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ECONOMIC REVEAWA
Elished by The People's Bank Research. Duririn
Park, Sr. GlRI 2, 5R|LANKI
HE ECONOMICREVIEW is intended Ponole knowledge of and interos In the ELEUTNICTY and econòmic development Process by a many sided presignation
EE riportage facs and debate
THE ECONOMIC REVIEW is GOTTLIT Service project of hig People's Bank E3 conten 5. however, are the na EEIorial considerations Onilliyi Fariddi E Elsari rele Baik polities pr 'L'lgia'Evöpoint' Sir Ed feature
ls ir B ES authors and do not represent the Institutions in which լիա) յուր the Similar contributions as wella TNTENTSEIrldWibeWpoints are welcomen
THE ECONOMICREVIEW Lblished TOGETTY THEs tratible bihi niini Isigription ang on direct salo
Wolume I
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Dirirdi.Mey Diferaya
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SLSL SLSLSLSLSLSLSLSLSLSL
-
Number 7 October 1975
CONTENTS
FEATURES
25 Colonialism, Neo-Colonialism and
Underdevelopment in Kenya.
yake 27 Ivan Illich on De-Schooling Society
31 Justice by Index :
COWER STORY
3 Natural Resources Development
COLUMNS
2 Diary of Events
I6 Banking and Finance
Is Foreign News Review
I9. The Economy
30 Commodities
zz Trıdlı Stries
23 Agriculture
24 Management
portation in Sri Lanka, a comprehensive survey of the transystem, its potential and degrec of utilisation.
Common Market and Sri Lanka, a detailed coverage of the present and future relationships.
le poor in poor countries afford their rich P
is a well known photograph of Sri Lanka taken by the is Gemini Craft and gives an astronaut's view of the tellite techniques are now being widely used for natural II"Cy8.

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Sept,
I
--
I.
I6
DIARY OF
World Finance Ministers agree in Washi ington that any of the II 27 countries of the IMF could subscribe to a new gold agreement hammered out by a group of ten lcading industrial nations. The Finance Ministers, at their annual IMF session agreed to a proposal of the IMF to sell a portion of its gold holdings to aid the developing nations.
The Ceylon Ceramics Corporation enters the World market in mosaic tiles when it sent out its first shipment of mosaic tiles to Singapore.
The recommendations for greater stimulation of the American economy to counteract world recession were rejected by U.S. President Ford, in an address to the Annual Assembly of the IMF.
A US $1.5 million line of credit has been made available to Sri Lanka by the International Development N. Luthority (IDA) for financing projects in the industrial, agricultural and tourism sectors, stated the Chairman of the Development Finance Corporation of Ceylon at the DFCC's nineteenth annual general meeting. These funds will be channelled through the DFCC.
Israel and Egypt formally undertook to put an end to hostilities for 3 years when they signed an interim discngagement agreement in Geneva.
The five-member association of South East Asian Regions (ASEAN) for Incd a Regional Petroleum Council to develop pctroleum resources.
The U.S. Government will be supplying to India a total quantity of joc,boo tons of foodgrains during the current year (I975-76) on concessional tertins. The value of the foodgrains amounting to about $68 millions (Rs. 55 crores) will be repaid in dolars over 4o years, including a 10 year grace period and will carry a rate of interest of 1.5 per cent, it was announced in New Delhi.
Amidst strong reservations from the United States on major economic issues of acute concern to the third world, the U.N. General Assembly concluded its Seventh Special Session by adopting a resolution setting out a broad-based programme of measures designed to accelerate the development of poor nations through international co-operation.
2

EVENTS
18. The Manila based Asian Develtipment Bank (ADB) announced that it had approved a US$30 million concessional loan for Sri Lanka as part of the costs of the massive fertilizer project to be set up in Sri Lanka,
22 Egypt is to receive a loan of S sco million from the International Moletary Fund (IMF) to reinforce the posttion of the Egyptian pound, Egypt's Economy Minister announced in Cairo.
25 South Vietnam's Provisional Revolutionary Government (PRG) announced the creation of a new currency to replace the old piaster, in a bid to rebuild her ec010my.
24. The Indian rupee was delinked from the
pound sterling.
24. A plan of operations for a Dairy Production Improvement project for Sri Lanka was signed in Colombo between the F.N.O. and the Sri Lanka government. Sweden has committed US$ 2, Iz7,cco to the project.
27. The 13-member Organisation of Petroleum Exporting Countries (OPEC) announced a ten per cent increase in Crude oil prices from October 1, and to freeze them at that level until June 30, 1976.
29 Inflation, high fuel costs and even mismanagement will cause the world's airline industry to fall S. I.4 billions short of its goals by the end of 1975, states an official report released in Oslo. In an effort to offset these losses, passengers may be forced to pay upto 16 per cent more in air fires on most routes.
so The Trade and Development Board of UNCTAD was recoil vened for a few days in order to finalise the provisional agenda of the Fourth UNCTAD Con ferc.lce which will be held in Nairobi from 3 to 28 May, 1976.
30 Sri Lanka's Prime Minister inaugurates the eighth Asian Regional Conference of the I.L.O. in Colombo attended by over 250 delegates representing 27 governments, 15 inter-government organisations and II non-government orga
15 to S.
ECONOMIG REVIEW, OCTOBER 1975

Page 5
'The fr t a p:ச ஏது: து" #wர்: கோபி: : ரTrr; if fier's fire,
சxt ஆHerty be prodg of it irrig; profection fa al keingr, gyfering fhade every to the
#5g dértraya ir".
# ஒரீ
Lord Buddha (6
"In gy. Eigdary are may paddy fields stiltivated
of rain water, his far inded are bore which are rulin.
Éy Wearts of Pereirial Strozzi anigra
ரே ராக் காசி இது ஈசது : forefrif, and rangrad.
fai FF. by grea f' irrearther in
I'r diwch a rôi 'r'/'rry, Meirio'r ervery a rwan! try ஐரிந: y raior, gar fø får fra Hišicia ßeFTe/Fé7irgi *7,7iʼ°.
Parakrama Bahu I (I I53 – I 186
"The Je Tisd ereafrrer awfdré the I.
A:த்து :
rød forly izzi parfarif af a FG forca if ysgriffer awd ѓлгрfraffол, :AT ஐ லார்ர்r: இfr:
/fr'fhiood and itsi'-being'.
Julius Nyerere (Arாகின, பிற்
Ecosystem and the Flow of Епergy
If we examine these words we find that some denote life, or ar. Words that we associate with life, like plants, animals and man. Others, such as water, air and minerals have no life, Plants are the agents that convert solar cnergy, with carbon-dioxide from the atmosphere, water from the soil, in the Preserice of chlorophyll present in its leaves, to high-energy compounds such as starch, cellulose, protein and so on. This Process is called photosynthesis. Out of this encrgy assimilated by plants, the plants théInselves use a considerable amount for their own I use, that is, they add to the growth. of the plant; the remaining portion is passed on to animals or man in different plant products like leaves, fruits, seeds, roots etc. A forest fire represents the suddin release of this stored energy. Fortunately, it is usually released more gradually, by two diferent routes, along what is called the consumer pathway and the dicomposer pathway. In the CÖr1= sumer pathway, the living plant materialis eaten by some herbivorous animal, like a Caterpillar, or a rabbit or a cow; and in turn this animal may be eaten by a Flesh-cating or carnivorous animal like a copard, which may sometimes be catcn by another Carnivorc (Fig. 1).
In the decomposer pathway, dead plant or animal material is used as
ECONOMIC REVIEW, October 1975
food by bacteria El Iirimtals such as Cach step in ei Pattern of energy similar, Of til animal, the larges
養。
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, S
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т5лл,
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a NATURAL.
霹
B.C.)
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RESOURCES
rrëd
A.D.)
P#
1961)
or fungi or soil earthworms. At ther Pathway the transfer is broadly food caten by an it part is used to
E DEVELOPMENT
keep the animal alive, and of the TeՑէ, some is passed out as Facces and some go to form new body tissues, either in growth or reproduction. At each stage in such a food chain energy is dissipated by the life processes like
Che flow of energy in an ecosystem
.Pietropywritika air # САДғарфу//([^ағг), 5, кайт {"?%حبچہ
சார்: 7. Тғаллpirafѓал—јРаѓer 'சந்திரி, 8. o.
ரீாதிசதி" பரீது 0, சீேர்திரங்க ஆநr
HετείΡοτάμι σπίταση.
15, O.
13. Asir. 14. Carwirrorvoer ontwaf.
CO rfil rfiria,

Page 6
respiration. The difference between the energy intake of an animal in the for II of food and the production of Ilaw inilil matter is known as the CCITı Yersion loss. These CDI versiori losses are invariably large. If you think of grass cquivalent to Ito calories of energy going to for II. In calories worth of herbivorc Flesh which in tuir forms orlle caloric CF Carnivore flesh, this is about the right order of magnitude. In the decomposer pathway when plants and animals die, micro Organisms like bacteria breakdown these complex substances with which their bodies werc formed, into simpler substances that produced them, that is, into carbon-dioxide, water etc. and the energy is released. Carbon-dioxide returns to the atmospherc or is absorbed by water bodies like the Cocean; III: Luch of the water is again evaporated and comes backas rain, while the energy is let into space. Energy lost in this manner is always replenished by that never ending source—the Sun, Most of the Others are used again or re-cycled at sortle stage or other. There is therefore a close inter-relationship between those that have life, like plants and animals, with those that do not, like carbon-dioxide, water, oxygen etc. and that all these form part of a system or process. Such a system is called an Ecosystem or an Ecological Systeil. An important process going on in any ecosystem. is thic flow of energy.
Another question which occurs in this connection is "Whilt is a natural ccosystem' or perhaps "what is an un natural ecosystem” Is the Beira Lake in Colombo or the city of Colombo itself a natural ecosystem, or has it somehow been rendered unnatural, or at least impure? Is the Ruhunu National Park managed for recreational and acsthetic objectives, a natural ecosystem? Docs the very act of management render in ccosystem. Linnatural. Thus, natural resources available to nan, arc intimately connected with ccological considerations.
Natural Resources
A natural resource ecosystem has bc.cn described as an integrated ccological systeru, one clement of which is a product of direct
4
för indirect produce may be case of Forests, tural Products, f Physical, as in thi. and soil or both. distinguishing fac SOLITICI: ECCSyste til, direct involvermer set of ecological i
L5
'Màiri has a tlire: that is al Point tha
 

The Erfgraphid if f Sri YariÉa, (,5arar"g LVerírrer-riÉy, Hirigy far, tr. )
9 F.C. — I fro--4.C. x_Irf-4.C. – 3rd 4.C.
Мар 1
to main. The biological as in the zrais slands, agriculish and wild life; : case of water, air In all cases, the ct of a natural reis that rail has a it in the complex Literactions.
it involver Triclito and t should be empha
sised, that no ecosystem, natural Or un natural, can escape from this inWolyclicit,
A natural resource might be defined as anything found by man in his natural environment that he may in some way utilize for his own benefit. Natural resources thus include minerals, fossil fuels, and radio-active encrgy sources, water and soil, as well as the native vegetation and indigenous wildlife. It also includes
ECONOMIG REVIEW, ICIOEEE, 1975

Page 7
ABRIDGED
 

SOL MAP OF SRI LANKA
(After C. R. Panabokke)
Reddish brown earths and their draining:
55. HollLEE. Reddish brown eiths and immature Brown loans. Reddish brown earths, nonicalcic brown soils And their draimage:Lisociates, Red yellow pedolic soils, Red yellow pedzolic soils with prominent At and their drainage associates. Red yellow pedzolic soils with well developed lateric and their drainage associates, Red yellow pedzoli gails with weakly developed laterite ind their drainage issociates. Rcid clow littosols, Calcic red yellow liLE OF Kolk. Reddish brown litosilic soils and immature
|- Noncalcic brown Soils, soils rin old illuvium fırıld ilkili sili, Black tropical clay soils (grufinusoils). Alkilli IIld saline soil 醬 Sölnetz & 3. Cilich riks) Acid svarup spils (bog And half bog Sīlis). Sandy regosols on recent beach and de Sands. Regosols on old Band,
Alluvial srail.
Мар 2

Page 8
Alicient Sinhala Settle Ilents in Relation to Natural Resources
That the availability of natural LKaaaLLLLLLLaaa LLLLLL LLLLLLLLS LL LLLLL LHHLLLL suitable for the growing of a vairiety of crCPPS was al sine qua non For the establishment of dense scittlements, can bac shown by a study of the sites of the early Si Hålä Settlements. Friji išljaju the 6th or 5th century B, C, waves of immigrants seem to have landed particularly along the N.W. and S.E. coast of the island. This is about some soo years before the lite to which the earliest epigraphical monuments in Sri Lanka can be assigned. If the site of an inscripti ETL is assu III legd to indicate LLL HKK LLL LLL LLLLLLLLL of that period, then, the distri
lution of these inscriptiG-15 gi WCS
an indication of the sctElement Plattern at thit time. The spatial patterns of arrangerent of the sitcs of the early Brahmi inscriptions, indicates, thit by the grd or and century B.C. the aricient Sinhla people had explored practically the whole island.
C. R. IP-am abrikke Frı his 5 tulis
of the soils of Sri Lanka has shi will
that the stil type known as the Roddish Brown Earth; ind their Drain Lige Associates, found in the Dry Zone are not pnly the most important soils of this country in relation to the extent the OCCL1 Ey, but also the most Feitile, whin compared with others of the Dry 'Zone, This dringe characteristics of this soil, in relation to the toography of th: Dry Zone, is proեably the Iloit important single LLLLLL S LLLL SLLLLLLLL LLLLHHLLLLSLS S L S L at LS logical adlıpta bility to Certain ranges of agricultural crops grown in th: Well draincd, imperfectly dirilined, and Pehr arly dritined sub types of this soil group. Now, this differentiation very closely ipproxiates the local diferentiation of soils, as empirically evolved by the traditional Dry Zone: firmer viz. gada bi ziya correspond ng to the well drained soils, ree-year, corresponding to the inperfectly drained soils and the
rey ya correspon lly dirilincid sõils.
F th: &qciis and o reveals a while I fill in ForfTätirl I of soils that occu country and the made use of them. the characteristics scles had influe.
The Reddish typ C)CCLIT8 FT1181 dhapura, Polonin |-H:irIıb:ırıEI bitga :II1i. Monera gala and ta 'ħielse Fil
ii ia area of li
where the bed. of impermeable Cambrian age,
litt Elle dW: cl:1351c::151rf:1ce í tert III, and the g":la essentially confii tively less Ferni clay soils of th Էյքէttom: Լh = rliլք: melis locatol Oni : of the landscapc
Il Lille Fl: L. 1 Millai is trict GILLI'm Lu5Cl3 and S 5 bil5 ni:ırmead L h1e netz) oCCLIF, ver development to type of soil is . Cultiva Lim CF FC: thic fcWo irriga, tio region e.g. th: SHOW," that te Eh: Tiinirrigilt ta Epe ličite ; different manner
| loped in the regi
Hrryl Stils in
| TPI FILI, chief reason, F AEեence tյF the F outcrops on Wii F eills of the build CF rack Fol. III cilati sidered indispel bolics of wate charged.
III Ether Kircis Latosols, which Tilarine Sandy | Quartenary Ag thic, 5 il İrnıcı : Hind

ding to the poorSimilarly a study their distribution årige of Ineaningif a diverse range rthroughout the way Man had I and in Lլյrn, ht, M CF Elie Soil: IlıcIIIDıced Mğını.
Brown Earth soil lly in the Anluraruwa, Wavuniya, parts of the Tri rico III:t lisils aire developed ind lating terrain ick is croIIIpe.sed
strit JF Pre.
Such land PerBlopment of the Hrainage tank Sys" 4 tY. ITTIg4tIOE1 W"a, S led to the relilalle loyw" humid e shallow valley 1 irrigation chanthe lower aspects
andscape of the where the infertile alile and alkaline
(Solo dized Soloy little irrigation k place, as this instable for the od crops. Even п projects iп this Giants Tank,
sturage tank and in cili ilgi Hii und aligned in à
frr:ÖTT EH53 et die We:-
In Ft. Reis the Amura dhapura F:1 (ligEft:E5. TF1. crhaps, Was the 1ard gancis sic Teck licii IL fund Elie is, and the absence which was coil5a. Eble where la rigo: Ft Hill tri E lis
that contain the are developed Dri La III dërrisit: JË s, found between alkáline stil: ärld
the Reddish Brown Earths, along thic North West and Northern areas of the Puttalam, Mannar and Jaffna districts, there had been practically no settlement in the past, because of very obvious reasons. Construction of Surface storage reservoirs was not possible in this very porous, freely draining, Ile diurn to coirse, textured soils; åTid alsk i Herause of the fået that the deeply located ground Water resourcics they contain could not bc.cxploited, by any of the earlier lctricts, known to the Ancient Sinha la civilizati T1
If the two finaps showing the distribution of th - Brahmi Inscription and Soils are compared, some interesting and thought provoking corelations emerge. The early Sinhala immigrants who landed alring the North West Coast arrivEd in an arca of Por soils, meagre: water supply, and sparse natural vegetation, Hence they had to penetrate further inland in search of Better natural resources and settled in the area of the richer Reddish Brown Earths, which supported a forest ecosystem much пnore productive than the vegetation bordering the Coast. Thus the First large settlements in Rail rätä vere c: tablishelin äIld iroLIIld Nu Wara Kalawiya, with its centre a E Anthradhapura. (Cill the tither hand, the immigrants wh) landed ön the South Eås Cast did nirit Face such difficulties in cstablishing settle III: Its not far from the coast, because of the presence of the productive Reddish Brown Earth. Soils in the vicility. This is exemplified by thc sites of the more important elrly settlements in RLihuna such as Mahlgama, Kajaragama (Kata ragama) and Cittalapabbata (Sithulpahuwa).
Therc is a direct connection between the characteristics of the soils, sites of habitations and technological knowledge. Nglance
at Maps I and indicates that
settlemrits were mostly on the Reddish Brown Earth soils which were workable acco ding to the state of technology during that регіоd.
ECC. P.EVIE", OLIBE IG75

