Sunday Times 2
Sri Lanka, short of food, faces an economic crisis
At dawn hundreds of people wait in bread lines. Elderly men and women pick through garbage. Thieves harvest vegetables and rice in the countryside.
Although the earth is bountiful in Sri Lanka, which was formerly Ceylon, the nation of 13 million has a critical food shortage. Moreover, it is going broke, jolted by inflation, torn by internal dissension and plainly alarmed about the future.
Prime Minister Sirimavo Bandaranaike, a tough politician and a socialist, said recently that the economic crisis had “almost squeezed the breath out of us—we are literally fighting to survive.”
Mrs. Bandaranaike, who is the target of bitter attack, repeatedly pronounces a single, stark slogan for her nation: “Produce or perish.”
People are well fed
What makes the crisis at once melancholy and bizarre is that the Ceylonese, because of Government largesse, have been among the best fed, best educated and healthiest people in South Asia. Their fertile tropical Indian Ocean island, the size of West Virginia, is covered with dense vegetation.
Perhaps the fundamental reason for Sri Lanka’s plight is that the cost of food imports has spiraled while export earnings have remained stationary. A blend of Government mismanagement of farmland, meagre incentives to growers, the take‐over of private estates under land reform and the residue of colonial tradition—the British ignored food production to spur tea and rubber exports—has left a lush nation virtually begging for rice and wheat.
At one stage last month, some sources say, Sri Lanka had only two weeks’ rice supply in stock. An emergency shipment of 40,000 tonnes from China averted an immediate crisis. Other nations selling food here are Australia, Pakistan, the Soviet Union, Canada, the United States and even India, which has serious food problems of her own.
A diplomat remarked that Sri Lanka was living a ship-to‐mouth existence.” An economist said: “The country is now operating on a week‐to-week basis. We check how much comes in and how much goes out. We don’t think beyond the week. We can’t.”
US$ two billion in debt
The nation is about US$ two billion in debt to other, nations and is increasingly unable to get loans because of its poor credit position. This year it will spend about two‐thirds of its foreign‐exchange earnings, or about US$ 300‐million, just on imports of rice and wheat, whose cost has tripled in the last two years.
In the meantime the key exports—tea, rubber and coconut, which account for 80 per cent of the foreign exchange earnings—have failed to generate enough to meet the food bills. The reasons for this include fertiliser shortages, bureaucratic restrictions and low investment in new equipment, plus export prices, especially of tea, which have not followed those of grain.
“It’s a spectacular non-achievement,” an economist said. “They’re importing 50 per cent more than they’re exporting. They’re broke, and because they’re forced to spend so much money on food, they have very little left for petroleum, fertiliser and manufactured products to keep the economy going.”
Compounding the crisis, according to critics of the Government, is an ideological addiction to take‐overs, coupled with a tradition of far‐reaching social‐welfare measures, which are extravagant and perhaps crippling.
Big rise in population
Even Ceylonese concede that the decades‐old system of free medical care, free education and free food dole each week to every non-taxpayer—the vast majority—has proved economically unfeasible, especially with a population that has doubled in 25 years. In addition the Government subsidises and underwrites wheat, sugar and flour at unrealistic low prices.
It would be political suicide to end the handouts, and Mrs. Bandaranaike’s coalition United Front was swept to power in 1970 on the promise of supplying more free rice than ever.
Now the Government has cut the ration of rice, flour and sugar to about three pounds a week, compared with as much as 10 pounds a week in the nineteen‐fifties. The rice ration is about a pound and a half a week compared with four pounds last spring.
An indication of the topsyturvy quality of politics is that the Opposition leader, J. R. Jayewardene of the United National party, said he would make the food ration eight pounds a week if he came to power.
Because of free education in a nation where half the population is under 30—and because the floundering economy is still based on agriculture—about 700,000 educated people are without jobs. This is a main source of unrest.
In 1971 this group staged an insurrection against the Government that was quietly but harshly crushed by security forces. The number of insurgents rounded up and killed runs in the thousands.
Mrs. Bandaranaike, whose husband, S.W.R.D. Bandaranaike, was assassinated in 1959 when he was Prime Minister, heads an anti-capitalist coalition of three parties—her own Sri Lanka Freedom party, ‘which’ emphasises “democratic socialism,” the pro‐Moscow Communist party and the Trotskyite Lanka SamaSamaja party.
Private investment is under severe constraints and the Government has spurred a measure that allows the nationalisation of any company—a move that has virtually dried up foreign investment.
A ceiling on disposable income of US$330 a month after taxes as well as limitation of landholdings to 50 acres has further curtailed investment and production.
“The only salvation lies in making the country self‐Sufficient,” the Prime Minister told a May Day crowd. “We are facing a crisis such as the’ country has never yet faced in its history.”