Page 1
There is today unjust distribition of the world's wealth between nations.
The per capita ana income of the richest Western nations is about Rs. 26,000 whilst in India and Sri Lanka it is about Rs. 1000
The gaps between the rich and poor nations continue to grow and under the existing order the Third World will never catch up with the West and only in the distant future will even reach present Western levels.
Thus under the present order it will take Africa. 343 years to reach today's U. S. standards of living whose standard in the meantine would haye further increased Even for fast growing countries closing the gap is distant for Malaysia 494 years, for Malawi 727 years, for Pakistan 760 years
That is why the Third World is now trying to stop this unjust economic order and is calling for a New Economic Order
 

Page 2


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Soorya
rey
aid
Numbert Ó September 1975
CONTENTS
FEATURES
23. The Brail Drain
28 Developing Countries: A New
Source of Expertise
30 Self-Reliance and Ujalaa:
Tanzania's Development Strategy
=
COWER STORY
3 Towards a New International
Economic Order
S CCSTSS
COLUMNS
2 Diary of Events t
15 The Economy
16 Banking & Finance
17 Agriculture
18 Technology
20 Commodities
22 Foreign News Survey
ces – The available agro-resources in the country ise, abuse and potential.
- Path breaker of Third World thought. The need hinking on instituitions.
tion -Possible saviour of Sri Lanka's produce,
picts the figures behind the grim reality of Sri Lanka's and Third s' cconomic position. The graph is based on one by Richard

Page 4
August 1
2
5.15
10
DARY ol
Sri Lanka, India, Laos, Philippines, South Korea and Thailand, signed an agreement at Bangkok on trade liberalisation - the first of its kind in the region-aimed at trade expansion through preferential trade a Trangements,
35 European and North Allerican nations signed a document concretising "detente' with a pledge to pro Iunote better relations among them and making post-World War II borders inviolable.
UNCTAD forecasts that the combined commercial deficit of non-petroleum exporting states could be at least S33,000 million.
Commonwealth Finance
Ministers Conference орепs in Gшуапа.
15th Session of UNCTAD Trade and Development Board, in Geneva.
Third International Oceal Development Conference in Tokyo. The United Nations special committee on deccolnization adopts a subcommittee report coildem Ining foreign econoIllic and other interests thwarting liberation in colonial areas. All States were asked to end all economic and financial aid used by colonial regimes to repress liberat|0Il FT 10Werthents.
India will provide a loan of Rs. 10 crores to Sri Lanka for setting up a fertiliser project according to an agreement,
Bangladesh takes over from Shell Oil Company 100 per cent ownership and exclusive rights in respect of Shell's all gas fields in Bangladesh under an agreement published.

F EVENTS
16 West Germany cut its bank rate to 4%. 1 rom 4% 19-22 International Cocoa Coun
cil meets in Londoil. 21 Tile French Glow criment formally proposed resumption of talks in preparatio Ili for E: C) InicTellC 011 cEnergy, rai W. Dymaterials and development towards midOctober, according to authoritative sources. 21 The U.S. partially lifts 13 years of economic sa Inctions against Cuba in a step. towards closer relations With the GO WerlInet of Dr. Fidel Castro. The State Departiment said overseas subsidiaries of U.S. manufacturing firms would be permitted to sell to Cuba, but the ball Will contile ol direct exports to the island from tle U.S. 4 EEC Flace Miištes
leet in Wenice to prepare the Community position for Fund Bank Annual Meetings. 24 The annual report of the Executive Directors of the IMF Inoc5 that because: If the vir Lilletice of the inflation that had developed during the 1972-73 boom, thic expansionary II leasures adopted to combat the subsequent recesSion have remained generally cautious. While ratics of inflation have generally bcc 1 subsiding du ring the recession, prices arc still rising in most countries at a pace Lihat is extrem Telly Tapid by historical standards and cost-push pressures remain a widespread problem. 25-29 Non-aligned foreign MinisEers” conference il Lima. The main topic-demands for the evolution of new World ecolonic order which would aid developing countries to achieve Self-reliance.
ECONOMIC REWIEW, SEPTEMBER 1975.

Page 5
* “If we survey the global development scene today, it is clear that most of our developing member countries are caught up in a critical situation.
“Statistically, stagnation means that fora billion people, per capita incomes, in constant prices, will grow from S. 105 În 1970 to S |08 in 1980. The comparable figures for the peoples of the developed world are S 3,100 in 1970 to is 4,000 in 1980.
“Oyer an entire decode, a „S" 3 Increase wersus di
S 900 increase" Robert S. McNamara President World Bank Group in his Address to the Board of Governors in September 1975,
"Severnity per cent of the world's people get only 30 per cent of the world's incorre....
Children in poor countries die of diseases that would not be fatal if the victims had enough to eat. ..." United Nations background paper on the Seventh Special Session.
Towards a New Intern
The Seventh Special Session of the United Nations Ge. meeting over the first two weeks of this month (when to press) can prove Inonentous for every single nation a for those of the Third World. How far can the Progra for bringing about a New International Economic O. mented is the crucial question that will be answered Session. A clearer understanding of the events and
have led to this meeting should help to place this Sess
perspective.
The Session is the result of an initiative taken in Algiers in September 1973 by the Fourth Summit Conference of the Non-Aligned countries. It was a significant initiative: it showed that the Third Worldeven before the decision of the OPEC countries - sought a genuine two way discussion, no longer accepting its de facto marginal status in international decision making.
THE SIXTH SESSION
A few months after the decision to convene a Special Session of the
U.N. om development and international cooperation, circumstances
ECONOMIC REVIEW, SEPTEMBER 1975
led to the meetin Session-the Sixth-d erials änd devel the non-aligned a major role. The a Declaration on of a New Intern Order and approv Action to thai ef
The document Establishment of tional Economic C crystalised formsc of the Third Wol companion piece Economic Rights States was propo

ational
eral Assembly his issue went lld particularly Ilme Of Acti விer be implett this Special FeSSL.res that ion in its true
of the Special FY'0tEditið TwiliPIIlent, at which Ountries played
Session adopted he Establishment tional Economic a Programme of it.
calling for the a New Internal der sets out in a Le of the demands Nations. Its the CharteT F and Duties of El by President
Economic Order
Luis Echeverria of Mexico. The Charter itself was drafted by a forty nation Working group under the auspices of UNCTAD and was adopted by the General Assembly in 1974 by a wote of 124, 6 against With 10 abstensions. The in votes Were Cast by Belgium, Denmark, West Germany, Luxembourg, United States of America and the United Kingdom. Apart from demanding a more just and cquitable pattern in international trHide, the Decla Tation and the Charter postulate the right of permanent Sovereignty over a nation's wealth and natural resources and the right to control forcign investments. The Declaration was drawn up in the Wake of the world's energy and monetary crises and reflects the rising consciousness and militancy of Third World Governments protesting against the growing gap between the rich and the poor countries despite all the talk of "only one E:11th.'

Page 6
The development of this growing solidarity between the Third World Nations can only be understood in the background of centuries of colonialism and neo-colonialistin producing exploitation and poverty, oppression and death, humiliation and misery. It has now become clear to the Third World Nations that the only Way by which they could protect their independence and survive is by co-peration among those who have hitherto been merely at the receiving end.
The Declaration is ; historic document which we refer to later,
THESEWENTH SESSION
Finally, last December, the U.N. General Assembly specified the terms of reference of the Seventh Special Session, which was to discuss and act шроп:
A comprehensive report on the state of international economic activities; focussing on constraints of a general policy nature which face the implementation of the Program IIIc of Action, as well as the International Development Strategy.
Proposals on structural changes within the United Nations system to make it fully capable of dealing with problems on international development cooperation in a comprehensive manner.
The choice facing the Seventh Special Session is eitherto set in motion the process of change or to end up with another negotiation on words or with an empty dialogue. The challenge is to achieve a turning point,
The Build up
This Session meets in the midst of a deep crisis of development, of international economic relations and of institutions. It marks the concluding stages of the international discussion whose milestones have been the major conferences held in recent years: Environment (Stockholm, 1972), Raw Materials and Development (New York 1974), Population (Bucharest, 1974), Food (Rome, 1974),
4.
the Lily of the S. Genleya, 1975), ai (Lima, 1975).
The problems fore were related raw materials, energy апdcсопот matters. They at obvious signs of Corder."
The HLIEilan Elvir
The sudden cry science about the Tinent was rically in the SäIme Salient f рапісd the шpsuгg the developcd nati ly discovered that Els 'racis IIn' Eind * actually existed. At ing issues the pr Wironment Canne LIT embrace of libera
(rர
United States. United Kingdorր West Germany
טטחFTh Italy. Sweden
U.S.S.R.
Garm in D3TTocrati Czechoslovakia Hungary Bulgaria Cuba ..
Pakista III dial Malaysia Thaillid Iraզ
LUAR
MLTTLL Za Tibia Nigeria - GlıE TIL
Scale FC: United Na

(Caracas, 1974; Industrialization
brought to the to environment, opulation, food, ic and Inonetary s only the most this "great dis
LIt
talization of conhuman environthing new; it had ature that accom2 of anxiety when ons apocalypticalsuch phenomena Inderdevelopment" with these precedoblem of the elder the imIIlediate s in the capitalist
democracies. The inevitable upshot of this trend has been a liberal perception and analysis which evades, or deliberately mystifies, the fundamental causes of environmental problems. Consequently, the prescriptions being proposed are only cosmetic, They do not take into consideration such variables as exploitation which are, and must be, of crucial importance to the Third World.
Those envirol III lental problems which are predominantly thc probblems that reflect proverty and underdevelopment of Third World nations are obscured, if not totally ignored.
Third World countrics face Ilore serious and compelling environmental problems than the developed nations. As will be evident later, the sic issues are of direct concerni not only to them because those
Table,
Indicators of Economic Development
Per capita costriplo, 1964 | "Fே ாேதt --
rigrairiere Energy ir kg. trial
rt Tri- of coal or i Feel Iri
equivale நீதது.
19f 2,700 8,772 5 1954 || II,355 5,079 - 1954 || 1,415 4.230 579 19G-4 || II, 370 29 356 1964 760 1,659 1964 || 2,025 4,320 623 1954 - I964 890 3,430 355 - Ricp. 1954 || 1,205 5.569, 424 - 1964 1,685 5,789 498 1964. I.445 2,824 24 1 հ5[] 2,410 12 |
- 19Ճ3 . - B[] 8
1963 SO 1酰 - - 1953 235 373
1953 95. IO 3. 19ñጔ
- | 1 130 2. 2
|Գե4 17) 14) 93. | Անկ | 5
92 마 38 7. 1954 25() 2D 3.
ions Statistical Yearbook, 1965, various tables.
LLLLLLLLS LLLLLSLLLLL KS 0 LLLLLLLLL S 0000

Page 7
that have created, and Imaintain, the fertile conditions under Which these problems flourish also have strong wested interests. And these interests are best serve by Iaintaining the status (LIC). Therefore, the ultimate and definite Solution to Third World environ mental problems entails a radical reversal of the present.
The primary characts ics of the environmental crisis ... confronts the Third World e poverty and underdevelopmett. In most inder. developed countries today there is abject powerty, Both in the COL Intryside a Tid in the towns, the life of the masses is contaminated by pollutants such as poor Water, blad housing, lack of sanitation, di Eleases, hunger, malnutrition and war. A this, when juxtaposed against the priorities of most Western environment movements, reduces the concept of Only One Earth to absurdity. What is at stake in the Third World is not merely the գլյality of life", but life itself
These unequal economic relationships contribute directly to environmental presures. The cheapness of materials has been one factor in increasing pollution and CIl COL Taging wat ste and the throwaway FOTOTY FITlC Ing the rijch. And continued poverty in mlany developing Countries has often coInpelled the people to cultivate marginal lands at great risk of soil erosion Or to migrate to the physically
degraded and overcrowded cities
RAW MATERIALS
The sixth Special Session of the U.N. which took up the subject ofiaW matera's preduced the Delaration which we have already dealt with. The Session's ultimate importance lies in the realm of What historians like to call ritwater sheds'-those particular moments in time When ideas, notions and Ըtincepts Which earlier had led an airy life on the speculative periphery of the main scene, suddenly coalesce into a hard core of systematic thought that is sliddenly there, which Tot, g0, a Way, which needs to be dealt with, and which begins by affecting our actions and ends by changing our perceptions. This is
FONOMIC REVIEW, SEFEMBER is
Cαίτητη
United States
Iiic Кіпgdom West Germany France ... Italy
Sweden
U.S.S.R.
German Democrat. Czechoslovakia Hungary Bulgaria -
Club :
Pakistari . . India Malaysia. Thailind 1rig
J.A.R. . . Morocco. քamհia : Nigeria Ghām H
P АтEепtiпа. Bräzi|| Chile. Colombia.
* Productiori ir grunn – 5 fағғ. ғаfrсағfry блIј Sufres: United Ni
Whalt a British di have had in mir tersely to the ΡΤ never be the san
The real impact
CIl TaW Tlateri: 15 ä
Summed up by Un
rail Kurt Wald Hei
"But perhaps th efect of this rema in the long term-- it established for ti national co-operati doubt that some n enteTed into the Ilational co-operat gence Of Scarcīties to the industrial of awareness of it The Poot raw. II Collintries. And, negotiating patter have been astered.

Table . Indicators of Social levelopment
Number of inhabi гангл. pғr:
I)rn p1950-53
E90 : 마 670 87Ո O 69
5.
5TC) 65)
62 1,200
7,000 5,800 10,500 7,600 4,800
Rep.
9,700 3.900 34,000 12,000
2,200
67. [] 2,700 1,800 2,000
ber of riffer.
2,500
Teacher Registered Books - 1963-64 || pupil produced" receiver 1963-64 1964 196芷-f事 SE .7 5.75 10) 153 5.8 2,077 3.39. 158 6.1 2,226 3.21 112 4,5 3,585 3.2
O3 5.9 5,682 4.J1 93. 5. 1,161 2, EO
118 4.4 2,910 3.15 113 4.7 2,862 2.7: 95 4.4 1,54: 3. SO O 5. 2,108 5.Ա5 4.고 2,367 4.15 141 과,7 14,120 383 11.3 65,000 183 - 8.3 35,980 11) 144 5.3 18,280 20 193 6.1 7.254 5 164 G2 24,170 O
보1.5 7,0 10.870 13 375. 1.O. 고I} 9.5 3CO 5Dց 17.4 || 21,70마 4 08 1. 34,080 13.5
4.9 11,900 . S. 5.4 6,633 35 170 O 14,910 10.5 4.9 5,380 5.4 S. - .5
ວ່າງ Statistical Year Book, 1965, various tables.
elegate may well ld when he said ess: “Things will e again."
of thic discussion t this Session was N Secretary Genem as follows:
e Illost important F'ka ble scission lies perspective which le future of illiteTon. There is little cw elements have fabric of interion. The enerlas brought home World a degree s dependence can aterial-producing the traditional n may thereby
“Thicre hias, furthermore, emerged a greater practical scope for the solidarity of countries of the Third World, through schemes within their group, to develop investment, trade, and transport, which may help to correct some of the new in balances. And it is encouraging that a comInitin front was maintained between them during this period of the special session where their more immediate interests did necessarily coincide."
POPULATION
One of the the Tics that have been taken up and pre-occupy the reform movement in the West is population. It is suggested that the root cause of environmental problems and even underdevelopment itself is that the world is "over populated'. Thus population control is demanded as a solution. Scmic Western Ecologists prophes y doom and have con
5