Page 9
the land ind landscape, the at Inosphere, the ocean and solar energy. They might be classified as non
renewable or fund resources and renewable or flow resources. Renewable resources include Williter, soil and vegetation and non-rencwable as fossil fuels, minerals ånd radio-active energy sources. Natural resources might also be classified into marketable products, coal, timber, fish etc. or amenities, as harbours, waterfalls or scientific and aesthetic values which are not marketable in thic accepted sense.
The resources listed above might be considered "natural' if they are provided by nature in the place where they are or may be usdor put into useful form. In these terms we night classify a Dry Zone forest of palu (Mari/katra šie:Tiriadri), wira (Drypeter sepiaria), burutha (Chloroxylor piede Julia) and kaluwara (Diospyro, ebenw gw) trees as a 'natural ecosystem and a teak plantation on cleared Dry Zone LLL K S S S S S L L LL0L LLL0 LLLS S LLJS S practice, the distinction becomes academic, it is difficult to identify the point at which this condition of being "natural ceases to exist, and many would think of a teak plantation as a way of managing what is basically a natural ecosystem,
The concept of what constitutes K S L LLLL LLLL S KKaaKLL S S S S S S S LLLLSJ LLLL resource ecosystem varies according to man's capacities, interests and objectives. The concept is a dynamic one that changes with the needs of man, the state of his technology, and
ECONOMIC EEVIEW, OCTOBER 975
the choices hie Order: tō achie: dred years ag grew wild in t not used for beverage from tender leaves its delicii te ja ornamenting Similarly, the Eppawnila, whi of natural ph LI IlknoWm ti LI al hence were in: SOLITIces. If the kians s廿 iwin century, they
H. 3-P-
the muid dug fro a valuable natur, or the rubble
Colinbo Fort : source of buildi
Natural Vegetat Community Frorin the foi
İL 15.5ürı hit m
Cornposed of a
 
 

prepared to make in his aiils, Two hu lill
coffee plants which i Kandyan Hills, were he preparation of a ts beans, but only its ade into curries, and line-like Flowers for imples and shrines. patite ores found at h are a good source phate fertilizer were out 10 years ago and gnificant natural ree were any Sri Lariin the twenty-fifth ili possibly consider
One of the Crucial elements in these is natural vegetation, In the paragraphs below we will attempt to show haw this resource could be, and is being put, to use in Sri Lanka.
Wegetation can be defined as the mosaic of plant con Immunities in the landscape. Plant communities consist of species that represent one or several of growth forms like trees, shrubs, grasslike plants (graminoids) and others. The spatial distribution pattern of these growth forms of a plant community is called the structure of the plant community. Figs, 2, 3, and 4 illustrate the struct
LCCLL LLLCC0 C CCCC LS SLLLSJLG S LJJJCGGCYCCTLTLLL S LLLKJJCCLS 区立)
In the Beira Like las lfertilizer resource, that was once the | useful natural reyg material.
to I-Flora-Plant
egoing description
tural resources are: Li nimble of clencents.
LSY CLCCC S yTLJKJ S SLCCLT TTLJCGG S TTYuKS
ure of threc plant communities of Sri Lanka viz. Tropical Lowland Rain Forest, Upland Savana (Talava) and Scasionally flooded grassland (Willu).
Plant. Succession and the Climax
Wegetation is natural, when it has not been disturbed appreciably by. man. This of coursac is di Ferent From princval vegetation or that which has not been influenced by man at all.
இழி స్లే,
E.

Page 10
Man can destroy the natural vegetation by firing, felling, ploughing etc., but when the land is abandoned the original natural vegetation will returnin most instanCes, by a number of stages. In this way опеPlапt community gradually replaces another till such a condition is reached when no change in its structure would take place. Such a change would occur only with human activity or climatic change or other natural cataclysm such as a landslide. This process of one plant community replacing another is called plant succession and the stage when no change occurs as the clinix. Where the climax is in equilibrium with the climite of the area it is called a climatic climax; and good examples of this type of vegetation is the Sinharaja forest in the Wet Zone and the areas of indisturbed Forest in the Dry Zone. When, however, the climitic climax stage of vegetation Canırı ot be reached because of the influence of repeated human activity like clearing and firing or the condition of the soil or a number of such factors it is called a biotic clinia. or cdaphic climax respectively. The sub montane grasslands (dry patanas) are a good example of a biotic climax while the Willu or seasonally Flooded grasslands in the Tamankaduwa area is an edaphic climax. A good example of plant succession is the sequence of plant communities that takes place inı sırı abandoned chena in the Dry Zorile. During such di succession plants like Para and raria para give way in a series of successions till the environment is again favourable for the growth of the climax species like far, Heera, Eritha, harrill, Eartiara etc. The time taken to complete this process will vary according to a number of factors, the most important of which is the condition of the soil and climate. Studies in the regencLLLLLL LLa S SLLLHtLLLaaaHLLa SLLSLHHLL0 L LLL Dry Zone hawe showIn that it takes in early fifty years for the climatic climax stage to be reached. Certain terms used by villagers of the North Central Province to denote types of land at various stages of recuperation after a chena had been abändoned, indicates the villagers recognition of the phenomena of plant succession, and its influence on the characteristics of the soil. These words are as Follo Wr5: Kariere – at bandoned chena, Little - a 5 to 4 year old
8
abiara domeidlichena. F year old abandor Affiadijos — I TE rior to ordinary cheila cultivation,
years old, Mirkalary The above descript natural vegetation
be obser. Wed. Or it
Il Sri Lailka to: natural vegetation significant typics a than actual. Heil Principal plant cot by N. P. Perera, sł
Ma
H
3 | r
The diffrilfriar frie
சர்ரி:
I. W rufifra Karlatif : 'ஆதிக்க : 5. Trafiikas žygyrfff;" | 4. Tr 3: . "தங்க : .ே Tr r fr 7. /"rgфїra! wgлѓgле ; 8. Troήίται ήί κάπία g, Triரr
(И’f') та, Lдfтї їаттлня II. FL-ETAPI JPJ Tiz, Margriper
the potential dis communitics. T explanatory, exce soils when two
occur together, as case of tropical st
 
 
 

Hirila ride - a 5 to 6 led chena jungle, :dium jungle supeungle, suitable for
irid from IIc - zo a - a high jungle. tion shows that thic is actually there to
exists potentially.
day, most of the
except for a few rc: Potcntial rathcr ce the map of the mrnunities (Map 3) Iows irn 111111y ATeil 5
p 3
Prirripaľ Polarif ContrifiKaiffert W. P. Perera)
idir før. artri rariri firer. Γαίη ήστη, ಙ್ raj_firer re rgarfirirs r:Fir forr:Fr.
rrrrÏ (o# Â ர தாராசர் : ார:
(Talтна)
(ГЗамуаѓig)
tribution of plant This map is selfPt. On those occaplant communities
for example in the ıbrıontane Sea:50İızıl
rail forest and submontaine grasslands, which at times form a matrix of vegetation, in which each retains its discrete character. Usually in these instances 'islands' of one type are embedded in a matrix of the Other variety, in which case the more widespread and abundant community is indicated above the other; thus 85 denotes "islands of submontane seasonial forest in a matrix of submontanic grasslands.
The Walue of Natural Wegetation
Natural Wegetation therefore, is the key to the utilization of all land, especially with regard to crop production, range management, forestry, land use planning and Inlich ecological research. There is an intricate relationship between the various plant communities and the physical and chemical environment. This is because vegetation is not simply the result of given climatic and edaphic Conditions; but also because Wegetation, in turn, quite directly, affects and modifies these environmental factors; examples of which will be discussed later. Natural vegetation itself, is the best und the most logical foundation on which to base an inquiry into thic ccological conditions of thic landscape, as it alone expresses the intricatc interrelationship betwccil all factors of the environment.
Trees and the Forest Ecosystem
Forest and woodland are the most extensive, complex and biologically productive of the terrestrial ecosystems. It has been estimated that formerly they covered at least two thirds of the Earth's surface, and although now reduced to almost half their original extent, they still occupy an area, greater thin that of the world's agricultural land. They occur over a wider range of ecological conditions than any other type of vegetation. Producing the largest biomass or the volume of organic matter, per acre; their impact on atmosphere and soil is correspondingly great. At the peak of production their annual rate of photosynthesis probably approaches the maximum that can be achieved by plant growth for a particular site; and in thir efficiency of the utilization of solar energy it has been said that they are comi
ICONOMIC-TEWTFEW, OG TIDHER Tg7

Page 11
parable to the highest yielding crops. Forests, therefore constitute one of the basic primary resources.
The Forest as a Resource
The Forest is oil of the most Walliable of man's natural resources, The size and complexity of the Forest ecosystein is reflected in a variety of products and a diversity of Lises un rivalled by any other type of biological crimunity.
The nature arid ville of forest resources vary, dependent on the type of forest, and relative importance and competition from other resources and not least the stage of economic and
technological development of the areas in which they accur. The
original and still the major use of the Forest is as a direct source of such priimitry biological products as wood, food and fodder, and a variety of wood extracts anong which gums, resin, latex, dics, tannin and 1:dicinal substances are the Ilost important. Wood which för is the bull: of the Forest biortlass, however, still retains top priority. Until the dis
covery of coal a. was the only sou in spite of the p natural and syi Wood retails its it stutionil materi: constituent, celul basis for a wide not leist of ,,hie and rayon. In spi in the ville of V J. D. Ovington Lit of the world 42%, is used for construction, 4% for pulp and 6%
THe value eff Primary food is : their high level ductivity. Relat total biassis what there is, is fruit; nucli Eeeds. been an importir forge supplied C ceous undergrow of woody plants. CF. Sri Lanka Frī doTilestica Led liv by shrubs and he
TAE
SIRI I
Distribution. According
Developed permanent grassla Damania grasslands Kekilic Ferrilands ... Patiana grasslands ... 5атап па . . . Scrib and Willu gri:linds Other grasslands ... - High yield Wet Zone. Forests Medium yield Wet Zonic Forests Low yield Wet Zone. Forests Non productive Wet Zone Forests Mcdiin producti Low productive Intern ediate Forest Zone Non productive IntermediateForest Zone Mcdium productive Dry Zone Forests Low productive Dry Zone Forests Non productive Dry Zone Forests Mountain Forests . - - ları tation5 .
Indis
Fortis Marsh lands - Unproductive lands Salter rh; Water strfaces
Total
ye Interfieldiate Forest Zone
* fari= |-
aff P
3,37ב
35.393 0. II, - 후 g:8ՃՃ . ביב 72:
6,6бс о. 고, .
#.*/,'$C) I, 77,9bծ 4:
II, 830 26,255 o, 7,43 O. 4о, то
3յն, C7 Ճ IՃՃ,
ICCOJ, NO NA LOC FLE, WI ERY , OCTOLIER, T 975
Report of the Land Utilization
 

ld litti oil, wood Էc OF fuel Today, duction of the thetic substances, partit. In CC. ELS AL CIB nl. Finally its main se, is the chemical range of products are alcohol, paper le ofrecent changes food as a resource, in 1965 estimated 's harvested wood, firewood, 37% for for Pit-props, гт% for other purposes.
iests L5 a Source CF Bruli El ili relation, La
of biological Provely little of their cdible by Ilian and mainly confined to Forcsts have long It surci Filminal ither by the herbaith or by the leaves In the Dry Zone h (Fthe fodder of stock is provided baceous plants.
LE ||
AYFA
The possibility of using forests more effectively as a direct source of food stufts-particularly of edible Protein-is being given scrious consideration. One of thic as yet lintapped Sources is kaf protéin; as described in an earlier issue of the Review. Leaves frolinicirc of Forest can contain half to one and a half tons. Extraction and processing from-fresh leaves has been carried out and the product is as nutritionally valuable as animal protein and is superior to seed protein, Potential sources are available in forests presently fellcd fortifiabet and pulpwood.
The Forests of Sri Lanka.
The report of the Land Utilization Committee estinuated (Table II) that in 1967 the area of cultivated land in Sri Lanka was about clakhs of acres or 25% of the total land surface. Of the remaining area 7.5 lakhs or 44% was forest, tj.6 lakhs or 15% Chena lands (used for shifting cultivation) and Lo... 5. laikh s or 6.4% grassand of shrubland. Mul of the Llimi -- cultivated land is in the Dry Zone,
to I LAND-USE Categories
red 2.
LAFFET நிதி
1,11
C E.
C.g םם 7, 8 ח T;d;ffg5 6 1
구
器
- "I C.
- I2, Bo c.
ப்ே :
.
3,550 I.6
в 11,52,бро поо,с
துே:
冕 FFFF ".
+5ნ*ra - fi. Tổ c - 1ւցg:778 2, 2, C, IC *,±
- - те T,3rd - 1:6 c,7ցc I.f. i 19544 其、 2,990 கேப் I.G
c. 6c to C- 28,
- - τ, τό, εξ ד,ם
is 8,75 I, 6
- - 1:57, gնը
- I87.
- c.
- 1.7 다 T
ჭ, 75,9 ნrs ே T 1 - I. Հճ, gr:5ge = 5:1 Հճ:յrigo 15.6 - 34. 曹、 II. +9,8ኛù .ெ 45 IC -- 8, oc 2.5; 3,620 C. Ι, σ5, ύ Σα c. :Ig .6 - םם.61 29 . 후
5,0570 logo 4,62, 28,230 LICO
Committee Sessional Paper XI of 1,68.

Page 12
A study of this table shows that in the Wet Zone therc is very little Forested land that can be cleared for cultivation. This is also the region of rapid population growth and the advance of urbanization. In this proceis, more and more of the existing LLuGGLL S aLLLL S HLLL S LLLLS S S LLCLLL S LLLLLL building homics, factories and seruueOL L LLLLLLLLS LLL LLLLH LLLLLLHHLLLLaLL LLL LLL aaLLCLLL LaLaLaLalL LLLLLL HL LaHLLS ing Galle Road between Ratt malaria. and Moratuwa about 20 years ago and the village homestead gardens in and around Nawala, Kotte, Nuge= goda and Maharagama can be cited as good examples of this process of land Lutilization with Lirbimizati OI 1, It is the Dry Zone forest, about 60%, that still remains to be exploited. But
Influence of Forests on Cirilatic
and Water Supplies
In I929 the government Set olut the main objectives of forest policy in Sri Lanka as
I. To provide those beneficial influences on climate, soil and water which results from the presence of forests.
2, To ensure a sustained yield of timber, fuel and other forest products to meet the needs of the lation.
The indirect influences of forests are themselves adequate reasons For the maintenance and Creation of Forests and other för ITS OF Will vegetation. Many of these beneits are real, but intangible, and easily overlooked in a balance sheet. Perhaps, the first question that arises in most Tild 3 when considering the influence of forests on climate, is what influence forests hire on rainfall. One school of thought considers that forests increase both the abundlinicc and frequency of local precipitation over the areas they occupy; while others mainly meteorologists, hairbour doubts. On this III:litter, Höyever. D. Mucllot-Dombois of the Smithsonial Institute Ecology Project in Sri Lanka, has demonstrated by an analysis of the daily rainfall in the Horton Plains, that there was
of this, cycn ther forest is only 3% the area CF redalis) conly spils cxceptii wial areas, which
Future: Cultivitit II. the remaining are regio II of these s C. in the next few Maweli "w" ters
Central Province, ; ern Province espe niya district. Itis the Pace of a fer Zoile Forest will ||
SOIL EROSION CONSERVATIC
Land collipletely tation, whether gr
TTjT: ”LITT LI March and April ted in rain gula pata na land adje during these in the amount was during June and WATEĽ WAS ECCE. gauges in the op Forest. TH is 5H10 Ihlowing at Cross til OF the Horti
always issue: rai April. Never the out the superdroplets precipit ches and lety charge the soil
April is the time of the South W during this rela Eactw cel Izco, cca per acre are depic floor thin are de ing Pata, Illa grass Il crist durii Monsoол регіоd there is plenty to floor seems to appears to be . broad last showe shine, the latter cvaporation fro: thic intercepted gives an impres: title of the M Hortill Plains in of the streal Fl the Mahawelig
ganga which
O

ledium productiye Lnd this is found in Erown soils-the Il 3öIllic of the illu
are suitabl: fr
In fact, пшен of a CF First il Lilie ils will be cleared,
years, when the
rt the North nid liter the Northcially in the Wayuseen, that within w years, the Dry Je greatly reduced.
all N
covered with wegetiss shrubs or trees
is in ideal condition for resistance to erosion and absorption of rainfall. WHuel man first cinc to Sri Lanka most of the country was covered in varying density by either forests savanna or grassland. During the Kandyan period (1509 - 1815), in almost every province, there were the Tarie or Rga: Ke in which mo chemia could be cleared and was preserved solely for defence purposes. But in 1882 Dyingent in his report on the Forests of Ceylon, stated that this protective forest could not be traced and very little reII lained in regions below 5,000 feet. With the growth of the plantation industry much of the forests in the Hill Country were soon cleared. Ernst Haeckel in his book "A Wisit
der trees during that that collecge in the Open ining the forest, onths. In May, about equal, and July more rainived in the rail in than inside the Wis that the clouds he 7ood foot level Polis les IOL ns during Marchess, the trees coill FâtLIr:Iltevid Fair ğırıldı atu pri troc Hyrails, that then rebeneath. Marcheler: the Sct est Mansodan and tively dry period to loo,000 gallons isited on the forest livered om adjoinland or crop land. ng the South West June - July, when f water, the forest retire less. This lle to alternating ractivity and sun"esulting in greater In tree crowns of
riil Fall. This ion of the imporMIELT FIT-23 : Lt. I the regularization ow particularly of ganga and Walawc live their lead
show that during the May - August
streams in this region. Actually, these two rivers provide a high proportion of the irrigation water of this country, Changes in the Water budget in this manner, are clearly much more important, than any effect on precipitation, and these also includic increased run off followed by accidental soil erosion and decreased ground water, thus leading to a hydrological rather than a meteorological drought.
Because of the stronger winds in cleared areas, deforestation has frequently been followed by soil erosion, The deliberate planting of trees to provide a well disguised wind break, brings not only protection from damaging Winds, but as a consequence of these, higher humidities, and reduced evapo-transpiration rates are experienced. Experiments carried Out by the Forest DepartFrient in the Uva Basin in the planting of Eucalyptus for shelter and timber
period of strong dry winds in this region, the average wind velocity was reduced to a quarter of the open velocity at distances upto 12 tirnes the height of the trees. The il FILII rice IF His Ebelt 5 CIL wind yelocity hits contributed cyflsiderably to the conversion of the sub mountain grasslands (dry patailas) into prosperous areas of vegetable cultivation, particularly around Palugama (Keppetipola).
GLLLLLLLLHHLHHH LLLLHHOkS LLLLHHLL CH00

