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| Sunday, 22 January 2006 |
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Solemn Thoughts 500 factories and the world of Lee Kwan Yew by Wendell Solomons Presidential advisor Ajith Nivaard Cabraal has spoken to the press regarding the Presidential pledge for setting up a large number of factories. Why does the election pledge call for as many as 500 factories? On the administrative side, among first clues was that provided by Treasury Secretary P. B. Jayasundara. Also quoted in the press, Jayasundara asked whether the World Bank intended turning Sri Lankans into slaves... World Bank reforms (social engineering manoeuvres such as 'structural adjustment') geared accountants, economists and many professionals in Sri Lanka to 'paper capitalism.' This contrasts with professionals in neighbouring India where market fundamentals grew rapidly. Thanks to such awareness you witness on Sri Lanka's roads, India's Ashok-Leyland, Bajaj, Maruti and Tata vehicles. For executives in India, the policy of Swadeshi meant erecting customs barriers to protect (a) the assembly and later on (b) the full manufacture of vehicles. In the US, Abraham Lincoln and Henry Carey chose an analogue of the policy of developing market fundamentals. They had advocated protection for home industry and that led the US to reaching Britain's level of industrial output by 1900, just 30 years later. Post-independence Sri Lanka was on this track once assembling FIAT, Mazda and Mitsubishi cars with Customs tariff walls for protection. After assembly Sri Lanka would enter manufacturing - when up to 500 feeder industries would be needed to supply bulbs, wiring, clutch plates, shock absorbers and other components. As in the case of India an upward economic thrust awaited Sri Lanka then. However, from 1977 policy makers and professionals in Sri Lanka - as in many other small and vulnerable developing nations - were blitzed with 'Free Trade' hype and 'Open Economy' reforms. In year 2005 Mahinda Rajapakse spoke as PM before an accountants' audience. He called 'Free Trade' a myth. Many in his professional audience were conditioned away from knowing that 'Free Trade' was not part of US economic history when that country needed to develop rapidly in the aftermath of civil war with its separatist south. As to recent WTO summits that showed the US (and EU) still involved in protecting domestic sectors such as farming industry, many in the audience needed the PM to awaken them from slumber. About the foreign reformers who put these professionals to sleep, former World Bank Chief Economist Joseph Stiglitz went public with comments like this - the reformers don't know the foundations of a market economy. The Stiglitz interviews emphasise what P. B. Jayasundara notices. The reformers sets off a blind opportunism so that infighting impoverishes the community. It is enslaved to return to a pawnbroker for larger loans and to more reforms that wrench the last pennies. Resuming discussion of the Presidential initiative for as many as 500 factories, that number indicates to us the economic backlog of the last 30 years. Human lives and livelihoods are involved in all this. Thus, professionals whose careers as opportunist 'Haves' among 'Have-nots', can regain worth by discovering what process (or feeder processes) the 500-factory program will focus on. This excerpt from a German interview with Lee Kwan Yew describes a way forward. SPIEGEL: But has China's success not become dangerous for Singapore? Mr. Lee: We have watched this transformation and the speed at which it is happening. As many of my people tell me, it's scary. They learn so fast. Our people set up businesses in Shanghai or Suzhou and they employ Chinese at lower wages than Singapore Chinese. After three years, they say: "Look, I can do that work, I want the same pay." So it is a very serious challenge for us to move aside and not collide with them. We have to move to areas where they cannot move. SPIEGEL: Such as? Mr. Lee: Such as where the rule of law, intellectual property and security of production systems are required, because for them to establish that, it will take 20 to 30 years. We are concentrating on bio medicine, pharmaceuticals and all products requiring protection of intellectual property rights. No pharmaceutical company is going to go have its precious patents disclosed. So that is why they are here in Singapore and not in China. Lee Kwan Yew examines facets of a real world - not that of paper capitalism. We have seen Trade Minister Jeyaraj Fernandopulle and his team exert great effort to keep Sri Lanka's garment industry from collapse in the world market. Despite decades of warnings from the government sector that the only local component, the labour of garment workers, provides little added value (little surplus,) managers and accountants in many a vaunted Engine of Progress had been on spree on borrowed time. Techno-economists are rarer than fine diamonds in Sri Lanka. Thus teamwork for technological advance among country players must help achieve focus for the factory initiative. |
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