Page 8
wincingly and with some inpact, offered as a solution to the is of the World a Zero World Population Growth. Notable among then is the American biologist Paul Erlich who sees population growth not only as the sole cause of underdevelopment, but also predicts that it will Cause a thermonuclear WaT. Invariably, population growth is thought of in racial terms, and all the dictimai Trids a Tuld The Surces for its äTTest a TC di iTcted to Wa TCS Third World countries.
It is apрагent that huппап population growth cannot continue indefinitely in a finite environment With filii LC ITE:SOLITICES. But it is also obvious that population is not the most important cor the most most important factor affecting the environment. In fact, the question of population is intrinsically inseperable from the question of access to resources. A qualitative improve: ment in the material conditions of the masses of the people of the Third World would go further in stablizing population growth than any other IIleasures. Thus, population is not single global or biological problem, but one which has a conplex interrelationship with the social, economic, natural and political environments of man. Population may be too small or too large at a given time depending on the availability of natural resources.
Thus, population is not a single global or biological probler, but one which has complex inter relationships with the social, economic, political and natural environments of man. Population may be too small or too large at a given time depending on the availability of natural Tesources and the stresses On the environment. This ecological princi: ple is equally applicable to animal and human populations. However, in human populations Sccial organization is such that massive mill distributions of essential TESOLITICES a TE: practiced.
This does not deny that there may be an eventual need to stabilise population growth. But the emphasis must be placed on generating a consciousness among people to relate their immediate interests to the broader and long term interests of the community as a whole. This consciousness, of course, can only
6
Lälterialist: il å reorganization of system of product an equitable dis EOLITIS
FOOD
CoFSET WEtive es the World Fo Röme àst NWET close to half a bil from hunger a: COLLET es Ei Tites bilicin and SJIle հHIF billitiI1,
А герогt prep Hammarskjold P up the Third thus:
The Ilea I15 ELTE fy basic needs: it distributing then Hunger and maln dille to the act L! depriwed cof the produce oro tio pl the Socio-econ being so orgä Inizi that the li nos 5 rich and the pov factical of the Ille production can r set a part from a political and soc. tiLTES,
This is true internationally; it shortage of cere: Wes have dWillic but price increas deprived colunt Ti to reduce import CT of capital goi ing thicir sutlu TL i other. It is II of fertilizers, aggravated by a Which cuts off th tries that do Il Ih decific Il Of t GOYCIIllint to a Third World : 2 milliol Els preventing thic milli In Los Lif that during this tols of fertilize Cemeteries, JawIn: of the greatest ble CESThdie Linnhedl 01 but what is 10 the dependence WCT COLI TIL Tię:5

struggle for the
Ecciety and the ion yeared towards trigLutiJIn of - Tc:-
tilates submitt Cd Cid Conference i
ber indicate that lion people suffer nd Illa lluitritio I.
letion a full -Li Tile sole and Ei
ared by the Dag Foundation surns World's viewpoint
available to satis: is a question of 1 Timore equitably, utrition are indeed hat the poor are
I Eä Ils cithlET. I til ITclase their food, dmic IllechInisflis til His to el 15 Lufë hare goes to the Terfull. The Satised for Tood and its ot, therefore, be transforlation Cf io-economic struc
oth nationally and here is no absolute ls (although reserilled dräninä tically), es force the TT10SL E5 into a choice:5, eithler. Of i fod 5, thlus TimotggIl Cille Way GDT :: Ilof the shortage but their price, political decision, e supply to counit produce them; le United States imit exports led to stimated deficit of in 1974/75, thus, production of 20 cereas. The fict period 3 million were used on the and golf-courses world power could 8חal gróliתסl IIIן e serious is that of many. Third las been incred5 el
by technological solutions. isolated from the economic, social and ecological context to which they Epply; the "green revolution', which entails the use of large quantities Of che inical fertilizers, is a case in point.
Struggle for the Sea and Seabed
It is estimated that vast a mounts of Inoney have been spent by the WaTiOLIG UI liited NHLiO5, CommiLtice5 on the Lliw of the Sea CoInferences iIl Caracis, Geneval and els Ewhere costing nearly 150 million dollars and Ilay be a good cxample of bureaucratic waste at the cost of substantive progress. The fact renails, however, that the Wealth of the sea, particularly that beyond the area of national jurisdication to be found in copper, nickel and mangenese nodules is a big enough resource for the nations of the world to share equitably.
Despite massive documentation and preparation there has so far been no agreement on any final text: or any single subject.
The Conference is presided over by Sri Lanka’s Shirley Atletsinghe, The almost unanimous agrcement among the Big Powers to prevent the Third World countries from gaining access to this wealth Combined With trivial differences of opinion between littoral and land locked States have prevented progress. Though the attempts to expand the territorial sea to a distance of 12TilçSfTC)Till the cast has a filiasure of agree Ilient there is unending dispute about the next 200 miles (economic zone) ëInd na agreertient at all on the area beyond national jurisdiction. The Atte Tipt by the Third World countrics LC set Lup a In internātionā authority for the division of the wealth of the sea among all nations is opposed by those merely having the technological ability to do Eo, This shows wery clearly that we a Te ai công way away from international co-operation. It is in the long ter T1 interest of all states to seek to realise thic goal of establishing the principle of international co-operation. It is in the ilmediate interest of all Third World NaticIls to establish El Llew regime for ocean space. The creation of machinery to administer ocean
ECONOIC REVIEW, SEPTEBER 97.

Page 9
space beyond national jurisdiction and its resources Would be an important institutional step in the di Tection of the CW ECOICO"mic Order.
INDUSTRIALISATION
The last of the Conferences was that on industrialisation held in Lima in March this year where during a marathon final meeting that began on March 26 an hour before midnight and ended the next Ilorining, there Were mỡ less tham ten roll-call votes, as weary delegates recorded their “differences con fundamental points of principle". And the adoption of the Lima Declaration and Plan of Action on Industrial Development and Co-operation was also by a vote of 82 in favour, one against and seven abstentions. The United States voted against; Belgium, Canada, the Federal Republic of Germany, Israel, Italy, Japan and the United Kingdom abstained.
The main thene of the Third World countries was that the existing forms and level of international co-operation were not sufficient to cause the major changes they wanted in the industrial map of the world. If their seven per cent shares of world industry was to be raised to 25 per cent in as many years, there would have to be radical changes, in traditional concepts. Economic growth in poor contries could no longer be seen as an appendage to growth in the richer ones, for this would lead to a widening gap between then,
To close the gap, the economies of developing countries would have to grow faster than those of the developed countries. With this end in mind, the Lima Declaration Sct out "the main principles of industrialization' and defined "means by which the international community as a whole might take broad action" to cstablish a new international economic order. It envisages a process of "continuous consultations' in redeploying World industry and bringing about a new international division of labour. And it recommended that UNIDO be made a United Nations Specialized Agency with a new "industrial development fund' and undertake the central co-ordinating role in
SLSLLLL LGLLLLLLLSKLLLLLLLLS 000
TH]
This is ЕСолpržіїg month's C the opport cording tł which is wie Wg with New Ecg.
Since th has been a their plight InitiOS 5 1 strong posi ferences lik 1 the En holm, the l ference in Food Confi Non-aligned giers, the Law of th call for a N Sri Lankan Third Wor these confer active part
From its yies has mioiod of Ir of the Th with Profes cle *The : Third Wobr
The Background
The internatio, by thesic confe the fore the pr food., population material TesouTC and technology and пloпetaту п lying them all Conle face to f. national crisissystem of IT eq tions between countries El Ild dominated coll Seventh Special

ECONOMIC REWEW
AND THE
NEW ECONOMIC ORDER
sixth issue of the Review and - this Fer story allows Luis ity of explicitly re: Reyes" (Jutlock Le of an identity of he aspirations of the nic Order.
early 1970s there radical qyrenes5 Gf by the Third World as evidenced in their ions in Severa con! the UNI Conference iron Ellent in StockN Population ConBucharest, the UN rence in Rome, the Conference in AlConference on the * Seal and the UN ew Economic Order. ot only voted for the ld position at all ences but as an icipant.
first issue, the Remphasised the new депcy and ппilitancy rd World starting Dr Hellenter's artie' Mood of the
|years later
It has been our consistent airl to place before our readers all the facts pertaining to these issues. Our gaiun has been to de-Lunystify and de-elitise CODIplex issues by providing laterial draw froIII UN and Third World documents.
Another important facet that guides the Review is the realisation in many centres of academia that the tools of socio-economic analysis are themselves changing. We are wit in Essing the process of the old analytical tools collapsing and new ones being born, and the Review Will strive to bring to its readers these new concepts and ideas. For, we believe that Sri Lanka should be in the forefront of not only the emerging New Economic Order but the e Energing New Academic Order.
A third over-riding factor that governs the Review is to provide facts and interpretations as and when they emerge in various centres of analysis in the world. It is our firm belief that Gur readers should have access to information at the Sante time as their bre (herc. In in the rich countries and not many as happens in the existing division of labour in the World,
a debate fostered Trces brought to bleministrella Leitl to environment, raw , industrialisation änd economic tlers. But LinderTc the Teed to c With thic interamely, that of a Il economic relaa few dominant he majority of "ies. The current ssion Was thus the
logical outcome. The background
to this session
is best stated in
these few bare statistics.
ஒ
醬
A baina na exporting country gets only 70 cents of the S6 price paid abroad for a box of its produce.... Severly per cent of the Worlds' people get only 30 per cent of
he worlds' incorple.... The net fransfer af fintarcial resources fror: rich to poor COLITITries arriot IIIs Io aboIII oriethirtieth of the world's arri Efall military ea penditure. . . .
?

Page 10
THE EXISTING ECONOMIC ORDER: Some si Within the existing Economic Order of exploitat distribution of population and inlccme changed dras 1850 and 1960, The World population incrcasted 2: Li output increased nine fold. However, While Guiput trialised countries increased by 2000%, the output of countries increased only 300%. The now industrial a quarter of the population produced only 1/3rd of this in 1850 whereas by 1960 they accounted for four-f income. World distribution of population and inci
Artes Population share %, І.
1950, 1969
Industrial economics - 26%. 28%.
Pre-industrial ecÖIlonies ... 74%, 7.2%
Source: Patel, Thic Economic Dista Ilce between Na The gaps between rich and poor nations continue Lunder the prescion L Economic Order, the poort count catch up. The United Nations has estimated that the per head in African developing countries at only 1% the period 1960 to 1966. This means that for these col present British levels of per capita income, it will and to reach present U.S. levels it will take 343 year time the rich countrics Would not have been stand Would have been growing and at a faster rate.
Dr. A. P. Thirlwall (University of Kent) has interesting statistics on the problem of "catching up'. F of developing countries "catching up' is unreal growth rates are less than those of the rich count for those economics with faster growth rates, the out For instance on the basis of recent growth rates it years for Malaysia to closc the gap between itself Malawi 727 years and for Pakistan 1760 years. emphasised that these figures relate to a future bas. Economic Order existing.
Dr. Richard Jolly of the Institute of Developme quantified some of these trends and the graph belc. picture of the growing gaps.
THE WIDENING GAP
PRICES US 1960
O
GOOOH
in

Inificant facts. itu, the World tically between Illes but World
of the induspre-industrial CCL Intries With ! World output, ifths of World Tliը 1850-1950
1cur77e share'%
1850 1950
35 78
65 22 tions,
to diverge and ries will never rate of growth Per ännu. Il for Intries to reach take 273 years 5. During that
ing still, they
IFO CLICCd So I le for then Ejority Listic is their res. But even lcok is dis Imall. Wold Lake 1944 and U.S. For
It should be ld on the Old
nt Studies has W. gives a full
mmmm
فيste/
Countries
DI ALTETlCl کرسمس
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The Position of Developing Countries
There is one overwhelming problem the poorer countries of the World have declared they hawe in coIII mion, and this is the prevailing system of international economic relations which opera Les consistently againsi their interests.
This system sets at laught all attempts to close the gap between the rich and poor countries of the world; instead, it encourages the gap to widen. Under the existing system, developing countries have little control over latters of Vital concern to them, Global monetary and trade policies are decided without enough attention to their interests. Their natural resources are exploited with minimal benefit to their own. Foreign markets for their products are limited, and their main export commodities subject to un predictable price fluctualtions. The forces of science and technology in the World are concentrated on raising the living standards of the rich, and even When they could be applied to the problems of the poor the cost is sel prohibitively high.
The developed countries have benefited from centuries of exploitation of the labour and naturalresources of other nations. Much of the progress of developed countries was, and is still, being paid for by poor countries, and it is time, for the debt to be repaid. And repaid not by aid alone, but by changing the outdated and unfair rules of the game. Under the existing system, as Nigeria's representative in the United Nations Conference, on Trade and Development (UNCTAD), Mr. Akpo rode Clerk pointed out, that the "aid" given to developing countries was more than offset by the underpricing of their commodities sold to developed countries. "The developing countries cannot continue to aid the developed countries to live above their I means”, he saidi,
Two Different Approaches
The response of countries to the
call for a New International Economic Order has been varied, but two
EconoMICREVIEW, SEPTEMBER 97.3

Page 11
broad approaches can be identified. One argues that the existing economic situationis Worth PTSServing because it has, over the pist ILLETT Century, served the world CIloilously well. The growth of the World economy after the Second World War is unprecedented. This ETC.W.Li - has been based on fou Essental elements, it is argued: (1) Open and expanding Eräide: (2) Free Innveilent of investment, capital aid technology (3) Readily available supplies of raw marterials; and (4) Institutions and practices of international co-operation, Changes that would restrict the capacity of any of these elements to con tribute to growth would, according to this view, only retard global developfiiert.
Those who hold this view also contend that much more than global Economic development is at issue. As Mr. Kissinger föld the Ministerial meeting of the Organization für Economic Co-operation and Deveopent (OECD) in Paris in May 1975, "these issues go far beyond economic considerations. Economic stagnation breeds political instability. For the nations of the industrialized world the economic crisis has posed a threat to much nore than our nationalicole. It. has threatened the stability of our institutions and the fabric of our co-operation on the range of political and Security problens. Governmen's ca Tn Tot act with as SLTrance While their economies stagnate and they confront increasing domestic and international pressures over the distribution of economic benefit. In sich Conditions the ability to act with purpose - to address either our Initiolai ar international Trob IL Tig-Will fär.”*
The other approach was summed up by the Netherlands, Prine Minister, Mr. J. den Uyl, in an address to an international SymբՃsiun on the Seventh Special Sesiojn (23 May 1975}. “Onè I cannot bI agree that the growth of the gross World Predict over the last three de Caldes has been enorious", he said. “But at the same time we have Witnessed failures as a rest of today's systern....the uneven distribution of income between States and within countries...in
ECONOMIC REVIEW, SEPTEMBER LGT5
H
TRADE NOTAI
Alverse trade terms offset 'Aid" beliefs
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creasing destruction FileIt..., all it of resolices, caus exploitation."
"Our system is free enterprise and it is guided and Tility Tespects,
“Against the pri and expanding trad tariff system with TE W FT1Elter Fäl5 = | Ildustrial products industria Hization of tries.
"Against free mow We know at te s capital creation and El Te dominated by th All Europe, today. cil producing coun
"Against free move logy here is a sys Lions för ownership fact restricting the PEI Its to rich col
"Against the hot 24 WEilable Taw materi threatening scarcity.
"This illustrates t national economic sy free HS is of en saidi. choice is not one -

1 0four environFicining Sca: Tcity 2d by unlimiteči
lt Cle of pure free märkt5– IIlarliբլյlatEt1 in
inciple of open le We Witness a lo W tariffs for high tariffs for blocking the the poor coun
ment of capital Lic till that - CTEdit Systems e LU litic Sites icined by some tries:
Telt of Lechno Item Cf regulaof patents, in 11st Of these II tries.
ion of readily als We Witness
hat the inter"Stell is not as and that our BETWC: 1 L f'Te
A TD di ALL LITT LOJ NE)
System based on free cnterprise and completely planned economy. Our real choice is between oir present system which is largely guided and manipulated for the benefit of the rich countries and a system directed towards solving the problems of division of income and property, of scarcity of natural resources, and of the despoiled environment".
The Issues
In preparing for the Seventh Special Session, there was a general attempt to focus on important issues on which practical agreements were possible. Six broad topics vere identified Ferdiscussian during the two-week session. They were:
Op International trade:
S industrializition;
Transfer of resorces
finance dicyelop nl:Lenta Tid Moletary Reform: e Science and technology; O Agricultural Development:
a nid Restructuring of the United Nations system.
International Trade
Most developing countries depend
heavily on the trading of their raw Ilmaterials and cominili Odities to
9.

Page 12
finance their development. Few of then Produce coil toT; other Imateriāls highly priced in the intellational Tha Tiket. Most cal Illot be CeTtail from day to day. Whether their exports will fetch reasonable prices or will be subject to weak delland and falling prices. One of the key objectives of the Programme of Actio is to redress this SitLTEtioIII and to link (or "index") the prices of exports from developing countries to the prices of their imports. This is a major issue between developed and developing countries.
Industrialization
Only 7 per cent of the world's illustry low exists in the developing coli ntries of the world. The Test is concentrated in the richer countries where, as a result, the pollution of the environment is a major and growing concern. Under this system, the developing colintries export most of their raw Tilaterials to be processed in the developed countries, losing for their own people the eployment and the affluence that manufacturing industries provide. A call for change WELS That in March 1975 When the Seco Geleral CFerelce of Lle United Nations Industrial DevelopTiment (Organization (UNIDO), Ihmeeting in Lima, is s Lled a Declaration and World Plain f Action.
The Lima Declaration calls upon
the developed countries to eliminate barriers to trade With developing countries and encourage their manufactured exports. They are asked to **Tc5 LITLICE LIIe** theit industries i order to deploy production capacity to developing countrics and Llo expand Ecchumical assistance pro= girl Times. They are also asked to co-operate in ensuring that the activities of translational corporations con for In to the economic and social aims of developing countries in which they operate. They are further asked to avoid discriminatory and aggressive acts against States which exercise sovercign rights over their own natural reSOLITCe5. All Elese reco Tleiliations are, in differing degrees, malters of controversy. But ercouгаgingly, there is по questioпing of the general direction of cha Inge Tecommended — that of
O
indi LIstrializing til tries.
Trimsfer of Resol Monetary Reforn
The Charter of Farid TOL tile:5 of States to respoIl ment needs of de by promoting in Of TEE TeSCurces States jurisdically Tight to participt1 tively in the intel making process i World economic, f tary problems. l. ill States Have til general a Tld CoIII LI Elder effectiWei rol and to util freed by disa II for developme substantial porti KÜLI TL5, E5, Eddi developing coun Intitional co Timm LII play special atten CuläT I lecidis Hind least developed, island developing
Science and Tech
The Programm lares that 11 E ädet fTTL lit code of conduct of technology , leeds aIll Conditi countries, to impr moder Inticchinoleg conditions, and "" cantly the assistan to developing col alıcıl qlevelopment in the Crcation of Ous technology practices governi technology also to requireill.cnts of trics, the Program
Agricultural Devel
The agriculture thic Heart of the di lems of many cou for the producti of thic ELL Tk of the is the SCL TCe cof Tä W lateriāls foT most developing