Page 13
to Ceylon" published in 1883 describes how the forcists were annihilated by felling and burning so that after the fire had completed its work, the land was covered with black logs, lumps of charred timber, massics, and often great fragments of stones, broken by the heat that had swept over them. This is further substantiated by Ferguson in his book "Ceylon in 1903 when he wrote
"Money was sent out to Ceylon, to fell its forests and plant them with coffee, and it was returned in the shape of copious harvests to the home capitalists, leaving in some cases only the bare hillsides From whence their rich harvests were drawn'.
Much of the lind that was cleared and not replanted and where no soil conservation incasures were taken, reverted not to forest but to Patana grasslands. This happened mainly because, since the top soil was washed away the indigenous tree species found it extremely difficult to germinate and grow in competition with the Patana grass zwaarva-Cyw bryggory offertifari, It can be shown that many areas of the sub montane grasslands (dry patanas) were actually formed during the early British times and that this process is taking place cVeil today. Although it is not possible to restore the original conditions of vegetation and at the same time maintain the nation's agricultural economy, measures taken to conserve soil and water must be patterned, as falt as Possible, after naturc’s Own methods of soill conservation. This means the maintenance of a protective cover of vegetation, or a protective mulch över much of the land a5 possible. Erosion during the early British period was probably so extensive, that laws were passed during this period that at least, all the land over 5 Ogo Feet that were not cleared, should be left intact, and that vegetation bordering strealins passing through estates should not be cleared.
The landslips that occurred in the Kotmalc Walley and land subsidencic that CCCLII Tried in Centtiin parts of the Central High lands focussed attention on the need for effective soil conservation incisures and a soil conservation division was established in the Department of
ECONOMIC REVIEW, OCTOBER 1975
Agriculture. Th Act was passed i. visions of this A upper catchment Ganga and Kelain above sooo fect : very small perc of Sri Lanka, bu arca has been li of the Horto E and Elk Plairls.
reasons why close and vegetative d residues are highl ing soil and watel place, such cover climinate the cli rain On the 50ils a drop of rain
particles are agital
the spilash effect ai thrown into susp away in the runof ing the ground tation or vegetati in soil wastage i specid of water Fl face is checked Sterns and leaves vegetation or by left or placed on ground. This red of run of greatly to pick up and car while allowing Water to penetrat Ilulimi EpicT OF 1: ri which supply w irrigation scheme: in these it reas, it i headwaters of the protected from ex
The Walue of th Natural Fauna
Another Tea SOF) landscape has a flora which illust only for thc beaut recreation, but al. pool to be utiliz pests and discase vated Crops. Til especially the diffe: cal Rain Forcist, is genetic diversity, had influenced t and initial cwt. the world. Her strong reas Orls, t) degree of this div important to prc: tives of domestic

Soil Conservation I 95 I and thic protarc applied in the ÖF the Mahlaw'cli Ganga. The lands ctually form only a ntage of the arca Even much of this ared in the region. Lains, Moon Plains Thiere tre severial growing vegetation :bris, such as crop | cffective in checklosses. In the first ser res; o reduce or cct impact of the rface. When even strikes bare soil, ed and loosened by ld the finer ones are insion to be Floated water. By sheltersurface with vegewe debris, this step 5 controlled. The wing over the surby the numerous of a dense stand of the vegetal litter the surface of the Luction in the speed decreases its power try off soil particles, more time for the it the Earth. As a vcrs of Sri Lanka alter to the large i nave their 5rrCC s essential that the st rivers should be essive soil erosion.
Conservation of and Flora
is, that this wild seculiar fauna and be preserved, not of these areas for 20 ALS FA gerle TESCITWE 2d in fighting the
that ravage cultie wild vegetation, ent types of Tropia reservoir of great which in the past e pattern of plant ution throughout Ie, there are very conserve at least a trsity. Firstly, it is rive the will relatcd plants, as rela
tives of those domesticated, retain resistance characteristics, lost in the increasingly specialized donesticated ones, and hence, more susceptible, to pests and diseases.
Secondly the tropical forests have many plant species, which are at present unused by Man, which may have value in the future. These in clude food and fibre plants as well as animal fodders. Also new hytochemical compounds are being found which have value as medicines, The minimum extent of Forest cover required to serve as adequate protection for the soil and water resources will depend inter alia on the intensity and amount of rainfall, the form of the land and the liability of the soil to crosiol.
In Sri Lanka the protective role of the forest must assume greater importance in the Wet Zone where thic railfall is high and the terrain generally steeper than in the Dry Zone. Fortunately the main plantation crops that replaced the forest in the Wet Zone were rubber and tea, much of which were well managed and maintained.
Natural Wegetation and Wild Life
Conservation
Soil conservation and Wild life conservation doth depend fundamen tally on the re-establishment and maintenance of protective stands of vegetation. Each, therefore, may make important contributions to the other. The term wild life is cd here is restricted to lindorimesticated animals-mainly mammals, reptiles, birds indi fish, THle Basic essentials of existence of such animals are cover, food and water. Without exceptions, all Will life illust live cover of some sort, cover into which it may dart when attacked by an enemy, cover in which to sleep, or in which it may find protection from the elements, This cover must also be in such proximity to their food supplies that they will not be unduly exposed when feeding. Without exception, all wild life must have adequate food at all seasons to survive, be they be herbiWorous, Carnivorous or omnivorcpus. Tn the balance of nature, one cannot exist without the other, for if carnivorous animals are greatly reduced, the herbivorous animals will multiply at a rapid rate without their natural
11

Page 14
enemies. The increased numbers of the herbivorous animals will in turn, have än effect on the vegetation, and change its composition, The cffect animals have had on the vegetation of the Ruhunu National Park in relatively recent times has been recorded by C. W. Nicholas in his Administration Report of the Wild Life Department in 1953. It is well to quote this observation here.
"To those acquainted with the Yala Strict Natural Reserve and the National Park over the past 25 - 3o years, an impressive development during this period has been the gradual extension of the forest into the plains. The writer (Nicholas) recalls the Mahapelessa and Wepandeniya plains with scarcely a tree on them; today Mahapelessa is heavily overgrown with trees and Wepandeniya is nearly covered with bushes. Similar invasions of parklandis by forests have occurred at Potana, Pilinawa, Agta Eliya, Buttawa and Silawa, Under natural conditions, such as have prevailed in the Yala area for the past 500 years or more, there is an intimate relation between the grasses and the herbivorous animals. The latter maintain thic boundaries of the grasslands by nibbling and trampling the sced lings and young plants which have grown up from sccds which have fallen or deposited outside the forest vergc and
In this compel will hold Ellei invading tree or provided there animals to des But if the a decreases appre: interference, Illi other cause the the plains.
The two largest Sri Lanka, are the Lrea betwce Putti And the RL1lhul nu il the South East, T. there is a growin, those that maintaint should be extender say that they be b: plough. From the agriculture both the for marginal use a contain are not high agriculture, cspecial
The arcas of the Dry Zone i.e. the Earths, are the areas today or earmarket lopment, It is su contain the fores medium yield. It For this Mahaweli P. a million acres of natural Forest will ters consid:r that Fr forest produce, all and should le all
are competing for space with forest. In such the grasses. prudent manageme
TAR
FOR EST RESOURCE
Wet Zone த
| تمiFFع
f தி. (ரோசாசி) (åíäRA) High yield ... - - - - 후 105,920 Medium yield II 7 - 후, Low yield j78,ÿ } ፤ Non-produ CHYE: Is B MO 5,46 PEAntation 茎翼
All type 8,74 Pri I
Jarre: Forest Inventory
12

ition the grasses own against the shrub scedings Le 8 TIFFicient try the latter. nimal population iably by human ration, disease of Forcst will invade
National Parks in
Wilpattu, in the läIll and Mannat Nati, lil Park imli day, in Sri Lanka g battle between lat these Reserves and those who tought under the point of view of se areas are -- Only is the soils they ily productive for lly in the Wilpattu
lichest soils in the Reddish Brown that are cultivated for Fulture levesh areas that also ts of high and is estinated that roject alone, about what is possibly 3e cleaired. 蠶 or the gathering D
) Lt 蠶 bweil to remain is reas, carefull ålfid int practices have
E.
ES OF SRI LANFA
to be adopted to gct maximum benefit. Management can be done in severailways, one example of which is by enrichlert planting of Wet Zone forest with Mahog tny (Vitrirleifa frgersFyla) or opening of the forest cally or the upper storey of the existing forest, which induces fora (DifferaFairfiřt a gyda # if"AJ") Eo establish natural regeneration and grow to the height of the canopy strata; so that, more than 95% of the hora pole size: CFCP, replaces the original Inixed crop of trees. The above examples show, how, the existing Tropical lowland rain forest can be managed, without totally destroying its nature. But, in most other areas, like in the Montanic Zone, and the Dry Zone; management mostly entails the cstablishment of forest plantations. Replanting with the native species or entrich ment is Lot economical in the Dry Zone Forests, because of the paucity of regeneration of the useful species, like Palo and Safir. Palo, takes something like zoo years to reach a growth of six feet gifth. It is the same with Salin. Nearly 25% of the abundant tree species in the Dry Zone - förestis !!ofrazo (EProfi#### repiirii) but this is not of much use economically, because of its poor for III.
Table II indicates that the capacity of the flattiral forests to provide the requirements of industrial wood is severely restricted and hence the country will have to depend more and more on forest plantations to produce future needs.
ITIEEr TH-HEITE FLIFE- Drர ராஜ்
valam .iritri Tegwyr
ಙ್ಞrrr CEI, fr. Horoj (#, fr. (சே) (før friidr} (திக) (fbsr safjall)
I 该 II, 翼 5 8 قهوة 6ך III 3, 13 2, 4,298 II 88ւն: ஆரே 831 ,1טד
I . . . .
I. 38,427 . . 4.8 3G,
of Cuylon - 1564.
ECONOMIC IL EVIEW, OCTOBER gy

Page 15
SAWANINASSo-called Royal Physician Gårdens
The natural vegetation termed savanna, especially that type called the Upland Savanna or Talawa; is found in the Passiira, Bibile, Nilgala, Ekiriyankumbura and Koslande arcas. It cor Inprises a mixturc of tall shoulder high, coarse tussock grasses, chief of which are Illrik (Irperaia eylindrica) and Maria (Cybpage far fertifaras); and low, contorted but profusely branched trees, of average height 12 - 25 feet, characterized by fairly thick corky barks. The tree and shrub species in such areas carry about 50 - 75 Plants per Acre. As the most frequent frce species present are widely used in Ayurvedic medicine, like Neli (Eryhiira offசங்சர்) B: (Tril ler), Arah (Terrirai hebil) and GarAralı (Pterozar; A. Azar Frafir"), the myth of Royal Physician Gardens has been conjured to explain their presence. Another common tice species is Kadłyberiya (Diospyros relatioxylor) the dried leaflets of which are used as the wrappers for refer. A characteristic feature of a good many of the savanna tree and grass species is that they are resistant to fire, ånd this cultural practice offiring has been shown to be beneficial for the perpetuation of this type of vegetation. A case in Point is that it is after a fire that reflush of leacts occurs in Kilaέεrέγγι τrερ5.
Another characteristic feature is that they are plants, though now growing wild, which have been introduced probably during historictimes; the type of plant, described by botanists, als naturalized alien species. A possible reasoning to establish the above statement could be as follows. In the region of Eastern Uva, where the pland Sayan na is found to its greatest extent, the threefold pattern of land use; irrigated paddy fields o'r ysgryri, garden gland o'r gwrywaith, shifting cultivation plot of heria, with adjacent forest land or palpiti; which Form: the basis of the agricultural economy of ancient
Sri Lanka, colul to its fullest ex (:siukic : For Somt> ] large irrigation : structed in this irrigation work: Totus, usim cother; (Map 2) indica of soil foundi Reddish Brown mature Brown region of undu. relief, the agrict. dish Brown E found on the Hindi middle sla ing terrain. Thi pied by the lov forest (Map 3). cspecially on the thic imilimature by the savanna ve while the huri. (in the lover bottorius, alire Pro used for paddy in air requiremen brown stil for satisfactory sup "WATCT, KI Ft CCD1 water retaining 8 Oils.
Now the prese type, in the regi bre yw'r hearthus, riddle and low be explained. A tion is as follryw; paucity of irriga this area, il är people living in have i H. EF resor cultivitätFrom to foi than if irrigation available for p This is the posi Ілscriptional ant logical evidence
though not is
Areas of a largo gation schernes,
populations, mevi that there was 3.title:Illeen E. FLITt] was mainly depi cultivation, the
finan "Would have where this type not play a domin aret of predo: Hrown loiam S.
Ei:Je; EJĀ. IE: AIVIEW, OCTOBER - Ig7 5

not be pursued ent. This is bicason or other, no hemes Were conrea, Ewen minor
Te ft 50 LITTEreas. The soil map es that the type this area is the Earths Lidl InLiams. In this ating and rolling lturally rich Redrths are usually crests and upper is of the un alılat; is the al rei occulAld seasonal lin Mixed with these, middle slopes, are gīl silī, vhere getation is found; soils that occur lopes and valley arly drained, and cultivation. The ts of the in mature
cultivation is a ily of irrigation unt of the poor capacity of these
lice cof such a sijil in of the reddish aspecially in the er slopes has to possible explaina: Because of thic tion schemes, in cient titles, the this region, inust tillore to shifting btain their foclyd,
water had becil ddy cultivation, tion cven today.
| Gther irchaef)-
in this region, Illil CO 1152.5 L lurriber of irriand hence large rtheless indicatēs a considerable gT, if subsistence Iident oli Cheila "atio of land hec{1_mfire, than cultivation does rt role; as in the finantly reddish Consequently,
instead of the normal forestchena-forest cycle being allowed to take place, it chena plot which had not fully recovered from the effect of such cultivation with the usual plant succession and soil enrichtuent taking place, would have to be used, with the resultat soil erosion and d gradation.
A. W. R. Joachim and P. Kandiah,
hawe show I'll that il Sri Lanka, chena lands suffer little change in soil structure unless the period of fallow has been drastically reduced and thic Cultiväitors forced to prolong the period of cultivation beyond the usual one or two year period. These immature brown soils werc thus formed by a degradation of the reddish brown carth, especially in areas where there was a presence of a certain amouilt of ferro-magnesium minerals, in the parent material. In most cases, the top or the A horizon of the soil is very shallow being 6-8 in. deep in the best area. The middle horizon or B, is usually less than 2 feet in thickness, with a layer of quartz gravel; while the lower of Chorizon, consists of decomposing acid gneisses. Once this deterioration of the soil has taken place, new firc resistant and sun leiving spccies like the sawan na trice and grass species would colonize such land, and climinate the forest species. Once the forest was replaced by savanna in this manner, it is not profitable to use it again for chea cultivation. As described earlier, the common silvanna trec species are used in medicineand as such, would be widely grown in home gardens, with the spread of settlements to these areas. But once the soils of former chenas became impoverished, these species colonized such derelict land, and displaced the forest species; thus converting an original forest vegetation to savanna. Even today, such lands conting the silianna vegetationarchirdly cleared for chena, because of thic infertile nature of the soil, which contains a matrix of qua="tz-gr:ll:15 with little water retentive power. In these areas chen as are cut where land is available in the Meriri or high forest growing on the morc fertile reddish hirown et Eths.

