agricu feudal and petty l production and . exist and overlap
T|hisi Lrticl: tri economic base O of Wille il thic: the economy -the trial and agrict yer Willic III |lı boyur Teyr (WA), Tiller; production, in add in the fields (and lını qızı il fırılı illy wo, Will Elst indicite exploitation is ni elaborate institulitik cal supers LITLICILLI re traditions, religiou. LListo Tills gered to nuous supply of ch und til Titlillini SLibri Inte social
THE RECONOWII OF EXPLOIT.
Plantihis
While in STI L. of the total pop female population ed and of the to: էլrt. With mull. Thus ed by the high rat (53.8') ci wone According to the Survey of 1969.7 breakdown is ils f
Employed
List Work SLLidents Linemployed
This shows sign betwe: List:it: W. in Lhee coL FlcT TWO plantations as Till the female popula whereas the figuri TLIT-ıl, while [] := True respectively. How are probably in they do not like

lic L. WEGLI I W Intryside. In the tral sector, stillurgeois modes of |Iss Teil:Litions CCWith ceach othēT.
:lly examines the the exploitation hree key arcas of plantation, indusLLITill succturs — a source of cheap
If the canis in Li 1 ml to their Work 1 Il Liuc lioiiic) Iskurs, The LTL ilLihat lilis di Lublic aintained by an inal and ideologiof laws, practices, ; beliefs al Id scil. I ensuring a contieap female labout ոg WGillen in a SF: TILLS.
IC BASE ATION
Elk form 48.7', Liliation. Of the |7% are employwork force 25'., rites are affectc of participation n in plantations. Sci-ECTIOTTIC ) the percentage
Eloys -
unpaid labour of Women in agriculLLIT
In no sector of the conomy is the
exploitation of women less disguised and more blatant than in the plantation sector, which from colonial times has inherited a high rate of exploitation combined with a rigid, lilitary style of organisation and management. There are 300,000 women Working oil estates forning nearly half of the estate working population. The Woncil are almost wholly (93%) occupied in the plucking of rea, which is considered LInskilled man Lai Work. The esta: Women are Tong the lovess Tait category of workers in the island and they receive lower wages than the Inie I Workers, Coll esta, tcs5. Theo daily rates of pay are Rs. 593 for men and Rs. 452 for Women, and they are only paid for days on which they work which can range from 3 to 6 days it week. The average Ionthly wage of estati: Willen Workers today is about Rs. 90: TTh,) I h t li,
On the question of est: te Worllen Werkers Tissa Bill:4 suriya las stated: "The st: tյրt thդլ (չի լիս լույs| exploited groups of Women in the whole world. The cup of teil dePends on theill, the Ceylonese uppet classes live ein then ; big multinational companies like Liptons and Brooke Bonds have grown rich con their exploitation for well over a century. They are about half the work force that earns the foreign
it. It differences Tich Hild Woller| sectors. On the eh as 53.8" | in is employed, for urbani arid 0.4% and I.I.' :verthese figures clerestiliate for inti la Co L1 t I HI L
Lr|: TRILIITILI ELL Femalւ: Fellgile Fil-:
(). 53.8 54.2 55. 7. 3(1, 7 29.준 |구.
4、 斗封 2.0
exchange of R.s. 1.500 millio I oli I of our total Rs.2,000 million foreign exchange earnings".
Este With The Werkers || Work longert hours tha in ther categorics of workers inclutling men workers. on estates. This is LC: Lise the LCHHLHHLL LSaHHS KaaaLa LLLHH S L Ill hours (after they clock. Lil' Trou
25.

Page 28
the field after 8 illus Wark, i. carrying the lef to the factory and queuing up while it is weighed. This tile is not counted in the hors of work.
Moreover, the health and educational levels of cstate, women arc
deplorably low and well below the
nątional averages. For exampłe, whereas thic maternal III ortality rate in Sri Lanka Was 1.5 per thousand live births in 1969, the cstate Lt. was 2.7. Infant illortality rates were 52.7 per thousand live births in, 1969 Willercas on estates it was 11) and is today probably much higher due to the present food crisis. The high infant Iloriality rates which have always been more than twice the national figures are due to the gross anaemia and underInggris lille L of Hic estate Illothers. The Illiteracy of estate Women also constitutes a major sorce for concarn. The illiteracy rate for Women of citates is as high as 5.8%, that is, double the rate for mell of estates (26.8%).
Industry
With the growth of industrialisaLiII, II Sri Lilka Ellerc li:LVC been more employment opportunitics for WGE) en in this sector als semiSKIEG I LIII skilled ElbOLIT. WCOTICI form a high proportion of ic labour force in the textile and garmen inistry, in tea processing Lild the
in facture of primary rubber and
cair fibres, in the bcccdi and Lobacco
industries, in the hall facture of
inci Listriall chemicalls and food (including biscuits, chocolates and sweels). ilıqd in Ehıc Tı : Elch, 'footWeir, brick, toy, and soap industries.
III all Lhest: industTies WC) Illen Werkers. El re paikli less than Innen Workers. Where ildLIstries come Linder the Wages Boards, thc Wage direisfrel I We are laid down and published each Illonth in hic Lab Lu Ft GilzcLLc, The discrimination against Women workers is perpetuated in Wo ways: either the jobs in each industry are demarcated into male and female sectors and labelled Class A and Class 'B', and the women workers who are relegated to Class 'B'
artրaid it wer rilt: dispenscd Willi . Ward divisio) is wOrkers', 'feit: 'young Tersons", rates :ATc p:ıid Luy { gorics, Below, EL (ii) trades govern Bourds) of cliseri T{11:5 --
Brick & Tic Mill Ceir Mattress & E. Match MELIDL die LLI Plum bago Trade
Rubber Export TI
Agriculture
WoITien's organ cal associations a largely tended to little activity has Ehle TLITEIl a reis. Stil dics bicie delt oppression all Wille of differ: society. The will and poor peasant the paddy-fields is. El Certai II divisit). being traditional involving trails Willowing and cluded from plou Work in the tres
III arcius Wile:Tee thīELL W Colleil. Te tisk s CCITTected | ture (such als wo HoLiT): Te not Ill the belief that yie
Women of the a Te confica | LI W thill in the field, they may super Cathers in Lihc fiel dency to prese relying CT the II: WolcIl in Llle f: daily-բaitl labույլ
Wehmen fUFIm : ticon of Wilge ab W Lidol :: Illicit Titi district to dist Rs.350 to Rs. 5, depending on the

