Development is NOT economic growth alone

Reviewed by
Leelananda De Silva-October 20, 2018, 7:40 pm 

Facets Of Pluralistic Development in Sri Lanka – A Collection of Writings
by Godfrey Gunatilleke – Published by the Marga Institute (1983) – 430 pages
Rs. 1300/=

There was a time in the 1950s and 1960s when development planning was a popular topic of discussion among the economic cognoscenti, especially economists and administrators. Although there was much discussion, and many Plans – three, five, six and ten year Plans – Ceylon/Sri Lanka was never a planned economy. Between the years 1956 to 1977, it was a kind of mixed economy, with the centre-left governments nationalizing some of the so called commanding heights of the economy – banks, insurance companies, transport and even plantations. Unlike in India, where the process of national planning was more rigorously followed up, the most that Sri Lanka did was a degree of investment planning, especially in the period 1965 to 1970, and that again was confined to the state sector. Since 1977, development planning has receded into the background, as the market economy and economic liberalization became the norm. However, even in a market economy, there has to be some kind of economic planning, directed by the state. Today, newspapers and other media are full of figures on economic growth, currency rates, trends in the stock market and other day-to-day and month-to-month trends, and they largely ignore long term patterns of economic and social development.

The volume by Godfrey Gunatilleke is a collection of his writings, many of them dating back to 40 years or so. They deal with the history of development planning in this country, village level planning, patterns of urbanization and the rural-urban balance, and education and employment issues. While some of the issues raised by the author, especially in relation to education and employment, have been overtaken by events, most of the other issues he refers to are relevant to current policy concerns. Economic and social researchers of today have much to learn from these collected writings as they focus on the broader issues of economic and social development and consider the future patterns of economic and social development. There are growing inequalities, both economic and social, in Sri Lanka, which should cause concern among all sections of society. This volume offers many insights as to how some of these problems were dealt with in the past and how they might be dealt with in the future. Godfrey Gunatilleke has been a strong voice for pluralistic patterns of development and for attaching importance to the moral dimensions of social and economic improvement.

The two long chapters (chapters 8 and 9) on the history of national planning and planning in a market economy are arguably the most noteworthy, and where the author is exceptionally well placed to discuss these issues, as he was personally engaged. Development planning was first mooted in Ceylon in the 1930s and the moral dimension of development was uppermost at that time. The author suggests that the socialist influence from India’s pre-independence planning (the Indian National Congress, of course, influenced by Gandhi) and Buddhist influence featured the earliest planning document prepared by the Ceylon National Congress (CNC) in the late 1930s. An Indian economist, Dr. B.B. Das Gupta, who was later professor of economics had carried out some village surveys and his findings were reflected in the CNC document. (Dr. Das Gupta was an influential figure in the early days of national planning.) It is intriguing to note that the CNC, which can be described as the parent organization of the UNP was at that time more oriented towards socialist policies and state direction of planning. There was no talk about a market economy. The UNP continued its commitment to national planning after 1948, and as the author says, the budget speeches of the then finance minister J.R. Jayewardene was really the first Six Year Plan of Ceylon. The Six Year Plan placed much emphasis on agricultural development and import substitution.

Another important development in the history of planning was the World Bank mission in 1951 (headed by Sir Sydney Caine, head of the London School of Economics). As the author says, the 550 page two volume report can "be regarded as the first comprehensive national plan prepared for Sri Lanka after independence". It is probably the best planning document produced for Sri Lanka. Thereafter, there were other plans and changes in the central institutions of planning - the National Planning Council, the Planning Secretariat, and then in 1965, the Ministry of Planning and Economic Affairs. In all these, Gamani Corea had a leading role. Between 1965 and 1970, the focus was mainly on sectoral planning, apart from macro-economic management. After 1977, the main planning instrument has been the five year Public Investment Program which is revised annually. Godfrey also describes the value of planning in a market economy and points to the kind of experience you can draw upon from other leading market economies. (One possible omission in Godfrey’s history of development planning is the role played by the IMF and IBRD, and to a lesser extent by other UN agencies in shaping Sri Lanka’s social and economic policies.) These chapters on the history of planning offer many valuable insights in the management of Sri Lanka’s current concerns. In a short review, one cannot do justice to the many fascinating dimensions of its contents. Today, in 2018, there is not much transparency in the development of economic plans and policies, and one could even suggest that there are committees dealing with economic affairs operating in the utmost secrecy and influenced heavily by the business community whose major concern is in maintaining low levels of taxation.

