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Lalith: A Beacon of Nation-building

Let’s see how we can build this society. Last time when Lalith, Gamini, Premadasa, Jayawardene, and all of us started, it was derailed by a war. I don’t think there is going to be a war in the country but the consequent, after-effects has to be actually rectified.

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File photo of Lalith Athulathmudali [ Special Arrangement]

Following article is based on the keynote speech by the author as the President of Sri Lanka at the late Lalith Athulathmudali commemoration held recently in Colombo.

I was thinking about when I first met with Mr. Lalith Athulathmudali when he was a lawyer and a lecturer at the Law College and I was an apprentice under Mr. H. W. Jayawardena, before I took oath. The day I took oath I also invited Lalith to come to my oath party, another person I invited was another young lawyer older than me and a member of Parliament Gamini Dissanayake. I had two other members of Parliament I invited since I knew them. One was the Chief Opposition Whip, Mr. R. Premadasa and finally, the Leader of the Opposition Mr. J. R. Jayawardene.

I think the destiny of the country and the UNP was to a large extent tied to the interaction between all these members. Lalith, like me and Gamini, was eager to see a modernized UNP. Now, why did I join? My family has been UNP from the start.

But what attracted me as a modern UNPer was what was called the Kalutara Declaration of the 1963 UNP Convention which was a draft done by Dudley Senanayake and J. R. Jayawardena which laid the ground for social democracy.

We had envisaged as a party from the time of Mr. D. S Senanayake for a capitalist economy and the fact that we wanted to do away with hunger, illiteracy, and disease. That was in 1947.

The next most important part was trading. The trade was given over to Lalith. Later on, shipping was added that the other major project, which is to be the impetus for the development was one was going to be the greater Colombo Economic Zone with the President kept for himself and the other one was the Mahaweli program which had given to Gamini Dissanayake. that is how we started. Lalith’s job was trade.

It didn’t have the flash of the other jobs, but nevertheless, it was important. And he opened up the trade the Greater Colombo Economics. At that time we were a socialist economy, everything was controlled and President Jayawardena wants to go decided to proceed cautiously. And what did he do? He took seven electorates in the Gampaha District starting from Negombo and ending with Biyagama where the normal laws of an open market economy, were applied and special concessions were given in the two investment zones of Katunayake and Biyagama.

But Lalith realized that we can’t get export only from those areas. We need to have the rest of the country. Therefore, he started the Export Development Board to promote exports outside the economic zone.

So he undertook the development of Sri Lanka’s main port, the Colombo port. So you are getting into that two big areas of development around Colombo. On one side was Colombo, the trading hub, and Colombo, the port connected to Colombo was on the other side, the Greater Colombo Economic Zone then into the rural areas came this massive development program which really developed the north central province, parts of east and the whole of the Kandy district.

So these were the driving forces of growth that went along .then as it went on., I was then the Minister of Education Lalith came up with this idea of scholarships for those who want to go to the university. So you had the Mahapola scholarship. It is the first time that we funded individuals for free education and not the institutes.

Unfortunately, we didn’t carry it through with our institutes. And you have, the universities which are today taking money directly from the government and which have not developed, unfortunately, structured around the UGC. I think we have to rethink all mechanisms rather than the countries which funded the student who funded universities and therefore the courses had to be employment oriented.

But in addition, the universities run their external courses so they are external students and every year we had to take in about additional 10,000 people which contributes to the 500,000 excess in the government service.

So anyway, he started the Mahapola scheme to go ahead. So these are what we have to learn of the changes that we have to do now, keeping free education and making it more meaningful. Then came Lalith’s next stint as the Minister of Agriculture where he started modernizing the villages and looking at modernizing agriculture and looking at exports and then his stint as the Minister of Education.

Another one in the picture is Lalith as the Minister of National Security. Much had been said of this, so I will not cover that. I will look at the contribution he made both to the economy and to the development of Sri Lanka. It was then in 1991 that we all parted ways. Lalith decided he will leave the UNP and I thought that I will stay with the UNP.

That the party mattered and the party had to be strengthened. He felt there had to be changed and that he had to go out. And then the politics of Sri Lanka took a different, state altogether. By 1993, Lalith was assassinated. That was a great loss to the country. Within a week, President Premadasa was assassinated. And by the end of next year, Gamini was no more.

So the drivers of the development, the people who were to shape the country were no longer there. And then we had to look at a new phase. By that time, the world was also changing. The whole concept of social democracy had gone further forward. And it was known then as what we call today a social market economy.

When I became president, it was partly because we didn’t follow Lalith’s advice. He said you export or perish. We didn’t export, so the economy perished. Now, the whole issue was how do you restart it again? What is the type of economic model? Are we going in with a completely open new liberal model or something else? So I thought we should stay on with the social market economy and define it should be vibrant. It has to be vibrant.

It cannot be otherwise. And we developed what was relevant for today, a highly competitive economy with social protection. So the economy has to be highly competitive, highly competitive globally. Then it had to be an export-oriented economy. We’ve included in that for the first time what Lalith said, export or perish. And we brought in an issue which was not important that the time Lalith was living or the others. But today, climate change and environmentally friendly, green and blue economy, the green and blue economy, a word that was given to us by the late Mangala Samaraweera at that time, And finally, what Lalith again laid the ground for and what I also work for and what we did to the digital economy So it’s a highly competitive economy, which is export-oriented, which has social protection which is environmentally friendly, and the characteristics is a blue-green economy.