ki, Cor Iris, Fiction is ind a straightformade into "Illale Workers” Til ind different wage all of these cate : Tew ex Euples ld by the Wages inition i Ti Wilge:
End the custonary Fates o pay in the HTէ:HS- However", donc factor is Liversal, Etil that Is that Wonileri doing such work receive Rs. 150 or Re. 1.- a day less than the men.
Women wage workers in the country
side are from a milies of landless pausants, dr.those whose land-holdings are Loo small to provide then with an adequate income.
Alլ:ր Wille.
facturing - - 5.JI -4. Bristic Fibre Export Trade 4.7 --- ring , , , . 5.21 4.7
(4.4 4.T ilkle 6.25 5
isa ticals and Politimong Women h:1ve e urbal biscid till Ecc cried III NOT have {{fly | CIl the mit LITL (f exploitation of 1 segments of rural I'll cil o Titiciliticill.css: families labour in with men, but there El Cfb)LT. WIJINICI
confined 0 Work blanting, weciding, 1ärvesting and exghing, sowing and ling floor.
old beliefs persist “Li nicle: Imi'' ċerti II with paddy agriculrkin he threshing }ւtttւ It WtimiըI1 in els would go down.
Inmiddle peas:Intry 1831tik indoors r:Littlich lthough se solally Vise he Wrk ol | There is al IIve status by let hull | labOLLIT TIL Hlic mily, but on hired
significant proբerpur in paddy cultiis of play vary from ic ranging from - H duy (with lünch) drill for about
1 E1 tille ErHdi Liu Iha L | agricuLiit, LI rai | sictor, apart froit paidd y cultivaltior, women are also employed in highland cultivatic II (coccoli u L, chillius, vegetables, spices, etc.). Here, tec, Woller of the fanlily or Wollel wage Workers do Illiny of the difficult tasks connected With this typic of cultivation ind, in the case of Wage labour, the pily is less than that paid 15 mil WCT kers, 11 TLIF:ll El reis. women wage workers are also enployed it lower wages ill indusTies sind Occupations sich as the production of bricks, coir, beedies, stonic cutting : Ind in constructio III.
In all three sectors (plantation, agricultural and industriail) the fuair demand of wome workers should bË for equill wages; they should also press for het ter centecil Hind medical facilitics and for modern reces in infa In E schools, Which Would helpi tie). relieve these Workers some extil from the double exploitation as Wagt workers and housewives to which they are subject L LI Indier tlie Ericssiċi li lceçnomic system.
THE SUPERSTRUCTURE
II Sri LilIlk:I Wllere the HTee sectors of the ceonomy are Lirtly based on chelp ficennale. Harbour, ziuridi Where in certain echelons of society, socialistal LLIs is II measured by Llic Illin participation of women in productive work – zu superstructure of liiws, i Instit Lu LiCJI IS, idcology a il clul I LITIC have been evolved to justify the prevalent exploitation and to rational
- S SLLL HL000KJ YJKKK S LLLKK S00SSK