Page 16
INDUSTRIES BASEID ON WEGETATION RESURCES
Natural Wegetation provides a base for aninereasing number of industries. - In Sri Lanka there is an increasing Else of paper for purposes other thäIl the traditionäl.
Paper - The annual requiremert of Paper in Sri Lanka is estinated at 87,000 tons of which only 25 % was IIianufactured locally.
Per Capita Paper Consumption in Some Developed and Developing Countries in 1973
U.S.A. ... 60 lbs. Canadä - I - Japan 320 LJ.F. 50 Australia ... 29 Malaysia ... Кепуа ... I 로, , Sri Lanka Indii Pakistal ... Nigoria ... 3 Ethiopia. ... TLC1 -
The paper factory at Walaichchenai commenced functioning in 1956 with a capacity of 3,750 tons of Writing and printing paper per annu ilin. Theo raw material was illuk grass and rice straw. The fibres of these arc short, Illuk grass grows wild in the Savannas in the tree and grass mixed commuInity in the Manampitiya, Passara and Bibile arca 5. However, it is cultivatel it a Farm at Punani close to the factory, to save traПsport costs. Again, inspite of the factory being situated close to the large rice growing Arcas of the Batticaloa and Polonnaru ya districts, thic: Collection And cost of transport of the straw is a problem,
The available local raw materials like grass and straw have short fibres and supply 70% of the raw Interial. As a result, a certail percentage of long fibre and pulp has to be mixed with it, in order to get good strength for the paper. Til I 973 this 50% was imported from Canada, U.S.S.R. and the Scandinavian coultries. But today these long fibres are obtained locally froll plants like Cypraffar and Errayff , grown in forest plantations in the hill country, Experiments have shown that Kenaf, (Hibirra carriali) Bamboo (Dendro
14
fallai yrff. Ffffcfff")
(பிசோங் ஜாரின் ( Hiki irrifrif filiaretur) The advantages
Cypresses and e. they are quick gr within 5-7 years and eucalyptus tyearSto attailp.
Iп, 1967 a secon was established WallaichichFrai to 1 board and this col cial production in for paper produc forms of writing wrapping paper et current production 7:27, 5 C Ç tO, 15 perialı der Lland of go, coco least part of this d Paper factory at ET Construction ind. into operation by r facture fine paper ing). When this ir duction, the total country will be annum, and by would rise to Iz Paper Corporation sidering the settir factory in the Nort tåking intro consid weli Development availability of wat and fibrous Tawila development. Thi in the Irläufic: ELL T e: making of bags, ne for hoxes.
POLLUTION Ol EN WIRIONMENT
Theuse CFrtit L'Iril accompanied by the increasingly exhibit forms of pollution. destruction of the Viron IIleIlt is one o tant problems of Pfultirl 5 Caliser of a substance of the environment, li hain the local | accommodatc. He li: 5 al ex:l I Limity d States of
million dollars to c. Co cinc HlIntrerid
liiton trill 3 CF til of urban areas, in cars, 26 billion be 6.5 billion metal

Kathurumurunga T) and Wall beli cal also be used. the sc Hilve over localyptus is that owing and nature while the cypresses ke abolt 53 — 4 g ilpable wood size. ld paper machine in the mill at manufacture paper Timenced COll'IllerI 1972. The de Irland ts in the various paper, hardboard, c. are rising. The | capacity is about Dını umı against the rols. To leet it e Irland, the second mbilippitiyalı is Linder scheduled to go mid I973, to manuwriting and printmill goes into proproduced in the 37,500 tons PCI 1980 the demand a, quo tons. The i5 thcrcForc Clng up of a third h Central Province tration the Mahascherile and the er, electric power terial through this s would specialise of Kraft paper for wsprint and board
F THE I
resources has been il" abo Lise, which is tid in the Warious Pollution or the purity of the enf the most importhe modern age. by the addition orm of energy to n larger quantities habitat can Well }w has man don't mple, in 1965 the Atherica spent 5 tollect and dispose and twenty five e waste products cluding 4.8 billion titles and jars, and and plastic caps.
These figures do not include human and farm animal excreta, pesticides and herbicides, automobile exhausts and industrial sewage which are released into the environment.
The Ecological Significance of
Pollutilts
The ecological significance of insecticides is related, first, to the fact that some of these substances are chemically very stable, breaking down or decomposing, very slowly. Once discharged into the physical habitat they can therefore, persist for a long time in their original or even more toxic form, This For instancc, is a characteristic of the more popular organo-chlorine, insecticides like D.D.T. than of the organo-phosPhorous insecticides like parathion, which in comparison, a revery unstable. While the latter are highly poisonous to birds and mammals. including man, they break down so rapidly that th:y lose their toxicity only a few hours after application.
The Second Es that these substanccs which may be present in very small quantities in the soil, air or water can become highly concentrated once they enter the biological cycle. They are absorbed directly by the tissues of invertebratic animals or in the case of some of the particularly poisonous insecticides, those of higher animals including man. If it broken down in the process of respiration or mot excreted, these substinces can become progressively concentrated in tissues als they are passed from one facet or food chain of the ecosystem to another. The degree of concentration is dicPCndent on the Particular animal tissues in which these materials are stored' and the length of the foirt d chain or number of trophic levels through which it passes (Sce Fig. 3).
At present the effect of insecticides is morc Widespreid and appare-II t. Research on D.I.O.T.-tih Test videly used and easily detected of these substances, is beginning to reveal the Full effect of insecticides on initial population. Concentration in the tissues of higher animals who feed on plants treated with these preparations or Who Prcy on such herbivorous animals, may build up to levels which can cause sterility or dealth.
ECONOM TIL FREYTIL 'W', CONTICI B.F.F. I 1975

Page 17
thıc areāls, wher and Technologi а. Пecessary Co. vironmental pr centrated At:
Isel improve it--as
CARHI WIRE 2. Si Ilog clearanc à¤àdae 2 U.S.A.. I thi.
reduce carbori
HaLISE Cf motor sures increasing products by hi of nitrogen ox Poisoпіпg nitro Sa Inc way, the a
၌%8မျိုးမျိုF { TI).D.T. and oth つ chlorine insgt cally increase | ". | محبھی
agricultural pri
LITELS
HERWIRE || - The problem Bağ: Erca /് plex and Compl
ՑIITIIէ: Cxpert5 T million people C نتیجه A. - at present high the products of PLAAT : and minerals in c. EE
" " however, postul Image in terms of 影 thermal pollutio
disruption, if cy &CCLETC Elle CLIFF
Land Exploitat
Fig 5 Th:rg is no 1 for the Inaximum
ECHASS Country's availał GEIE) E3D more iTuportant
in the foregoing a जT Thät each1 fFact [] LOSSES THROUGH RESPIRATION to a use to whi AND EXCRETION | paying due regar, Qogůc3 to, Bobcascal 21652 and the d:rnand dice. But there
to guard again :: PD This use and over EE8 litural resourct
quick and large : iiiή ήτανίας : 雳 ment of long LLLTTT LL LLL CCGTCu THLTuLiu TT L TTTTLLLLA SLLLyyTTS SStLtLLLLSS L SLLLLS LSLttGtLGYS S SLGLl TlGGGCCCLGLLL SLLLLL References 豁 Cu TTmTTT LLTTS LCTCTCL S LGGGGGGLL SS 00S aYYYmaLH LL LLLLLL Which warin ag
Despite the 1 Brites : feet should be all
Man himself is accumulating these compounds in his body fat, but as
uli ilin – Fanvo - 蠶 蠱 li li li During the peric
POLLUTION AND Tercia planting DEWELOPMENT m15s land clearif
Today, the largest sources of pollu- In the process tion are the factories in highly deve- the hill country loped areas of the World. These are essential forest
T ECONOMIC REVIEW, OCTOBER 1975
 

: the largest economic were denuded right up to the water's tal resources that are cdge and steepland was left un1dition to act on eil- protected. To these destructive oblems are also con- activities were added incfficient draintӀоп. however, might age, which caused Un Precedented ituation rather than silting and floods. A gross igпотапсе was true in the case of of tropical conditions, initially, led c in Los Angles, to a devastation of Acre upon Lic is process, efforts to of stream reserve which continued monoxide in the cis- unabated despite warnings of the vehicles led to meals dangers in such a course. Retribution the cqually har inful for such truculent misdeeds did not igh powered engines take long to come. Faulty land usc, ides and the highly it was argued, was a contributory gen dioxide. In the cause to the ruin of the coffee planbolition of the use of tations in the 1880's. er persistent organoicides, could drasti. Again the rubber and coconut malaria, and reduce plantations, subsequently opened up bduction in tropical on the lower hills and coastal plains, themselves contributed to the deteis indeed very coms :” and cosion of vast quantiicited. For exile soil. Cultivation practices,
P such as growing of cover believe that zooloo g O CEUP3, JPl rubber lands which ensured the All lic in the U.S.A., bility of the soil standardi, simply on 醬 ಸೈ' i nd II liniilliscid Its atomic energy, water "ཕྱི་ years of trial toilIIlon rock, Others
late irretrievable da- The object should be to strive to exhausted resources, restore equilibrium and an overall n, and environment consistency in man's interventions "Cl half that number on the natural environment, in order int living standards, to satisfy the population's requirc:- ion ments as far as possible by reconsti
tuting the biological potentiality of pubt about the need the country's soil, Flora and fauna, exploitation ofte both natural and selected species
le land area. The issue that emerges Some ecologists however, view any
inalysis, however, is agricultural intensification in tropical f land should be put landi: as futile and dingerous. For ch it is best suited, instance Tropical forests are often to national urgency improvidently cleared for farming for Particular Pro- or grazing when, in fact, the land arc inherent dangers would provid: greater returns st; particularly, the through forestry. Forests can -exploitation of our provid: wood products, fuel, enis with a view to ployment and protein in the form of returns to the detri- Wild game for nearby residents-not term conservation, to mention their role as ccological e earlier pages drew stabilizers.
: lessons in history
ainst such dangers. A fear is constantly being expressed
on whether the regions being opened ruling by the early up for agriculture will survive the no land over 50cc coming onslaught of development icinated this principle without an ecological collapse, or at uit colonial interests, least a permanent Cutback of pro2d of intensive com- ductive capacity. The most intractin the 19th century able challenge may be the maintegs were lishered in, nance of soil fertility over time the upper slopes of within the financial and technical werc deprived of constraints that bind the average tower, River banks tropical fariner.
15

Page 18
Banking
Funding the External Resources Gap
Trade Deficit Reiche: Rs. 1572 Million
Sri Lanka's foreign trade gap had, according to Customs data, reached Rs. 1,37. Inillion by the end of August this year (See Table I). The country's adverse balance in
74 of Rs. Iro7. Tilliol, was an all-time record, has already been exceeded by als much as Rs. 65 million. Indications are that, with dile adjustments in Custo III:s data for the Food Commissioner's and Petroleum Corporation exports the foreign trade gap could reach almost Rs. 2,000 million by the end of 1975."
additional burden on the coulEry'5 petroleum import bill, with the recent price increases could possibly take this Figure even further. This widening Foreign trade gap is causing Scri OʻL1S Ci,3il.CeTJ1 Hn II1arm1Y qLIartCTS, especially when its impact on the country's external resources situation is considered. The big question looming just now is how can the widening foreign resource gap be bridged? Upto now the excess in the value of imports over export earnings has been financed almost entirely through foreign aid in the absence of private capital inflows.
SOrlea Sgran Cg5 CFrlie Flave come our way in the form of the IMF's oil facility ind other offers of assistance by the international Community to the lost affected nations along which Sri Lanka is placed.
Imports
The sharp increase in the country's import bill has resulted largely from the higher expenditure on the imports of essential commodities such as rice, flour, sugar, Petroleum ind fertilizers. It port values of base incials, machinery and mechanical appliances and vehicles and other transport equip
TALEI
SII ILANEA'S F
Innparts Frts
Deficit ...
ment Have als : t:Ti::18:: World. preSSLI tes 氮工曹 til: SrI LEgrıl;a"3. b;alar Table II).
TAB
SRI LANKA'SIN T
Ja II. tc. Aug
Cercilla ... "...
F. - - -
Sugar
PerleĻILT
Fertiers
Base restills and Arti
herif
Machinery & Mecha
է:զuipment
Exports
While the co LL rit kept Soaring ou Te. not moved up at exceptions arc te and CC3 Pra exports eight months CF til: in increscals: Cf F earnirgs över th Y el I.
SLLLLLLLL LLLLLLLTCLLS LLLlCGL LLLLL uLuH CCCLT LLL TGTTLukLkL S LTLuGTS JCuLLLTLL YJ LLL S L L TT LTuuLTTCuukS LLL TTTLTT LLL HTT L rLCL TCCCS TTCekCLuTGuL S TTTLLLL LLLLS 000 S LLTTL L S TTLT TTLTLL YS uu TLT S SJS CCC LT LHkLSS LLL TTLL சrசிறு சீர :ெ சீசர் .ே ர74 Wi d gi)
of R.J., I, 247 και του.
6

百
12)C6
Β
H
_E I
BEREIGN TRAIDE
Jarl. It Aug. I975 (in Rs. Million)
Tg7+ I5לפ 구 壬斗” to
IIGT II, T후
recorded steep illwille irrifl:LltiClary ing their toll on ice of trade (See
[II
PORTS-MAJOR EMS
in Rs. Mill.)
I974 I5לפ ĜI 2,5 ே
- - I ogg 3. 50
icle
工基望 171 lical
I
2.53. Its
ry's import bilhas xport carnings have
equal pace. The a and catճnuէ Ճil which in the first is year have shown S. 5 or million in = sanne Period last
f. Crs Fog F da få kifå fraférуху Сóгрgrafїgл நிதி : : : ரீதி
: y : விர திர ரீgr
TABLE TITI
EXPORTS OF TEA, CCPRA ANP)
COCONUT (BIL
Jan, to Aug, (in Rs. Mil.)
T974 I975
TEA - 1. . E 1.5
Circuit oil And CIPTA
E
All other major items of exports showed a drop in earnings. The following seven major items, together with tea, cora and coconut oil, lake up over 5, of our export carnings. At these items have earned less over the first eight months of the year as seer il till: tille belCYW".
TAEBLEWF
EXPORTEARNINGS OF OTHER
MAJOR ITEMS Jan. to Aug. in Rs. Mil.)
75פT 4דפT Animul products = и = 翼重 I
Cocontproducts (ther than
coconut oil and copra) Ruber - to $ଽଙ୍ଗ Lt aLaL TuCuLTTCC S S Du S S 0C
Woolei articles i Lind wol
charco: - - - 2. I
Ready-imižide ganriments i ild text
tils ... ... é6 T Petroleum products ... ... 6 BI
1358 – 180
The injustice of the existing economic order is clearly evident in the above figures where in most of Sri Lanka's continodity and industrial exports earnings have fallen over 1975. Meanwhile, as pointed out earlier, we had to pay over Rs. 500 million III pre for Our basic inmıPOTES. The value of imports continue to exceed export earnings, the deficit being financed almost entirely through forcign aid. It is becoming more apparent that the exterial capital being received through official lid is being completely swallowed up by the overseas price increases of Sri Lanka's imports.
Foreign Borrowings Increase
Data ol Government's loan operations is available for thic first half of this year (January - June). This data shows a marked increase in the
GL0aHLHGLL LLL LLLLHHLZS 0LL LLLLLGLLGLG S HLHHL

Page 19
ቦ8
utilization of foreign loans relative to the corresponding period last year. The total amount of foreign loans utilized during January - June 1975 amounted to Rs. 5 in Illillion as against Rs. 138 million during the same period last year-an increase of Rs. 202 million of 50%. Of this total Rs. 163 million consisted of project loans obtained mainly from the International Development Association (Rs. I co million), West Germany (RS 332 milion), Asian Development Bank (Rs, I 3 million) and International Bank for Reconstruction and Development (Rs. II million). The balance Rs. 17.7 million of nonproject or commodity loans was received mainly from Japan (Rs. 7 million), U.S.A. (Rs. 58 million), India (Rs. 16 million), France (Rs. 6
Inillion), and Canada (Rs. 10 million).
Indications are that the utilization
of foreign loans by Government during i975 will be substantially higher than in 1974. The amount of foreign loans utilized during 1974
reached a peak of Rs. 388 million.
Sri Lanka's total outstanding foreign debt amounted to Rs. 5,364 million by the end of June 1975. COf these outstandings Rs. 764 million of 23%, of the total represent debts to the United States of America; Rs. 5 of Inillion or 15% to West Germany, Rs. 4 Izim. Cor Iz% E O China, and Rs. 56g or II % to Japan,
PUBLIC DEBT (GROSS)
H.L.L | TF
Sire. Central Bank of Ceylon.
ECONOMIG REVIEW, DCTDEEE 1975
Finance
Public Debt Ol
By the end of public debt outst Ris. I, Ióz milli ),798 million wa debt and Rs. 3,3 foreign debt. T. outstandings com banking sector a non-banking sect The charts : trends on the ac public debt durin and the composit debt during this More Governmei The provisional for the first six in reveal increases i itetus when Comp: period last year. recorded in recei Ris. I 33 milliamı mı period last yeari; ir by Rs. 62 fillion. Rs. So III illion; tu 43 million and to
Hiillion will in cito corresponding Per. cations are that IOLLI. Freye these sources over thcy would all exce Inally expected c. evidentin the adjoi provisional figures of 1975 and the for the whole of I
COMPOSITION
8 HLFEEE
IgG ET F3 Eg. T.)
 
 

Estail ding line 1975 the gross inding had reached in F which Rs. 5. On the distic 64 million on the he Domestic Delt prise 30% from the ind 70% from the
T. low highlight the CLITIlulitigil CF Elle g the last ten years ion of the foreign period. 1 Reveille figures of revenue onths of this year 1 nearly all major red with the same Major increases are 3t from FEECSire thalm in the similie: nport tax increased ; import duties by nover tax by Rs. acco tax by Rs. 35 Timpared with thc iod in 1974; Indiif the Saile le is citled from the next six Iloriths :ed what was origithem. This is ning table showing for the first half estimated figure
75.
F. FC REIGN DEET
HLLIü*S ÖF FLFEEE
:
|Iւնք
EE_
*ಲ್ಲಿ?
Banking
ASLAN MONETARY, UNIT Effective November II
The nonetary authoritics of six Asian Countries, including Sri Lanka, 1 hilwe concluded agreertients arriong each other yer the last two months to operate an "Asian Clearing Union". Uniler these agreeleit: Sri Lanka vil EE Ele to phalic its payments to these countries, fron November 1, through the special clearing facility maintained by the "LInitin'",
The III el sure is a sequel to the militual declaration signed in Iran in July by Sri Lanka, India, Iran, Pakistakri, Banglidesh and Nepal to link the trading accounts of these nations. This "Clearing Union" is essentially a banking facility which Inikes for quicker and easier LLkSLaaHLLLLaaa S LH S HH HHHLHLHHLCCLLLLS LLLLuuLLLLLL L LLL currencies of each of these six countries and with the leist reserves of foreign exchange,
The accounts of the clearing facility, in respect of the trade among these countrics, will be kept in it common unit, Under these agriccimen Es the instruments of paymenteligible forsettlement through the clearing facility will be expressed exclusively in the currency of Sri Linki or one of the countries involved. Sri Lanka's Central Bank would notify the Colinistricial Balks during each month of the buying and selling rates for the Asian Monetary Unit and of the Clearing Union's clearing currencies and also of the payments not eligible for settlement through the cleiring facility,
TABLE. W. MAJOR ITEMS OF GOVERNMENT
REVENUE siri Rs, Millian)
T சேர் : நாசரி: 1975 - 1975 Irıca kıllı TL: 55.8 The 3.18 :ே4 器 Ducs 2. FEEC Receipts ஒ:
The adverse trends for two of the country's major export commodities Have als affected Government's revenue position. Export duties show as much as Ris. I og million less when receipts between January and June of I 974 a nel 1975 are considered. In the first half of 1975 export duties fetched Rs. 22.9 million compared with Rs. 32.9 million in the same periodil 1974, This was mainly due to the heavy fall in earnings from rubber all coconut products. Export dutics are expected to bring in as much als Ris. 74 m. for tille whole of
1975.
17

