CEYLON ECONOMIC DILEMMA PLACES AN ISLAND PARADISE IN PERIL

Press, Volume CVI, Issue 31269, 16 January 1967, Page 10

CEYLON ECONOMIC DILEMMA PLACES AN ISLAND PARADISE IN PERIL

(By A.

H HANSON,

in the "Yorkshire Post”)

(Reprinted by arrangement)

The proclamation of a State of Emergency in Ceylon has passed almost unnoticed outside the country. Perhaps “states of emergency” in under-developed countries have become so familiar that they have ceased to be remarkable. In Ceylon, however, such a proclamation means a great deal more than it might mean in, say, Upper Volta, Laos or Paraguay

Admittedly, this delectable island has had its share of political troubles since independence. The persistent antagonism between Sinhalese and Tamils, which is the chief of them, has from time to time flared up nastily, even threatening the country’s unity. But by the standards to which the world has now, unfortunately, accustomed itself, Ceylon’s political record (despite the fact that one of the Prime Ministers perished by assassination) is a rather sedate one—even encouraging to those of us who hope, with increasing desperation, that at least a few of the underdeveloped countries will find it possible to follow the democratic path. Smooth Transition The island’s transition to independence was remarkably smooth. Freedom did not come as a product of violent revolt, or even of “non-violent non-co-operation,” as in India. As early as 1931, by the “Donoughmore” Constitution, Ceylon received much of the reality of self-government, and was indeed presented—remarkably enough at so early a date—with a democratic franchise.

Since independence, Ceylon has been enjoying a way of political life which, to judge by the vigour of the wordy battles conducted by her political parties, is as “free” as anyone could reasonably wish and perhaps freer than many would regard as appropriate for a country at her stage of development. To the visitor, “continuity” finds its visual, if superficial, symbols in Colombo’s doubledecker London Transport buses, in the red pillar boxes, am in the boldly-displayed names of the tea plantations —“Moray,” “Osborne,” “Somerset” and “Carfax.” A sensitive tourist is no less attracted by this apparently civilised political culture than by the graceful appearance and easy-going manners of the Ceylonese, the mountainous

splendour of the country around Kandy, and the long, golden, palm-fringed beaches of the southern coasts. What is Lacking? When one adds to these delights a standard of living probably at least twice India’s,

a high rate of literacy, and a collection of welfare services (including free education from primary school to university) far superior to those usually found in an underdeveloped country, one begins to ask what constituents of the “tropical paradise” can be lacking. Unfortunately, one does not need to stay long for the answer. Almost every advantage possessed by Ceylon carries a corresponding disadvantage. Even her beautiful scenery is too distant from the established routes of international tourism to become a source of much profit. Even an educated population is by no means an unalloyed advantage when the educated cannot get the jobs for which their schooling has fitted them: and welfare services are of doubtful benefit when they absorb resources that ought to be devoted to the development of the economy. If the rate of economic growth tapers off to a point where it is barely keeping pace with the headlong increase in population, the country concerned is heading for trouble, particularly if its people have got into the habit of regarding the Government

as a universal provider. Such, alas, is Ceylon’s present situation; and it is made worse, rather than better, by the existence of democratic institutions; for democracies are almost inevitably “consump-tion-oriented.”

The Government, apprehensive of what may befall it at the next election, is naturally reluctant to take unpopular measures, and no political party that aims at maintaining or improving its strength in the legislature can “afford” to tell the electors the plain truth and to demand of them the sacrifices that any renewal of economic progress will inevitably entail. Demagogue Prevails As a result, the demagogue tends to prevail over the responsible politician, and Ceylon’s leading civil servants, an admirable body of men who know quite as well as any “foreign expert” just what needs to be done, suffer increasing frustration.

However, one can hardly attribute the whole or even the greater part of the blame for Ceylon’s economic dileemma to the policies of her governments, and to the attitudes of her people, unhelpful as these may often be. Basically, Ceylon’s problem is one that she shares with many other under-developed countries: the dependence of her economy on the export of primary products for which world demand is stagnant or declining.

An economy geared, as Ceylon’s still is, to the production for export of tea, rubber and coconut, has a very awkward corner to turn. Faced with deteriorating terms of trade, Ceylon finds difficulty in mobilising sufficient foreign exchange even to buy her essential imports of rice. She certainly has nothing left to finance the 'import of the “producer goods” required for the development of her nascent industries. Yet it is on these that depends her ability to provide employment for her swelling population; and it is to these that she has to look for the production of goods, such as fertilisers, that will enable her to become agriculturally more self-sufficient. Vicious Circle Thus the familiar vicious circle makes its appearance. Adaptation of the economy to the new situation demands diversification, both agricultural and industrial; yet diversification depends, at least partly, on the availability of resources which, as a result of the unfavourable movement in the terms of trade, are becoming less and less abundant.

“Belt-tightening,” of course, could help to increase the rate of capital-formation, but there are limits to what can be achieved by this ascetic expedient. Politically, moreover, the taking in of more than a few notches might well be disastrous in its effects. Ceylon, in fact, needs aid—far more than she is getting at the present moment. Unless it flows more freely in the near future, her present Government, which is showing rather greater capacity and determination than most of its predecessors, could easily fall. This, in Itself, might be considerably less than tragic: but there is at least a danger that, in the resultant political confusion, democracy itself might disappear, sooner or later.

This is a possible perspective for Ceylon. One must add, for full measure, that the immediate economic situation has become rather grim. The purchase of adequate quantities of rice from abroad, always difficult because of the foreign exchange shortage, is this year impossible owing to the physical shortage of supplies in South and South-east Asia. Hence the rice-ration has had to be severely cut—and hence (since rice is politically the most sensitive of subjects) the state of emergency. Help Needed Ceylon, in fact, has reached a very sticky patch. Is it too much to ask of the rich countries, that they should help her to get through it? In terms of global strategies, this rather remote little island may be of small importance. In terms of urgency of need, there are many other countries which might appear to merit higher priority. But Ceylon, with her potential resources, material and human, could be the scene of a success story —and heaven knows that success stories, in the middle of an ominously faltering "development decade,” are sorely needed.

Professor A. H. Hanson, Professor of Politics at Leeds University, recently visited Ceylon as part of a team to conduct a seminar for senior civil servants on development strategy and administration. In this article he discusses the country’s economic dilemma and need for more aid.