Page 29
|fsc the unequal social status o Wollen and the discrimination that spr:1gLisci gli inst the 1.
The laws of the country affect the position of Worllen in sic Werl ways. There are many legislative el la ctm c`En Ls Which givic - certain pri Wileges to working Wolen (maternity leave and henefits, Lanteen. Creche ind rest room facilities) but these arc not always strictly follo Wech by cmployers. While the larger industries adhere to the laternity benefits provisions, the calı Eeen. creche.alıd Other facilities are in Innost CElsels deplorable: JT II con existen L, LIVEII i II the best run work places. There are also other restrictions om hours if Werk, on right work (with certain Exceptionis) i ritic II Coverti Fle, Which 1re in keeping with enlightened legislatico F1 in other countries. But om le key issue ofequal Pay, for equal work, the wages board legislation of The country enshrines the reality of fisCrimination Het Weel Ten Tid կԿII-IIIԸ11,
The other types of laws that diffect Women are the persona i laws of the Roman-Dutch, Kandyan, Thesavalamai and Muslim Law systeins which govern inheritance, marriage, divorce and allied probcm3. SLI-dics LGL ble Tilde of these laws in order to determinic where women are it a disadvantage In respect of property, SLIccession, divorce, payment of airflony and the custody of children.
Discrimination against Women is especially prevalent in employment {Ind is purpetuated by both employers and the government. Even Though լc:uss to st:und:try and higher education is freely available to girls, the highest unemployment rates in the country are to be found Lig girls and won 1. In Several types of government employment there is open discrimination against Women; it has been stipulated by circular that only 20% of available Wacancies in the clerical service aid L0%, in the administrative service are to be filled by Women. The xtent of this discrimination chill b2 See in the results of the last calliIlaltio1 for Tier LitTime te the LiidIllinistrative service.
Certais occupations are trillitionally regarded as male preserves.
"Et HJ-I- REWEEN", JLFLE LST's
WCT 17:e är et liði
нгпенi services, ili
rail and harbour and sorting, in el WEL ter Services LIIII LIW O cases) is eng Tlaliinists. and ei are only Lifew won 20WCTT N1CInt p{}3ES, service and in top in As a receil L report training c) Li Tissies government depar Critics for in CHTIG H II || Erid "yij Hien arc initial beLEHLIRe: I 1) yY,')Iılık in those fields'.
Te GDI || LIUtiek for government depar CC. DIE TITTICS, Icell Weaving instructre telephone operatoi Departle of I excluded T11 it training co LI F'ses By thus restrict in "Liriditit Fäl” field Them acc5 to tech Filent training, the discrimination äg. pirpetuated.
WOII el Workers Centrated in occup: a high cheap labout plucking tea leave strippingtobacco le ing, spin Ining and g (75%), packing, la manufacture (Gt)') and agriculture (40 Inuti growing and (30-40%), They : the traditionally "f til 15 stigh is II: Wifery (94%), tea: telephone Coperat (40-50%).
Within industrie Tha Tkcd S3x diffe Women being emp un skill:d, Toutine, (Weaving, spinning ing, sorting, labellii jobs not requiring Inicial, Lechnical or (clerical, sales assist
Te tre ad
ppF=1
Elle economic WÖft1:11 tnd th:ir re!

in ployed in the transport (road. postal delivery :ctricity, gas and Fט טmט t inקXCCט) icers, surveyors, clicials. There el in higher level in the diploitatic anagement posts. has shown, in the conducted by LITICIhts äld Cor{lgement techniapprenticeship excluded, chiefly in are employed LI LI shirt coLITses When 11 certain The Its in 10 The ework Kind For SSts, typists and 3. Ewell i Lluc abour girls are the Vocational except tailoring. women to the is and denying nical and manageVicious circle of insL Wollen is
Leild L.) be contions which have potential such as s (93%) women, aves (90%), Welwarment industrics balling and beedi rubber growing -50%), and coco5Dir milluflicture Te Fulso foundi in enninine occupa
Irsing and mid
hing (54%) and ors = #F1 di typists
s to there is : rentiation, with loyed mainly in
repetitive jobs plucking, pick1g) and in skilled very high mechaintellectual skills ants, secretarial).
naythology of
exploitation of legation to a sub
ordinate status is airlained and fostered by strong traditional and cultural attitudes towards Women which originated in patriarchal and feudal societics, and which have been perpetuated through an elaborate mythology of modern-day superstitions directed against Women. There are, in many instances, traditional prejudices and obscurantist views which arc reinforced by capitalist ideology. For example, the view prevails that Women can nevet be given equal rights with men because of biological, physiological and emotional differences. These differences are said not only to prove the inferiority of women but also te act is the basis for the division of labour, and the demarcation of "spheres of influence", between man Il T1 W01 la II.
In classical Sinhala literature (influenced by the Indian tradition) the emphasis of the ruling class was on Woman as ill object, a thing of beauty and an ornament, whose purpose was to serve, entertain and a muse. Woman, whose Thain virtues were servility and beauty, had to conform to a given stereotype (face like the noon, eyes like blue lotuses, hair like black clouds, breasts like swans and hips like chariot wheels) and possess the five attributes of beauty-pancha kalyana, (hair, teeth, skin, flesh and youth).
Today, this "panch: kalyana feudal attitude to Women is used by
e capitalist II lass mcdia to Perpetuatie the concept of Woman als 21 mere commodity-either as a source of cheap labour or as a play-thing. For example, at a time when successful anti-imperialist liberation struggics with women participating alongside men have been waged in Asia, it is interesting to note that the mass media of the capitalist world is busy projecting and perpetuating myths and fantasies about the traditional "Oriental Woman'. In the airline advertisements (including Air Ceyton) she is portrayed as beautiful and servile, whose only function is to serve male passengers: "Visions of warmth and laughter...our girl, gentle hostess in her sarong kebaya, she Will care for you as only she knows how'' (Singapore Airlines); "In Malaysia girls are taught the gentle Ways of Womanhood - among them
고 7

