THE COLOMBO PLAN

itself and of the improvement in the general purchasing power of the country. It should be possible to relax controls on trade and to admit more freely imports which are at present excluded or restricted owing to shortage of foreign exchange. It is hoped that the balance of payments will return to equilibrium after the period at a higher level of imports and exports, and that these will be permanently maintained. 20. If external finance is not available to the extent indicated in the plan, the economic development of the country will have to be curtailed severely and the rate of economic and social advance correspondingly retarded. The Government of Pakistan are convinced that time is the major consideration in the situation which confronts not only Pakistan, but also the other countries in South and South-East Asia. The events which followed the attainment of independence and the economic distress which still prevails have caused much disillusionment amongst the people. It is of prime importance that they should be given grounds for hope that the harshness of their existence will soon find relief. It is realised that the present plan will not achieve spectacular results. But its execution will provide tangible evidence to the people that the immense task of improving their standard of living is being taken in hand, and that within the limit of what is immediately practicable real improvements are being effected. CHAPTER VI THE DEVELOPMENT PROGRAMME OF CEYLON 1. The population of Ceylon is at present 7,300,000 and is increasing at the rate of some 200,000 every year. The economic position of the Island is dominated by the fact that two-thirds of the cultivated land is taken up with the production of three main crops—tea, rubber and coconut. Twothirds of the population depend on this production or on allied manufacturing and distributive activities. This specialisation is at the expense of food production. Two-thirds of even the present restricted consumption of rice, which is the staple diet, has to be satisfied by imports—4oo,ooo tons out of a total of 587,000 tons consumed in 1949-50. Over half Ceylon's annual expenditure on imports goes on food. Tea, rubber and coconut account for 90 per cent, by value of the total exports of the Island, which is therefore dangerously dependent on the fluctuations of world prices over a very limited range of commodities. In the past these fluctuations have been great, as will be seen from Table 22 on page 46. This has had grave consequences for Ceylon. The high prices which have prevailed since the end of the war have made possible a general advance in the standard of living and the Government have been able to improve social services. Basis and Objectives of the Programme 2. The main objective of the Government's programme is to bring about increased economic stability by reducing Ceylon's precarious dependence upon factors outside its control. To achieve this aim, it is proposed to diversify the economy by some increase in food production and by the creation of other forms of employment. This will better enable the Government, over the long run, to maintain revenues and thus sustain the improved social services. Failure to do this would, in their view, involve grave social and political consequences.

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