E DOO TE COLITI=
Irces and
" Economic Rights States urges all to the developveloping countries creased let flows ... It proclaims all equal, having the te fully and effecInitional decisionTլ the stilլլtiւյm tյք iIlia Inicial Id IlleJilder the Chatter, e duty to promote plete disa TITha Tent nternational Conize the Te SCL TCEs T18:TT1CITE TITE: SLITES It allocating a ion of SLIch TeLillä lä5 foi tries. The interlity is asked to tioni to the partiproblems of the la Ild-locked and
Countries,
nology
T Action decFիրrth Eհոլյld Էլ: cı : Tı il t:TTE1 till: 1
I the tra 15 e corresponding to ons in developing We their access to y adapted to local to expand significe froIT1 developcd ITILITrich, il Tegel, Tch programmes and sluitable indigcn''. Clercial ing transfer of must be adapted developing colnTille Faddesi,
opment
sect lies it evelopпment probintries. It accounts cı il aldı il Colle ir populations: it food supply and
industry; and in COLL litrics it is a
major ea Tiner of foreign cxchange L Tid Sourcë 'if (do Timestic Salvings. A vicious circle of poverty, Lilderemployment, ignorance and ill health characterize the Lal sector in many developing countries, prewenting the increase in production necessary to fuel strong and contin Lled econo Illic growth,
Solutions to the problems of agricultural development lie predominantly in the domestic area of Inatio11:11 policy blu t, as Was evident at the World Food Conference in Rome last year, there are lilavoidable international aspects. The agricultural situation is complex Ilot only in technical terms but in LLLLLL LLL LLLL aaHHLHHLHHH LLLLL HLLLLLLGHL aspects, and in its relationships With the SectoT; of the Ila tiõ1 || aliud international economy. While each country has its own unique roblemsת.urcesםSטf rם ationחhiוחרct and objectives, the Test of the world Carl provide vital support not only in the technical field Hut in accolimodating for pressures on the country's balance of payments and in planning agricultural policies for general benefit. It is evident now that national policies of both developed and developing countries would gain from a systematic international consideration, at least in respect to the implications for träde in agricultural input5. Anci ոլItրլat.
Restructuring the United Nations System
Proposals for re-ordering the economic and social aspects of the United Nations STICLLTe halve been made by an international group of 25 experts who were nominated by governments but acted in their individual capacity. Theiг герогt, titled "A New United Nations Structure for Global Economic Cnoperation", will form the basis of discussions on the structure of the United Nations system.
The expert group made two kinds of proposals for change. One set of proposals deals with the way the General Assembly, it5 cornIIlittees Eind the ECDI10 mic El Ind Social Council conduct their deliberative and policy - making work, The other set of proposals
LTLTLaLTCLCLL S KLL u u HuH S SuLLLHLLLYS HuL0S

Page 13
deals with the implementation of the U.N., system’s action progra Illnlc5.
TOWARDS THE NEW
The demand for a new inter1aLicOIma1 eco Dno I mic: order II hust be seen, however, in its proper historical perspective. On one level of reasoning it is a natural evolution of the philosophy already accepted at the national level: that governments must actively intervene on behalf of the poorest segments of their populations (the bottom 40 per cent) Who Will otherwise be bypassed by economic development.
On yet another level the search foi a ley econo Illic: Görder is al natural second stage in the liberation of the developing countries. The first stage was marked by movements of political liberation from the 1940's to the 1960's; the Second Stage constitutes a struggle for not only political but economic equality, since the former is unattainable and meaningless without the litter. The del mand for al TheW" international economic order Thust be seen, therefore, as part of a historical process,
Much ofthe World hasnot yet emerged from the historical consequences of almost five centuries of colonial control which concentrated economic power so overwhelmingly in the hands of a small group of nations. To this day, at least three quarters of the World's income, investment, services and almost all of the World's research are in the hands of one quarter of its people.
The solution of these problems cannot be left to the automatic operation of market mechanisms.
In the international system the powerful nations have secured the poor countries' raw materials at low prices (for example, the price of petroleum sell decisively between 1950 and 1960), they have engrossed all the value added from processing the materials and they have sold the manufactures back, often at .ly pricesםטסnסוח
At the same time, the very cheapness of thematerials was one element in encouraging the industrialized nations to indulge in careless and extravagant use of the imported
ECONOMIC REVIEW, SEPTEMBER 1973
It laterials. Oric the best examp a dollar a b growth in energ and eleven per c: the annual incre tions reached 1 Indeed pre-In of a disproporti resources conflic longer term inti by impairing th LO TESOLITES El development and CCS.
These unequal ships contribute mental pressure: of Illiterials factor in increas encouraging was El Way economy And continued developing count II pelled the people inal lands at gT ercision or to mig cally degraded : cities,
Exploitation ha: for thousands to Incoder InfoTTims haW centu Ilies. But f'a give a political hope for change:
The decision of the price of oil, if perspective. Its i IIlore than in the in its character as In October 1973, countries put an which had begun West calls the 'g For the first til Gama, mastery o decision in a cri есопопnic policy o tries escaped thei peripheral countric them.
The outcole Indochina, where spurred on by til dependence, orga themselves froll able military a power that the kl0'W11.
In these circum question is obvio

again, energy is Oil at just over el simulated a Ilse of between six a year. In Europe te in car registraęty per Cent. tion by the rich late share of key directly. With the ests of the poor It ultimate access :essary to their hy increasing their
conomic relationrectly to environThe cheapness has been one ng pollution and fill the throw mong the rich. overly in manyes has often como cultivate margiit risk of Soil rate to the physiLld overcrowded
been in existence f years and its e evolved through fe eter low timension to the
OPEC to multiply teen in the proper Ilportance liesprice increaseshistoric reversal. the oil-exporting end to El era With what the feat discoveries'. since Wal Eco da :r a fundamental ial area of the the Centre Coungrasp as certain Wrested if Trom
the events in
the peasants, ir will for inized and feed e III OSL for II lidi technological Fold ha 5 ever
inces, the basic "either cooper
ation or chaos', as stated by the Mexican President Echever ria,
WORLD BANK WEWS THE DISPARTIES
Robert McNamara in his September 1975 annual presidential address to the Board of Gover Lucrs of the World Bank, Inade this point strongly. When he said:
“Last year within this forum II outlined the problems imposed upon the developing countries by Worldwide inflation, deterioratic in their terms of trade, and stragration in their export Ilarkets. In the intervening months these threats to development have not abated, They have grown more crinolls.
"The one billion people of the lowincome Tlations have becCпе ће principal victims of the current economic turbulence. They did not cause it. By themselves they cannot change it. And they have little margin to adjust to it. Granted all they can and must do to work out theit OWIl probléIls, they desperately need additional external assistance.
But underlying this emergency situation-and partially obscured by it-lies the more fundamental problem of poverty itself, and the need to shape an effective strategy to deal with it.
"What is required is a strategy that will attack absolute poverty and substantially reduce income inequities. Incit merely through programs of Welfare, or simply through redistribution of already inadequate national Wealth, but rather through measures designed specially to increase the productivity of the pcor.
'If we survey the global development scene today, it is clear that most of our developing member countries are caught up in a critical situation. The consequences of the continuing Worldwide inflaticin, the sudden surge in the cost of oil, the deterioration of their terms of trade, and the prolonged recession in their export markets have cembined to endanger their Economic Tuture. Tile nel effect Of Liese external forces has been to reduce
11

Page 14
their prospective rates of economic
growth, while increasing their Foreign exchange requirements.
"And it is the Very poorest coultries, countries that collectively contain a billion human beings, which face the ble'ı keşf prospects-the prospects of virtually Ilo increase at all in their desperately low per capita incomes for the rest of the էl:Catle.
* It is important to comprehend what this stagnation really means in the life of an average individual in al po oI country.. lt does not Ital incolvenience, or a Illinor sacrifice of comfort, or the simple postponienient of a cons Liller sitisfaction.
It means struggling to survive at the very margin of life itself.
*Statistically, the stagnation mea H5 that for a billion people, per capita incomes, in constant prices, will grow from S105 in 1970 to S108 in 1980. The comparable figures for the peoples of the developed world are S3,100 in 1970 to 54,000 in 1980.
“Over an entire deglce, a 3 inGreasę Versus, a 5900 inęTcase.
* * (?) yer a Il cintire cecide, är SF3 itltreast versus H :)t}Ո increast,
"The 725 million human beings in the Iniddle-incoille developing countries ilire also facing a fit lore difficit situation that we alticipateli 1 ycär Egg. Ulless th: foreign excharge available to them can be substantially increased, their per capital, il colles to Will inch forward at a wholly unacceptable
"Are those in the developed World going to conclude that they CFIIlliot FİLid It Within their CÖ||Ective capacity to Inake a modestly greater effort to help save several hundred in illion people from a degree of deprivation beyond the power of any set of statistics even Temotely to Carl Wey?
I Canilot believe so, "I can believe so because wat is involved for the cleveloped lation 5 is Ilot the diriTmin Lutf0 | 1 Of their already towering standard of life. All that is required in order to assist these peoples so immensely less privileged is a simple willingness to dedicat a tiny percentage of the additional Wealth that Will accrue
to the developed nations over the
next five years."
2
. N.
The Geral A. Լin Stբtember 16/ Testiլյtiըլլ ԼյIl tiլ:
DETT.
On tէլԸ Վեestion and commodities, nations dropped re. ** iIET Weltiil"" | fo II m Of Support : prices. The U.S., a opposed the id: I Tial Tket I til Cchi:i:i:II the Itoxi f{T : national stocking of market arrings stable and equit at Iliadities.
The developin, Էլլcceeded in tյbt: “litect alltid iiij schermes" as op their purchasing trade,
The U.S. Propi ment security ia export earnings, of conversion of grä Iltis, Was n1Clife.
Oil the questi Iլ:EւյլIrtes, lite է։ received confirit oped countries Lilia intil CIIIIIIiiittt of 0.7 per cent o. ever, the propo reach this target ei to the cIld of
Developed co theis, citiltiltilled . picct of the targ tr:LIls fer of Teso) tic official devi target af C.7 pel tional product, inter Tätical te for the scCord development de as their co-It. il Crca 5 e il Offic sistance with a these targets b. declie.
The eight-chap the Ilted for the

ADops REsolution
ՀSETLibly adopted Lunanimous םנות כוונטור) IE - "ויים לת
GE Tuw Ilittérial the developing 'ETIC LC II ärkeit rting-ITieղ18 Հih : for TEI'll Llinerative nd West Ger II lailly -a of disturbing I5, but acceptccl popTÇIP Tial te interind “other formiš IMEINES" to SECUTC le prices of coin
g countries also ining mention of
irect index äition tions to preserve power ill world
sal of a developcility to stabilise with the provision lcans into ou Liright d.
oil of transfer of leveloping nations t|0,Il TIL LE it:Westh:lt the lätter Tetd to the aid target f theỉT. GNP. HøWSeçi tille-tible to by 1978 was stretch"the decade.
untries, confirmed (Il little E is resetsi Irelating to the Jrces, in particulaT el. Im ETE assistênce * cent of gress IllaEls agreed in the Velopment strategy United Nations cade, and adopted, II Filli El – effective ial develop Ilent asview to achieving y the crid of thıc
tę T cit? CL.III helt L Tiges establishment of a
link between special drawing rights and development assistance.
It also envisages the establist: lent CF EI HITList fuirid to be filiāli liced partly through the International Monetary Fund gold sales and partly through contributions, and ble go VerTed by Fin appropria tę body, for the benefit of developing contries.
Ởn the problem of increäsing debt burdens faced by developing countries, the dock. The it directs the UNCTAD TW, to be held at Nairobi this year, to consider the need scT convening, as Scien as possible, a conference of Illejor del Cor, creditor and debtor countries to devise Ways angi fiicains to ulimitigate the burden, with special attention to the plight of the Iliricist scriously affecticid colul Eltries.
On int-Tatral lii-, heapproved to culilent urges that an illportant aim of UNCTAD IW should be to reach decisions on the ill provement of market structures in the field of raW materials and comilities of export interest to the developi Lig CDLIl trics, including decisicils with respect to ai integrated prograIIte and the applicability of elements thereof.
On food illud agriculture, the appro Wedi document Sluggests that in TeleTito lake additional reSoL rccs available on coicessional terms or agricultural development in developing countries, developed and developing countries in a position to do Eo ishould pledge on a Wolul IItary basis substantial contribution to the proposed international fundi for agricultural development so as to enable it to corne into being at the ell of 1975 With initial reSources of One bilio SDRS. Tiereafter, additional resources should ble Pro Willed to the fund on a continuing basis.
All states should co-operate in evolving an international code of conduct for the transfer of technology, corresponding, in particular, to the special needs of the develop
TE COllilt:Tie:5.
ECONOMIC KEWIEW, SEPTEMBER 157

Page 15
A U.N. Conference on science and technology for development should be held in 1978 or 1979 with the main objective of strengthening the technological capacity of developing countries.
There is an urgent need to formulate national and international policies to avoid the "brain drair' from developing to developed countTLS
Oil industrialisation, the docuInent endorses the Lima declaration an el pla, 1 of action on industrial development co-operation and requested all government to take
ecessary Treasures.
EFFECTS ON SRI LANKA
Many of the approved proposals have special applicability to Sri La Inka Which comes Luthder the category of the Inost seriously affected. The proposals relating to trade, development assis Lance, science and technology, and food and agriculture are of particular value to LIS.
Sri Lanka's position of setting up a trust fund, to be financed partly through IMF gold sales, for the benefit of the developing countries Was accepted.
Poor countries facing a shortfall in income from traditional exports could look for help from the compensatory financing facility. The IMF will have to take the final decision regarding this facility but now the U.N. has given the political Inlandate, Loans could be converted into grants under the same facility.
The document calls upon developed countries to enlarge the flow of concessional financial resources to develop-ing countries in order to assist then in the implementation of their longterm programmes for economic and social development.
On transfer of real resources, the document urges that financial as sistance should, as a rule be untied.
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Our Exp
RUBBER
For 25 fra cfd rs || För fala bat frr:ICfürt, Pi α) είΙΓπίπής
 

“If the poог патіолs had ћеет able to exercise the Fame degree of control over the processing and distribution of their exports as the rich παίίσης αI PrενεηI do and gει back a similar proportion of the final consumer price, their export earnings from their primary corriIodifies would be closer to S150 billions than the present S30 billions."
Christian Science Monitor rt Earnings Bring Dinnishing Returns
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Page 16
THIRD WORLD PRESSURE PAYS : , .
At the end of the Special Session on the 16th September a compromise resolution was adopted at the United Nations (see box incorporating some of the demands of the Third World. This is a strong indicaltion that Third World attempts at a World redistribution of wealth which only two years ago was generally laughed at in the rich countries have now been accepted because of the cInerging bargaining strength of the Third World,
This cha Inge is amply scen, when one considers the coverage given to the Special Sessions in the Western McII. Wege câTTied à CcWer Story titled "The New Cold War' which generally takes a relatively sympathetic view of the Third World, although from a Western perspective and it traced the history of how the present demands came to be articulated.
The other leading American international magazine Tire also carries a Cover Story which although not so sympathetic as NeHS14'eek at least brings to the consciousness of the Western World the issues at stake. The British Ecolor is likeWise carries a generally adequate although still pro-rich coverage. C)f the regional news and eccionomic journals, the Indial ones halwe maturally taken a Very pro New Economic Order stance, The only glaring note was from the Hong Kong LLLLLL LL TS LLTLLLLLLLLCH LLTLTCCCCCCLLL LLTLLLLL Which in a Col LIllin has talken 21 stand more anti. Third World, than the Western media themselves. In the following week however this
magazine in a shart editorial
Censured the US StEId.
capital.
The U.S. position itself which
is basically against the New EcoDomic Order Corri flIIld:TTleitfll grounds ("The United States cannot and does not accept any implications that the World has now embarked on establishment of something called the new international economic Order" Mr. Kissinger stated in the U.N. on Sep: tember 16th) has now softened its stand and has come learer
14.
Α νιε μ αf the E
the less hard posit enstflı te:S. Thli5 = ficient a shift to distribution of th is a notable Chā II the hard ille U.S. months ago. Thl sador to the U.N. in his much public article : Tliewi Illum frontal attack I New Econo Illi: State Secretary has gone on rec justifying the exi OIdeT.
LOOKING AHE
The session ju: been a partial : Third World view a Tapid rise of t voice during the la: Various World ning from thic St mcilt Confere İlce the Algiers Non-A in 1973 սբto the of the United N clideki äre I miles L World's growing problems, and of confidelce ad II
 

risting arder
Ion of the Europlthough not sufring an equitable e world's wealth ge of tone froT 11 stand only a few 1. U. S. AlbisDaniel Moyinhlan Ciscid Cor FTPF TEF7F7F" this ago made il the cry for a CITET U.S. Kissinger himself ord many times sting eco no ITnic
ALO
it concluded has cess from the joint and indicates le strength of its Et three yeaTs. The DIT TEILCes beiglCckholm. EnwiTCOTTin 1972 through ligned Conference Special Session lations just coilIles in the Third a Wareless of its its growing self ilitancy. The most
crucial among these various con ferences was the Algiers Non Aligned Conference in 1973 in Which Al
geria on the basis of carefully and laboriously worked out documents olte static of thic Third World presented the basic position of the NEW TET WI. I.
As economist Mahabub Ul Haq has stated, the call for a New Economic Order is lo a le shot affair, but a continuing dialogle. Its ultimate end is the equality between all Ilations Where the SLand
ard of living for example of the
average U.S. of West German citizen - the richest today (with their present two car, colour television, appliance loaded once-a-year, Vacation abroad, life) is the equal of say the a werage Sri Lanka alıcıl Indiam liwing 5 tandard (with its present over crowded buses, low per capita consumption of food and the sceptre of unemployment hanging overhead).
In this endeavour of the Third World there are many more meetings and conferences to come in the near future. For example a crucial one in the coming weeks is the Paris meeting of the Oil Producers and CoIISILJI Iers where again al attempt is made to improve the Third World position. The high point in the coming years will have to be - specially in light of the role played by the last Non Aligned Conference, the forthcoming NonAligned Conference in Sri Lanka. It would be our historic duty to take the torchlit by Algiers and advance it further in the coming conference. This would mean much work involving hard research into various rich-poor relationships and would imply the mapping of IEW strategies. During the last 3 years the Algerian work has borne much fruit and we and the other Third World countries arc He beneficiaries there frCm. The Imantle Ilow CEn fall on Sri Lanka for mapping out the overall Third World strätegy for the next few years.
ECONOMICREVIEW, SEPTEMBER 1975.