Page 30
the art of providing graceful service; Its a tradition you will find on MAS” Malaysian Airline Systeins): "She Die Ver sorgels höW importlInt you are. He certainly didn't expect her E0 Sew hi5 but 10Il btick (Ill, HLIE she did' (Japan Air Lines): "The Tesplerıdently bu oyant - yet pırıIdently tender smile uniqucly Todest, T Tiiliition mally crieri tal'' (SCID LI LI H1 Korea Il Air Linies).
II1 ii irri Lidolail. Lil nature dependent,
physically fragile.
Falst a SSLI Tıptici 15 mental inferiority ( been Lisel agilirist : CeTttiin other nytt: cited that WIT cannot claim cq and that equal pa Hec111SL Women
TTT TTLLLLLL TT TLT SLLLT LTHHHL LLSLuulT LLTLGGLS LLLHGM LLLLSSS bring trwy'n sir Fried by fire The death of Frer H.Eshard III erstrar FF til
תrTFly ITIMITrים חi חrולוטיJI" H),
Apart from the mystique about criental Women. Which the airlines « If the World Tesort to, we fi Tid hält The Imass Imedia in Sri Lankal is used to reinforce traditional prejudices about women and inculcate false Walucs and attitul des to WOII el 1.
Many myths concerning the alleged inferiority of Wolnem Tid fheir traditional social role are fostered by the press, films, radio as well as in text books and magazines. These tly this fall into several broad catcgories. First, biological differences between III el and women are used to put forward false propositions that Women are mentally and physically Weak. Such views are based on LI Inscieli Ħic LSSLITTıptions tial L. Women have less brains than men, that they are/inherently emotional
definition of equi: the Tass media s til Teatt: a Whalt the only permiss Wola are those Ol Connected with worn legends that is in the ho Tille, til "women's work",
Work Ltside the so-called femininit are neither interest involvement in pc. ind SOLill Livitie
HOW is the Illass ni
WOT le ''
In LIT newspill W{}Illon : To LISEt to in advertisements Đf products such
 

1:1 [ Lhey :tre by Hind that they are
Second, on such
of physical and which hil we always }րpressed groups). is are deliberately in being inferior Lality with men lilot be given 1re incapable by
fp'fig f ச3 நீங்
II work. Third,
deliberal Lely Lised : mythology that ble Toles for il f Wife Illud Illother. his are the Well Woman's place 1ät hollsework is that women who
hulle 105e thei T and that women di Incor capable of litical, economic S.
Ledia used against
pers, pictures of itträCL titeltill Eo 3, whole range its ridics, tyres,
furniture, and shoes, thereby reducing women to the status of an cyccatching object in order to sell other com lodities. The si me is true of beauty con tests organised and sponsored by business firms and by newspapers Whereby women are degraded and reduced to the level if (clittle, in order tb ld yertige Fındı market various products. Recently “Miss Sri Lanka” beauty contes! was advertised in the papers as follows "Calling all you beautiful
II**.
The so-called women's pages of ELIT I 1ewspapers alls direct the attention of women to personal questions like love, marriage, family, and ornamentation (jewellery, hirstyles, cos Thetics) and consciously deflect their attentil roll social and political problems, This sa IThe attitude is scen in the weickly papers (TWarri, karir har Wirklı fii) which specifically cater to a large readership of youg Women. In a typical rccentiss Luc of TWarri, Lluc content8 included :l feature story on "Our beautiful air-hostesses', astrological Illarriage predictions, fashions for the New Year", Fild altı ilirticle enti = tled "I Will like to be belltiful'. There was not a single story or reference to women at work, or wormen in any kind of intellectual, political or community activity.
Sinhala and Tamil songs on the radio are also a form of propaganda -0te tertain stereotype attiוחto pro LLIdes to WCITheII. The 50mg5 Tange from crude "bailas mocking working women ("Our grandmothers were not typists") to pop songs about the modern "pancha kalyana' who demands and extorts clothes, perfume and jewellery from a man, who in turn is proud to be seen with a well
Ldored Will II.
The Tos degrading attitudes to WIIlen are reflected in the recent spate of Vulgar Sinhall films whose CTL de titles : Te iTdiica Live of the content. (1333 exico, occide අම්මා, ඕන්න මාංජෙෂි කොල්ලි පැනපි, jl:J. GE33-37. jaggő). In Such films a Woman is portrayed as a devoted Wife and mother sacrificing herself for husband and son, or as the doll-like girlfriend of gangsters, muda lalis and play boys.
ECONOICFEWIEW, UNIT