The volume contains an instructive chapter on village level planning; it is called micro-planning. The author believes in the concept and considers that village level planning can make an important contribution. There is one problem with micro-planning. When one plans at the national level, that is done, at least in Sri Lanka in air conditioned comfort, in buildings like the Central Bank. When it comes to micro-level planning, there is a category known as "the people" that intrude into the consultative process. You are not confined to consultations with Oxbridge trained economists, foreign and local. The village people do not like to be planned. They are not as ignorant, not to know what is to their advantage or not. These people in villages would like the government to develop village tanks, roads, schools and hospitals. What they want are programmes, and not "integrated" plans to improve their village. The NGOs have been busy improving villages. NGO inputs have been useful so long as they lasted, as they brought in some resources into the village, and gave some little employment. Not many NGO projects have been of lasting impact, although this type of village level activity has been beneficial to the NGOs and their continuing supply of aid from abroad. Government programmes – education, health, agricultural extension services, guaranteed prices for agricultural produce - in the rural areas have contributed to major improvements. The village cannot be considered in isolation as it is so much connected with the rest of the district and the country. The more a village is connected to the rest of the country, it has a greater social and economic standing. Moreover, most of these village level planning aims at developing the villager’s physical assets. The human resources aspect (education, health, employability) is neglected. Although villages can make a much more substantial contribution to the country’s economy, that is not through village level micro-planning.

There is a fascinating chapter on urbanization. Its analysis is as relevant today as when it was written in the 1970s. The statistics have to be upgraded. It has a relevance to provincial councils, and other forms of district administration. The author argues rightly, that Sri Lanka has experienced a decentralized form of urbanization. People have not congregated in Colombo or other major provincial cities. There are problems of definition of what an urban area is, and that is an important issue for the government and local administration. A consequence of this form of decentralized urbanization is that urban populations have maintained their connections with their rural homelands. When someone is working in a factory five or six days a week, and there is reliable transport, it is possible for factory workers to commute on a weekly or daily basis and make their incomes and their quality of living go much further than exclusive urban living.

The chapters on education and employment, written 40 years ago describe a pattern that existed at that time and has been overtaken by events. Since that time, the number of universities has grown to over 20. There has been a massive increase in public employment with about 2 million people being employed in the civil and military establishment. It is obvious that the public service is overmanned and has become a source of employment instead of offering services to the public in an effective and efficient manner. Employing so many people has meant that the public service is an important target of the politician for votes at elections. At least one-fourth of Sri Lanka’s population is dependent on the wages arising from the public service. The decline in the standards of education at university level has meant that they cannot play the important role they could have played in the many districts they are located. The migration to the Middle East, especially from poor segments of society, is not an issue that was prominent when the author wrote his chapters. Adopting his analytical approach, it would be most productive for these chapters to be revised, or new chapters to be written on the current education and employment patterns.

As noted before, Godfrey Gunatilleke rightly believes in the moral dimensions of development, suggesting a pluralistic approach to human wellbeing. He believes in an inclusive approach, and of bringing people who are disadvantaged and in the periphery, to the mainstream of development. In this volume, there is a chapter on reaching out to vulnerable groups and identifying them and developing appropriate policies. In his other writings for the United Nations and related organizations, he has expanded on some of these themes. He refers to Robert McNamara’s important contribution in changing the direction of the World Bank from its exclusive focus on economic development and emphasizing more the imperative of diminishing poverty and inequality. This volume is essential reading for today’s economists and administrators, although current top level administrators are not inclined to read in English.