Page 17
THE ECONOMY
Fluctuations in the value of the Rupee
Since July 1972, the Sri Lanka Rupee has been linked to the Pound Sterling at the rate of Rs. 15.10 per one Pound Sterling. Our exchange rate systemis based on this oficial rate With the Sterling. Exchangerates for other currencies are determined on the basis of the London market rites for these currencies, Under this system, while the Rupee-Pouild rate remains fixed, the value of the Rupee fluctuates with the changes in exchange rates between the Pond Tld other currencies. Any weakening of the Pound, for example, as a result of continuing balance of payments problems or a relatively higher rate of inflation in UK, or any strengthening of other major currencies such as the US Dollar as a result of an improved economic outlook in the US, would lead to a depreciation of the Sri Lanka Rupee against these other currencies.
For example in 1973 there was a mild depreciation of the Rupee Vis-a-vis mostotherforeign currencies. The exchange rate with the US Pollar for example, changed from Rs. 6.40 at the end of 1972 to Rs. 6.75 at the end of 1973, denoting a depreciation in the value of the Rupce by about 5 per cent.
On the other hand, in 1974, When several important currencies depreciated in relation to the Pound Sterling, the Rupee appreciated against these currencies. The appreciation was particularlrly marked in relation to the Australian Dollar. the Japanese Yen and the Italian Lira. There was an overal|| appreciation of the Rupee by about 3 per cent against other foreign
ill relicies.
In 1975 there have been some marked fluctuations in the value of the Rupee particularly in relation to the US dollar and by the end of August the Rupee had depreciated te the extent of 10% Vis-a-Vis the US Dollar. The important factor behind these exchange rate fluctuations has been the changes in the
ECONOMICRWIEW, SEPTEMBER 1975
ecolonic situal UK and USA. rch 1975 When t
բassing through
stagnation char in industrial pro rise in unemplo El high ratic of Dollar deprecia Other currencies
Erlid 1972 r. End 1973. EI1ւ 1974 , 1975. In 2
Mär. 5H Арг, 4th May І4ht JuIG 19EH End Aug. mmmmmmmmmmmmm
The exchange El E is 2.33 at A1 = 5 2.43 in Wils. El correspo; CT Lihle Sri Links 6. 69 per US s. tc preciatiоп of 4. months, there was tion in the econ UK with growi El high Tate of Line high inflation ra depressed the val In addition, clear TECOWery appear st гепgthened the U. cally all major result Was a drop Pound to US 2. August, There we ing di Top in the w: Vis-a-vis the US cha Inge Tate at th (Rs. 7.39 per US drop of about 1. that prevailed att
So long as the II UK continues at a in other industria. chances are that Pound would go Most analysts e. lo fall Ó the level 50 pence per dolla of inflation in brought down. If Sri Lanka Rupee

manus
ioIl and outlook in During January-Mahe US economy was a periodo Teconomic acterised by a drop duction and a sharp yllelt Cao Lupled with inflation the US ited against most
ncluding the Pound.
further to Rs. 7.80 per Dollar which is a depreciation rate of abt about 14% from the end of the 1974 level. Thus, although Sri Lanka has not officially devalued the Rupee, World currency fluctuations have in effect led to a depreciatic n of the Rupee against most other foreign LITrenciēs cxcept the Pound Sterling. The economic outlook in UK, in particular the success with which the inflation is controlled in that country, has turned out to be a Illajor determinant of the value of
CHANGES IN THE RUPEE-DOLLAR EXCHANGE RATE
நேச $ LES Črt per Rei,
fi. 15.3 - 5.7 |.
5. 14.5 5.5m |5.
15: Ճ| G.55 13.호 6.79 1.7 f.岛市 14:55, 7.39 3.
Tite TOSe froII [hle end of 1974 to March 1975. There cu ing appreciation | Rupee Irom Rs. 2 Rs 6.41; an ap4%. In the later a generaldeterioraomic prospects in Ing tradie Ieficits, Imployment and a ite. These factors Le of the Pound. signs of Economic td in US whicի JSSagainst practicurrencies. The in the value of the II by the end of LS I COTTESCpoldilue of the Rupee Dollar. The exe end of August F) Te prese Inted a }}, from the level he CId of 1974. at of inflatil in higher level than lised Diations, the the "alue of the down further. pect the Pound of USS 2 (that is T) unless the rate UK is sharply this happens the Would depreciate
the Rupee against other TCreign CLITTEIrities.
Emergency food aid for MaldivesSri Lanka helps with sticks
About one third of the population of the Malidive Islands Will receive free rations from the World Food Programme (WFP) because of a dwincling tuna catch. The Republic of Maldives Earns practically all of its annual S3 mill lion in foreign exchange by exporting dried Luna. One third of the earnings pays for the import of cereals and other fects.
As the average catch has fallen fron 5,0C0 tons per year to Ebcut 3,CC0 tons and the Iccd bil has risen due to higher prices, semistarvation has struck about half the 190 inhabited islands. Normal schools of tuna have not arrived this year for causes not Es certained.
To supplement the ratic Ins PTC+ vided by the Government fram its resources, the Fccd and Agriculture Organization has approved S496, CCO emergency aid for our micnths for 37,250 people. The Government of Sri Lanka, in spite of its own needs, has agreed to the immediate shipment of the food from WFP and national stocks held in the country. Eccording to the U.N. Chronicle of July 1975.
15

Page 18
BANKING
FINANCE
BAN
NFLATION and the developed
During the last several years prices in the OECD countries have been rising at an accelerating Iate. In 1974, the average rate of increase of prices worked out to the alarming figure of 15 per cent. In the six months ended May 1975 the rise in consumer prices in OECD dropped back to an annual late of about 10 per cent. This was mainly due totle declining raw material and food prices and the stabilisation of oil prices. But prices have failed to drop as much as they are expected to fall in the recession, the exception being Japan, where the sharpest deceleration in inflation rate Was registered.
Most member states of the Organisation for Economic Cooperatio. and Development succeeded in reducing their inflation rates for the year ending in June, compared with the previous May figures. But both Britain, with the secondhighest inflation rate, and West Germany, with the lowest, suffered increases, along with Canada, New Zealand, Norway and Luxemberg.
Britain s Tate jumpa ed a to 26,2 per cent, for the 12 month period, from 25.2 per cent in May, ALI, OECD report says, West Germany's rate increased marginally from 5.9 per cent to 6 per cent, but it still was two full points better off than other members.
NFLATION RATE FOR JUNE (May figures in brackets) W. Germany 5.9) Switz, Erland 8. ( 3.2 Austria . ( 8.2
LJE . 9.5) NELHETills O. ( 10.4) Cirildig 1.4 (10.1) Den riark 1D. E (12.0) Luxembourg 1|Tl:T ( ), Swede 1Ս.E ( 10.9) Fai 1.7 12.1 Norway 12.0 (11.5 JaբHn .. ( 13.5) Belgium 1호, (13.7) New Zealand 14. (13.2) ALStalia 1.9 17.5) Spain 7. (17.1) Finland 3. (18.1F) Italy 19.0 (197) UK. - . { 25.2 )
6
Tie trīs Lille flexit 10y'est r latıdı (83 per = cent) Ըent) HTitl tHւ Լմ
Il te casc coif : inflatio Il figure gi was the May figui
De In Timark and the biggest imբr inflation figures June, a cording
OECD leiber tered an overall cent inflation in ווסט 1975 - טJun perceit for the ye:
SRI
MeåSLITITlent O. tion in Sri Linka problem in the at tative Tetail alli indexes. The I cost of living indi:
The cost of
shows a fairly froIII ll 150.8 iI ] 83.8 in June 19, crease of 22 per 18; III litlis. Il has the cost of this externt. If Ti the price increa 1960, the costmost increased each year up to on Wards, prices E fästēTald be:LWE the cost of living 8 points yearly W. 1970 them the il points.
It Taybels isolate the Varic flation in the co that has been gi has bLETI - I "ויים וI imports. Inflatic nomy Very ha ri toլIntry's heavy t imports. Apart have also been 8LLITS Willici. Tet: at hone and onl to imports becau: required to make be illported, T.

KING
benefiting from ates were Switer
Austria (8.3 per (eIttטיerון 9.3) .S. Iceland, the latest ven in the Teport re of 47.4 percent.
Belgium showed
Weillet in their between May and o the report.
s a 5 a group TegisTa te of 11.9 pēTthe year ending in pared with 12.1 a Teligin May.
LANKA S
the rate of it:- has always been it bsence of represelwholesale price ly indicator is the 鹭。
living index itself ubstantial increase Deceber 1972 t) 4 which is an incent in a II latter of по еarlier period living increased to efference is Illil de tC. se since the year f living had at the by about 2 points 1968. Firo Ill 1968 legan to rise a little էtrլ 1958 HIլti 1972 index rose by about ith the exception of crease was only 3
a ful to attempt to ш5 Sources of inLIIntTy. C}ne factor Wen emphasis uբto he high prices of in his hit the ecobeca Lise of the dependence on food
from this, there scarcities of foodxclusively produced y indirectly related se some of the items
them Imay hawe to
here have also been Source:
FINANCE
BANKING
Priti's Inition. REL
Faureres: Lloyd's Farik Reise
NFLATIONARY TREND
price increases which have been Cill 15 eitil by El Lillo, Illi Il10lls Wilge IIIcreases that have been confilled to particular sectors of the economy, according to the Central Bank Stil i Studies.
The Cibo Consumers. Price II dēX for the Iloilth of May 1975 stood at 1980 recording an increase of 0.15 per cent over the previous month's figu Te of 197, 7 This was due to an incTease of 0.24 per cent in the sub-index for food. The inclices for clothing, fuel and light reIut ad Imiscella lleolis items, Temained unchanged.
Colomb) || CJH5Lillers" Price Index.
1371 - Η.Π .
Terra Eāk arī EP ir
L0L0LHLLMLLLLLLLL SYLLLLLCLL LLLLSS LKKSLLOLLLKLkea00

Page 19
Agriculture
Untapped potential of the Coconut Zone
It is widely acknowledged that over 1 million acres of land under coconut need no longer continue to be exclusively cccupied by a coconut mono crop - the crop which his traditionally been labelled the lazy mans crop". SoIle efforts are being made already to bring this vast area under an intensive programme of mixed Farming that will not only contribuite to increased food production but also generate Timore empi Cyrillent fron the coconul lands Whic Inaintaining a steady production of coconuts. Such efforts at introducing additio Ill:11 era terprises Lunder coconut have been SLIccessfully attempted in several countries (in India - Kerala) while even in this country examples of intensive land use uIlder COCOIlut i Te nuITerous.
Lazy Mian's Crop
The total extent of nearly 1.2 million acres of coconut accounts for almost double the ai Creage Lunder tea and rubber. Even the total extent under paddy - the basic food crop of the country - is slightly less thin the extet LIIlder coconut.
tea HLeounts f value. On the tea all rubbe dustry is essen More than 65 Elite bellt, W. 20) a holdings" over account for onl a quarter of th Generally the of coconut cut very inefficient, ECCLCIT, ä5 Silc, W studies, has not b ly. The cultivati the Ilaintenanc generally involv and supervision. Why cocolnut, cul f investle Ilt բopular among |
The low in Inlel LS alloWei äbsenteeism am Which II LILI TIL poor productivit The average yield 2,500 nuts which researchi has poi more tham doul I ment generaticin
Te Rubber No. acres Linder Cultivation il 1974 . 598.466 5(3,474 Export earnings in 1974 RS, MI - 1360 738
Coconut has a significant place in the national econcInly as an important foreign exchange earner, as a supplier of industrial raw materials for a wide range of local industries and also as a source of food, 50 per cent of the coconuts produced in the country are consumed locally. Coconut, however, is not a basic requirement in the diet to Warrant such a vast area being devoted to this crop.
The contribution of cocollut to the GNP is substantial, accounting for 15% of the total output of the agricultural sector and 18%. of the industrial sector. However, the value of agricultural output per acre in coconut is the lowest among the three plantation crops;
L0L0LKLLLCK0 LLLKKLLKKS KKKLYLL0LLYS 000
lcwels of Illmanage попо сrop has pTSl pET Vi: making it the l generator among
Un tapped Resour
The practice ( ing the use of clusively for til CCCCTL It is obvi Extra'Vägä111 llse resources. Ther denial Cf the fat palm is a useful industrial raw 1 clear that the blessed will enc between palms W supplied with a
 
 
 

ET LIVET 3 Lilles i 5 other hand, unlike r., the Coconut III
itially indigenous. % of the holdings cres in extent, The 50 ë cres in extent V : little more la
- EGE !.
Firma lil scale sectoT Itivation has been EIld e.VII he eslatc 1 by scveral recent Een turl 50 efficieltJIl Caif CC collit indi 2 ol plantations 2 very little labour This is one reason tivation as a source had been most Ceylonese planters. intenance requirea high degree of Tig the wers :Ontributed to the y of these estates. Per acre is around l in most cases, as inted out, could be led. The employCHբacity under low
H
Cucullut
1,200,0CO
397
Illent of a coconut been around one y 10 acres, thus West employment majer crops.
f hither to restrict. CCC) il Lutlands exE բTմd LittitT of 1sly an instance of if Our Scarce land
is certainly no
that the coconut Eurce of food and a terial. Bilt it is conut lands are gh ground space ich is fertile and is Fill ilte soil IIIois
rt and sunlight plantations less han 5 ytäTS I äld over 20 years in age to be capaible of introducing a variety of other enterprises. To overlook the potential of putting such land to Inaximum use is totally LInjustifiable in the present day economic and social circumstances of the Tail coconut groWing areas of the country. One may even wonder whether some of the present coconut lands in the over-crowded we zone arcas should in fact, have been planted at all with a CTOp. like this. The importance of coconuts as a national foreign exchange earner Cannot hūWever he unüer stimated and it should continue this role in the future as well. While conceding this fact, of paramount importance is the use of these lands in the most efficient and բTLtiլմtive manner. Much discussicin is Presently being focussed on this. The possibility of introducing a. VEl Tiety of Crops between the palms and of developing livestock arming on a large-scale has been põimted 9 till repeatedly by experts and is in fact being successfully attempted in certain areas. It is Yn Ole Worthly Lihat many a fi enterprising and pioneering farmer did inilerplant crops like pineapples, bananas, Various tubers and even cash CTQ2S (Cocoa and coffee) prior to tie general awareness of the need and potential in this area. Renewed Interest
This PT duction war, no doubt, Was largely responsible for elicit ing renewed interest in the potential of utilising coconut lands to grow more food. The worsening unemployment situation gave an added impetus to the continued search for untapped employment potential in this zone. The twin objectives of increasing the productivity of land and productive employment which formed the basis of the 1975 Land Reform paved the way for the first serious and organised effort in this direction. The several JanaWasas established on Land Reform lands in the main coconut growing areas have clearly demonstrated the feasiblity of diversification through a variety of crops and livestock enterprises capable of generating more Employment ånd greater productivity from the land.
தோர்: நிரநழ 18
especially III
17

Page 20
The potential for such intensification is Imo Te marked in the Wet zone coconut triangle With a Well distributed rainfall, a dense network of roads and a dense population providing a large market. This zone is thus placed at a distinct advantage as a pro II nising region for a vigorous system of mixed farming with coconut as the main crop. The potential is certainly very much higher in the so called Class II coconut lands which represent the Telatively inferior seg= ment of the coconut growing areas.
In coconut lands with sufficient sunlight a variety of crops like pineapples, bananas, passion fruit, sugar cine and many tubers could successfully be grown. Even in lands with insufficient sunlight a variety of shade loving crops could be cultivated. It has been repeatedly pointed out that the introduction of additional crops need not affect the coconut crop if both are propertly managed. In some cases they even benefit the COCOIllit Crop e.g. pastill re.
It is encouraging to note that the Coconut Research Institute itself has recently set up a separate division to Work on the possibilities of diversification under coccinut.
Effective Planning and Co-ordination
The Inced foT coconut la Inds to be more intensively used is undoubtedly an II disputed sect, but the important and difficult question is how best such a programme of intensification could be launched and sustained. Not only should such an attempt include incentives to the farmer through price support policies, credit and marketing facilities and so on, but should be integrated with a programme of adequate technical and scientific support, More intensive research on mixed farming under coconut too is al II LI Tgent requirement. Any intensification program. I mille will obviously call for a strengthening of the institutional infra-st Tucture which has hither to not been geared to this task. This is IIhore SD als the bulk of the coconut holdings are STall and to drawin a large mass of people to full participatic in in any program Ine of action needs effective planning and co-ordination at Several lewells,
1S
TECHNO
The Policy of
What does the po of Two Legs' II developing F nomy, China bala, between industry heavy industry аг large enterprises smallenterprises, in qCEthods aldı indi ente:Tprises Tun by wer Ilment and the authorities, and ol tions, She does 1 to the neglect to develops both s such a way that With and promot
The relations be a.Ie like Lhat betW of a person. Wh ordinatic Well, the Walk steadier and the policies for ha of relations in c. tional economy h simply the policy Two Legs'. What is the basic policies and th: SOLs for thịEINT? The basic conte 1. Industry an lopp simulta Into Lusly large agricultural of her population sice. Only a rapidl culture ca III I Ticet and clothing need dustry with ample development and its products. At L. development of a on the support of modern industry large EIIlounts of electricity, chemic insecticides necess agriculture. Thus, CLülitu Te in Chil simulateriously a plement each oth; 2. Heavy indi dustry develop Buildig a moder agriculture and s fence requires ad and Imaterials fro