Page 31
Women ill. Sinhala films arc altermately slapped, pushed around, pampered, showered with jewellery and clothes, taken to night clubs and birthday parties or Worshipped in a shameless hypocritical Way as a long suffering "golden mother".
These attitudes to girls and Wymen Fire inculcated Troll infancy all ill cursory glance at any of our school text books will leave the reader in no doubt about the place of Woman. In the Grade 9 Sinhala reader, El section from Kaya'da Sekera is included-"(Advice to a Daughter)- which urges a woman to spend her entire time in serving her husband and his family and in looking after his property and belongings, Taking another school book (English Book 4) at random we find the following examples :
"Mrs. Perera is cooking rice", "Mr. Perera is working", “GLIInsiTiis a Techanic",
"Solitiatla is a dress Taker",
"Leela is sweeping the kitchell",
"Ranjith is repairing his bicycle".
For the school exhibition "some boys will make model aeroplanes, spaceships, ships, trains, buses and motor cars. Some girls Will Inake teapoy covers, tea cosics, tray cloths, cushion covers, paper flowers, shell
līcī,
In a country where nearly 30% of the Work force HTe WOIIlen, Mrs. Perera is portrayed cooking, sewing, sweeping and making endless cups of tea for Mr. Perera, who having returned from work is reading a book, while his daughter is sewing, bill this solis playing with an engine. In all OLIT text: books WOIT1CIl a re never portrayed doing intellectual ormechanical work, reading books or going out to Work,
LLLLKKLL LL LSLL LLSLS LLLLL 000
Sigпs of hope
In discussing Sr. emphasise certain Which fal","CLIT the: women. The fict has the first WT: thäf there häWE bei Ministers and M. II let, that the Te ; University Profess worllen holl leat government se Twi professions (esp. m:dical), that allt organisations il th: ԼTitle LInitill rii their shill of ini Wyomine HC Liwis LS – dolu bE in celtiyes ! the present strugg rights.
Ole of the IIlJ: the high education girls today. With education find է: bisha girls ha'c of all opportunit For example of t. of St Ludents in gra 48% of the stude What is Ilore IE figures for the h grades 9-10 (in 56%, girls in the A parallel Sciences 11-12 the figure: (Arts) and 3ճ% The tither reill ar of the past dec increase in girls level (24% in | 1972). In some fa ties, social scien the Wolhel Lt(53% in 1973) and Womlêl in the SL faculties has incr
Willät de5, this: the status of WoT) societies the ig and lack of educ י חטmסF WטLies T

i La Inka, we | | | 1 List
positive aspects
enlil incipation of
that the country In Prime Minister, II aldare Wollel 2.11bers of ParliaTe W Will TG di Lihat SCT ile ling positions in Ce :Ild in Certain cially legal and hic radical political this country and Wellemt hliwe Hlad litant, to Lurageouls - all these are I) 0 0thef WOII en in leto a chieve equal
st hopeful signs is al standard anlong
the advent of free tiu::HtitյIl im Swilya Eled tElem155 WE:5 gs für Eduction. Hic total eTTITEIT t des 1-12 (for 1970) its have been girls. smarkable are the gher grädes. In 1970) there Were rts and 41% in the tream. In grades i were 59%, girls girls (Science). kable development ldic his been the at the University 96 and 42% in Lics like humanies Illud education Inti liber Lille Time
the proportion of illuc ad Illedical eased significantly.
II leall iIl terms of en " IIl traditional norance, illiteracy :ational Copportuniwere weapons used
to keep Women in a slave-like subordinate status. In a country. Where the Women's literacy rate is among
the highest in Asia (71% today compared to 10% in
1911) and where wolcn have equal access to schools and universities, it will be difficult. Lo continueto deprive Women of equality in other fields.
But inspite of the hopeful position in education, Women and girls in Sri Lanka are also subject to various forms of dependence and subjugation based on attitudes and Practices of a feLIdä erä. These irl:lude the dowry system, arranged marriages and a ready acceptance of the superior status of father, husband, ind son and the subordinate roles of mother, wife and daughter.
The psychological problems and anxicities of Women in Sri Lankal have yet to be studied, but from a cursory su rwcy of attitudes of girls from rural homes one finds a multitude of fears and superstitions about devils, ghosts and spirits. With malevolent influences over women, along with fears of rejection by parents, relations and society if any deviation is made from raditional norms of conduct. Some of these fears are of course inter-connected; the belief that certain devils possess Women Inore than le is linked With talbots on Wollen going out late, or leading an independent life. As in most patriarchal societies, this is also connected with a riigid code offemale chastity.
Changes in the economic structure of the country, the introduction of collective forms of ownership ifnd greater industrialisation will sweep away feudal attitudes to Women and bring Women into public life on an equal footing with men. Onc Will then find that the great un tapped source of productive and creative talent of the women of the country will be harnessed into all activities connected with the transition to Socialis III.
9

