Economic independence

Although it is over 60 years since the country gained Independence we are still very much a dependent nation in many ways. This is seen more starkly in the economic sphere where all Finance Ministers in the past made a beeline to the World Bank for aid at the drop of a hat. Cartoonists had a field day portraying them with the begging bowl.

These aid needless to say were with strings attached and although the country was able to stay afloat the debt burden continued to accumulate. The vicious cycle kept continuing until we are today neck deep in debt which would have to redeemed by the succeeding generation. So in a way although the British left us they did not let go of their economic grip on the country and kept dictating to us in all spheres including governance.

True, we may have broken the shackles somewhat in the post 56 era where the country strove to assert itself vis a vis our colonial masters who until then had a stranglehold of not only the economy but all other facets of national life. Nationalisation of the commanding heights of the economy, the take over of sterling companies the foreign managed plantation sector etc., no doubt broke into this dominance by our former white rulers to a great extent.

But even then they succeeded in making inroads into our affairs notably the economy particularly under right wing regimes who pandered to the West. Geo-politics too played its part in the West dictating terms to small countries like Sri Lanka particularly during the height of the cold war. All our Governments of the past had little option but to cave into the demands imposed by the West in order to keep the country economically afloat. This was the case when the separatist war was raging that sapped the country’s economic resources. Debts kept piling up deepening the hold of the Western Governments’ on the country’s economy.

Lending agencies such as the World Bank and the IMF who were acting on behalf of the West were imposing harsh conditions that not only held the country in the economic grip of the Western powers but also forced it to compromise on matters of sovereignty as well. One recalls the constant refrain of the West enjoining Sri Lanka to solve the country’s separatist problem through negotiations. There was also the carrot of 4.5 billion dollar development assistance to Sri Lanka dangled by the Co-Chairs if the Government accedes to a federal solution.

Thankfully with the war now successfully brought to an end the country is in a position to review its option. Are we forever going to be dependent on Western aid and genuflect before the mandarins of the World Bank?

It is in this context that the observation made by senior lecturer Sri Jayawardenapura University Saman Udayanga bears relevance. Addressing the Entrepreneur Day 2007 program, he said that though Sri Lanka attained independence on February 4, 1948 several foreign countries and financial institutions impose conditions on us. This is due to the fact that we are not economically independent.

He said as a result of this situation it is the World Bank who decides whether farmers should be given the fertilizer subsidy adding that several countries even tried to get involved in the Humanitarian Mission to eradicate LTTE terrorism. They were trying to dictate to us he said calling for measures for a better economic grading of the country to ward off this unwanted interference and suggested the mobilisation of economic enterprises as a starting point.

The country thankfully is now in an excellent position to re-assess its options. Are we going to be perennially at the mercy of the Western lending institutions or are we going to break out of the shackles? We should now start looking for regional assistance that is shorn off conditions that impinge on sovereignty. There should be a stronger South-South corporation for developing regional economies that would obviate the need for dependence on the West.

The emergence of countries such as India and China as economic superpowers could well act as a countervailing force to this dominance of the West in the economies of small countries such as Sri Lanka. The large-scale development assistance that has been forthcoming from China is a sign that we can extricate ourselves from this Western dominance.

With the new independence that has dawned with the defeat of terrorism the Government should seriously consider steering the economy in a new direction breaking out of the fetters that bound us to the West all these years. Already there are signs that the Government has considered this option. Its steadfast refusal to bow down to the conditions of the EU in return for receiving the GSP plus facility show which way the winds are blowing. Hopefully this would act as a catalyst for all its future dealings with the West.