Walking on two legs'
icy of "Walking
El II? er Illational ecoces the Telations and agriculture, d light industry, Il di Illedili Im-t0= Ud ETn production gentius TTL-lhcds, the central gose run by local her pairs of relilIt епphasize, опе | լիe titlլքT bլIt mulla neously in hey co-ordinate
täclı Cathe T.
Ween thes e pairs een the LWo legs In both legs coperson is able to laster. Therefore, incling these pairs welcping the naave been Llamed of "Walking on
cuntent of these * Llinderlying rela
It is as follows:
i agriculture deveF. Chila is still 1 country and Imost is in the Count Tyy developing agrithe people's food s and provide illraw materials for 1 Wide market for he Same time, the griculture depends - inclustry. Cnly a can provice the farm Ilechinery, a fertilizers and ary for a modern inclustry and Egria- are developed til Le L Wo CCT1
is try and light insimultaneously. 1 industry, mcdern топg national deVanced equipment III heavy industry.
To develop heavy industry, however, requires a great a mount of funds. In China today, one of the main sources of these funds is the accumulation from light industry. Light industry needs comparatively less funds, goes into production faster and the period of capital turno Weisshorter, ThcTesore, While giving priority to developing heavy industry, China is also actively developing light industry. As light industry progresses, more and more consLi Tiller goods are produced to satisfy the increasing needs if the people and a growing amount of funds is thus provided for heavy industry to expand production. Developing light iпdustгy also promotes the die Weltprile:Int Cyf het Wy industry because light industry demands more and more machinery and industria I TAW II la terials s Luch as plastics and materials for the chemical and synthetic fibre industries.
3. Large enterprises and mediumto-small enterprises develop simultaneously. To build a modern indius Liry it is necessary to build some large core enterprises with a high level of technology and proudlcLivity. But large enterprises require large investment, a rather long time to build and the technological requirments are complicated. Therefore, at the same time that largescale enterprises are being built, many medium-to-small enterprises are also rising up throughout the country. Medium-to-Small enterprises require comparatively less in Westment, a shorter time to build and simpler technology. They not only provide the people with urgently needed industrial products but also train technicians and accumulate more experience and funds for building the large enterprises, thus promoting the development of the big enterprise.
4. Modern production methods and incigenous methods develop together. This means that in the main China adopts the newest modern technology and at the same time actively accipts the simple and practical technical experience of the
ECONOMICREVIEW, SEPTEMBER 1975

Page 21
local people. New China's industrial base was Wery weak, so it is impossible in a short time to hawe the newest equipment and technology for all factories and mines. Wherever it has not yet been possible to adopt the newest technology, simple and practical indigenous methods are being used. These methods are llen continually improved upon. This saves time and speeds up China's industrialization.
5. National and local enterprises develop simultaneously, China is a big country with a huge population. Its provinces and autonomous regions range from 100,000 to several
factories which it the country's ir ment have beer directly manage government. On the central gover every province, a municipality, reg to build local in to their particular industri Es ulse ille their locality and that locality. Thei are part of th production plan.
By developing enterprises at th
The de ha fe about les s-fhia 7-a d'araced technology" (“in
“appropriate") versus cadranced technology has Pro} La 77 ka. There are strong basic technological argir 777 ents ediate' technology in that it helps perpetrate the c. of the World. The Third World under this scenario rem, of raw material and indulges in primitive technology as the centuries before, continues or its forward ind In fact it has been seriously suggested by Third that the epiphasis on "intermediate technology' is a propagarida campaign for precisely these ends.
The opposing view is that the resource hase in coil, Lanka is small ("lack of foreign exchange") that to k. employed we have to find recourse to less expensive, technology, Why our foreign exchange resource Eas rGLLHHL LLLLLL GGGK LLCH LCL LHHHHCCCCCLLLLL S SLLLYLLLHHL TT CH LSYL our tea, rubber and coconut fetching less whilst capil the industrial corri fries continue To sky-rocket ir prie LCLGGLYLL S YEEL LY YLCGGGL GKCGL LLLLLS YLLLLYLLLLLLS SSLLGLYLS LLLLYLLSL to correct With a derland for a New Econor77ie Orde
The question the is how to corrhine the need of real LGL TTCLL LLLL LL LCCLLmTL LLH HHHL GGLL LLCLL LC correct with the need to be technologically equal wi A successful strategy that has combined both these CCLLS LLLLL LGLLLGGLLLLLLL LCELY LGGLGLGCCCLCH Y HCLGGL GGGLLE SS stuides, is the Chinese are of "Walking on Two Legs'.
LGGLL HCT THHLLGL TCCCHCS LLLLS LGGGGCCL LCG GGLL LLSGCYLL 5 Tf7 seg.".
hundred thousand square kilometers in area. Their populations range from several million to several dozen million people. In such a large economically under-developed country it is not possible for the central government to run everything in economic construction.
China is carrying out a planned Socialist economy in which the industries throughout the country are parts of the whole, like chessmen in a game of chess, On the one hand, important mines and
ECONOMIC REVIEW, SEFTEMBER 1975
initiative of both play, and the natur: equipment and te part of the count lized. This speeds nomic constructiť What is the mit "walking on tW loping the nati building socialis The policy of legs' suits China's
Ind ConfTīls of China's econo

Ct als thic Core in ldustrial develop1 built and are by the central the other hand, lment en Courages utonc mous région, icin and county lstres Eccording CũInditions. These : TE W laterials of manufacture for Production plans LI Ilified mition II
lational and local ё sаппе tiппе, the
Hu
Ferdie'-- Eritre Sri της αίτι τr ή Er
il fia Tiris a producteF ils to the West, strial triarch. World Italysts ' (-Se-SE
fries ke Sri ÉF? Ĉ#FF7eople 'e 55 sacra rice e is is is ( radealgoods front "E.N. TWEE Fe fes are trying
rTNTוזני תT1"-t?fr (ТГЕ їгуїлg го 'W፧ WWù ዘ'ዕr/ሰ/?
r"E?7 I.i frErF7Err,5 f developmeлг Here in gues
ferinologίται
FIl be given full resources, funds, Inology of every Can be fully utilip China's co1.
significance of legs' in deveal COCIn and
■
Walking on two (Il Crete situation e Objective laws ic development,
It enables China tomobilize all pgsitive factors for the building of Socialism, thus Eccelera ting the country's conomic development and gllilranteeing that the General Line for Sccialist Construction-"go all L}լIէ, aim high and achieve greater, faster. better and more cconomical results in building socialism"-is put into efficit.
Precisely because the initiative of the national and lecal authorities and the people has been brought into full play, China's agriculture has had good harvests every year for the past decade, her main core enterprises have developed rather quickly-thus laying the preliminary basis for eccialist industrialization, and local industries have shot up everywhere.
Every province, municipality and au LOCI Iloilus Tegio Il has thOLI SEATnds of factories and mines in production. Ninety-six percent of the counties have built their own farm-tool manufacturing and repair plants and 70 per cent have built cement factories. As the masses set up factories, not only are engineers and experienced Yeteran Workers able to display their initiative to the full but the peasants' enthusiasm for building industries is also aroused.
China's large core enterprises utilize rich natural resources where they are concentrated, whereas the thousands of medium-to-small enterprises utilize natural resources that are scattered. This brings the people's initiative into full play and makes full use of materials and |Fildi.
There is also a long-range significance of the "Walking on Two Legs' policy. Because it has brought about the increasing numbers of modern industries in China's West countryside which train many workers and engineers from among the peasants, the policy leads to reducing the differences between wcirkers and peasants, city and countryside, mental and manual labour. Thic policy, therefore, will help China make the transformation from a sccialist system to a ccm munist gicciety in
which these differences will be eliminated.
Some Bosc Facts about China
From CHINA RECONSTRUCTS
19

Page 22
Upward trend in prices
Sri Lanka's tea production in January-July 1975 increased by 2004,406 lbs, compared to the same period in 1974. Exports too recorded a higher figure of 250,983,083 lbs in Jan-July 1975 compared to 220,304,593 his in the same period in 1974. Export values also showed an increase during this period. In 1975 they stood at Rs. 1,170,075,391 compared to Rs. 76,070,734 in 1974 for the sale period. The FOB value in 1975 Jan-July) stood at Rs. 4.66 םer 1b.compared to Rs. 3.25 per b.il Lihle comparable period in 1974.
Prince trends at the Colombo and London Auctions also showed an increase as shown in the table hel W.
Colombo Auction: Jan-July (Rs. Kilo)
197 1975 High Grown 6.59 7.10 Mid GroWI 5.54 6.5$ LW GroWII 5.08 7.02
London Auction: Jan-July (EKilo)
1974 1975 N. IT dia 55.83 61.8 S. India 52.52 59.58 Sri Lanka 556, 53.55 African Countries 59.56 61.69 Olles 48.42 57.13 All 53.43 1.91
Instant Tea Plant in India
A Pilot plant for the manufacture of instant tea is to be set up at Jorhlt (Assam) und LT the SPOTSCIIship of India's Tea Board, Calcutta. It will manufacture instant tea from green tea leaves produced in India's North East region.
RUBBER
Buffer Stock Sch en le
The ANRPCS Second Sub-Committee meeting on Natural Rubber Price Stabilisation was held in Kuala Lumpur in mid August. Experts from five member countries ended
2O
their talks without agreement on the national buffer Sto reported that it he sible tũ [[]II1F1C5ẽ of the Tleinber C main issues such is the operation of t and the Supply Scheme. Another Sub-Committee is held shortly.
More exports Less
Exports of rub period under revie զաantity as Som same period in 1 earnings continued One prices contin aslightly upward ti with the prices at the year, Latex rubber exports quantity during a as compared with period in 1974.
Sole Tepi
at:x. CTP: Scrap cript Sheet Liber Block rubber
Total
CO
The preparat up to draft a Cocoa Agreen its sessions in the last prelimin before the re-Illeg which is schedule on September 2
COC
Indonesia lifts
Accordi Ing to Indonesian GoW* to lift the ball
 

reaching final proposed interck schelle. It is s Tot becni pos
the differences intries on the Is the form and He BլIffer Stock
Rationalisation meeting of the expected to be
earnings
ber du Ting the w was higheT iII pared with the 974, but export to be lower. RSS Led to maintain "endas compared the beginning of crepic and sheet were higher in nuary - July 1975 that of the saille
imploscd two years ago and has scit its export target at 100,000 tons for the fiscal year 1975/76.
Sri Lanka Exports
Export carnings from the Cocunut products in July 1975 at Rs. 35.8 million showed a decrease of Rs. 6.9 million and Rs. 20.9 million in comparison with the pTevious IIlonth and the corresponding month last WCAT.
Earnings from the export of Coconut oil in July 1975 at Rs. 11.7 million showed a decrease of Rs. 12.3 million or about 51% when compared with the previous month despite an increase in the quantity exported. This was due to the decrease in the average F.O.B. price.
Earnings from the export of Dessicated Coconut in July 1975 at Rs. 15.5 million showed an increase of Rs. 6.7 milliol when compared with the preceding month. This was due to the Temakable in
RUBBER EXPORTS
1975 4 17 19 ܢܒ January - July January - July Ouantity Value: Quantity WiliLe
Es. Risi. TıHT. Eg... R5. III, 6,267,153 21.9 6,311,456 (5.8 - 52.533.13 - 164.3 59,808,153 (7.
19293.290 44.) 17,973,430 24.3 107.928,932 287.2 120,403.805 198.6 394,688 1,2 1,039,724 5 186,417, 194 519.5 205,535,578 E48.3
oA
y Committee set lew international häls concl. Idel OIndon. This Was ry round of talks tiating conference
to start in Geneva ld.
DNUT
рга Export Bап
Reuter reports the ment has decided in Copra exports
circa se in the quantity exported during the month.
Earnings from the export of Coir fibre and fibre products in July 1975 at Rs. 6.7 million showed a decrease cof Rs. 0.4; III millico II, wheT compared with thic provious month. This decrease was due to the marginal drop in the quantity exported.
Export Apргоvals
The total value of the exports approved by the Coconut Marketing Board for August 1975 was Rs. 45.1 million as against Rs. 68.8 million in the stile month of 1974.
ECONOMICREVIEW, SEPTEMBER 1975

Page 23
The total value of the exports approved for the period JanuaryAugust 1975 amounted to Rs. 335.8 million as against Rs. 364.8 million for the same period last year.
The total volume of kernel products approved (Copra, Coconut oil, D.C. & Fresh Nuts) diu ring JanuaryAugust 1975 amounted to 580 I million in Luts equivalent Els against 304 million during the CC5FTcsp Elding period last year. This represents an increase of 276 Tilliol Llts or 91 per cent.
Internation: 1 Prices
Average London market prices of Copra, Coconut oil, D.C. and Fibre were hardly altered during the IIIth of August,
SPICES
Export earnings from spices during the first seven Tonths of the year" :at R.s. 3 65.5 mln. were lo"Wcr by Rs. 11.1 mlin. as against the same period in 1974. Exports of cinnamon quills and chips during the period tilder review continued to bei äitiä ITILI Chl lið vafer le Wells 15 ÇOI Ilpared with the corresponding period last year. Imports into Mexico the mil single iarket for Sri Lanka cinnamon during January-July 1975 was only a third of the quality imported during the saille period in the previous year. Exports CF El spices with the exception of cadaIloils were substantially lower both in quantity and in value compared with that of the salic period in 1974.
drop is beca, Luse
decline in both of the exports of and Citronella items Uf Essenti Tolseiil It registered an incr:
Sri Linki-EEC:
Uilder Ehle CGI) tion agreenleIlt S L:1Ilkā illit the E Market, Sri Lai Hlave člšier a cc munity. This fi VIII Cle ito קוזTםC ש5icles Haw preparations. Un thic Community Sri La Ilik:LITETI its trade With : gress Will be ring collis Sicil. The the concessions Bild include:S te: spices, tropical produets and receive Illos. E faWC
UICEI CILII Clit
TI - EcheII: UNCTAD O.T. envisages setti stock piles of 0. jori. L'erestito d They are coffice, til Sug::T, CICLEOTI, Lires Ild Ilard fi aim of this progr
PIE EXPORTS
1 ) 7 Jan. பly էիլHntiւ: WHILטנ
Cwts. ER 5- mln. Cillia III T83FF 2. Cartill 1376 모. Clos 8,940 고 Pepper 5,039 고, 5 Nutriteg 1,896 1.1 ESSENTIAL OIL EXTORTS
Cinis Hil Illty I'll le Hf tuil 1333 3. Cinnal I Hark Lil 1. D.4 Citrilisielli till F.D11 串、 Gılg:T Öil 구 Cardi. IIlıIII. Chil Cove Oil 1. (), 모 NLiit meg Oil ! O. Essential Oils prices and el 15 LI: Earnings from Essential Oil modities in an
exports during the period under review has registered a decrease of Rs. 6.2 mill. as compared With the same period in 1974. This marked
ECONOMIC PREVIEW, SEPTEMBER 1975.
sche Ine. The maj ing is expected änd importing oil producings

if the Substantial Llantity. It wall Ci II-III l:fi il, the ԼWL major al Cil. Tille: only Illeg. oil, which has :Sea tälld Werleyel.
Mgreement
mшпетсial Co-оретаigned between Sri European Com III o Il ka's exports Will E.88 [[] the CGIll= ve year ag TeelēTilt Effect Wien both Tetep the Lechnical der this agrice#"mellt is pledged to help 1. tc :: Iind expand le EEC. The proInitored by a joint
agreelent widels
already in force a, Tubber, tertain frris :Ild leither Sri Likii vyo Lild Lirel Ihtiol sit EL LLIS.
y Stablisation Plan
proposed by Immodity stablisating up reserye bufieT Cømmũdities Uf IIlācycloping countries copra, Tubber, tea, jute and manufactbres like sisi. The a. m. me ist3 reg Lulate:
| 모 도
IIII. 1uly
La littity WLL12 C"ts. Rs, In,
...)
4,535 『.
2,843 5.I
IEE8 1.고
1,254 D.
573 O.
事
102 1.斗
1. ..
O.O.
(),
ннаваннан re. Supplies of coll
overall integrated or sources of financto be the exporting CICLE EltTries i Lluc La tes.
NATIONALIZATION OF PUBLC COMPANY ESTATES
The Lald Refo TI I LLWNG 1 , f 1972 covered -
(i) individually owned lands;
(ii) lands o Wined by Private como panies as defined in the laws
of Sri La Ilıkal; El Id
(iii) un cultivated lands belonging tcj Comp): Inies othe-II - Lihail PriWaite companies (i.e. Public Companits)
l'Illis TouIl 1000, JCO cresca Le to be declared under the Law among 5000 individuals. Of this a creage about 559,000 acres were wested in the Lald RefoITITı Conlarıission. It was reported that about 135,760 acres were tea, 82,944 were rubber and 5,350 acres were coconut, 246 acres were Linder са сан, Тб99 acres under cardaT01 T1 i 774 i CTES LITET. Cillä Iloil. These iHi I lids have Illow been diistribLited for Tillä nägemilent almo Ing State institutions, like Lhe Lawasama State Plantations Corporation, Coco nut Cultivation Board, Rubber, Research Institute, Land Commission, Livestock Development, Board, For est Department, Cashew Corporation El lid I TIL 1gJ4, Iława sElis, ElĘctor1-level La Lld RefoIII cooperatives, MPCS's DDCTs aПti i sizeable acreage has been alienated among villagers - LtLLtLL S LLLLL LLLLHHLLLL LLLL LLLLLLLLS tio Il pitur Proses. The CLltivaticul lands of the Public companies were excluded from the Land ReforII Law Իվլ, 1 ՍT 1972,
The Land Reform (Annendiment) Law of 1975 to be enacted by the National State Assembly of the Sri Lanka Republic provided for the vesting of Every estate land Jhned or possessed by a public company in the Land Reform Commission. The management of such estate land, for and on behalf of such Company, and such agency house, oTzignis EL LIon, or pc Tson shill be deemed to be the statutory trustee of such estate land.
On this basis about 370,000 acres of public company cultivated lands are expected to be wested in the Land RefoTim Commission. Of which about 225,705 acres are tea, 130,869acres are rubber and 5,779 acres coconut lands.
21