Page 32
A Primer for Ai
PLI STEETEI
LL 0000SH HHHLLLLLLL YYS LLLLL LGG GTHCSMTTTTCH T S TLLLLG when both donors and recipients sincerely believed good of aid. Since ther aid has been seen often as LH CLL LLLLLGGTCCTT TL LLGGLTL LLTTLHL HH TT LLS LGSL HCCLaLL LLTL T L CCGL LCLTT GTaLaL LLLLLL ship. Paul Streeter is a well known writer on CCCHLaaaaL HT LHLH HCmL T CCHTLLS TTLT TCT LLLLTTT T
"Because I am Witty you must Inot imagine I am frivolous, and I will not imagine that because you are pompous you are therefore serious",
– Sidney Smith to a bishop.
This short guide is written for aid recipients who wish to find their way through the political and bureaucratic jungle of donors' prejudices, myths, idios yncracies and more sensible requirements,
The kings of Siam are said to have ruined obnoxious countries by presenting them with White elephants that had to be Thaintained at vast expense. In the modern setting this can be achicved best by tying a highinterest Ioan, called, "aid', to projects and to donors' exports and to confine it to the import content or better still so Ille part of it, of the project. But even untied aid on soft ter 115 Can ble Lused to Tollcote projccts of a white elephantine natu Te, because Capital grants do not cowcr the subsequent recurrent ex
penditure which the elephant inflicts
on his owners. Receiving aid is not just like receiving an elephant but like making love to an elephant; there is no pleasure in it, you run the risk of being crushed and it takes years before you see the results.
Economists have correlated aid received per head with a number of characteristics of the recipient country, Waluable lessons can be learned from this exercise. If you wish to maximise aid received perhead, you must become a very small country.
3)
If you are al mem! breakaway. Ify tist ovement, e.
in List register a the cold War, ! CENTO, SEATO military pacts as hawe a regime thi urable to priטav! fact that the pub much larger in
preach the virtue let thin it is Televät. You a high score ori performance critic IL CIC) Elles lO POPIL ווTTGTTטק=nטIt is n
THE FIEITHE 5LICEl hat it bele the recipient. Aid for the exports reducing delland recipients, while supply, tends to LETIS OF träde. Si managers, technic TräLors floy back from which they never failsto poi investiment ower: stream of dellan spare parts and investing country extended for good prices, but have interest, in cons,
currency. Char begin abroad, but at holle.
If äidil is not pressure groups ||

Recipients
"pr7Zé*FTI ʻ"criä7"",
of Frp tro 1477 715 of Trade. dil réaltaí idireleveloprilier ! "Oxford.
ber of a Federation, LI have an irrendelincourage it. You QW temperature in Delong to NATO, and as II na ny other possible. You Inust it declares that it is ate enterprise, The lic sector is in fact the countries that I of private investin yours is quite must attempt to get the check list of :ria - except when lation policy when : ICC that counts.
:rict Of Illugh Hid 1s fits the donor, not by raising demand of donors and by for the exports of increasing their improwe dono rs' ilaries of expatriate cians and adminisil Lo the Countries colle. The CBI nt out how private SeaS gel Crates a d for components, laterials from the ". Tied loans are ls at uncompetitive to be repaid, With fertible very hard ity therefore may sometimes ends up
given to benefit the donor coun
tries, it is given to undo the harm done previously. According to a news item in The Times (16th Feb. 1966) -
"Wice-President Humphrey of the United States announced a S501, loan for Pakistan to reduce pressure on the national econolly caused by the suspension of American econoIllic assista lice".
Much and a growing amount of aid is given to finance repayments of past loans and interest payments on them. Gross figures for aid hawe grown, while the only relevant figure - the net transfer of resources, has decijed.
A simple test is this: whenever a overseas firm colles to you for a concession with the promise that it will raise your exports or encourage import substitution, and therefore be splendid for your balance of payments, check carefully what story it has told the authorities guarding the foreign exchange position in its mother country. Often you will find that the very same firm received permission to spend money abroad on the ground that the investment would strengthen the balance of рауппепts of the capital exрогtiпg country. It may be the same firm that promises in its company report to export more from Britain, which also promises you to import less frol Britai.
Many forms of aid received Lurin out, on closer inspection, to be aid. given. Aid is, for this and other reasons, a three letter word, Dolors may lend you at 8 per cent and you hold sterling or dollar balances at 4 per cent... Aid from domorso surplus capacity means that you, the poor, are helping to reduce uneII ployment and to raise profits in Hic count Tics of the Tich. The acceptance of food aid helps the party in power in the donor country to keep the farm vote, sometimes at the expense of your indigenous agriculture. Purchases of fertilizers keep important branches of the chemical industry in business. Aid-tying enables producers to raise prices
ECONOMIC REWIEW, NE 1975.