Page 20
FOREIGN NEWS SURVEY
The Conference Front
Focussing on the Seventh Special Sessions ofthic UNGeneral Assembly, which discussed the Plan of Action for the Establishment of a New Inter national Economic Order in the early art of September, three important international meetings of direct rclevance to Sri Lanka escaped attention. The conference of eight Asian nations which met in Bangkok till July 3, I and reached agreement on tari Freductions; the 5th Ministerial Conference of non-aligned countrics in Lima, Peru from Áugust z 5 to 3 oth; and the meeting of Commonwealth Finance Ministers from August 26-28th. Asian Common Market
At the end of a meeting of repre: sentatives of the Governments of Bangladesh, India, South Korea, Laos, Pakistan, the Philippines, Sri Lanka and Thailand, held in Bangkok with the assistance of experts from the U.N. Conference on Trade and DevelopITient (UNCTAD), agreement was reached on a series of broad multilateral tariff concessions among the eight countries as a stepping-storic towards an eventual Asian free-trade zone or Common Market'.
These tariff reductions, ranging from Io to 8o per cent and averaging about 33 per cent, related to more than 60 items, including agricultural commodities, manufactured goods, Chemicals and minerals-the total estimated value of this trade being So,000,000 a year.
The agreement was to be ratifiedby all the governments involved by Jan. 31, 1976. It was also ckpccted that other Asian governments would be invited to join in the tarif concessions, and at a second meeting in November 1975 agreement would be sought on the climination of certain non-tariff trade barriers, such as quotas, packaging restrictionis - Lildi health regulations. The Commonwealth
Meeting of Finance Ministers The 1975 meeting of Commonwealth Finance Ministers, held in Georgetown (Guyana) on August 6 - ŝ, considered inter alia an interim report on the economic relationship between developed and developing countries prepared by an
18
expert group appoi work within terrils down at the recent heads of governmen
The report cnidorst integratedl Commodi drafted within the fi U.N. Conference on lopment (UNCTAD U.N. Special Sessio rials and Developm 1974 and the subseq Ference of non-alig February 1975, und proposed to create Fund to finance E certain key commod to stabilizing raw II compensating expor Fluctuationsin incOT wealth experts acce suggestion that cont a fund should coTII importing and exF adding that “Petr countries might (al tributc., in view of ment possibilities a tributions to inter co-operation'.
While certain as report-which was Guyanese Prime M. Burnham, as climb action which "an munity (wishing til rhetoric and to a V embark on spee accepted by the . meeting, the comil. the Teeting gil'." "general endorsen ting the reservatio. trializi il mer Tibers Till do II Solle ditio 15.
In particular, ti ment, whose P o trade in fly outlined by the F Wilson, in a SP wealth head Of said to have obje endorsement of ti pile financing pla pragmatic a PPro encourage C015u of particular raw their common PT case basis; to ha

ited in May to of reference laid Commonwealth t meeting.
:d the plan for an Lies programlč amework of the Trade irld Deve) following the l on Rav Mateint of April-May lent Dia käT COI-l- ed countries in er Which it was an international uffer stocks of ities with a view aterial prices and ting countries for le. The Coni 11011pted UNCTAD's tributions to such e from both the torting countries, coleum – exporting so) wish to conthe Fund's investẽ ựëll as ft; CDIlnational economic
ects of the interill described by the inister, Mr. Forbes odying a plan of international collby match deeds to aid chaos ought to dily were fully Finance Ministers' unique issued after : only a qualified ient” to it, reflecus of ccrtain indusCF I thic Com T11) Ilof its recollllel
he British Gover 1roach to problCIT15 materials had bic:Il rime Minister, Mreech to Commons gyvernmelit, 5. cted to the report's c. UNCTAD stockin preferring a more ach which would mers and exporters materials to examine oblems on a case-bywe argued that the
indexation of commodity prices to the general level of inflation in the industrialized countries would Increly create new inflationary pressures from which many of the poorest developing countries would be the worst sufferers; and to have dismissed as un realistic the report's call for the immediate implementation by the developed countries of United Nations aid disbursellent targets.
Funds Mooted at Non-Aligned Session
Under a resolution fully approved by the non-aligned ministered conFerence in Lima, it was decided to create a solidarity fund for the economic and social development of nonaligned countries.
This fund was to be established by means of contributions of the equivalent of 5 ao,golo special drawing rights (SDRs) to be paid by each of the fund's members in four annual payments in freely convertible currency. These contributions were expected to produce a basic capital ofsome SDR 4a, googood which could be augmented by voluntary contributions from the wealthier IIlember states. The fund was to be located in Kuwait, which was reported to have offered an initial contribution of 3Go:Côt2, CO3 Kuwaiti dinars (rather
over U.S. SI,ogo million).
In other resolutions the conference agreed in Principle to the creation f fire other funds, as follows:
(a) A "special fund for financing buffer stocks of raw materials and primary products by developing countries', with i Es modities to be settled by a conference to be held in Geneva on June 30, 1976; a fund for the development of food production in Thir World countries (as proposed by Peru); another fund for agricultura development (also on a Peru viaп proposal.); a special fund for land-locked countries, such as Afghanistan, Nepal and Upper Voltai and
a fund for the post-War reconstruction "of Cambolia, Laos and Wietnam and of the other peoples affected by impcrialist aggression'.
(c)
(d
)
(e)
Econostic REVIEW, OCTOBER 1975

Page 21
THE ECONOMY
Recovery of Plantations Output in 1975
THERE has been much concern cxpressed about the declinic in the output of the major plantation in dustrics (tea, rubber and coconut) after 1970. This decline has often been attributed to the sharp curtailInent of development expenditure (manuring, rc-planting and mainteinance) in the clinate of uncertainty that prevailed with the impending land reform legislation and the possibilities of dislocation in management caused by the land reform. Some observers go a step further to state that the plantation output would continue to decline even further in the next few years owing to the operation of these factors.
conditions that I of the period 1 The plantatic Sen5 itive to Weh civen under the a fall in output weather conditio Contrary to t casts about the future years alli. 1975 the outp| marked improve the provisional output should att 48.5 million lbs., level recorded equivalent to t level of 1966-7. the I 974 lev Rubber product reach around 525
PLANTATION CROPS AND PADD.
Output 0 ver Ten Years
Effer 0
(fia (infor (rari,
盘r》 f r.)
196б-7o 4.9 " " = 후 후과 II,; - ° - - - Η Βα, Ι 3 IE Ι972 ... . .6.סלו ಕೆ?: 2ಿ? 1973 I9 T97 9.8 501. T975 4. * 3.25.g" ... =
* Provision:l estinates
As seen in the table above, it is certainly a fact that the plantations output has recorded a substantial drop in recent years. The output
is somewhat high average and is a about 89 in relat nut production is around 260o mil
of tea which averaged 48.5 million lbs, per year during 1966-7o, recorded a continuous decline in the subsequent years, and by 1974 it had fillen to 450 million lbs., the lowest level recorded in the last fifteen years. The rubber output during 1971, 1972 and 1974 has also been considerably below the average annual output of the period 1966-70. The coconut production, having reachcd a peak of 296.3 million nuts in 1972, recorded a diastic fall in the subsequent years, 1975 and 1974, While the reduction in development expenditure, the elects of land reform etc., have certainly played a role in this output decline, one factor that has been often ignored in the discussions on this subject is the adverse weather
ECONOM TIC LIEVIEW, I OCTOFITIM I 973
higher than the I966-70 and rel of nearly 30% This improvemen perfor Inance of t in 1975 is not a r increase in the LI other developme removal of the ownership (in fa Will low be ext owned estates asresult of favour ditions. The clearly shows th: ditions of reduce penditure and 5. tations output cau to improved weal

availed during most 71 - 74.
crops arc highly her conditions and est of Thanagement, runot be avoided if s turn adverse. e pessimistic foreantations output in dications arc that in t should show" ai lent, According to estimates, the tea in a level of around which is thc highest ince 1971. It is 1e average annual and is higher than :l by over 8%- on is expected to Lillion lbs., which
*凸 கரீழ்
or (мг///fан fr) θηriείει
6 Ι. 17. ம்ே. 63 ... 62. ... 2ே, 51 76.8
at Below Gg.o"
ir than the 1966 - 7O n improvement of on to 1974. Cocoestimated to reach on nuts, which is annual average of resents a TCCOW cry #1 the 1974 crop. in the production e plantation sector sult of any sudden ei offer Lilizct and it expenditure or uncertainty about , the land rcform ided to companyrell). It is rather a ble weather conperience of 1975 evel under COndevelopment, exforth, the planrespond markedly er conditioits.
The economy of Sri Lanka is a victim of not only unfavourable word market forces (such as sharp fluctuations in commodity prices) but also of unfavourable weather conditions internally. A drought can cause severe adverse cfc.cts on the balance of payinents. It can, on the one hand, lead to a lower level of plantation output and hence a drop in potential export earnings. On the other hand, a drought which eauses a failure in the paddy harvest will lead to higher food imports. In this way, adverse weather conditions can seriously undermine the balance of payments, just like unfavourable World market forces. Growth prospects dampened by adverse Weather
Morcover, the agricultural sector (plantations and the domestic agriCulture) is the largest single source of national income in the country, accounting for over one-third of the Gross National Product. In such a context, a fall in the output of the plantations or the domestic agriculture can lead to a dampening effect on the overall economic growth. During 1973-74 in particular, the domestic agriculture (which centres around the production of paddy and other subsidiary food crops) has shown significant increases in pro= diction. But, this failed to bring about a corresponding increase in the overall agricultural output owing to the decline in the plantations output. In other words, thic rise in the output of domestic agriculture has been merely instrumental in offscting the decline in plantation output. In 1975, the sanne story has been repeated in a different form. While the plantations output is expected to show a marked improvement, paddy production has suffered heavily as a result of bad weather conditions. It is well known that the last Maha crop was a failure. Everı the Yala crop has not come up to the cxpected levels. All indications are that the total paddy crop this year would be well below 60 million bushcls, a drop of over zo% from the last year's leveland-lower than any of the years since 1968. Thus the increase in the plantations output will be more or less offset by the drop in the paddy output. Adverse weather conditions have once again dampened economic growth prospects of the country . -
19

Page 22
coMMODITIES
TEA
UP. - Production 5 Mn, Ibs.
Earnings Rs. 453 Mn.
Both production and earnings for tea continued their upward trend into August 1975. Compared to the same period (8 months) of 1974 tea production has shown an increase of approximately 54 million lbs. and tea earnings an increase of Rs. 453 .11llionח
Tea Production between Jan.-Aug. 1975 WAS332,243,744 its compared to 302,423,098 lbs. during the sale period in 1974. The Enjor part F this increase was achieved from Jan.- March 1977. The increase in Production was also reflected in the increased quantity of tca exported from Sri Lanka during this period. Exports in Jan-Aug. 1975 recorded 309, Io 5,203 lbs. Co. In parc d to 253,212,335 lbs. during the same period in 1974. Export earnings frontil tea di ring Jan.-Aug. 1975 was Rs. 1,295,385,550 compared to Rs. 843,594,023 and this is ascribed tō the better prices for all grades of tea. The FCOB value of tea ir 1975. "aš Rs. 4.9 per lb. compared to Rs. 5.30 per b. in I974. -
The rices ܵܐ݇au grades of tca at L}ie ဒြိုဂျို့ Auctions showed substantial incretses, il 1975 When Coripared to 1974. The increase in unit prices are shown below:
COLOMBO ALION PRICES {Rs. Der Kilo)
I 1דפ * IFFFFF Eldfff;" . Ir-rif, Fr. High :-) մrn 3 Ճ4 T. T.,
է հ: G 7 95. | 구 All Elevitir15 = 8r 2 1ם עד.
London. Auction Price5 also Provided higher prices in 1975, as agilist hose of the same period in 1974; is shown Eely:-
LONDON AUCTIONS (New Toence: per Kilo)
re I 구 15775 N. Hrirlili. B.פך ĜI , 72 5, il تشابهة Sri Lanıklı ճt.g: :ே African co-Liritics ÖI.63 JHL. F. 1.21 3. All ... I. gr
EO)
The Oldest Tea i
The approximatc. te held up in the S 7 years and ultin Trieste Were 5ole The fact that these support is perhap. 醬 黑
TELS,
Scle Crepe Latex Creps: Serap. Crepe Sheet Rubber Blick Ft Lab EET Lite:
Grand Total
Frost Pushes Do
Record LOWs
Calamities new mient times, but Brazil has colle, incorremiert - Ei Til difficult till for For Brazil this f Heels CF indicati work and loig e LEic coficc ruist vei had given the B formulate long-te. which were based ings from these that would ni'w bi while it the 511. Flated el rnings fr. För consumers i tries, the frost higher prices. higher prices wil Lcceleration of
| Sumption,
The First estill: lian CryFee 1115ti the grim picture frist darriage:
Tillion trces il largest coffee pri Hected; in San Po milligini trecs; il af 54.8. Inillier tr Minas Gerais ao trees were hit b
 

n Recent History
tly cool cases of : Canal for Wer tely discharged it with all faults. aged teas attracted s an indication of ility of low priced
RUBBER
Export Earnings so per cent drop
A higher volume of rubber was exported during the first cight months of this year when compared with the same period in I974. Earnings, However, were: lower by Ris. Il 7 mln. RSS I prices continued to maintain a steady level, Thc incrcase in quantity of rubber cxports during the period under review were the result of an increase in Latex crepe and Sheet rubler.
RUBBER EXPORTS
I미구 1975
ான 1: Warry Hilary - largraff நி: இரர்' l
(fr.} r, (ի:) 置、
I 로 )8.35 5,15,5| דפב.
E. ճ+ց Ichir #5,585,შ-54 8. I I փլեյ-լճ 874 :51,C. 14ம் 883,854,ך1 ז
ჭigi,&88 重、茎 T
III 로
모 67+ 그 7.
ΕΕΕ
will StockS EO
: le tibi,"'"e- the recent frostill not merely it an e bout at L Til ther the Cocc World. TK St COIS DIT the ons that her haril ffor Es in combating re succeeding. This
razilians reason to
rrn marketing plans olprojected garnCoffice - cropsi-crops C drastically reduced e time causing inIII. the CLITrent crop. importing Collinwill translate inti
But substantially Il Probably lielai atin the drop in con
ates from the Brazitute (IBC) showed CF Elliee:čitent of the Igrico, of the gI 5 1 Paeana (Brazil's bducing State) were iulio 66% of thic 830 Mato Grosso 8o. ees; and iri sty1Ithcrt:1 of its 292 million y the frost.
The 'Black frost' as it is called, Y” Ls unus Llally Severe, killing Tially trces olIttiglit and häilly III:ling many more in what was by far the worst frost and freeze of the century. In Paea it, as in other coffee growing States in Brazil. Frosts of a much less intensity called "White. Frosts' are more or less expected. These usually affect only the higher leaves of the tree, allowing the plant to recoverilii shift time. This, however, was lit the case of this July frost which froze the trunk It if the coffet trees, tuirling the gap black and ca. Li sing all that: lestyle:s to turn brown and eventually failiff.
The damage comes at a particularly bad title, as world stocks of coffice in consuming countries are it lear record lows. Also IBC Carry-over stocks front previous years-used in recent years to offset production shor EFulls --Lire åt an all-titre loy," of 5 million bags. In addition coffee crops in other Latin American colntries ait: behindl Schiedlule de TT lainly E) un Fly Ourable y'orither.
These factors have all hald än impact on international coffee prices and encouraged local coffee exploits too. isetween January and August this year a total of 799,291 lbs, have been exported at it value of Rs. 2,219,345; of this as much as 432,991 lbs. were exported in August carning Ris, I,566,39.
LLLaLaaaHHGLLLLLLL LGLLSLHHLHHLSKS LLeLGHLGLL S LL000

Page 23
COCONUT
Copra, Coconut Oil Production
Rising World production of Coconut Oil in 1976 is forecast to reach 2.57 mln. tonnes which is about 4.0 percent higher than the output in 1975. World production of Copra this year is estimated at 3.88 mill, tonnes compa rcd with la : I 974 output of 3.2 mln. tonnes. The 1975 copra outurn is equivalent to 2.45 mln. tonnes of coconut oil and would be higher than the 2. Io inlin, tonnes cquivalent of copra produced last year. The imcrcased production is expected pri
SPICES
Drop in Earni
s Export carnin
January-August fallen by Rs. . pared with the
Export earnings major spice, cont
level. Further di
SPICE EXPOR
marily from a larger output of copra Cirillion
in the Philippines and Indonesia. Carda Tom .
CLotrei Pe.
Actual Exports 深盟
Export earnings from all coconut products in August 1975 at Rs. 45.0 mln showed an increase of Rs. 9.2
ESSENTIAL OII
Cinnamon leaf of Cina Liam Birlik i
mln. in comparison with the previous Citronella oil month. Eärnings during the first fit, si Card LT1 ITh Coil eight months of this year were Rs. Cove oil 18.8 mln. ahead of carnings du ring the Niitincg cil
same period in 1974 (Seetable below).
EXPORT OF COCONUT PRODUCTS
1974 Jan.-August
Pada Walio مبrs frr"
(கீழான) (Rr.) g Coconut til ... ... I 2,443,400 80,97 Bizzo 35,91t: I.C. ... - ... ,=6,סIB,32.10 1 = 78,3ז,#7ז 8דםರಿ? Capră ... . ரே, Pronic - i,94, 18ı 977,713 IOT Fresh nuts (nos) 575, EST 853, LO 1947, Fibre products 73,82ն,aնյ 6522, 28 +ჭ„ნg= Shell products ... LIB. II, 599 I6,382,160 II,7 Total valuc . 3; II, 88,62 z
Earnings from the export of coconut oil in August 1975 at Rs. 2.3.6 mln. showcd an increase of Rs. II. 8 illn, or roo', when compared with the previous month. This was duc to the increase of the F.O.B. pricc per unit as well as the quantity exported, during the month.
Earnings from the export of desiccated coconut in August 1975 at Rs. 13.2 mln. showed a decrease of Rs. 33 mln. when compared with the previous month. This was due to the decrease in the quantity exported during the month.
ECONOMIC REWEEW, OCIOBER 1975
PAPAIN EXPOR
Fxpgror Papain white ( Papain brown Total
Colombo Average Papilin whitePapa in whiteJan.-Aug. 197 Jan-Aug ry)
London Average
Ceylon browa Ceylon white o

g s from spices during Lt Ris, 44,2 mln. hadl 7 mln. when corınme periodin I)74. from Cinnamon, the nued to be at a lower tails below.
Essential Oils
Export carnings from essential Oil during the cight months up to August were substantially lower when compared with the corresponding period in 1974. There was a decrease in the quantity of Cinnamon leaf oil and Citronella oil shipped the two major essential oils exported from Sri Lanka. Details of exports are given below:
1974 1975 Jan.-Aug. வா.-Aug. இriy 'சர் (டிர் 'பேச் 【エ 萬』 エ品。 C= fr. Fr. Frsr.
4,878 37.2 ,7부터 8.7 I,j+1 - T 8.5 9,199 ם. 후, -과
s 2. 1888 T #972 1,374 CORTS
- - - Lo B 후 ნóჭ billi I 0.5 0.7.
92 --7 FBS I.
s T.I - - - କ.0; 16 -- q.04 I-로 q.23 - 후 44 ழ்,
PAPATN
7.5 Jan.-August
Τε : ...) (RF.)
solo
Slight Revival in Market
The papain market which crashed earlier this year due tolinited purchases by Japan has shown a slight revival. The quantities exported are higher this year (over Jan.-August)
794 피후 19727 -
音 compared to the same period in 1974; 92.5 b h Col. b бо; Hg,55,T ut VCrage Prices at the El D) Auctions were almost 50% down 551 94* 333 compared to the same periodin 1974. gே 56,094.809 London average prices remained cons95 g, Boz, I II2. tant for Ceylon Brown Sun-dricd 33,666,773 Papain. White Ceylon over-dried papain was unquoted.
TS
1974 Jan-Aug: 1975 Jan.-Aug. (2Kir Puffy Zalae (R. r.) இrg 'ச (RF) wt.) 『. 19후7후7 to 1,885, II 3 cwt.) - ܕ ܢ  ̄ BIO4. I 7 Ο III 2,83
17ն 4,337ն 78 , .. 78t Prices: (Monthly) Ris. /Lbs. Aин. тртн ит, то Papain brown - 1974,. I9.סם Aug. 1975 23ಥಿ+ Pпрnin bгоwn — т971 ... I0.90 ... --f. ஓ.98
# נדבני T.
rices: (Monthly) Elbs,
in-dried (spot). r-dried (spott).
Jan. - Aug. I g74
Jan.-Aug. 1975 13
I. UNQ UNQ
*ഴമൂ