Page 24
FOREIGN NEWS SURVEY
LSLSLSSLLSSLLSSLLSSLSSLSLSSLSLSSLDBDLLLLLLLSLSS
UN BUDGET 22% INCREASE HALF FOR INFLATION
Secretary-General Waldheim has proposed a nited Nations bւIdքut of S. 737 million for the two-year period 1976-77-21.6 per cent Haıbyov the current one. Inflation accounts for half of the increase. A financial watch dog committee recommended a lower figure, S721.2 millin, which would hold new posts to 590 instead of the 826 proposed by the SecretaryGeneral. The budget proposals, made public on Thursday, 31 August go before the General Assembly at the regular session opening in Septeinber.
UN MEMBERSHIP FOR THREE NEW AFRICAN STATES
Three new African States which
recently achieved independence afer nearly five centuries 04 Portu" ԱLIESC; Tule Were TO
mended by the Security Council lor membership in the United Nations. They are Mozambique-in southeastern Africa-and the islands of Cape Verde and Sao Tome alid Principe-off the West Coast
T Council's lIIliinimolIS recommendations will go before the regular session of էlle
General Assembly for final actionwhich would bring the United Nations membership up to a Lotal of 141 States.
World Economically Divided could not be Politically Stable *
The United Nations Secretary General Kurt Waldheim in all address to the International Management and Development Institute has stated that the reduction of the gulf between rich and poor represented the greatest challenge to international statesmanship and vision over the next 20 years, just as it had represented an increasing challenge to national Governments throughout the past century. By the year 2000, the world population would probably be nearly 7 thousand million, and the great majority of those new citizens of the World would be born in the developing countries.
22
When the devel called for El Ne Economic Order, for a more equit: mot only of the ric but of its opportill experience oI histol in which the few the majority lived without hope coul We could i Flat hic world political s for human progre have al III luch gr economic equity. TI United Nations are of the Illost pro to us all.
TWEE EFFI PIE 5 In New Yorker specialised subdeerfiri I, sessions are Fre Fffilia 77 77, Inters for E 马(-配置D)、 Dενειομηiεη.ύ. fiori (IFC). TW of Fost Frie, seşỉoris 11'hich
This for large is re. y Action for для also дгор
The focus speciaised a indicates the conditions of
mmmmmm ESCAP COMM. CULTURAL DE
Key govern Ill. nations of A, si: concerned with d1 developппеп to take the towards improv and output in life of the milli rural HTeä$. Thị on Monday, 25 Mara Imis, EXCC the Economic mission for As as he opened th Commission's
Iāl Devl.
 

oping Ilations W Intellational hey were calling ble distribution hes of the world, пilies. It was the fy that no society lilad wealth and in poverty and d Tamia I stible. pe to have the tability essential SS if we did not 'eater degree of he debates at the Il those subjects found importance
INDIAN OCEAN CONFERENCE A conference on the Indian Ocean
should bc Convencd not ea Tlier than the middle of 1976 and! attended by a littoral and
HinterläTld States of that Oceal III, a long With Ell Indian Ocean councountries that had not become independent; the major Powers and other artitille States Which Lised the Ocean frequently; and any other State Wishing to participate. This Was the general View of the Ad Hoc Committee on the Indian Ocean which held its first series of meetings for 1975 fril 5 to 20 Jule.
This month the Committee will resume consideration of the question of convening a conference as soon as possible, in the context of the General Assembly's 1971 Decla Ta Eion of the Tia Il Cicea I is El Zone of Peace, The Chair Thail
essions of the United Nations General Assembly opens LLLLLL LHH HH LLL HLCCLLLL TS TCTCLLL CYG LLL HTLLLLL SLCCCLLCaLHL CCCCHGGHCCLT TT CLLL LLL L LLTCCCCT TCTTL ver the next Three months. The General Assembly ceded by IF (IHF Ital stock-taking by the U.N.'s financial Telly, the International Monetary Field (IMF) and the Park for Reconstruction and Development (The World rd is group of aரிiated institas International Authority (IDA) ahid Inter Piazional Filiance Corporale Finance Ministers and Goverrars of Central Banks hers of the U.N. converge in Washington for these
continue into September.
s U.N. sessia 77.s hoy’e 1'er, take Girl (7 particular 5 igrisi S LrlLHLHHLLS CCHCLCTS LLLLT LGLG 0C TCL C CLCLGLGLDLHCCCL LCLLTLLLtGGHLLLLHHL T S L LCLLLLLCHGGGTCT LCLCmHHLLLL LLTLLLLL osals för restructuring the entire U.N.
f the Trials aries f the M.U., nd same of is encies in our Foreign News Survey this north nary viral areas in which U.N. activity can affect the
Third World itatiori 5.
TTE on Act WELOFMENT
of the COIlmil Lee is Sri delegate Mr. H.S. Amarsign he Int officials of jie
Lanka's to the United Nations
and the Pacific bod and agriculturwere urged first decisive step di faming Illethods Ider to better the ins in the region's appeal was made August, by J. B.P. tive Secretary of and Scicial Coll1 and the Pacific, : first sessing the cmmittee on Agri ment in Jakarta.
Forty States have been considered ass litto Tal End hi interli Indi States of the Indian Cicean for purposes of thic Committee's consultations: Afghanistan, Australia, Bahrain, Bangladesh, Bhutan, Botswana, Burma, BuTLundi, Demccratic YeImeIn, Egypt, Ethiopia, India, Indonesia, Iran, Iraq, Kenya, Kuwait, Lesotho, Maldives, Mauritius, Nepal, Oman, Pakistan, Qatar, Rwanda, Saudi Arabia, Singapore, Somalia, Sri Lanka, Sudoan, Swazila Ind, Thailand, Uganda, United Arab Emirates, United Republic of Tanzania, Yemen a II1d Z:aIT1biäi.
GL0L0LLLLL S LLLKHLGOLOLSS LLGLKLLGLZS 00

Page 25
FEATURES
The Brain Drain
With special reference to Er
by B. M. A. Balasooriya
By the Sri Lankan brain-drain to the rich countri reveals, Sri Lanka is aiding the rich by Rs. 110 m. whilst incurring an additional loss to our econo millior per year, B.M.A. Bala sooriya is a resea, working in the State Engineering Corporation and Quarterly Journal of the Institute of Engineers.
The problem of brain-drain has Characteristics of been discussed, debated and documented in various places at various If one carefu times. However, in most instances characteristics of it has been looked at from the lup, the "Brain Dr point of view of the professionals several common who form the elite of this country constituting probably under 1% of In the first
the Lotal population. Most profes- of thel FII sionals talk about the higher Wages incוחסe Tevre they can earn abroad, the material the average comforts they can enjoy abroad, Lanka, education of their children and so
on. It is quite clear that most view 3. A very large points expressed at various times have goneth and pressed on the Cabinet Com- level of ed mittee that reported on the Brain provided by
Drain in Sri Lanka through thic Institutions and Trade : They enjoy
Unions that represent these mobility be elite groups, are for their PWT) Per- of educatio sonal interests and not with much titirls which
sense of responsibility towards the other 99% of the less fortunate
people of this country who have nowhere else to go but do or die here. TRANEDPE The professionals are more inclined to identify and compare themselves rேgர with their counterparts in the developed World together with Doctors ... whom they constitute an Inter- Englicers national Elite Group, and alienate Accountants themselves from the people in their ohe
ther Tithers 1IntTy: Lawyersםc חWם
Techniciáns The write attempts here to dis- NLIT5gs; cuss the problem of the so called Others brain-drain with special reference to the extent to which it applies to the engineering profession,
ECONOMIC REWT.E. W. SEPTEMBER 1975

gineers
S, is rice llioni per year of Rs. 128 ch engineer Editor of the
.ബി
the "Drginքըs"
ly analyses the those that make lin', one cal In see actors.
place, almost all within the high ls in relation to
i colles i Sri
majority of them rough the tertiary Ication, which is free the state.
the privilege of cause the type 1 and qualificathey received
here are designed on patterras sinni la T to those in the developed countries, and are recognised internationally.
Consumption patterns that so Time a Te accustoned to OF those that others aspire to, mostly match the developed country pattern.
The reasons for migration of the professionals should be viewed in the light of the common characteristics Tlen tio Ilegi ia boWE,
Reasons for migration
Warious investigations have attributed several reasons for the
migration of professionals from the developing countries to the developed countries or developed pockets in other developing countries. Several reasons have also been listed in the Sri Lanka Cabinet Committee Report in their investigation of the problem in the context of Sri Lanka. These reasons could be considered as constituting two types of forces, namely Push and Pull forces, the former being those which push one out of Sri Lanka and the latter, those which pull one towards the developed regions abroad.
PLI FOTCEs
"Attention of higher salaries abroad and the ability to make
SONNEL WHO LEFT FOR EMPLOYMENT ABROAD
May 1971 May 1972 May 1973 May arti Tofa
fa April fra April sa April
1972 1973 1974 1974
10 171 238 558 - - 3. 94 275 - 2표 35 163 S., 41 55. 52 193 莒 35 13
BD 7. 15 I II 2 28 Կ[] 142 85. 1. 37
37ց GO 521 III. 1.705

Page 26
substantial sävings to nleet a variety of personal needs both while they a TE: brod Lld Cill theiT i TetLIITI
llē,
This is the lost illportant and LaLHHLHHLLLL LLLLLLaH a0KS S L LLLLL HH Laa Cabinet Committee Report, and it is ollt of egoilti Illic Ilecessitill:S. The international Inobility gives their access to “world III:Lirike Lil' Wall Lies. This has a catalytic efect on Ille migration of the professionals.
Ellulica Lion of Childrc 1 - LlLLhigher standard of crucation available in the developed contries and Lille Tclatif We cåse ad Hic less stringent Standa Tills of er try requirc:-
ents, specially at British Universities. Average or cwen a below averagic student, who II11 Hy not štandi a chance of a dission to ill University in the fierce competition for entry, has a good chance to go through a University at e.g. in LJ.K. OT L.J.S.
Psi Fores
Education of child:TEI COLlici bic grouped under push forces as well and this is probably the second irportant factor, as evidenced from what the Writer has gathered from his QWIl colleagues Who FilWg emigrated. The common apprehen50Ti 5: ITE:
{a} he dificulty in ādmiting a child into a "good" school, and the high degree of competition for admission to the University,
{b} the belief thät thẽ chäTht:es of doing well in life with swabäsha educatio II is Slin ansi that no fo Teign countries Will Tecognise: COLIIT SWali basha deg Tees.
The latter arises through the intense desire to gain access to "World Market" y Lles and ächlieve international nobility. It appears that to some, the concept of doing Wellir life is based on the chiefTient Of these values.
Difficulty in adopting themselves to the changing Social situatil i Sri La Ilka - this is also a Contributory cause in some instances.
24
AS ä rESult Of like Halk reformıs, etc. SCOITIE: hawe impossible to live ständiä Tids, COITII fic: that they have be past. They proba 1055 office Lo SL. high pedes tills ir lesg er beings il Yet, in a foreign guite Willing til tủ stärldards of evič belovy to: they could have li situation in Sтi to as second I Wi" iliyet 18 i II resilice.
IF Tiglio II5 3 jej proble IIIs, discriu Iment, leth argic an taken by the respect of the ric and a spilations ol HGWęycT, Olc { forget the fact til criminati i Ertl finding cII ploy IT 5 Lich the rillä EL house to live il. titolis FC Tilleti TE Cold LIF ÇifÖLIT Ekim take Teffief i Il te իtttEր էլ) be liէ, in a foreign ca. people than by: , at hille,
ATIOthe COTIT! spirit of adventu the younger ped world while they is Lite at LIFE
It c::III III:o b. hesitatingly hati] the Teil FCI5 (ExC iпsti: пces) fог || engineers:
"Low status of p
administrat 1үe Society” –
Engineers on the enjoyed a priv Cur society. ! that the engill personnel in E relatively lowe administrtitive : Writer's opinio.

recent legislation
ceiling on in council
fical II did that it is up to those same rs. Ild LXLITies Em LISEdito ir. Lhe bly consider it il p down from the the eyes of the our own society. country they are adopt themselves living, may be lt St:Il'Eirl's thlit Wcd il the changed Lf Irika, End that class of even their country of
persorlTitl וו1jrCI Imla li, Il, haTTasti negative attitude administration in ck's, the prolific Ins the professionals. holl also It Eric is WOITE e di 5Ed. Tot cinly i II Int, but also in ers as finding a
Such fisi čirilillS basically CIn the . Yet, somcpcople
thought that it is
criminated against Intry by freign one's own people
I real is the Te Epiccially a 11 Cng plc - to see the are you Ilg. This | 15 Lict.
* said tuite LIIIle folcWing are Tot FE in excepticinal he mig rätien Cf
rofessicials in the System äTlgii. Fıç
Oth CT id Fla V illeged position in However, it is truc :CTS : Ind Itch Ilic:1 eneral were kept it 'l WI i III Lie Eystri IIl. Yet in The I, SLET ELS 13 ST1CI,
been a consideration for any engineer to elligrate.
"Lack of opportunity for the develop
et of professional cmpetece and pгоfEssioпal advапсёппепt" — For any Engineer who has the initiative Eind the Lirge, opporLLLInities are available in Sri Lanka, for professional advancement and development. This has in the writer's opinion not been a reason for Imigration.
"Job satisfaction and limited participation or non-participation of professionals in the decision making process Here again this has not been a cause for migration except in exceptional instances. For that Tilalter a Survey hä5 has revealed that generally the professic Illas Imigrating to develop ed countrics from developing coultries, fit into slots wer do Wil in the professional ranks compared to what they were occying or could occupy in thier own countries. The writer has le:TIII this frt I'll & C.IIle CF hi5 0WIl colleagues who have Tigrated; lost of the admit that the level of responsibility that they shulder Fibroad i 5 ric Weer thān what they were given here at home. Consequently, if as engineer's Wici a Tic so I lle distance away from the decision making process in Sri Lanka, We would be much further away in any other country. エ
TIETC. Te FIEC, CHCT Teča, FCIs listici in the Calbit CollTit Ece; RcFert. Such Es'absence ci fadequate promotional prospects, lack of Equipment and othicr il 5 tituttionalized support, organisational inefficiency and better opportunities abroad to come into Contact With filltiellectual CC 11peres, etc. Although sole of them IIlay Elc valid they have not been significant causes for the decision to migrate among
IglsleeTS.
It is tILe Hat İı STİ Lanka, Hiterature, eզuiբոlent and financial provisions for research are lacking. In this context it may be
noted that the University of Sri Lanka had stopped subscribing for most foreign
L 0L0HLaLHHLHOLLLLLL S K LL LuLLL LL uHS S u LLKLH LHHL LYuLLLYS u HLK