Page 33
against you and to acquire a captive Harket. Sending young and promising men to be trained helps donors to staff their hospitals, factories and universities with the best of Will brālis.
Always look a gift horse in the mouth, for it may turn out to be
Trojan. Or, als Ernest Bewin used tot
say, when you open the Pandora Box, it's full of Trojan 'orses,
Many donors have promised to provide "financial resources...... f a Illinimum Inet amount approaching as nearly as possible to 1 per cent of (their) national income". (UNCTAD Recommendation A. W. 2). You must beware lest they will hit this target not by inflating aid, but by deflating their national income. The British Government has said
"We shall hope.......... to be in a position to increase our aid to foreign countries...... "" (Cmırıd.
2736, paragraph. 5). The hope may be realised as a result of the break-up of the Commonwealth.
Much of what donors call "aid" is really aid to their own citizens. This does not only cover loans and equity investment yielding handsome rates of return, though tabulated by the Development Assistance Committee of O.E.C.D. as "aid". (It is rather as if, when buying a share of I.C.I.. I enter the transaction as a charity). In addition to this, aid covers part of the compensation paid to former colonial civili serwants for loss of career when they retire when a country attains independence. Aid covers compensation to individuals and companies who had claims to money, property or land in newly independent Countries, which these countries did not meet. Compensation of British farmers in Kenya and the British South Africa Company in Zambia is counted as aid. If exporters, over-eager to sell, have acquired debts which cannot be repaid, and if their foolishly incurred debts are paid off by the British taxpayer, the payment is called aid to developing countries. Those who lost the war and pay reparations are also encouraged to count these damages paid to developing countries as aid.
There are a few simple rules which may help you to get aid.
First, potential donors have to be identified and their peculiarities and
FCONOMIC REVIEW, UNE 175
idiosyncracies hɛ S0 that proper rei and the right typ bie sont ou L. In right impression c. Inotives and II st Lidied. Send ot tions, representat the donors, or I, illage that donors The representati the same language phorically, appe: SE I lle välucs i Ilia Il Tiers as Ille tit English IIlen, he in sense, be able to el Obes tCHO EL Tticulatic or at the Englishmen 5liggest that he l OLI, TO E O WOII ET TIL HI appeal Lo Amerit frank, manly, u at facts and fig professionali. To THns, he should keel on private ini of formulating ide philosophical sys OLIS Cal tegories, s Words With clas: (A Subsequent primi Lo What appeals Chinese donors). Topreseative appi that each donor na While remaining pro the better his ch It is useful to kn always say, and, Write: "absolute in and incone per e positively correlat levels of income capita" when you the rich get richer. to be familia T with || tull falds. To thic Pressed by the r agriculture and I growth you must F mes of land reform purchases and cost tion of the marginal Others, eager to emb evaluation exertises, sed if you can produ Ofévaluators. What to do, be ready with But to send out Liators, who can pla beeгor be preparec

: Lo be studiedi, Lc5 LS ca Il be Imalde of representative rudert. Lo Imake Lille aid agencies their thods must be for aid negotiares who resemble her resemble the ave of themselves. is should speak literally and III het Elto accept the have the same mor. To appeal to |st shi) W cOIT1T11()I1gage in small talk, rious, too clever, oo learned, laugh Siokes, which will is a sense of hillsuccessful With ave oily hair. To ans, he must be pompous, good res and appear appeal to Gerbe hard-working, iative and capable as in a coherent cisil with numerpelt out in long sical derivations. ler will be devoted to Russian and The more the oaches the image tion has of itself, operly deferential, tnces of Success. ow the jargon : Illore important, creases in income apita are highly cd with initial and inconne per wish to say : It is also useful hic latest intellecvse Who are imccd to ref3 TITI |пnit population resent programl, large fertiliser benefit calculasperm diverted. ark on thorough will be impresIce all evaluation EveryOL PropOSe an evaluation. |cceptable nego
y golf, or drink to picnic, and
who can talk of the trade II atrices, systems analysis and gaps is not enough. They must be well-briefed, documents Inust be ready on time and le Lters must be ELIls WeTed.
Amongst the projects, some of the best ones will stand little chance of success, while some of the Worst most. Agricultural, fishing or forestry projects may show low rates of return, sometimes long delayed, but can Imake largc, contributions to the economy as a whole. They will not be very popular with donors. Projects with a small import content make good use of local resources but, because of the local cost theology of donors, will not attract nuch foreign aid. Large residential universities, preferably on fertile agricultural land, planetariums, auditoria and other monuments to which labels can be attached, may have no (or negative) development impact but are dearly loved by donors. Administrative buildings, police houses and even, in some cases, prisons may be essential but to ask for them is a pretty hopeless quest.
In matching projects with your donors, you must also pay attention to their balance of payments position. It is easier to persuade surplus countries to finance the domestic content of a project than deficit donors. Projects with a high import content should therefore be sold to those with balance of payments deficits. Make good use of the skills which donors can supply. It is not much use asking a catholic country for the pill, or one without a chemical industry for fertilizers, however important both pill and fertilizer may be. There is no point in asking for a project which Tequires for its execution managers whom the donor country is notable or Willing to release. It is useful to employ knowledgeable aid consultants, preferably men who are familiar with the procedures of donors.
You do not have to know Whether aid is given for military, altruistic, Machiavellian or profit-seeking reasons. But it is a great advantage to know something of the power games played in the corridors of the officers of the donor country and of the bargaining between different Civil Service departments concerned with the distribution of aid. If the
3.

