The folly of nationalization | Daily News

The folly of nationalization

President Ranil Wickremesinghe has put his finger on the exact spot that has caused the country to go bankrupt 75 years after Independence. Speaking at the 71st death anniversary of the country’s first Prime Minister D.S. Senanayake, the President said the dumping of the free market policies of D.S. Senanayake from 1956 onwards had led to the present pathetic state of the country.

He said that Senanayake’s vision was to create a free economy which meant that business should be done by the private sector so that the country can be developed with the tax revenue obtained from them. However, due to the nationalization wave of 1956, the Government took over the task of doing business and that was why the tax revenue was inadequate for the country’s development.

It was from this tax revenue garnered from the private sector that we were able to afford free education and a free health service. With the State undertaking to do business, there is insufficient funding to pay for free education and the free health service, the President revealed.

President Wickremesinghe said the country has distanced itself from D.S. Senanayake’s policies, but following his vision Singapore has become a developed country today. “We have become a bankrupt nation 75 years after Prime Minister D.S. Senanayake worked to bring independence to this country. However, now we have a chance to restructure debts and restore normality.

“In 1948, Sri Lanka was the second most developed country after Japan as a result of Senanayake’s policies. But what happened to us? Countries such as South Korea, Malaysia, Singapore, Indonesia, Thailand, Vietnam and Bangladesh have made vast strides. But why did we fall back?,” the President asked.

The President also noted that Prime Minister Senanayake requested the people to protect their Sri Lankan identity. “He had stressed that the rights of the majority Sinhalese and the minority groups should be safeguarded. But we developed a nationalist agenda in 1956, which was followed by an ethnic conflict. Therefore, if we are to move forward as a nation, we need to do so while keeping the Sri Lankan identity in mind. This country failed due to extremist and religious ideologies. Singapore did not allow that to happen.”

President Wickremesinghe, in a nutshell, had laid bare the underlying reasons for the country’s present predicament. President Wickremesinghe is not alone in making this diagnosis. Former President Chandrika Kumaratunga apologized to the country for the 1956 policies of her father which divided the communities on ethnic lines and took steps to continue with the market economy by giving it a ‘Human Face’.

Unlike her father’s nationalization policies and those of her mother after that, she boldly undertook to reverse and dismantle the socialist outlook of the Sri Lanka Freedom Party. She famously went on to say “I who was a good socialist will now be a good capitalist”, shortly after becoming President in 1994.

This about sums up the whole tale of the downward slide of the country into bankruptcy when the daughter of the architect of the nationalization policies owning up to the folly of her father and asking forbearance on his behalf.

Post-1956, all flourishing private enterprises were taken over by the Government purely with a view to fit into the election campaign rhetoric and the nationalist wave which had as its theme the catchy line ‘Apey Aanduwa’ (Our Government). No thought was given as to what consequences will result to the country by such a move.

Nothing was spared from nationalization that included even Christian missionary schools with the Government stepping into their shoes to undertake the running of business. The long list of failed State-Owned Enterprises (SOEs) and the litany of mind boggling losses that were passed on to the public form the legacy of the nationalization policies. Like the President said, the quantum of the losses suffered as a result of the State undertaking to do business would have been sufficient to create 100 Mahaweli Projects in the country.

Not just the harm done to the economy, post- 1956 also saw a fractured society with the polity sharply divided on political lines. Instead of national unity, so essential to economic development, what was created was a culture of hate, rancour and bitterness. Post election violence took on an established pattern and entire communities were divided into political camps, giving way to the pernicious patronage system that saw Government jobs handed out, not on merit, but chiefly based on political affiliations. All of these had their origins post- 1956, resulting in the present mess.

It is time to break away from the past and like the President said an entire new course charted for the country that would lead to its renaissance from the present gloom. Of course, deep-rooted and established mindsets cannot be changed overnight and past hangovers are likely to linger. But a majority of Sri Lankans are more likely to get a good grasp of the bigger picture and bear with the hardships and difficulties until we turn the corner which the President has assured would not be long in coming.


Add new comment