Page 24
Industry
Sri Lanka's household electric bulb
ܣ ܨ
A survey conducted a few years ago had showin that, the locally manufactured HOLISE-H Cl electric bulbo based on clif, price of local manufacture only vyras one of the cheapest in the World. The table below shows co
Packaging) cristi Inately I 5% of th the balance being
The glāss cove 55 - 40% of the
Forcigri Col.
I: Sri Llyfrgi Erffair TE*. Čerparty
直
in W. ... 2. IĜ 후 후 후
W - - 파구 - 호
parative rupee (c. i.f.) prices for five countries including Sri Lanka,
However, in recent years prices have been increasing rapidly, locally Broadly the retail cost of a local bulb is today made up as follows:-
e.g. 60 watt bulb
Retail price 595 Rictzailer's IIlargin - - -
翡
B.T.T. ...
B.D.
Raw materials of which -so
cts. Ils du ty, Feecs etc. o
Balanc: for wage, over-heads,
lisco Limits, profit: etc. T.
The price lists of local products displayed in local newspapers some time: igo are ra rely scen nov, including those from the manufacturers of reputed products.
Local Illilufacturers of bulbs have taken refuge in that favourite resort the world market to increase prices. The major components of the local bulb are imported and the import prices of these raw materials are dependent on world II larkets. The local raw materials (inclusive of
22
colponent and highly profitable
could be locally B tutes a file type of local technologica not geared. Hy w the logical and step for the in industry and wo approximately 8foreign exchange ! production of the tory tests oil loc: shown that they purpose. If, i to : cally viable bulb of the production We should be a foreign markets.
The Bisc or w the 'cap' which is not necessarily b since the life of : bulb is comparati respect, local pr menced the user)
thereby reducing
There tire twell who among then local requiremen to 5, Hnillion Luri bulb factory coil in 1961 with a has two producti duce approximat units per year of
 

tute only approxie finished product,
imported.
- Ur "shell”. Covers foreign exchange
til Erics
Hssafir Firgsjörg
구 2.87
г.5 f I.5ն
would constitute it local industry if it wn. This constiblowing for which I know-how is yet "ever this will be Il-vitable: LILLITE provement of the Lill lee leLeerl 3 lillil rupees investinent for local sÉleli, The laboral siliā sāls hīlī are suitable for the set up an economi"shell”. Init, Part has to be exported. le to Hirid suitable:
litis rFred tš I usually brass need so indestructible household electric vely short. In this lucers have Coillfan aluminium cap
St.
ocal bulb producers 1 supply an annunl t of approximately its. Te Est ljil menced production pını ese: capital, Sarıcıl оп lines. They proely 2 to 3 million I - Iowatt bulbs.
The second bulb factory was established in 1969 and had all excess capacity due to which they had Eo cut back on production. It's annual production on a single line is about 2 million units or approxiliately 40% of local requirements of 25 - Igo HHHHLLLLLLL LLLLLLLLS L LLLLLLL LLLLHLLLLLLL agreement with a Hungarian firm. These companies are both privately owned. However, the Government in kccping with the practices at that time, had approximatcly. I5 - 18% participation in the former company and a government Director sat on the Board of that Company. Both companies were run at a loss for the first few years due to various factorshigh rejection rate, poor quality of gas being available, etc. However, both industries are today viable and are Imaking profits-the latter having yet to cover up losses incurred earlier while Ehe former h45 declared di Wideilds of 6-8%, after the initial tax holiday. The capacity of both factories together is over and above the country's total requirements; but it was envisaged earlier that with the process of electrification of the coultry, they together would be able to nicet future requirements. It was also thought at the title that a monopoly in this sphere would be econdmically unhealthy.
A Wicious Circle
Thinking on the local market is based on the theory that the expansion of this industry depends generally on Elle prosperity of the country and : vicious circle starts operating here. Until consumption increases no exPansion can take place. For coilSumption to increase-costs are too high of (a) initial costs of electrifying houses-e.g. cables, switches, holders, incters (b) initial electricity connection deposits and tariffs and (c) bulbs. Approximately only 12% of the country's homes are electrified.
The local industry has also done little to explore tie possibilities of an export Ilarket. Some negligible exports have been done e.g. to the Maldives and ships calling at the Port of Colombo have been given their requirements of IIo volt bulbs. However very much more remains to Ec dome jf We are to make a mark in international markets. The present low capacity utilization demands that
this avenuc be explored.
ECONOMIC ELLY DEY, OCTOBEEL 1975

Page 25
Agriculture is
PASSION FRUIT
The need for introducing new or non-traditional crops that would not Ճnly satisfy the nation's demand for food and indistrial raw laterials and for increasing employment, but also aimed at diversifying a vulnerable export sector heavily d-pendent on a few products is no doubt compelling and urgent. Some of the programmes undertaken to expand the cultivation of such crops have on the whole achieved good progress especially in minor cxport crops. In certain others, however, inadequate planning both in respect of short and longter Erl require theits has led to discouraging results. The story of passion fruit is a case in point.
Since 1970 considerable effort was nad Lo induce commercial cultivation of passion fruit. Foreign Tilmarkets; were held to bgc Fawr, 11 Table. and assured. A Swiss Firm, according to authoritative sources, contracted with Marketing Department for 3 zo tons of passion fruit juice in 1972. going up to 2,000 tons in 1976. It was estimated at that stage that an cXtent Of allit sia a cres were required in 1976 to meet the contract demand. Market prospects were claimcd to be promising indeed.
The Cultivation of the Crop om å commercial scale, how cycr, was new to the Fatmers and it requited continued effort by several government departments to popularise the new Cultivation. The Departiment of Agriculture offered generous technical advice to cultivators while the Marlicting Department gave a guarantec of purchase at a good pricc (35 cc.nts a pound). Further, the estate owners "wyere: given ai:Iı o u tright grant of R.s. I, Coco - Per acre to convert unLLLHLHHLHHLLLLLLL LLLLL S LL S LLLLLLLlLLLL LLLLLLLLS LLLLLH passion fruit plantations. Even the rubber replariting subsidy scheme was modified to permit cultivation of passion fruit as an intercrop. These incentive schemes and the promotion drive were based on the assumption that a World Market has been established for our passion fruit". Efforts are now bearing fruit, The coo acre youth scheme under the
ECO C3TC REVIEW, OCTOBER Ig
Tall Cliss located at Yatta this crop. Several (e.g. Lassanagan also grow Passio) An estimated 5,0: are grown today
thic country in ac lumber of sillall
as an intercrop, season the daily Marketing Depa
Tegion of ICIC, CCC
Success leads to awkward situatio
This phenomen ever, put the Mai into a very awkw. Anticipated foreig Ele III contra buyers, for reas liliwil seeill no Lir fırılır. "TC) a third of the pas in the country cou foreign and local keting Departemer ntles to buy at th all passion fruit Though the fact has the capacity te quantity received cesses only the an marketed locally part of the purch the private sector is L5 el #5 i Ilirleri Sector to P Forcess t the product them cer Lil Filar FLL the Department i process all what keep in storage ( kept only for a ye för IT).
It is unrealis, Eic keting DePartime; continue buying which it cannot it continue with Sl sugar) the private indefinitely. In th such practices m: protect the produit invested in the tr. see that he dies future promotions not dl that evren1 ir. nuing market L.
 

biller’s
Department batha specialises in Co-operative Farms La at Deira niyagala) ಇಂಕ್ಜ scale.
] Cj RET-35 [1] passion in various parts of Edition to the large farmers growing it
During the peak
purchase of the tliet i ii Lfruits.
all success, has lowketing Departinent ard situation today. in demand and even its with foreign ons precisely not longer to Work in lay apparently only sion fruit produced ld be disposed of in larkets. The Marit, however, ContiLe guarantccd Price Dered for sale. Jry at Narah.cnpital 3 process thic critic it actually Proout that could be and externally and sg i5 divert-d ti
A stagir subsitly tive for the private Hc Fruit aill: ITizirket selves. Being illremarket situation, s not prepared to is bought up and the juice could be är Cor. Sc3 il Curlined
to expect the Marnt to indefinitely
the passion fruit market. Nor cold lbsidising (through * processing plaпts c immediate future y be necessary to er Who has already p and especially to
it lose fill in Il campaigns. It is the facc CF coltiEl certain tics, here
apparently is no official policy yet to discourage further expansion of cultiya Lion of passion frLiit.
Several strategies are available to at least partially solve the problem. One would be the launching of an intensive campaign to market the products locally through attractive prices to the consumer (Marketing Departinent has already reduced the price of passion fruit cordials). Authorities could if necessary stop the local sale of other jams and yli: already have better marketing outlets in other countries. An alternative which obviously is crucial from a long-term perspective would be to Lundertake Amillediate: G 1c intensiwe drive for foreign markets, especially through effective bilateral agreements. The possibilities of direct contacts with independant foreign buyers may Berhaps be an area Worth exploring than relying essentially on large firms. Our products ear-marked for foreign Tiarkets should miro do Libt be coi lista litly of a high quality.
That market research at the early stages of nationally promoted new ventures is a pre-condition for success needs no elaboration here. Such research should be of a continuing nature in order to assess periodically the changing facets of the International Tiharket situation1 especially When the new programme relies heavily on foreign markets. While research should supply the Planning Authorities with accurate data and Projections om which to basic Programmes, the planning itself needs to be realistic in respect of possible changes in demand, particularly in order to build up safeguards for the flew Programme. To take an example, if the organisers of the youth scheme at Yattapatha took such built in safeguards in planning, they would have based their farm plans on two or more crops capable of spreading the risk rather than relying solely on a new crop. The necd for realistic and accurate assessilent of Illicket conditions is thus a pre-condition before launching new programmes, the absence of which may lead not only to considerable loss to farriers (e.g. those who took up to cultivation of crops like manioc, Sorghum, cowpea, ctC.) but more seriously to a loss of confidence to undertake any such futurc programe5.
23

Page 26
MANAGEMENT
Taking the Shock out of Retirement
THE transition in the personal lives of all employees that his often the Hracteristics CF a shock and tri Li Tiña is retirement. One week in climployee is working eight hours a day of more, in the next week he is left aimless and almost considered without
"Falle.
In the traditional social and economic order of countries like Sri Lanka there was no sharp division between the working life and the retired life, just like there was no sharp division between the working day and thic leisure, both Tierged onc into another. The sharp divisions arose with the introduction of flew techniques within the last century OS.
In the Western countries where the movement towards sharp divisions and regenentation of lives firstirose, there cists now a reverse tendency. In the ficlid of working day, there is a more towards Flex-time which in its treatment of the working day his similarities to the time in the traditional tாற்.
Many Western countries have now begun to introduce the same philosophy into sharp division in working life and retirement, They are low advocating a phased gpproach to retirement. "Someone who has worked for 40 years has almost got to learn to relax to get out of the work routine' states the Personnel Manager at the U.K. Pharmaceuticals Firm. Glaxo Laboratories Ltd. Glax is one of several firms that have introduced "Phascd retiretment” PIOgrammics which give employees a preliminary experience of life without a full time job. As Glaxo employees near the retirement age, they are gradually given increased leisure time över a long_Period, which may extend from months to even years.
LLLLLS S LSLS SLLSS SS SKS SS LLSLSLSLLLLLLLLLL Association and its Chairman, Dr. H. Beric-Wright states "two factors have recently promoted interest in phasing retirement. First is the growing involvement of the more far sighted Pensions Departments in the general welfare of pensioners......... the other is thic resilisation thirt retirelent at
24
1rly ag: Pri5ts Company and f Both 11:11, a to it: and replacements retirert III like easier'.
Enterprise Pr. 5itiÇını of Frenli calculated that th
Eir: II be guite small. I a programline th employee is red his salary drops steps, the workin declines to 50% whilst the salt However, Phased corne under criti the Prile M caraticcessory Firt feels that Phase fair to the perso Wellis his Suce People relax in t ci 5ci ildə "Tırıcı re comes in only week, people dor They regard hin Phased Retirelle However many
it Havaci riccarde French Heavy Turbo Tierra intri PELS RETI employees in Is enter the phas abrupt retirene the employee.
Althcr Frent Lice the new sch St. Her: tij si of G receive :
Feliĉe, fiĥaj-ge! பரந்து திச் grgii-ratiorir ir Heidriia, fit
is
F
Lrgriffffförf
 
 

problems for the E lic individual. ake | rc-adjustiilients in activities. Phased
all this very much
Igress-the Organih Employers has c cost of instituting cnt Prograllie will They have suggested at begins when an iced by 15%, while by 5%. In similar g time progressively at the age of 64 y drops by 25%. | retirement h:15 till:50 cism, Mary Welch, anager of the U.K. 1, Joseph Lukas Ltd. -Retire Telt is not in who is retiring, as ssor. She feels that heir last years in any over, if the retirec yne or ty o tilles :1 it take him seriously. in as retired already. nt is a ............... ?“ firms that have tried Hi a success. The Engineering Societo Ėjeduced a voluitary rt Schelle for its to. The decision to el Schlemme for the it system is left to
th company to introre, is Gillette France ployees over the age additional weeks as
* Grig Bre i A: frg:
lCCCCLLLLLLL u LLTLuLGkLLLS TT TS TTTTTuS HLLTTT SYHT kkT S TuLLS LuCuS uLKTL CuS TCHHLLLLHu TTS T L Lu GT uu u uu uT T CTTMLYTS Tr ரீதி: r ஐந்து ஒர் ##ர்
*5e 19* ErigFerry. ாத
蕾
LLLLLCCCC LLCLLL CLL TTS00TTTLLS LLLLLL uuTLlumLLLLLLLS HCCTS LTTTTTTLTLT
』
holidays, starting with two extra weeks in theit 61st year indi rising to zo extra weeks in their 65th year.
Organisations who have experimented with this field of retirement, which is phascd has adwantages because it allows a smooth succession into the retiree's job. This allows for an organisation to be sure that the new executive was capable of taking vicr bcfare the till executive Tetir Cid. In this process conflicts over authority or sharing out the work his not generally occurred, for, by the final stages, the retiree is hardly in the organisation enough of the time to keep a tab on things.
When the phased programme inplies 蠶 taking oft time during the working day, some conflicts with efficiency could arisc. At Turbolteca for instince, the er uployees chose when they take their time off. One might opt for two huts it day, LLLLaLLLL LLLLLLLLS S S LHaLLLLLS aS SS SS LLLLLLLLuS LLLL raildonness in this procedure inevitably creates conflicts with production line efficiency.
COf the schemics which have becn voluntary, phased retirement generally seems to be popular with retics.
In the case of developing clintries like Sri Lanka, which have many systems if time in their work places depending on whether the work days belong to the relatively modern sector (officks, factories etc.) or the traditional (paddy cultivation ce.) lie have been adopting too sharply diferent tine scheduling systems, With the Hilošt : divinced Woote:ÉIl techniques now shifting the time Scheduling systeris nearet the traditional lethods, it would be advantagogus for is to examinë these new techniques favourably, for they seeith to be retirer to turi existing Patte:Tls.
diffir TIILI (Fxiffrr:Fillir rangé parff
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Page 27
FEATURES
Colonialism,
Neo
Underdevelopment
W. SELWA RATNAM
Colin Leys, Underdevelopment in Kenya: The Political Econ Neo-ralaisialisry, London, Heineman, I975, 284 pp. 4 F
r
The relativé #rderde Felaporerif of corrurier liée Sri L. tipo decide after their independence i fe fijer
analyser, Carsegrently the idea of the 195 or and LTTLCCLTLLL LLLLLL TGL J LGTTGGGGlCGGGLCL LCL LTGGCuD LTTL LLH GGS GLGCCCu CLCTS TCHHLTS S CCC LLL CCCCCLCLS book y Colin Ley “Colonialism, Neo-Colo Underdevelopment in Kenya, published his LCTCCCL CL JS S SJSSS LLCLLCLLCLJSS LLLLLLLCCCCLCCCGCL LTGLCSS HHLT TLCmTT TCCCCCCT EL TLGGGuCGCLJLCS CCLGGGGGLS து Er:ார் 4:irror, Uர்சார ஆf Mal
A continuing and deepening situation of poverty and a highly unequal distribution of income is the most terrifying reality faring many Third World countries today. Many developmental social scientists of the 1950's and 1960's attributed this phenomena primarily to such chronic internal factors as lack of capital; poor planning; economic co-ordination; technology and know-how; rapid population growth; and investment climate. They stated that the problem of Third World poverty could be
and orienting and incorporating the economy of these Third World countries Within the fra Ine Work of the world (largely western) market and its economy. The major role in achieving the targets in this developmental process, according to this thesis, must be played by the Westerneducated or Western Oriented middle class who they say have the 'universalistic characteristic of being 'rational' in their conomic outlook.
Many of the Third World countries under the guidance of aid-giving countries and 'developmentalist institutions have toed this "conventional development theory for at least two
ELDFCIMIC KEVIEW, OL-TUHER 1975
decades. Howey Rostowian "Stag emerged. If anyt a widening gap rich and poor c. both the rich i. themselves. Wh within the Third that there is alongside parasiti tion by the bourg
ilenon was poi
theorist5 likc F
Gunder Frank, contained and possibly eradicated by successfully attracting foreign capital
Osvald Sunkel, in terms of the I nonic dipend: lopment theory a to the world capi
Colin Leys” situ steps of these in Based on the 'underdevelopme theories the studi of the "coil well talists' prescriptic in Kenya since dience in 1963. Kenya a continu poverty and ineq the country is pe inically subordin: of international
 