Page 34
recipient can add his Weight at a Crucial lollent Hild at i Crucial point in the process of decisiontaking into a balance of consideration and power, he, Illay be able Lo. II lake a substitial diffe Telce. Sulch knowledge I may hawe less to do With Illnerits of a cal se thal Ill With thicidiosynCricies of Illinisters and Lei T. Gelior Oficial. Es Eli With the Städte CT balgaining on quite different fronts.
You must try to Inaximise the LLLLLaLLLL LLL LLLLHaaaL LLLLLL aaa aLLLHHLLLLSSS Although this adds to your administrative work, it makes it possible te play one against the other and to encourage them to completc. The larger the number of chanics, he greater the number of vested interests and therefore the larger is likely to be the flow of aid. Always oppose efforts Lo co-ordinate, streamline, or integrate aid-giving activities and istitutions. More diffic Lilit is the creation of the right kind of political cilite. TU the AITETICHПЕ НП Ц the Germans, you must convey the impression that you are helping yourself, then Uncle Sam and Onkel Michel may wish to push the car you hawe started. To the World Bank and other donors, you must present consistent national plans. National planning, irrespective of the Pola Ils of other nations and sometime inconsistellt with these pola Ins, is the Inodern cquivalent of 19th century laissez-faire. You may be forced to repeat and perpetuate myths, such as that your borrowing is "only for import of capital goods, that it is only for projects that yield exportable goods, or for projects that "pay for the Ilselves'; that all the Ioney will be spent on the donor's products, and on his chose TI POTČojects, etc. Most important of all, you must perpetuate the myth that you will "take-off" within a specified period and that all aid Will then Cole to a happy end.
If you have a good agricultural engineer Qr a good expert om fisheries, and you wish to do hill a good ELIT Tecruit hill foTä LJ. N. Lechlicä assistance prograTime and ask for a similar expert from another underdeveloped country. Admittedly, both will be less effective in the foreign land, but their multiple salaries Will be un taxed and paid for mainly out of rich countries' U. N. contributions. The Timore swapping of this type you can engineer, the
32
higher the standar experts, though ad tributil E de Welt.
It is LI Seeful to ki1 mythology of aid,
There has bec discussion of th project and procu doubt, a terriblդ: forms of tying can WEILIFE CF i eiter of the W. half. BLIt project tying or in is linlimited, the li ỜIl a ILLI I libert CT f stage of developm Liry, the wolu The cof donor, etc. Proje by the fact that t only apparently priority project, Would have been case With funds W. For soile low prio. larly, the possib alway's exists. With Free foreign excha cx Ports can be di W froIII other cūLI tied oal is used have been bough
Another myth to achieve develop imports must be c. of course, true developed countri capital goods th: at excessively hig development prob the Workers who Liol of Ill West Illi consul ptico El llewi very low. And to by importing food make as great : development as im goods.
IL is also said bo Trow only for exportable goods balance of pay III пап Сопsideral balance of payle bl: CGIlsid:Tel. A domestic producti or indirectly, redu imports, is just production of exp
It is further sai borrow only for foT LEIle Iselves" collected is suffic

di cofiliwing of your Illit Ledly their conplent is reduced.
now the prevailing
a good deal of 2 har il done by re.Inent Lying. No Lidol of Hesse Lwo greatly reduce the f recipients, and by itself can be Success either in procurement tying litation depending actors such as the ent of your counyour trade with the !ct tying is limited he donor's money finances a high While in fact it carried out in any lich ELTE Ilow Teed rity activity, Simiility of switching procurenlentitying. Inge earned through erted to purchases Il tries, While the o buy what would in any casc.
is the notion that, ment, aid-filanced apital goods. It is, that many underes can not produce imselves, or only h costs. But the le 11 is how to ficcd
do le C15TLicin L. goods, while els generally a Tc: finance this surplus | froII1 a broad may contribLILión LC) porting the capital
that you should projects that yield
F. Evil We Its relicf is the in, the whole
ints position must ny contribution to on which, directly ces dependence on as useful as Lhe
TLS d that you should յrojects that "pay So that L TE WETLue EL L SeTvice the
debt. But again, it is not the revenue collected from the aid-financed project but the total public revenue position that matters. If taxation from other sources can be raised sufficiently, there is no reason why a non-self-liquidating project, such as Illa Fly agric Lltura i CT educatio lil projects, should not be undertaken.
The donors' jargon of "taking off" into self-sustained growth serves psychological and political needs, but not analysis. As long as it is merely a rationalisation of donors hopes to be rid of aid before tog long, Tio great har T1 Imay be dole. Even then, it may be better to eduCate opinio Il gradually by getting it to accept not only the permanent justification of capital flows across national boundaries, for there is no reason Why, each Ination should be self-sufficient with respect to its capital requirements, but also toWards the international solidarity Which Would enable it to envisage the possibility of an international system of taxes and subsidies on a patter El which has become generally accepted Within advanced nation states. But the notion of "take-off" can carry misleading illplications for current policy. It may give the impression that there is something inevitable or Very easy in sustaining growth, once a critical point has been reached. Even which we adhere to the acroplane II letaphor, We must releIII be that crashes can occur. There is nothing automatic in sustaining development once certain sa Wings Eild in Westment ratios have been achieved. Equally, "preparing the runway', by gradually building up local institutions, skilled and holest administrative service, an entrepreneurial class interested in building large-scale enterprises and in producing rather than trading, a reformminded peasantry, etc. may be an essential pre-requisite for development, but show slight or no returns in terms of the ratios normally used to indicate distance from "take-off". There can be a good deal of developIllent without any growth just as there can be growth. Without development. The metaphor taken from aeronautics can be adapted, but it is usually Wisc T t touch do WIl from motoring or flying analogies and to ask Who dots WhL LO Who When and Why. Eschatology is no substi[Lite for policy.
ECONOMICREWEW.

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