Aug 13, 2015 (LBO) – Sri Lanka’s economy would have developed if the country continued the policy of former Prime Minister Sirimavo Bandaranayake to develop local industries rather than import, the President said.
“If you take the island’s political era from 1956-65 and 70-71, priority was given to the local industrial economy,” President Maithripala Sirisena told a symposium of Sri Lanka Ceramic and Glass Association.
“But with the introduction of open economy in 1977, the country absorbed all the good and bad things. All the local factories were affected and fell with the economy being open for imports. Not only for ceramic and tiles, but the food made at home was imported. We still haven’t got out of that situation,” he said.
“Today, most of the stuff we buy from shops can be found locally and 75 to 80 percent of the food we eat is imported,”
Pointing out an example President said, “When we started in 1970 – 77 to build the local economy through empowering local industries, people called the garments which were made locally as kerosene apparel (lamputhel Chiththa). But if we continued, we might have manufactured standard quality apparel now.”
Analysts say Sirimavo Bandaranaike’s regime fall after her unprecedented nationalization in the early 1970s failed to achieve desired benefits and expected economic benefits.
The Nationalization of private companies in Sri Lanka started in 1956 by the Sri Lanka Freedom Party led by nationalist sentiment. Most of the key businesses at the time were run by the state and by 1977 most of the companies were running at a loss. However, bureaucracy, political interference, lack of professionalism, managerial expertise, lack of capital and technology also led to making continous losses which ultimately increased the burden on the ordinary citizen.
After 1977, these policies were reversed under United National Party government which introduced the open economy policy and privatization was one of the key components.
President Sirisena said when this policy came in to play in 1977, most of the local organizations were shut down.
He said the nation with a proud economic history during Anuradhapura and Polonnaruwa eras, now looks pale.
“We are a nation with a proud history for not importing anything from outside shores to the country but producing locally for consumption,” President Sirisena said.
“If you look at the vision of most developed countries in the world, they have maximized their local innovation and knowledge base to build more power. They boast about their national strengths,”
“But we are on the other side of it. What we boast is the historical memory of us.”
President Sirisena said it is high time for a proper government strategy for the country to support local organization to push quality products and services.
“Today we are in a mentality which asked quality products and services whether it’s locally or internationally produced,”
“So, if we are to strengthen our economy, we have to make the right decisions. We should not cuddle or make friendship with the importers who import the same product that you produce locally. We should have a strategy to strengthen our local industries,”
“As a government we have the ability to increase import taxes to protect local enterprises, but you should be able to produce high quality products and services for consumers,”
“Your product quality should be improved and competitive enough and if so the Government will support you.”