Page 27
journals during the period 197275. These may be some of the Fersons for migration of engineering from our Universities, As ft T as the Lliw crisi Lics FATc concerned there appear to be several other reasons such as the general state of disorganisation, Telatively low salaries and disgust and frustration arising from discrimination and Ilaladministratitin.
It510uld Béilte: in financial LETTI Lanka by the e professionals to c total in IW of Sri La Ilka thrc agencies. Main Sc
lid received by U.N. Agencies the qua Ilitum fr. bei Ing not I more L. celt f tilē ttal Ministry)
RATE OF GROSS OUTFLOW OF TRAINED PERS
Average Fire
~~—
Maj:1971 a May 19
April 1972 April 1:
L JII 14.고 Enginlicers , I} AccouTitants .. 효.) . lniversity Teaches 1.교 Other Teachers 輯。暫 Lä"WÉye:Ts . 3. Thii is NLISes - - 1.2 I. Others - 7. I고,
TUL:ll .. 33. 5.D.
Happiness (a) Colombo Plan
One cannot say that people Illigrate because they could live a happier life abroad. Most engineers who the Writer has met, back in Sri Lanka for short holidays, have said that they would be happier here. They hawe no Toots in the Country of adoption; they have no sense of belonging to that country; it is a superficial existence but of course with material cc forts and Timore money in the pocket. It appears that the latter reasons outweigh the other considerations.
Magnitude of the problem
The report of the Cabinet Committee (Sessional Papet X - 1974) revealed that druing the 38 month period from May 1971 to June 1974 the total timber of trailed personnel who left Sri Lankai was as Ilmuch as 1700), Lhee Iu Imber of engineers being 275. This works out to, con an a Verage, almost LWo engineers every week. This is no doubt an alarming figure.
LL0HLLGCLL LCH LLLHOHS S SLLLLLLSS S LLLLLH
SILLIC Ent
The average input to Sri Lain equiplen recciY
plāces abroad, foreign Sri Lanka and o 14 IllillioII.
(5) Aid [hrough t Agencies
The correspondi Eell Ft Ebolul LRS. É: that about 10% o to be frCII oli hers technical aid 5ՃաTcts in about
The loss to S enligration of the Ebe Stilte il || sequent loss in sidering the nun Čingincers, dccltor: who have Inigrate monthi period s Luc. CCIIII liittice, the crimigrating is ab

resti Eng to quI2A Titify s, the le SS to Sri migration of Our cmpare it with the
Illicllid ugh the Various urces of technical Sri LEIlka Ed Te Elle and the C-Plan; In Gther EGllree3 hal about I0 per (Source: Planning
SLSLSLSLS
OMIM,IEL
For For FFFI
72 J fil 1973, Fr) 173 April 1974
고D.(} 7.器 7.
모I 串,3
만,
o
51,
Aid
TınLIil totä1 :ıidli
ka, which includes red, training and
Immide available Experts serving in ther is about Rs.
Hhe United Nations
Ing Tigure is esti Ill5 million assuming if (a) & (b) above: , the total annual input from all
Rs. 8. Tilliol.
ri Lanka by the professionals IIlay Le:ITIls of the COIIroductivity. Collliber of Cinly the S and accountants ed duringhe 38 tied by thic Cabinet
average number out 320 per year.
On the basis of an average productivity of about Rs. 4000 рег. рrofessional, per year (estimated by Nath AITiarak Con), the loss to STi La Inka CJLld be of the Cori:T of Rs. 128 II million Per year. The Tefore, it is clearly seen that the loss
incu Tred far colul Weighs the total inflow of technical aid. Which aIncounts to only about Rs. 88
million per year.
It should al Eo be interesting to quantify the extent of technical aid gher by Sri L: 10 he fertipt countries, in the form of the Professionals Who Illigrale to LlLinn FoT the purpose of this exercise the пшпђегs of cпрineers, Luctors and accountants who have migrated to U.K., U.S.A. Ca Ina da, Aušli Italial and New Zealand turing the 38 month period of the study referred to above was 706. Sirice in the die Welci pęd count Ties a Weiry high deg Tee of Sophistication anč1 äutcmillic Il is prevalent, the pro. Lictivity per professional WGuld be much higher in comparisLIl to that in H. dewellcping country like Sri Lanka. Taking a conservative figure for the productivity of say Rs. 50CCO per professional per year, the total technical aid input to the developed countries froi Sri Lanka Would Eble of the order of R5, 11(0) Dimi|lio Il per year, Which is far more thin the total quantum of technical aid received by Sri Lanka which is about Rs. 88 millican per year.
Beneficial Effects of "Brain-drain
among engineers
Migration of engineers is in a way a blessing in disguise because it acts is a safety valle on rising untill ployment or under EmployI tillent col Engineers in Sri Lanka. The statistical data given in the Cabinet Committee Report reveals that the largest proportion of those who migrated was in the age group 25 to 29, i.e. those With not more than 6 - 7 years experience after obtaining their degree; and about 60 to 70 percent were those under 35 years of age. These people could be replaced without Tuch difficulty from among the new graduates in stages.
A positive effect of the brain drain
is the potential to develop links between our local organisations and
25

Page 28
similar organisations abroad where our professional personnel are Working, with a view to co-operation in research and the use of services such as documentation and informatil.
It has been argued by many that experience gained abroad is coinparatively richer and Would be a great advantage 9, return to опle's own country. While agreeing that such experience Inay be different from that at home, and useful it is not necessarily more rich. Perhaps it broadens one's experience, but certainly it does not make one a better engineer than one who has chosen to carry on working at home. The Writer has seen sufficit Int evidence for this conclusion to be made in his own place of Work.
Cabinet Committee recommendations
The Cabinet Committee has obviously considered the problem from all possible view points. They have considered both the human aspect i.e. the attitudes and aspirations of the professionals, and the national aspect, i.e., the need of the professionals in the development of the country. The recommendtions made are very liberal and they are being gradually implemented. However, the writer is of the opinion that on the whole it would result in a worsening of the situation as regards the brain-drain, from a national view point.
It is presumably hoped that by facilitating the flow outward as well as inward, the net Durward flow would decrease from what it has been during the past few years. But is this possible in the context of the reasons for migration enunerated earlier.
Obviously Sri La the salary levels an of developed Col. WE CH HIIքt hope t of the institutions coluntries as rega Studiyi Hind TeSear"Ç Lihat We are il 3. of development. . education system thгоugh necessity reorganised to sui developing count from What has bei planted here fro: Was designed to hel. It is at LII take soIIIe time ! to stabilise itsel "pull' forces reini
Si Imilarly, as I
factors, there the Goyer IIIT1CIl cha Inge the E
because they a Government poli people in the lar country and of hi. any steps been ta irritations descI Section i.e., discri memt :: Ħidl malad very necessary f tion, tio - tikle Ea pO: dealing with pri sionals alld aw iTritatioIl5.
However, the Häs älso. Tillä de TecOLITendation: back some of Working abroad, important TeCOT) in this regard is TECT LittleTt OI personnel at seni le WEES in the Stil this facility is a the Corporatio
stock of GRADUATE-LEVEL PROFESSIONAL A PERSONNEL AND PROPORTION EMIGR
26
Stock.in Our flaw
Cargr II 1971, tim
19
Medical PCTS line ... , 3,294 Engineering personnel ..., 1983 ACCOLIInt:41.5 |복 All categories .. 21,297 15

nka CHILIlot match d living standards Intries. Secondly, 0 reach the le Wels in the developed Td5 facilitie 5 TOT hi due to the fact much lower stage In respect of the in Sri Lanka, it is that it is being the needs of a Ty such as ours cm a Syster in transIn Britain, which sluit theiT I Leeds all that it would for a new system f. Therefore, the lin as they Were.
“egards the "push is nothing that It could do Lo :xisting situation 'e resulting from cy accepted by the ger inte:Tests of the :r people, But have ken to renowe the "ibed in an earlier mination, ha TrassIllinistration? It is OI the administraitive attitude when oblems of profesoid causing such
Cabi LeL Committeet certain valuable ; which could pull' our professionals One of the very nimicidations II hade o open avenues for re-recruitinet of and interediate Le service. In Tact, lready available in Scctor and it is
D TECHNICAL TING
May, Per cerir af W PE 197I 5 fügk
To
s 38
고,
O 7.)
hoped that it will be extended soon to the Government Service too. There are quite a nu Inbct of thosc who migrate with the main purpose of earning a little more money and to acquire Various domestic gadgets, a car and so on, which IIlake life that much more comfortable. Some of theIll Wish to Tet LITI to Sri Lanka when they feel that they have fulfilled their mission.
Recruiting returnees
Therefore, a facility. Whereby they could be recruited at levels in keeping With their qualifications and experience is very necessary. Furthermore in IIlaking such recruitments it is essential that the administration should not be bound by a rigid cadre, if his or her services are useful to the organisation concerned, After a 11 a caire should ha Ye that flexibility to adjust itself to the changing needs of an organisation. At the same time, it is песе85ату to CS tablish a Secreta Tiat here to Which any of our professionals abroad in any field could apply for seeking employment. It should be the responsibility of this Secretariat to process his or het application speedlly in consultation with the other governmentagencies where his or her services would be lost useful and to offer him or her a place. At present since this service is not existent, there have been instances where such inquiries made to various agencies have not even been a knoWledged, even after many reminders,
which no doubt put off the prospective 'retLITree" aTld Imake him change his mind.
Another Tecommendation that can act as a "pulling force is the facility of convertible Rupee Accounts for earnings abroad.
Apart from what the Government can do to retain professionals Within our country, the professionals should also have a sense of responsibility to fulfill their obligations by the peoples of this country. The Writer secls that it has come to a stage where the professionals are attempting to hold the government to ransome by making various demands solic of which are unjustifiable. For example, a univerity don has recently suggested that the
ECONOMIC REVIEW, SEPTEMBER 1974

Page 29
TRAINED PERSONNEL WHO LEFT - BY COUN
W.R. U.S., Cர Category
DOCTOTS FO 95 蔷 Enginecrs OO 8 19 AÇÇÖLIII tanıt: - , 2표 事 University Teachers ... , , 7 Other Telchers (1 Llawyers 25 2
children of professional parents after completiol
should be given preference, in admission to the so called "good schools', because otherwise they will have no choice but to proceed abroad with their children, as they have a ready market for their skills.
It is possible that some of the Iccommendations of the Cabinet Committee which appear rather unwarranted may have been made through pressure from the professional groups. For instance, the
proposed facility of 5 years leave for employment abroad, is in the Writer's opinion
unjustiffable. This period is fartoo long and the Writer feels that about 2 years should be the maximum period that may be given for this purpose. If one wishes to be away for a longer period of employment one should rather resign. However, he or she should have the facility of being re-recruited at an intermediate or senio level CT1 retu III, depending on the needs of the same organisation or any other relevent organisation.
Another instance is that in the case of those who are sent abroad for higher studies and/or training on scholarships or grants, a facility is recommended whereby they could relieve themselves of the Whole period of obligatory services by payment of the bonded sum of money. It has to be realised that such Schola Tships or grants are given for training of personnel to meet the manpower needs of a particular organisation; they are not gifts given to any particular individual: at least they should not be so. Therefore at least 50% of of the total period of obligatory service should be insisited upon,
ECONCMEC REVIEW, SEPTEMBER 1975
could pay up or and be relieved c. have been instar individuals Who ei unity fortraining ly because a parti needed Such Tai Tot e Wen Teitu Til the end of the per ing... This is the lin Of course, at the is the obligation c administration to personnel in the manner. Again, instance5 where tE ing after specialis his place usurper may be less qual perienced, but political or other c right place. If would not take ste Iccurrence of Suc Iless to the scholar, not insist on the period of obliga
The situation as
At present engineers product absorbed within that there is con sic ment and under-er спgineering gradu is greater investin in development w participation of such work, this sit changed. Therefoil Vēīcinot bund the migration of
* The 4 fases fic: Corzine Report ry the officia алd Entigraffол d

Y OF DESTINATION, MAY 1971 TO JUNE 1974 Istralia Malaysia Zambia Nigeria Other Tafa I rad N Caiff Ffe g(
1호 558 4. 28 35 2 25 27 5 б 76 25 169 7 直 로 4. 14 2. 64 17 17 . 93. 3. 2) 58
of which they 3 Ipro-rata bäsis the bond. There es. Where certain rned this opporttudy abroaci purebular organisation ed person incldid O Sri Lanka a L. ond of study-trainit of selfishiness Samle til 12:e here in the part of the LISC SLIch trained : most efficient there have been Le officer return2d training found by others who ified and less exaving the right onnections to the he Gowe TT ment ps to prevent the actions, in fairthe Writer would 50% minimum ory service.
"egards engineers
Etit fitit TËSITË th; Il can be Sri Lanka, so arable unemployployment among es. Unless there :nt and activity rk and greater lt engineers in ation will lot be in this context yalamedabot ngineers.
er y Ffi
NA "FI cords Tvala Eble тg the 38
article are fra Pri
Oran". TFF fra
4oFF fe rjorth persod Hrveyed.
However, the loss of experienced engineers at intermediate and senior levels is causing serious problems in may of our engineering organisations, specially so in the writer's own place of Work.
Conclusions
There is a general lack of a sense of owing a service to the mother country for all that one has obtained from the state in climbing up to the very position one is as a professional. In the final analysis this is basically the reason for the exodus of professionals. Could it be due to some essential element lacking in the process of education of a child and or the absence of true and honest national leadership who should set the right sense of values for the rest of the country to follow and derive an inspiration from? This provides some food for thought.
Unlimited frc cd cm in migration of professionals is inct in the best interests of the country, A certain degree of governmental contor should be effected natic nally and internationally when there is necessary justification for it. At the same time, it is essential that those who exercise such controls do so with a positive attitude.
While it is true that migration of trained and professional persons is a great loss in terms of human Tesources, in the context of the existing supply and demand situation in Sri Lanka, one need not be undully alarmed about the out flow of engineers.
Sгї Lanka Caћїпеf waar gaf Hered from: Гппллlgraffол
re
|Depaғ#телл ол
27

Page 30
Developing Countr A New Source of Expe
by Mary Lynn Hanley
".... We do not accept any more fo confine playing a passive rale simply as receiving coLiArZ trie, F. PVe are villing to share our experiences атd capacities. Iп this context пII developing countries with the support of UNDP's seeding funds and mainly is field offices, sould becarne receiving and dorzor courtries sir77 uliraneously.'
Delegatic of Brazil to the Twentieth Sission of the UNDP Governing Council, June 1975.
Traditionally, technical assistance. dicifjcd as the LTH ISTET Of kWledge and skills from one coul
try to another, has taken place through exchanges bicEWEE developed and developing coun
tries. Experts from industrialized nations have been sent to impart their abilities to developing country "counterparts', or fellows from developing nations have been enrolled for terms of study in developed - country institutions. When differcnccs bct WEEIl dono T and recipient have been too pronounced, both practices have produced less than ideal results, In the annals of development assistance agencies the Te are many accounts of wellintentioned experts having been unable to adequately communicate their techniques to local personnel, being physically or psychologically unable to adapt to unfamiliar living conditions, or attempting to transmit technologies which proved too sophisticated or otherwise inappropriate for developing country needs. Similarly, fellowship
28
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HLLtGaL TTT LHHLLLGL TTGT LHHL S CLCCCLHGGLLLLL S LSL TLL SS LSa priorities of Third World cult tries gives official recognition to
LU, W.
students have h; unfamiliar lang customs, als wel little relevance of огigin.
creased cocountries which other not only stage of develop terms of cultura. traditions and sy'; living condition ably lessen and also greatly of available exp
Against this ITO-Te LI LI Ilide Plan of Actic II Illic Int of a New IOIllic Order, GçTCrill ASES II for all increas 1סוח H וTatic Tטתם tries (TCDC).
The Plan ri aiseas in which ( s FC Lld Crease with each oth “ʻto promote ar instruments in the fic science and Le shipping and media'. Thus, al, technologic legislative expe With thic coIllent of prod ensure stable p and maritimet PTCIThote Trade
The recon ון שE WhותזH t.

cated person riel ifficili probler; рг г/iis experiisғ World persar. Fel fer gyfle. The JITFEZ PE 5-JA" TF775 FT "lity. The Feder
ke. Its cope if Είτης Πεερ (1η: fs requirgrient.
to contend With ages and social as curricula with to their countries
peraticin between are close to each il te Tills of the IĘ TT but a Eo il heritage, political iteTTs, and physical s, could consider
these problems expand sources TLS.
background, it is "Ställda ble LIFt L He foT | Ee Esta bisterto Ecd'icopted by the UN ly last year, calls in technical cog developing coun
ommends specific ing countriesתWelc: their co-operation . They are asked establish effective co - cperation s (if industry, |nology, transport, SS CC.TTT TIL Illication sharing of indus Ti, managerial and Ice is urged, along eative establishTs" ä SEcciations to es for comIncidities Sport cinterprisesto
idations cCre eased numbers of
experts are badly needed. Development progress madc ower the past few years has, itself, generated the need for more - and more sophisticated-skills. They also come at a time when the developing countrics themselves hawe Imuch to offeT.
PLIS Llant to a 1972 resolution
passed by the UN General Assembly, the UNDP convened a special Working Group to study technical co-operation among developing countries. Analysing data submitted by 75 developing countries, the Working Group found that these countries possess a wide range of universities and training and research centres capable of providing instruction in diverse fields ranging from engineering, medicine and homic economics to Iuclear Tesearch for agriculture and satellite communications. More than half of the facilities cited, it noted, had received or were receiving assistance from the UNDP. Increasingly, the Programme has emphasized in its technical assistance activitics the building and strengthening of national education and technical institutes and research facilities. which enables developing countries to produce skilled personnel con a continuing basis. ., 7 1
At the same time, however, the Working Group found that the capacities of these facilities were ing d'equatcly known and little utilized by other developing courttries, due mainly to a widespread communication and information gap and the lack of adequate mecha Tiisins to promote co-operation.
As recommended by the Working Group, UNDP is taking remedial action on two fronts. In its work with developing country governments, it is sccusing its activities on strengthening their capacities for identifying "TCDC" opportunities and initiating actual projects for mutual assistance. Within the U.N. system, it is endeavouring to encourage inter-country co-operation in new and existing projects and programmes, A key element in both efforts is the designing and organizing of a new information system for obtaining and distributing data on thic capacities and needs existing in developing countries for technical co-operation with other developing countries.
ECONOMIC REVIEW SEETEMBER 1975

