Public investment and development
by S. T. Hettige, Professor of Sociology, University
of Colombo
If there is anything in common among developed countries, it is the
high level of investment in Research and Development (R & D). In this
country, politicians go around the country and tell the people that they
are in the business of development but never mention how other countries
have achieved a higher level of development.
This may be due to sheer ignorance on the part of some political
leaders. In the case of others, it may be due to utter dishonesty. To my
knowledge, there is not a single country that has achieved a higher
level of development without long term planning, rational human resource
development and a very high level of investment in R and D. This is true
in all parts of the world including Asia.
We have invested in education but our education system contributes
little to human resource development. Most people who have secondary
education are only fit for unskilled or semi- skilled employment in the
FTZ, the Middle East and the service sector. There is little investment
in Research and Development.
There are no large, well funded R and D institutions in the country
and the talented researchers have to go to other countries to engage in
cutting edge research. Universities are mostly engaged in undergraduate-
teaching and their research budgets are negligible or non- existent.
In any case, universities have degenerated so much that there is
little recognition of serious research done by academics. Each developed
country in any part of the world has some product line or another to
boast about.
The name Nokia is synonymous with Finland. Nesle is synonymous with
Switzerland. South Korea, Japan, most European countries, North America,
Brazil, etc have brand names the whole world is familiar with. Our
neighbour India joined the club many years ago. What are the aspirations
of our political leaders for Sri Lanka?
The first industrial revolution that flourished in the West gave an
advantage to western countries over the rest of the world. The division
of labour between industrial countries on one hand and countries
producing primary commodities like natural raw materials on the other
created an unequal world.
The terms of trade involved in the emergent import- export trade were
far more favourable to industrialized countries than for the countries
producing primary goods.
Since the first industrial revolution, there have been two morequally
or even more important technological revolutions that have enabled many
countries to take off and join the developed world. These two subsequent
revolutions involved electronics and ICT.
What is significant is that many already industrialized countries
have been able to ride over the new waves of technological advancement
as well. Equally significant is the fact that many late industrial
countries have also been able to play a significant part in the
development of new technologies.
Scientists say that the next technological revolution would revolve
around nano-technology. Sri Lanka will be left behind by this latest
wave of technological advancement unless we provide the facilities and
resources to our scientists to engage in research leading to new
innovations.
Today, some of the NIC's are leading producers of technological goods
in the fields of electronics and ICT. We as a country have been bypassed
by the technological advances mentioned above. We have become mere
consumers of goods produced elsewhere.
Motor vehicles, household appliances, electronic goods, ICT products
etc. are all imported to this country, using foreign exchange earned by
Middle East workers, garment factory workers, employees in the
plantation sector etc. and foreign loans. Our political leaders do not
think twice before importing very expensive luxury cars costing over ten
million rupees each for their own use.
Though we do not produce modern industrial goods, we have become avid
consumers of such goods. What we need in such sectors as transport,
health, education, communication, agriculture and industry is imported
from developed countries. With the spread of ICT, we have been importing
technological products like computers and mobile telephones in large
numbers.
It is estimated that we have over 7 million mobile telephones in the
country. These imports are naturally more expensive than our export
commodities which include cheap labour as well. When we export labour,
vital sectors experience labour shortages which is turn push the wages
up, making cost of production high.
The expenditure on imports has been consistently higher than the
earnings from exports. It is inward remittances and foreign borrowings
that have helped bridge the widening gap between imports and exports.
Foreign debts have been increasing steadily over the years, by now
accounting to nearly 100% of the GNP. Increasing economic difficulties
have encouraged more and more people to leave the country, mostly for
short term employment in overseas labour markets.
This, of course is a blessing in disguise for our rulers. The latter
do not have to think twice when they import the luxury vehicles and
engage in foreign travel at public expense.
How can you develop a country when valuable human resources are
constantly depleted due to exodus of labour and brain drain? How can you
find investment capital when the country is indebted to the tune of
nearly 100% of the GNP? How can you create a conducive environment for
development when the on- going conflict drives away tourists and foreign
investors?
How can you create an enabling institutional environment in the
country when corruption, wastage of public funds and politicization are
widespread in the country? Can we think of a single country that has
moved up the development ladder in spite of conditions similar to those
described above? I leave these questions to be answered by someone who
is more knowledgeable than myself, preferably by a pandit in the area of
finance and planning. |