Colonialism and
in Kenya
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er, nothing like the es of Growth' have hing, there has been irl wealth betwcem ultries and within ind poor countries it is also significant World Countries is тla SS pauperization - forms of consumpeoisie. This phenoited out by social alul Baran, Andre Charles Bettleheim, KLİndi Samir Amin, mechanisms of "ecoe' :Ild “LandrdHistoreld their relationship alist system.
ly follows the Foot*W. Social theorists. ra The Work of the it and 'dependency
explods the myth onal developmenls for development Es fornal indepenhere has been in Ils reproduction of ality; and above all itically and econoed to the interests nonopolies. The
general theme of Colin Leys is that the und ordevelopment of the Kenyan economy began with Colonial dominition of Kenyal when its CCOOlly was moulded as a dependent ссопопу to the metropolitan economy. This was carried over into the Postcolonial era. This process of underdevelopment has climinated in the early 1970's to a period of uncertainly monetary crisis and the risk of recession’ (D. 275). The direct result of this underdevelopment is widespread and increasing income inequality, insecurity and the Irating of a feeling of inferiority anong the inasses.
What are the main forces which have contributed to the underdeve蟹 of Kenya? Under colonial
e, European Capitalists becamc the dominant group and they moulded the Kenyaп есопomy. The foreign gapitalist relations with Kenya Were initially in commerce and trade and “the essence of it was conducted on Very unequal terms, namely that it was backed by superior force on the side of the capitalist traders. With the introduction of direct colonial administration, the administrators en: Couraged the implementation of rational capitalist forms of con modity production on the undevel loped traditional and pre-capitalist Hacid is of production in the form of Europeап-own d, managed and protected coffee, tca and sisal plantations and still settler farms. This was followed by European-owned and operated banking, commercial and manufacturing enterprises which further reinforced European economic power. An Asian, largely Indian, comprador otrgirie too developed. They were the more important finetionaries and they were completely linkcd to the metropolitan bour
25

Page 28
geoisie. At the bottom of the strata were the African peasant producers and wage-workers who were com
pelled to work for their European
masters "partly by Force and partly by taxation, and partly by preventing them from having access to enough land or profitable crops to enable them to pay without working for wages” (p. iio). Thus by the middle of the 1920's, more than half of the Kikuyu and Luo able-bodied men who were independent peasants had bc.cn. converted into a wage earning proletariat.
The first significant factor is that colonialism and the introduction of metropolitan capitalism, not only developed and perpetuated an unequal exchange between the Kenyan economy and the colonial metropolitan contres, but made Kenya play the classic role of a country at the criphery of a capitalist systeril. his capitalist development, in other words, integrated and locked Kenya and its economy to a world-wide net work of commercial, financial and other subordinate relationships such that it was difficult to extricate it from the world capitalist system, Thus this system was carried over almost intact into the era of postindependence.
What is interesting is that colonial domination and exploitation of the Kenya economy brought about significarit Feat Life5 within the colonia|| structure of Kenya. There developed a class, Ferrimatic II whichi malrý refleûtel a colour line. The Europeans formed the bourgeoisie while the brown Asians were the comprador class. They between them also gave rise to the petit bourgeoisie, At the bottom of the social ladde vere the Boulk of the black African peasant and Wage labourer.
In the colonial period, Leys points out, European plantations and the less capitalized white settler farms, in order to be viable, needed not only cheap labour but a lore elaborate system of state support. This was donc through a highly claborate system of propagandization of an economic ideology which fostered the myth of the importance of EuroPean agriculture to the economy. This enabled discrimination against the African peasants. In spite of this, the African peasants were made to pay the bulk of the taxation while the
26
Europeans were benefits of the g expenditure Frog railways, road, extension service additioд Leys pс EuroFeins werc CILI SETTS; EL TIES I Privileged access ti :aridl intern1:11 m:1 organized and reg degree of monopic
The economy particular Europea population thrivec Prosper con the b; of the population Wage-Workers so modity prices rem the prosperity of SCctor also depen GTT8- Howe קXט collapsed during pression European and the economy
The transition economy (C) a fleo started with the Sccing World W. only granted a repr cconomy buit, after considerable com pecially dic partly international ci created a sustained yan commodity ex nullEd into the II Leys points out . prosperity enabled talistinterests to m ications the ecc. necessity of radi yler the Miu M and the Africnn.
lationalist and a IIlents began to de fore foreign inves secure in the lights to ownership and Within Kenya. T. talist responded
IllultiTel New 1959 Ind-r the lea (later Sir Michael surprisingly they acci jimmodalitic li inti viEl African l:id becomic the ruling expence of the w However, this ecc. of the African par as long as they accept the private

given the entire vernment's public Hummes — like the: chools, hospitals, and sab qbil Irn. ints cut that the lbsidized through l were also given profitable external its rich were Ilátor Linder 501Tle Ly.
F. Kenya and in 1 : Initial and settler and continued to siis of exploitation as taxpayers and it as world Comained high. Thus he non agriculturc led on commodity er, when Prices the I 923 - 33 di::-
cEnterprise suffered
stagnated.
CF the ciclorial -colonial confly
outbreak of the it. This wif not teve to the stagnant thic war it enjoyed mic expansion, es
to investments by rporations. This | demand for Kenports which conti50's and 1960's. hit this economic the European capiake adaptive modinomy without the cal reconštriličiti:Jfi all political crisis
mass - supported Inti-Foreign Thovefinistrate. ThereEllents beci.Ilie inf the African desire
control of capital he European capi
by forming the
Kenya Group in dership of Michael !) Blundell. Not
were prepared Eo 1 seek in allinice irs who eventually class, even at the hite Farm settlers, in Comic accepta IIce tiner was per II liittcd were preparted te -enterprise systern
of the European and to allow then to stay in Essincss. But this alliance was always in favour of the European capitalist and therefore they continue LLLLLL LLLLLL a aLaLLaLLLLLLL LLLL LL LLL Kenyan economy.
Thus Independan1cc and Africanisation was a shall and a dic to kccp the colonial coconomic structure intact, and in reality, Kenya became a neo-colonial country. The African small businessmen were given special assistance and later protection against Local Asian businessmen and ligt at the expense of foreign-based investors.
LLYS S LLLL S LLLL S SSLLLLLD S S Hul S S LLLL SL S S LLL LLLLLL S S LLLSlHK LLLH HH LLa S SSLLLLLL petit-bourgeoisie, ensconced within the general system of protection and minna Pöly, in such a way als to ser We: and completinent foreign capital and not to replace it" (p. I49. The system therefore perpetuatd foreign import houses and foreign-owned LLLLLL S S L LLaaLaLLaLLLLLLLS LL LLLLLL a L S L LS teresting is that African small traders through stat: supPOtt,
"......learned to make their profits through illonopoly, in some cases Edding no value whil tever to the goods they handled, or even redicing their value. In the most successfull-that is to say, the most thoroughly protected cases, they could best be regarded as ling an extension of this parasitical system, receiving a coininission on turnover instead of a salary. A new and politically powerful section of the "auxiliary bourgeoisie” EO bc provided with a share of the national surplus.
.3);
More illportantly, the system also LLLLau S SSS S SSLLLLL K S SLaa S HHueu S S S LLLLttLLL LLLL capitalists who had considerable Political power. Foreign capital, finding these African bourgeoisic indisper5:1 En la tri Fihir ovifon ili terestis, stir:Luck
alliances with him in a Liller of
Forris. This thise Africans were made agents, partners, ctr, by foreign enterprises to pro vide political patri.Jimage and protection in return for a share in the profits.
The African Peasaint mode of production became Timore and III libre dependint on the Foreign-dominated capitalist mode of production. The capitalist sector provided markets for
LLL0LOLOLLGL LL LLLLLLLHukS LLL CTHLLt

Page 29
peasant products and gave opportunities for peasants to engage in Wage labour to supplement their linnited ineome from Their far His. Leys points out that the continued survival of these relatively low income generating peasant modes of production helped to subsidize the capitalist IIlod: of prodiction in two main ways:
"One was that they provided a direct subsidy to wages in the capitalist mode of production: "competition (for work) permits the capitalist to deduct from thic price of labour power that which the family carns from its own little garden or field. The other was that they supplied agricultural Cormimic di ties at very low PriCCs relative to the prices of the manufactured Produ CLs sold to the Pealsalts and wage workers (p. 17).
Leys' thought provoking and topical StU idly argues that indipendent Kenya LIIlde th : Purview of foreigil d'Hiilite deconomicinstitutions and Planners has not solved its economic and social problems. Instead, economic LLaLLL LLaaLLLL aaaCL LS aLLLLLLLaaCC0 KL LL LHa LLLK increase is a result of the growth of capitalism and the gradual disappearance of traditional society. These LLLLaa LSKS a L S a S LLLLSLS S SLLaLSLL LSLLaaLLaLaL along class lines which in thic past have been explain d'extensively in LLLLLaL SLLLLL LLLL LLLL LLLLLLLLS LL LLLLLL SLLLLLLLL LLL LLLLt LLLLL LLLLL L LLLLL L LLLLLL are sign3 ofan Overall radicalization of the working masses,
Colin Leys' study is a brilliant and lucid historical, sociological and cconomic analysis of the mechanisms of LLLLLL LL LLL LLLS LLLLLLLHHLLLLH LLL their exploitative process in the Kenyan economy. This classic study is not confined to Kenyan alone, in its implications. Other "undedoveloped countries in the Third World can draw from the Kenyan experience. The dipendent und rdeveloped'' countries have only one reins of discarding the continuous process of und - divelopment and that is to make changes in their social strucLLETS.
EEDSATTE REWE W, OETOBER Tg75
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Illich, Hilt:Hii: thinket, has II: impact on Thi during the last d innovative perst of prominent whose roles W. gram Lecl.
Born in Wicill di-Errate in hist siEy of SolzH3Li rg the U.S. W. in II, äIl A:i::It Pir Bill P: City. He was Citi Linier: Where he orga training Center Who Were to do Latin America, was the C-fill CIOCC)C-Cente:Tl DCullentation i. Cğı, The 5emini hitre:tchievcih vir
Hi reseri ; tional Alternati, Society' had sp. Altrica. It is CJELICETI, äi Ill idirill Immen. Es ad effert
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ILLICH
HOOLING SOCIETY
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Μεrνία. Μεθύα, ο Αντίτλ. Κατά τη Ουλοχλία.
5 a deeply stimulating La le a crisiderable rd World thinking ecade, H. Elias given lectives a fud a Tillyses
social li l-istitutions, sre long takel for
2 in 1926, he hills a ary from the UniverI Having come to "5, II, h.e. His scri 5'dis Istor in an IliristTil New York
Wic-Rector in the sity of Puerto Rico nized an intensive or Nimerican priests cvangelical work in till its culture. He 1çler of the Famou:
for Inter Cultural In Cilleri:ayici, Mexir: he hi5 conducted Hespread recognition.
emiflärs = []n "Institu = "es to tcch1T1D, ogical cial Focus in Latin
with his exter site lysis of life, requires of Latin Arnerica, za IIle widely Televan E.
LLLLLL LLLL Laa LLa a LLL LLLLt tLLLLSSSLLLHLLLLLLLS His incisive observation in whit is considered good for developing countries, both by themselves as well as the developed countries, necessitates funda Dillental re-thinking abolit marily filiiliar institutions aid efforts.
The two mos Limous boksa til thaored by him "De-Schooling Society'' (Harrow) and 'Celebration of Awareness” (Penguin) published in 1969 and 1970 contain what is referred to as "A call for institutional revolution'. His Favouritic institutional example that needs to be radically ilnovated appears to be the Schools. “Elis assault on the Schools. demands to be considered seriously'.
In his Foreiwerd to “Celebration Of A Wareness' Illich states "each chapter in this wolu IInc. records an effort of mine to question the nature of some Certainty. Eirith therefore dicals with sorune deceptior1-a d:Ccption1 embodied il Colle of our institul tions. Institutions create Certaintics, and taken seriously, certainties diaden the: het;irt and shackle the imagination'.
In view of the fact that schools
have become Universal institutions, practically following the same for in
27

Page 30
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and trends, the interest in educational over-hauling or drastic reforms draw globalintcrest. In all countries cducation is considered a criticalinvestment for development. It is considered a panacea for development too, Many countries have pursued policies of expanding schools and teachers with great determination, along with their population explosions. But as we in Sri Lanka are well aware, the quantitative expansion has created more socio-economic problems, 器 Ol trary to the expectations of development, through a mechanistic imitative educational process.
Illich raises profound questions about schools. He argues that schools all Over the world Hayc ni intieducational and polarizing effect on society. According to him "schools confuse process with substance, teaching with learning, grade advancement with education, diploma with competence, fluency with ability to say something new. Teachers because they sell a packaged curriculum becomme merchandise distributors. Pupils learn not because of the teachers but because they are motivated by the stick or the carrot of a career''. Hence he urges that the schools should be disestablished and the society "deschoold".
He does not use the word 'school' in its commonplace meaning. " 韶 School of course I do not mean all organized formal education. I use the term 'schools' and 'schooling" here to designate a form of Child-carc and a rife is passage which we take for granted. We forget that this institution and the corresponding appeard on the scene only with the growth of the indistrial state'...... "Schooling implies custodial carc for persons who are declared undesirable elsewhere by the simple fact that a school has been built to Serve thcm.
28
The School is su P excess population the family or the
'Schooling also of accepted ritual C. members of a 's Schools select those succeed and send t with a badge m Once universial edu as a hall-mark for a society fitness is allout of time an formal education than ability acqui from an accredit
Once educati, the product of sc education gives t something spuriol certainly unaccredi
Hic questions the obligatory univers People in EpooT na rich clough to affo other countries at as if they al Te.......
"...... Before pc. reach this point o! ing, however, thei would be ex la LIS twelve years of sol 85% of all men of happer to live out: where capital accu in Latin America group get beyond do more than I'} University. Yet spends less than 1 : schools and many 50%. Universal concept has been societies, is Cabo Vit ITEHT15'.
Even within : like the USA, wh fundling is Proy under policies of opportunity for child rarely can c one, because the lacks educational as travel, books which are "casual latter; both outsid "So the poorers hind so long ash for advancellent

losed to take the from the street, Jibour force......*
involves a process ertification For all chooled' society. : th:LL are bound to hem on their way Arking them fit.
|cation is accepted
the ill-inchbers of measured by the d money spent on in youth, rather red independently tel' curriculun'.
n is regarded as hools, unsch Colled he impression of s, illegitimate and ited.'
value of extending all schooling to all tions, ''U.S.A, is rclschools but I11 ost e mot buit behave
por nations could FUniversal schoolr ability to cducate ed. Even ten or hooling are beyond our century if they side the tiny islands mulates. Nowhere do 27% of any age the 6th grade, nor e graduate from a rico Go WeTilment % of its budget on spend more than Schooling, as this lefined in industrial usly beyond their
ni affluent society ere massive public ided for schools,
equal educational all classes a poor itch up with a rich former in any case opportunities such
Conversation citc. ly available to the - and inside school. tudent will fall be: depends on school or learning. The
poor necd funds to enable them to learn not to get certified for the treatment of their alleged disproportionate deficielicies'.
Obligatory schooling not only creates distinctions within a society but also "grades nations according to an international caste system' by making a country's educational dignity based on thic average years of schooling, "a rating which is closely related to per capita GNP and much more painful'.
"Schooling", he argues, does not promote justice or learning because, schools try to combine both learning and assignment of social roles, which should be two distinct functions. This happens due to the certification which imevitably follows al Programmed curriculum and is insisted upon for most social or professional roles. Competence should be detached from curriculum. Further all learning is not the result of teaching as "most people acquire most of their knowledge outside the school'.
"Certification constitutes a form of market manipulation and is plausible Conly to a school di mind. Most teachers are less skillful, less inventive and less communicative than the best Craftsmen or tradismen. Experiments.........suggest that many young teen-agers, if given proper intentives, programs and access to tools are better thin most school teachers at introdi Icing their Peers to the scientific exploration of plants, stars and matter
In his essay, on 'Ritualization of Progress' (in Derloading Sariety) he cludidates the social cffects that the school system creates. "Certified Collige graduates fit only into a world which puts a price tag on their hads, thereby giving them the power to define the level of expectations of their society. In each country the amount of consumption by the College graduatics Scts the standard For II others”. Graditë:8, become models for consummer standar d5, and the modern paraphernalia such as cars and tape-recorders, turn out to be their visible indicators. This is a new function Universitics have d:velopcd. Further a University graduate usually feels more comfortable with his North American and
ECONCIKLTC REVII.W. LICTOBTK 1971