Page 31
To some degree, the UNDP has always applied the “TCDC' principle to it's work. DLIring 1974, for example, 3,011 of the 9,809 experts who served in the field Ilder its auspices were from developing countries, als Wcre 38 per cent of the U.N. Wolunteers who worked on UNDP supported projects. In addition, 2,551 of 6,834 fellowships it awarded Were for study in 110 developing co Lilitries ald tele:Tritirile:S.
Through assistance to regional inter-regional and global projects, too, UNDP has fostered co-operation among developing_countries. Under many such projects apPro Ved for åssista Illice, developing countries hawe worked together to develop shared land, water and mineral resources, build transportation and connullications facilities El Id -- Control COITII inco II plagu Ies such as Llle dehabilitäting disease of River Blindness and the cropdevastating desert locust pest, is
At the present tiiline, the Programme is placing its emphasis on multi-country projects in the critical areas of food and tråde. Internation agricultural research institutes in all parts of the world are receiving its support, as are regional instituitio. Ils such as the West Africal Rice Development Association (WARIDA), which läs its headquarters in Liberia. This enterprise involves thirteen countries in research, demonstration, training and data processing activities geared to increasing rice production through the use of varieties suited to individual growing conditions. -
In Asia, a regional project is training officials, from Bangladesh India, Iran, Nepal, Pakistan and Sri Lanka in methods for initiating trade negotiations under the fra IlleWork of the Asian Trade Expansion Prograriunile.
At the Arab Institute for Economic and Social Planning in Kuwait officials from countries in the Middle East are also being trained to carry out multilateral trade negotiations, and to facilitate trade procedures, with a view towards liberating trade and elimi. nating tariff barriers.
ECONOMIC REVIEW, SELEMBER 1975
UN TOP 48dehate spine "N Administrator I
III is leisi quested the UN Eind to IIIake its гhнпgiпg пettisн documents H5-1b. lines for the fill
The Filii 5 IT -- Ti dictive El Tailabili capabiliti
()
The sele TCIIlain th fries. En t THC LT105
ICC Int of their :
【芷〕
Teicis litill nchieved,
(iii)
(IP) Տr long a ויונן ldנוחh$ Allur li
Ilents
LNDP 3 II, IIIլիIII: Il Crill from de
()
LJNDP | ti T and servic Nations p.
(vi)
GOTFITTELE
III:
(Pii)
Il TLB til Aller f : UNDP regional projects directly or indire activijtjes. II, the subregion, for e.
gramme Works Central AmericНП (SIECA), and a II of SIECA's plans:
ELL UNDP. || port to min Lulti-ri-A Li efforts for the productive enter expected to assi in the formation () Imittee for the cor Ila-tllira li lill cull
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

DECSON
tion Governing Council met in Geneva recently to discuss Ind Iw Dimensions" in UNDP technical co-operation as proposed by todolph A. Peter50.
LH TL LLC LLLCCLL LLLCT TTLLLLMLLLLSS LLL TMtLTK L SLL LLLS P Administrator to introduce more flexibility in the Program scope of activities and working methods more responsive to the ld priorities of the developing countries. Using the New Dimensions isis for action, the Council then adopted the following set of guideTe orientation of UNTOP's Tole:
S LCLCLaL LL LLLLL LeeeLSCCaLLLCCCC TLaLLL La a CLLLLL LL ance in developing countries by building up, i rI ter alia, their prolpability and their indigenous resources - by increasing the ly of the managerial, technical administrative and research es required in the development process;
tion of priority areas in which to seek UNDP assistance should e exclusive responsibility of the Governments of the recipient counis context, UNDP should respond favourably to requests for meeting urgent and critical needs of cach developing country, taking into C CHLLLLLCLLLC LL CLLTa a HHHLLLL LLLL LLmL TLLLLLLL LLLLLlLLLLLLL Focieties and enhancing the quality of their life:
co-operation should be seen in terms of output or the results to be rather than in ferrns of input;
projects are for the basic purpose of technical co-operation, UNDP vide, Yvhere approprinte, equipment and material Tesources, adopt eral policy towards local cost-financing and be flexible in requireir counterpart personnel;
ould diversify the sources of its supply from countries, to enable it TC C C uHMMa LL LCLLLCLL GGmMCLL LLLL YCCMLL S LLLL S LLL resources for technical co-operation, including particularly those veloping countries;
ould give increased support to programmes of technical co-operam LLtttLtCT LmLCMCL T Taa CCLC LLLLLL LLLLLL CCLLL tes his possible on a preferential basis, in accordance with United ractice, from the local sources, or from other developing countries:
its and institutions. In recipient countries should be increasingly with the responsibility for executing UNDP-assisted projects.
As the UNDP's
ica, fifty per cent nds allocated for are Consigned ctly to integration Central Americal xample, the Proclosely with the Integration Treaty recent joint review and needs indicates be giving its supional lo-operative development of rises. It is also these coultries fa Regional Comservation of their tural heritage.
Deputy Administrator, I.G. Patel pointed out to the organisation's Governing Council earlic this year, however, ".... UNDP's programme, however substantially oriented, cannot encompass more than a small proportion of the resources which develop ing countries can make available to search other... The blı ilk of the future, and hopefully expanding flow of such resources will take place outside the U.N. system both bilaterally and Illulti-laterally. And the scale at which it takes place will depend primarily upon the initiative and effort of the developcountries themselves."
29

Page 32
Self-Reliance and Ujamaa: Tanzania's Development
Strategy
by J. H. J. Maeda Ibrahim M. Kaduma
Since independence, the cornerstones of Tanzania's development phiolosophy have been ITeetitותנ equality and justice. These principles, however, were not effectively Articulated in strategy and policy until 1967, when the Arusha Decla ration was promulgated Experience had shown that Tanzania had made the same mistakes as many other intries in supposing that growth plus regulation of a basically private sector were consistent With either greater equality or plan ned structural change. Thus in the Arusha Declaration it was stated explicitly that "The development of a country is brought about by people, not by money. Money, and the wealth it represents, is the result ld not the basis of development. The four prerequisites of development are different; they are: People, Land, Good Policics, Good Leadership."
This statement implied that Tanzania would now rely primarily on maximum utilization of her own resources for development. Hence the country's philosophy of socialism and self-reliance.
With 14 million people, large tracts of at land and ample resource potential, Tanzania should be able to rely on itself to a WCTY large extent. This does not imply, however, a desire to live in isolation. On the contrary, the principles of international collaboration and solidarity are subscribed to by Tanzania, but with the proviso that co-operation must be on the basis of equality and in pursuit of balanced mutuai benefits, in which each country is free to shape its own destiny.
30
um
ராச ரி h repl of Heir oитут experfect or a paper by J. H. DevelopFireFit St Erdres,
The Willage: the basis of Tanzania'
Since the overwhell of Tanzania's popul: the Trall ATLES, SL1CC ing the count Ty’s gCE and self-reliance Will by the extent to whic Linderstand, accept : the policy's implicati ly, this means the ci necessary i Insti Lutic II: lcwel.
A policy paper el ism and Rural DeWi issued by President 1967 outlining the organization to be the rural areas to be tion towards the Ai tion's goals. The pii: the peasants to Org into viable sociopolitical communiti the "ијатла Villa to trasfoTIn proi private and scattere inal and planned
Ideally, the lujar to be sccialist Orgill by people who deci free Will Loy, li We 23 Irl. for their cent Iloil by those who live them. The peasan villages either in ex: communities OT mi moving into unlist grouping scattered establish new Ile are required to OW Tum at least sorThe activities in their wil ly, and to el 0.Tg: activity on that b.
As socialist and ing and Working which the membe to themselves, the are governed by making their OWI all issues of exc the village. They

: coultries a terpring a clevelopmeri strafegy Tr'. If * is Tartzarria hiriño iris corrcept of Ujamina. This article based
'M சார் Iri M. Kart of
Iris fire of
Dar es Sala arri describes this ir teres fing Experirrrerir,
's development
ming IThajority Lic lies in ess in achiewof socialisII. Ele determined h the peasants ild formulate 3115. L'ILIThalt"eation of the 5 at the local
titled "Socialclopment' was Nyerere in structual Teintroduced in egin the transirusha DeclaraFier calls upoll mize thĘIlmselves ccinc mic and E5. These a TC ges" intended liction that is il CIII lillproduction.
II "yillage5 = a Te: izations created de of L heiT 0 WD1 work together gcc di gover Illed ind work in its form these isting traditional ore typically by d länd OT TEIllest Eads t0 s. The villagers I, control and of the econcmic -tmmunalס lages ոize productive asis.
| democratic liw =
communities in rs are responsible није итал villages members, jointly decisionS OI1 Lusive conceril to
are expected to
own and run their communal farms and other projects such as shops, flour-mills, pre-primary and primary schools, dispensaries, and CLlLLural and recreational activities. The size of an ujaria a village depends upon fieland available and the number of people in each village anges fTLII 50 to 4,000, although 500 to 2,500 is normally viewed as the desirable village size. There exists no stanced pattern of organization to be followed by all Aja7Imza at willages — deliberate attempt to ensure that each uj maa village is organized in a way compatible with its ent vironment and to encourt EC CTEl tive local planning.
The constitutions of Varicus ujamaa villages, hic Wever, fh. W simila T fea Lures in their political orientation and organizational stilictures. From these, als Well as frem the general guicelines ist Lec Y the Prime Minister's office (rarily Cl basis of early experience), and under whose framework most TECEInt village constitutions have been crew up, the main objectives of most jamaa villages are distinguishable:
To engender ideological awareness amo ng members, organize total oppositic n to exploitation in any form, and create instead a sense of communal spirit in working together foI" the benefit of all members.
To give employment crportunities to every member of the villege, thus enabling each to earn a just incCInc.
To expand the socialist econcinic underta kings of thc vill: Ee by the establishment of communal farms, shops, inclustries and ccmmercial and scTvice activities.
To market all the products of the
village, including those from private plots.
EconoMIC REVIEW, SEPTEMBER 975

Page 33
To buy or construct buildings, offices, machines and other necessary equipment for the development of the village.
To co-operate With other ujamaa Villages or para-statal institutions in commercial undertakings provided that such cooperation does not Tun contrary to the common good.
To give the Willagers an opportunity to receive adult and primary education, medical treatment, pure water, improved housing and other essential services necessary for an adequate material standard of living and fuller human development.
To be an example to Tanzanians who are not members so that they can see the benefit of the Iјагтаа way of living.
Management of the villages
Overall responsibility for Tunning the affairs of the Village is vested in a general meeting composed of all villagers. The meeting is normally held four times a year. A two-thirds majority is required to change the constitution cor to dismiss a II member Cor Ilembers and a simple majority for other business, including "annual village plans and budgets.
The day-to-day management of the village lies with the village executive committee elected by the general meeting. The committee is required to meet once cvery month and a village may set up specialized committees with advisory, executive or operational authority.
Results expected
There are several short-and longrun benefits that are expected to be derived from successful implementtion of the ujamaa village program Inc. Among these are:
The CTchtio II of self-reliant and self-determining communities following the tenets of the ATusha Declaration. National self-reliance is impossible with out deep-rooted self-rehiant com munities at the local level.
ECONOMIC REVIEW, SEPTEMBER 1975
Avoidance of excessivc di wealth, inco
Better utilizati to raise pro ly obtainabij of peasants Realization requires spc. tions, divisic discipline al II ship to gui of group ac tive channel
Ecolonies of ing, market services (sc) etc.), and : tions requir
Openness to
tions, throug and readier education.
Raising the soc
ards of the Sequently re, economic g: and urban p
Facilitating n: both as to Overall goal implementati
Mobilization
both their the descnce !
Establishing a human Sctl knowledge, and transpo Walter and ed
Creating coi ca. Il Telate cf. Imont Öfficlä lowing the tion of Ilost tions di TE individuals,
Bet Weer 1968 Village formatio: and government record also show of supporting ser adult education IIlcIlt Was abolit be expanded ғар,

exploitation and ferentiation in ne and Power.
on of rural lab olur uctivity potential* through groups Working together. of this potential ialization of funcin of labour, Work d strong leaderLe the cltusiasIT1 ivity into producS.
scale in purchasng provision of tools, health carc ome field operaIng Imechanization.
technical innovah increase in scale, access to farner
io-econoicistandpeasants and coniucing the socio ap between rural tople.
itional planning formulation of said decentralized Ol.
of the masses for development and if their country.
new pattern of enents (including finance, Inarkcting t as well as health, ucation).
nlu Inities which lectively to governs and Councils fol 1972 decentraliza
governmental funcctly affecting
and 1973 jamaa
1 exceeded party expectations. The ed that provision rices and especially
(1974-75 enrol3.5 Illillion) could dly in villages but
remained virtually impossible for more dispersed populations. Thereföre il 1973 the TANU Co. Ilgress Set a 1976 target date for enabling everyone in rural areas to live in al per I manent a Indi planned village.
Thus, since 1973, there has been a nationaldrive to move the Scattered rural population either into Teja, P77a7f7| villages for those who so wished) or to ordinary planned villages (for those who are not ready to start ujamaa living). Movement to villages, therefore, is now compulsory, While the transformation of a village into an jarrtaa village is still, and likely to continue to be, voluntary. It is hoped that many of the benefits expected to be accrued from living in an Ijamaa village will also prevailin an ordinary planned village.
By June 1974 at least 2.6 million peasants (of a total of about 10 million) were members of over 5,000 jamaa villages. After the 1974 village system campaign, it was established that up to 80 per cent of the peasant population WeTe resident in planned villages, about 1.5 million in old non-Ijaria villages, 3.0 to 3.5 million in Ijarida villages and 2.5 to 3.5 million in new non-ujia7ri7:aa development villages.
Public-sector assistance, while seen as supportive, has been large. In 1974-75 education, health, housing, agricultural extensicn and inputs, transport and other expenditure diretly related to the village exceed 5C0 million shillings (4 per cent of total GDP.)
Implications of the village system policy on international cooperation
From the foregoing, three things may have become evident from the point of view of international cooperation.
The village is intended to be the cconomic base for rural planning and implementation. Selfgoverning Villages must be inWolved in deciding what outside resource transfers they should receive and on what LCTIllS.
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Projects at the village level will be basically small-scale ones directly responsive to local initiatives and resources, and implementation capacities.
Although village communities require technical and material assistance at least during the initial phases, their most important role is one of self liberation, psychological as Well as Imaterial. Therefore, "assistance' which is ideologically antagonistic to participation and socialism is inefficient in terms of village goals and thus unacceptable.
With regard to international cooperation and Lujamaa village development the international community will have to accept the decentralized, participatory and socialist nature of the village and not seek to use 'assistance' to reyerse it.
An interin assessilent
What can be said of the results of the цагтаа prograпппne to date? The liuman Settlement patter'ın has been transformed from one dominated by scattered homesteads and hamlets to one of Inore compact communities.
Access to basic health, adult education, primary education and communication facilities has grgatly im proved. Access to skills within the village community (not simply to outside skilled agents) is increasing.
Access to directly productive knowledge and inputs has improved somewhat but is hampered by inadequate central and village resources and inadequate communication and control patterns between villages and 'experts'.
Food production effects to date are marginal-though probably positive - because weather and relociation dificulties have im posed costs, and reorganisation has taken time. Access to food has improved; the change in settlement pattern, for example, was useful in identifying and Tecting deficits during the 1973-75 drought.
Mistakes hawe beel Ima de at village, regional and national levels, both in poor technical
32
planning and stitution of cccTicion for participation, ably these hav identific d a tive Incasures l e.g. by TANU Imittee in Octo ing peasant Cr of some region programmes.
Communal actio] ly with regard to it economic activitie dairy herds, small new crops, but l; staple foods and crops, which are individual plots.
Egalitarianism
within village are unequal radically so, сотmpared to non-fria |
Participatic In wil bToldened a II rural elite c. villages hawe to exeTt far II the post-1972 W:TIcelt StTL) ants could Ep dominated coco or the agents ment bodies ujaraa perio
Willage self-Ielia equal both in t of a chiewi IIIe in many case to a parallel exemplified li asserti WeaseIndisi Of Telatic Ils hij ment and part
Peasant ideolog has begun, realization th: be met and mobilize pres for party agents and in guard and եւ datc. Adult proved ccInt; letl to broE individual all

hic partial subxhortation and education and ELL 10 Te Illotusually been ti гарid согтесWe bic: El taken, ]'g central coIIlber 1974 foHOWticism of aspects s' village - systell
has risen rapidfrastructure, new s (e.g. shops, workshops) and ss in respect of traditical cash argely grown on
has progressed private plots Il size: built imot especially when these ilin sime ural el cläWES
hin willages has di the degree of ITC1 fällen. The often been able lore influence on dccentralizei gÓcLure than peasply to the eliteoperative unions of central govern duriпg the pre
Ice has been unems of goals and hts, but has risen 5. This is linked ecline il clientage by a Tuch more elfassurecipaltern ps, with goveTIIy officials.
gical development especially in the bil Sic Ineeds CE: T1
that they must sures and support and government stitutions to safeild on results to ducatin End imTnullication Shia Wic der end deeper -SוTםט munityתחתטc 1
ciousness ina significäont nl: Tinber of villages, even i it may be fair to question the present degree of clarity and elabora
tion.
#音 Each of these assess Ilments is a qualified one-individual cases of total failure or regression, authoritarianisITn of clientage ca1ı be found. Eachi represents a state of transition, not arrival. Tanzania, like China, sees the full achievement of socialist rural communities and of a socialistic rural society as a goal requiring time, evolution and sequences of
priorities.
To attempt more than an interim assessment Would be to distrort. Tanzanians do Inot claim to hawe achieved participatory, Self-reliant, sccialist development but to have begun the long tansition to it. They do not claim that the Zufa.777 da village core of another rural development is complete but that it has begun to emerge. The participatory nature of the transition forbids laying down detailed patterns for the year 2000 as opposed to evolving sequences and programmes within the strategic framework. The 1967-75 Tecord is one of significa: Inti cha Inge to wards another form of development. Basic needs-food, habitat, Water, Imasseducation, health, the utilisation of surpluses to increase provision of cssentials i Te central lo ecOTICInico strategy. The quest for self-reliance does inform Imajor Willage, regional, national and internaticial policies. Inequality of income and of access to basic services has been reduced rapidly both by redistribution and increased production, Participation Ild decentralization have Thoved very far from the colonial, authoritarian, bureaucratic starting-point, with an increasingly socialist and participatory mass party in control of strategic and basic policy decisions. To claim ITore coccs a disservice to Tanzi Ilia. Clints of total success and absolute certainly as to the future are part of the old, autholitarin, tech Tolcgical, growth mystique. "Mist: kes are mis kes (1o quote Mwalimu Nyerere) and the ability to recognize, cerrect and learn srcIn them is en intergral Part of the Third World's develcpment prespective.
ECONOMIC REVIEW, SEFTEMBER 1975

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