It doesn’t apply to the government of today, and a digital economy. This is what we have. Now we have to go ahead. We can’t be begging anymore. We can’t be going to countries and asking for loans anymore. We have to learn to stand on our own feet. When India fell in 1991, I was the Minister of Industries at that time, they decided to come up by themselves. Deng Xiaoping in China decided that he’ll bring the country up. Japan destroyed by war with the atomic bomb decided to come up by itself. Now, what the hell we are doing; Getting aid all the time?

I certainly don’t like to recreate a beggar nation. We must now in our own effort get back. There is no other way. We can’t aim low. We are looking at a 25-year programme. Many of us won’t be there when it ends. But we, as a nation, are going to complete 100 in 2048. I was born in 49, then we were second to Japan. Today we are just above Afghanistan. Now, where are we going? Let us make up our minds that we are going to build this economy and we can do it.

It’s an open market economy, highly competitive. It won’t come overnight. Gradually over a period of five years will build up our competition. We must aim for five years to sustain a growth of 7%. Easier said than done, but it can be done and international trade as a percentage of GDP must equal 100 or more. We are not doing it overnight, but certainly, over 5- 6 years, which we have to do.

And the annual growth rate from net exports should be $3 billion. Investment annually must be $3 billion and we have to create an internationally competitive workforce, highly educated and highly skilled. It has to be employable skills, not otherwise. So all this is what we have to aim at and we have to go for it. Then what is it? Before that, we have to stabilize the economy.

So we started that process in 2023 our fiscal stabilization program envisages, the government revenue increasing to around 15% of GDP by 2025 and from the present 8.3% at the end of 2023. If you look at an economy with social protection, I think our revenue will have to go beyond that to about 18% of the GDP.

But that can take another five years. We need that. We have to do it. Then we are looking at a primary surplus of more than 2% in 2025.

We are to improve thereafter we have to reduce the public sector debt from 110% of the GDP to 100% of the GDP in the medium term. We have to bring inflation under control and a single-digit and interest rates I presume have peaked and will gradually come down to a moderate and single-digit level.

And the exchange rate in this will become stable and strong with this has to come the growth-enhancing structural reforms. So we are not looking at the four years for the stabilization program and the modernization afterwards is running to get there. It’s supposed to start next year but we’ve already started getting the stabilization program and starting the structural reforms also at the same time.

So this is where we are and one wish on the structural reforms because my friend honourable Charitha Herath had raised it in the debate. Unfortunately, I was not in the chamber to reply. Yes as the policy, we accept that the government should not be running businesses at full stop. Except for one which is an exception, we will stay in the financial sector, we will build the banks we own and make them stronger, but it will be run like any good commercial bank and we don’t mind giving a part to the minorities shares to the deposit holders, amongst others.

File photo of young Lalith with beloved mother and father at Oxford [ Special Arrangement ]

It will bring some discipline in. So the financial sector. Yes, well, you control it with the financial sector. Not with the water’s edge or the Hilton Hotel. That is secondary. So we will keep building on our financial sectors we don’t mind helping out in the technology sectors. The digital economy will have to have some investments there. But the rest, yes, we have tried everything.

We tried state ownership. We have tried mixed economies. We tried to run it with corporations, that trillion of rupees that we have lost and we made us poorer than we were in 2019. So that is what we are going to do. And when you look at the future, one of the biggest new areas of development in Sri Lanka is as a logistics centre. Sri Lanka can be a feeder to most Asian countries, a transhipment hub first is the Colombo port.

Now we have got the south port very soon. We will have investment for the east terminal. And when that is full, the next project we are working on will be the north port, which will take all the way up to Ja-Ela making it the largest port. And from Ja-Ela only five miles away from the airport, you get an Air-sea hub naturally.

Then Hambantota another port, which can we reach out to Africa and Trincomalee on the eastern side of the Indian Ocean. So here we are. This is what we have and we have we are starting at that. Now that is what Lalith started. Secondly, large-scale modernization of agriculture small or big we have to modernize agriculture.

Which will aid the largely rural areas to increase our paddy production. We have a big market for export. The Middle East requires food. Singapore requires food and many other growing markets. There would be at least 500 million more people from Saudi Arabia to Indonesia by 2050 not counting the hundreds of millions in East Africa and South Africa. That’s the area we are looking at highly automated manufacturing because Lower-Wage economies will be in Bangladesh, Myanmar and even in India. We have to jump ahead. Our tourist industry has to now reorient itself to high-level tourism. We can’t have 10 million tourists coming in paying $100 to $150 a night. It’s better to have 2 million tourists at $ 500 to 1,000 a night.

So let’s see how we can build this society. Last time when Lalith, Gamini, Premadasa, Jayawardene, and all of us started, it was derailed by a war. I don’t think there is going to be a war in the country but the consequent, after-effects has to be actually rectified. And we decided after the budget debate is over in the following week that the party leader and the Speaker will meet and the Government to discuss how we can resolve the outstanding issues.

So that one thing we can all work together if you remember a large number of people who have graduated, thanks to what Lalith has done, so let’s work together both for the University and for a better Lanka, where those who graduate, those who post-graduate degrees from that university can exist.

Ranil Wickremesinghe

Ranil Wickremesinghe is a Sri Lankan politician who is the current president of Sri Lanka since 21 July 2022. He also holds the position of Minister of Finance of Sri Lanka. He has been the leader of the centre-right United National Party since 1994.

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