Page 31
European colleagues than with his non schooled brethrelandallstudents are academically procesFed to be happy only in the company of fellowconsumers of the products of the academic II nchine.
"The curricular instruction gives students a programmed or fragmented view of reality. It also alienates young people, preparatory to life by depriving education of reality and work of creativity'. Although most learning is not the result of school teaching, "once a man or a woman has accepted the need for school, he or she is casy prey for other institutions...........
Illich does not stop with his provocative analysis of the school system. He takes much interest in suggesting alternatives, which arc specific and also fundamental. Hic agrees with some contemporary analysts about the niced to diverting the state appropriated funds directly to th: learners. Ultimately there should be no obstacle for anyone at any time of his life to be able to chose instruction among hundreds of definable skills at public expenditure. He suggests issuing atin “Edu-Crcdit Card” or educationil passport to cach citizen at birth, so that they may acquire the needed learning at their convenience with less undesirable side effects thin a school. In order to favour the poor who may not use their cards early in life, interest should be ided to them. This will cnsure more just distribution of educational funds among all citi2
Prior to setting forth his detailed innovative proposals for learning, in his essay on the Institutional Spcctrum’ (De-Schooling Society) Illich states "we ced a set of criteria which will permit us to recognise those Institutions which support personal growth rather thin a diction, 15 Wallis the Will Lo in West Our technological resources preferentially in such institutions of growth".
The choice he has identified as between two contrasting types-(A) Manu pulative Institutions which are: dominant in contemporary society. These specialize in manupulating their clients. (B) Convivial institutions which are distinguished by spontaneous use and which do not require
ECONOMIC REVIEW. OCTOBET 1975
hard pressure on Examples are Pu phone link-ups models occupy c. tutional spectrun as right to left res) fall into the right Of al “false utili IIhost insidious. produces only a A schools system for thic entire set tions which crow of the spectrill. tioned the Ileed f be written of as a who questions the immediately attack less or imperialist. establish col teacher nological wizards: liberation Illower C) In IImiiitmart of Lili the fundamenta schooled world, Ilanırler that III protest movencilts Illiment of their black, female, yo seck justice throu the gross national
I le observics thit institutions are at teachers' goals. F Lires that have to throsic that will ei define himself by contributing to the His proposals are a new kind of educ between man and
I intend to sh of the school is pli depend on self-r insted of emple bribe or compel t) the time and they can provid: the links to the worl nuing to funnel a grams through a t
There are three educational system rates its follows:
A. It should pr to learn with TCSOLITICES lt lives.
B. It shoull im to share wh:

lients for their use. blic markets, telet These two tremies of an instiwhich he describes pectively. "Schools ind of the spectrum. tics' School is the A highway system dermand for Cars. Čft:itČS i de land of til Codictim institud at the right end A man who 미미 - Dr highways would ronin antic, thir: Thanlı 1rted for school is :ed aš either heart..............' 'The 5 Unions, the techind the educational ent reinforce the le entire society to I lixioms IF å somewhat in the Al Peace ani I reinforce the cornIllembers-be they Ul? DIT POOT=LO gh the growth of
il Corneo,
it OLIT Educational the Scrice of the wetter the strucbe developed are able cilich nilai to learning and by learning of others. inteinded LO Create itional relationship his environ lent.
"Y" that thic inverse Issible thit we cari 10tivated leatining ying teachers to Le students to finl ll to ltHrn: that we earrier with revi
insteid OF Corti Il educational ProElcher.”
urposes of a good which he enline
vide all who want access to available äIl y tire in their
rove all who want they know to find
those who want to learn it from thern.
C. It should furnish all who want to present an issue to the public With the opportunity to make their challenge known.
For this hic proposes four channels which will contain all the resources needed for real learning. Things, models, peers and elders are the resources that will be utilized in varied Wys. Elle Lises the term “lcarning webs or networks for his methods. The new educational institutions should start with the question “what kind of things and people might learners want to be in contact with in order to learn?' The four networks he suggests, as new educational institutions are:
A. Reference services to education
all objects. These objects Πl:11 be in laboratories, L'ILISell ITIS, or in factories, farms etc. B, Skill exchanges-which Permit persons with skills to shire then with others, by providing information about themselves. C. Peer-matching-a COT 11 municiiĝitions network which enables persons to announce the learling activity they wish to Engiքe, in the hope of finding a Par Eller for the inquiry. ... Reference services to educators at large-a sort of a directory SOLITIC:
The cducational administration needed for these will consist of three areas of Competence:
i. to create and operate the kinds of educational exchanges or netWorks outlined ii. to guide students and parents in the use of these networks. a primus inter Pares to undertake difficult intellectual exploratory journeys.
iii,
He also foresees the disappearance of the school-master and the rise of a vocation of an independent educator. His proposals are a distinct shift from the existing "Manupulative type of cducational institutions to the “Convivial type he suggests for the future. Thus de-schooling of society not only means digestablishment of the school, but freeing people from the shackles of categories created to view reality.
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Schools are not only thic "reproductive organ of a consumer society'. It has become the planned process which tools man fora planned world, the principal tool to trap Tian in man's trap". It is supposed to shape each man to an idcuate level for playing a part in this world game, Inexorably we cultivate, treat, produce and school the World Out of t:xisterlce.” The Critiquc and Proposals, though II lainly revolving round the current school systein, goes well beyond those confines and points to deeper and wir concerns about the contemporary world. The dilemma of institutionalization is not confined to the schools.
"Institutional goals continuously contradict institutional products. The poverty program produces more poor; the war in Asia, more Vietcong; technical assistance more under-development. Birth. control clinics ilcircase survival rates and boost the Population; schools Product Inor: drop outs and the cut in one kind of pollution usually incrcases another."
“Surreptitiously, reliance on institutional process has replaced dependence on personal good will. The world has lost its humanic dimension and acquired the factual necessity and fatefulness which were characteristics of the primitive times...... Man has become the play thing of scientists, engineers and planners.
Treatment flicted out to clients by professionals through their institutions, show steadily declining results, Illich observes that doctors, teachers, social Workers al realizetheir common factor-"they create further demands for the institutional services they Provide, faster than they can provide service institutions',
Illich illustrates how People have become prisoners due to the very institutions they have created, as they condition our World Wiew, Factorics, schools, hospitals ct.c. produce goods and services #ಣ್ಣ: to contain Our view of the world. Progress is treated as the increase of these institutions. Although industrialized rich countries can provide their citizens with packages of consumptive services, Illich argues, it does not mean that those societies arc "sane or economical or that they promote life." In most of
30
the Third World le. identified with the ability of material place in industrializ
In his c8 say dil ''' he says the cid re. Assistarice is that Brazil puts on the are denied good bus (2) every dipl. W..IT: ridi: oni la Ct. cost a hundred live: been spent on pro huntlECd5 Of livres saved. Similarly such situitið 13 ::
His perspectives Willic to the Thir we seek still inst initiating the insti
levelled in the
Ivan IIlich
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r societics. Invaria. to more misery be: appropriateness the
realities. Though tions may tend te visionary, the ove directions for thoug societies appears t
contribution.
Fundimental in thinking on matter for a long time di much enlight'n Ine levant paths we tri extract illustrates : in many developin of South America. workers who căn +
 
 
 

velopment has got progressive availgoods common
cdH societics.
Planned Poverty' ult of Technical (I) for each cair road, fifty people transportation by fır spent in Latinı irs and hospitals ị, Hitleich doll:1F viding safe water could have been the examples of Lill be increased.
arc of distinct World. Often, our problems by tutional solutions Wester industrial
froww.drлдогfed Fr
ly these have led ause they lack the ded for the local Some of his solu
be described as ill impact of new ht in Third World be his Foremost
uiry around retaken for granted is indeed provide t about thc - iree. The following COITm IIICJI I Iñistike countries, "Most Licedi parat medical inction for indefi
nite period without the supervision of a qualified dictor. Instead of establishing a process to train midwives and visiting teachers who know how to use a limited arsental of medicines while Working independently Latin American Universitics ewery year establish a new school of specialized nursing or nursing administration who can function only in a hospital"
Under-development, can be seen not only in material aspects such as less-food, less-clothing etc. Visible signs of being short of consumer goods is reinforced by the social institutions:'''
According to Illich “Indier-development is also a state of mind or as a form of consciousness is the critical problem. Under-development as a state of mind occurs when mass needs are converted to the damand for new branches which are for ever beyond the reach of the majority. Underd:velopment in this sense is rising even in countries which are for ever beyond the reach of the majority'.
Better Means Less
By pointing out the mistakes of the “advanced’ countries, Illich hopes to enable others to avoid the III. “ Above all’”, he says at the begining of this book Toor of Corriviality', 'I want to show that two-thirds of mankind can still avoid passing through the industrial age'.
Illich hopes that the Third World can take a different path from the presently industrialized countries. But he is not too hopeful. He fears it is being pressured, partly by its own professional elites, to follow a path which Will destroy its existing conviviality and replace it with tie tensions, additions, ånd sense of failure which characticrise industrial societies. He recognizes also that benefits for the poor demand a reduction of the resources being used for the rich (while benefits for the rich make huge demands on the poor). "Yet the rich pretend that by exploiting the poor nations they will become rich enough to create a hyper-industrial balance for all. The elites of the poor countries share this fantasy'.
ECONOMIC REVIEW, JICTIOTR FER I 97 y

Page 33
JUSTICE BY IN DE
by Alain Wernay
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A disagreement due to similar Ec:15015 CCCurre a molti beForeit Teheran during a meeting of Iraniam and European economists to examine global development problems. Even though the participants started out with many common premises, conLLLLaLLLLL S S LLLLLLLLLL00 S SLLLLLL S t LaaLLL the opportuneness and effects of a price indexation of raw materials as well as of oil. Referring to this disagreement, Professor Luigi Spiventa LL LLLLLLaL S LLLLLLaaLLLLLL SLaL LLLLL LLLLLL 0LSS nomy quoted a remark by Professor Joan Robinson, "It is difficult to Hirudi i black Cat in al dark TOIT, BLI E L LLL S LLLuuuLLLLL LLLLCLaL LLLLL L LLLLL LLL LL no longer there'.
Conferences end, but the problems remain. Ln view of thir importance for the future, it might be worthwhile going over the differences which arose at Teheran, even among supporters of raw material price indexation. Indirect Indexation
As for indirect indexation, which tends to stabilize the purchasing power of developing countries by providing for compensatory pay
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Sciveral viiriäitions but lone received These variations index of all Illi imported by the de a general index in Emanufact LH red groc) clutts Hill fuel brt loping countries: Hased sin rine fjf mulas but only a cular developing C Should we go ai ITILEF TE1-Te is lo " Ht be better Lig als question which Tlalnly III lista. Il CCS: main road to devi I should like tij it secrims LI In realisi prime importance Hetts CF i Tiflixiä developing count are closely link common experiento pendence, and in dependence, but

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ing a certain price in the market, it the grounds that correct the ''pilunresOLIECCsald i5 cr to control the of thic I 8 Principal Il dit net Hole: neceswith at least SI 3
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dexation of exporbased on the price orted goods stirred erning the selection import price index. were proposed, majority support, were: a general nufacturcd goods veloping countries; tluding as well as ds, the food ProLight by the deveirld Other irldices the preceding forհplying to a partiountry commodity, ly further into this way out? Wouldn't k the funda III:I til lliw sa Tises i Il so iki ild-xtil the: elopment?
make it clear that Hic: t3, Ille to attach to the beneficial tion for all the ries. True, they ed by years of :e and political deov by economic their needs differ
widely according to their wealth or poverty in petroleum and mineral TESOLILES.
Three Possible Solutions
In the light of this simple idea and from the viewpoint of cconomic effectiveness, three groups of possible solutions should be examined.
- The first solution is an indexation of only oil prices which OPEC may well be in a position to impose. It is the only cxporters' cartel or club, if you wish, which is sufficiently strong and united enough to do so. The second solution would be an indexation of all raw materials as demanded by the "Group of 77', led by Algeria, which considers Such a solution asia basic requirement for a new economic Orler, The Collsquences of this solution should be closely examined even if they Seen un realistic in the present
Ott. 4. The third solution would be Within the fra The Work of a Strategy for international cooperation. It would mean the adoption of a series of measures designed to stabilize raw materials and would vary according to circulistances and benefit
CATI:5 The First Solution
An oil price indexation would sec.III to be inevitable after the stibilization of prices from January to September which corresponds to a zo to 25 per cent decrease in real terms following the more rapid rise in the price of industrial products in 1974 and 1975.
Added to this are the effects of thic decrease in the exchange rate of the dollar-the medium of payment for oil purchases, even though OPEC countrics also import goods front Europe and Japan.
The second of these phenomena is already being corrected thanks to the fixing of the parities of the OPEC currencies (starting with the sales price of crude oil) in terms of special drawing rights (SDRs). This autonatically compensates for the depre: ciation of the U.S. currency. It will also be necessary, and this is relatively casy, at least bilaterally, to find ways of indexing the petrol-dollars lent
31

Page 34
the West so that OPEC will not beCOITle the victim of negative interest T1 t5.
With regard to the first problem, it is necessary though difficult to determine the relationship between oil and industrial prices. The essential thing is to agree on a starting level. It will probably be necessary First to take into account the cost of other conventional energy sources. On this basis, the price of crude oil, which is bound to rise progressively, would be lower than it is at present. This would respond to the anxiety to maximize OPEC's carnings in the middle and long term by not encouraging over-investment in petroleum substitutes. The Second Solution
The imdexition of all rawf Titlerials, in order to avoid the excessive fall in prices which occurred in the 1950's and 1960's, nevertheless seems to mic to be based on a false relatio. Ilship and mistaken assumption.
The false relationship is that of the developing countries to the raw material producers. Few. Third World countries have a predominant position in the production or even the export of minerals and metals. A price increase, according to the most recent U.N. studies, would first be detrimental to most of the developing countrics, but would be to the advantage of Canada, Australia, South Africa, the United States and the U.S.S.R. Moreover, the world's grain stocks are in the Western countries. The stabilization indeed the reduction, of agricultural prices takes on a far greater importance for the developing countries than the ALI TOT I latic indicxation of raw Imaticrials, if one realizes that the demand for insoluble grains will, by 1985, have to increase to fecd 750 million people instead of the present doo
Ililio 1.
In Illy opinion, the mistaken assumption (which explains the "Group of 77's' misplaced confidence in the possibility of a continued rise in raw material prices) is the belief that raw
materials are un renevable and the re
fore, rare, according to the all-toohasty thesis of the Club of Rome. The Club has in fact, had to revise its first report because the supply of new resources depends on the amount of capital invested in discovering them.
At this point what can we conclude? Clearly, it is neither in the interest of
32
the developing con prices of the com trol to such levels the development ducts, nor is it in industrialized cru : of raw filiatt ecause that woul discourage recycli This is more imp run than recyc Any excessive Fal excessive rise. It altruism that, afte: copper prices, th mining and indus Tinto zine, is t group of copper c. (CIPEC) to keep II up by negotiating Japanese surpluse:
The world is dependent, as We general collapse in the quadrupling () national structures by monetary diso: to hold up under rise of crude oil
There are grou: therefore, thalı Third World pr Westerill in F HL'ye uImfortuite the Third World indexation OF r:1', there Would be litt ing to a strict II fixed (but adjust abandonis Tient of been exposed as o the developing difficultics.
It seems in the to Lindertake sill form of the inte system, which has for some time, an: system of terms inıdLIStrializedli filml tries. Terms of governed simply market-place,
The Third Soul
Am international cc. will involve, first, taged countries
non-reciprocal-ac the largest numbe: as well as their ag secondly, maintain few commodities

intries to push the modities they conthat they encourage oF substitute Drothe interest of the Iltrigg to let the orills fall tó o low, li lcad to waster L rdl ng raw materials. ortant in the long ling petro dollars. leads later to an t's not because of r a dizzying fall of Lic world's largest trial company, Rio rying to help the porting companics he price of copper g the purchase of
!conomically inter
have seen by the ito stagnation after foil prices. Inter, already weakened rders, were unable
the late but rapid rices.
inds, for believing, i 1 index:itico II of roducts based on 1 iti so I would
consequences for as well. With the w material Prices, le: chinct of Tcy:rtorietary policy and able) parities, the which has rightly 1e of the cal LL5:e5 of countries' present
COrl, tr:A. Ty", 11CCe55A.IY ultaneously thic rcnational monetary been hanging fire the refoil of the of trade betWeen developing countrille cannot le by the law of the
tion -operation strategy granting disadvanpreferential and cess to markets For of their industrial ricultural products; ing the price of the produced only by
the developing countrics; and finally, giving more to the poorest countries, in line with the present tendency in Europe to increase the low salaries of workers faster than the high salaries, and to abandon the unjust system of equality in the granting of social and family allowances, adjusting the benefits according to the degree of poverty.
The Road to Follow
The road to follow has been indicated by thc Lome Agreement. According to this Agreement the European Community guarantees given prices for given quantities of the agricultural products of 44 countries, and, in the case of the Sugar Agreement, guarantecs prices equal to those obtained by EEC farmers.
This form of co-operation will call for action by the industrialized countries to encourage competition on their domestic markets. For this, the Western governments must obtain the support of Farmers, workers, industries where man-power is threatened, trade unions-in short, of public opinion in general. It will be impossible for them to obtain this support unless the developing colntries, at the same time, forego their Thost extreme demands.
THis II13dleration seerum5 itu II le more necessary because association agreeLLLLLL DCGCaLLL LLLLL LaL GLLKS LLLLS S LL LLLLLaLLS cluded between State-owned and priwite firms in the industrialized and the developing countries. However, hope of achieving the golden triangle -that is, the conclusion of agreements for development of the poor LCHLLLLaLaLS S SLSLL LLLLS S S SLLLL LLSLLLLa HTLLL funds from Ell: OPEC courtries and with Western countries supplying their know-how-should not be abandoned.
The game will have been won when selective indexation, carried out in stages, can be seen merely as a Compler Interitary micas ure, a barrier against excessic market fluctuations, and not as the main pawn in a wider game which includes the opening of frontiers, technical assistance and joint ventures. That round has not yet begun. Only when it begins and is successful will it be possible to achieve the sort of international division of labour which, heretofore, would have been considered by everyone to be a threat to economic independence.
ECONÇI ME QE FLF, ATT FYW, OCTOBER 1975

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