India and Sri Lanka are the greatest of friends.We are witnessing dramatic developments in our part of the world. Ever since the Industrial Revolution in the early part of the nineteenth century, the centre of gravity for economic development was very much Western Europe, said External Affairs Minister Prof. G.L. Peiris speaking at a public lecture on "The Rise of Asia and Sri Lanka's Role" Institute for Defence Studies and Analyses (IDSA) in New Delhi, India.
Minister Peiris said in the age of mercantilism, countries in our part of the world were seen simply as sources of raw materials which supplied the factories of Europe. Today, there has been a fundamental transformation, and these countries at the present time are major manufacturing economies and knowledge based hubs.
"We are witnessing dramatic developments in our part of the world. Ever since the Industrial Revolution in the early part of the nineteenth century, the centre of gravity for economic development was very much Western Europe. And in the age of mercantilism, countries in our part of the world were seen simply as sources of raw materials which supplied the factories of Europe. Today, there has been a fundamental transformation, and these countries at the present time are major manufacturing economies and knowledge based hubs. We have converted ourselves from price-takers to price-makers and vast populations in South Asia and the Pacific Rim have become active participants in economic processes which have transformed their lives fundamentally. This has brought in its wake concerns of very considerable magnitude. There is no doubt today that the vast majority of emerging global leaders in the economic sector come from this part of the world. And that is likely to remain the position for many more decades.
"What I would like to do within this brief period available is to focus on some aspects of the policies that we in Sri Lanka have been putting in place to make it possible for our country to derive the maximum benefit from the dramatic changes which are taking place around us. President Mahinda Rajapaksa has defined his vision in this regard as our country emerges from three decades of excruciatingly painful conflict and we breathe new life and vitality into our economy and we put our country on the accelerated track of economic and social development. President Rajapaksa has given dynamic leadership to the task of attuning ourselves to these rapidly changing circumstances so that Sri Lanka will be poised to benefit to the maximum possible extent from these contemporary developments. Prime Minister Dr. Manmohan Singh of India has on many occasions in his discussions with us underlined his own ideas in this regard. He has told us in the most emphatic terms that his vision for India is not for India to develop and prosper by herself in isolation. On one occasion he used the vivid metaphor - as the water level rises and takes with it all the ships to a higher level, this is the kind of future that he would envision for the whole of South Asia.
"No doubt this brings many opportunities within our reach, but those opportunities are also accompanied by daunting challenges. What are the steps that we need to put in place to enable us to confront those challenges successfully. Let me start with the implications of the remark that I made. These processes by their very nature involve large populations. This means that these populations become vulnerable in many respects. They are exposed to many temptations. There are new manifestations of assets, equities, bonds. All of these which in an earlier time were confined to the elite are now available to increasing numbers of the members of the public who stand in need of special protection because of the enhanced degree of exposure. We have had in Sri Lanka the painful experience relating to the collapse of finance companies and bankruptcy of a large number of individuals. This has made protective measures necessary which run counter to traditional assumptions of the law and social organization, but measures which are necessary to protect people in the new situations which have manifested themselves. It has been found necessary to impose heavier obligations on directors of companies for example and more exacting standards relating to disclosure. We have had to depart from the traditional premise of common law caveat emptor, let the buyer be aware - protect yourself as best you can. There is today a recognition of an increasing role for the State in protecting the population because of the exposure to these developments. In many of our countries advertising poses risks to those who are not wary of the effect of this. People can be duped and misled and innovative measures may be necessary to protect people from consequences of that kind.
"In many of our countries another challenge relates to population movement from the rural areas to the towns. Increasing prosperity, industrialization and the transformation of the economy have a profound impact on the rhythm of life. Traditional patterns of life are interrupted and reversed. In 1957 Sri Lanka enacted major legislation known as the Paddy Lands Act, which has proved exceedingly beneficial. Some of the proponents of that legislation foresaw the dangers that lay ahead. The legislative framework of the Paddy Lands Act has served Sri Lanka extremely well. The idea was to discourage mass movement of people from the rural areas into the cities because that brings with it many problems relating to housing, drugs, overcrowding. All kinds of problems can be avoided if people can be persuaded to remain in their rural environment and to prosper in that environment. But this means that you have to provide for those people in the villages of the country, the facilities and the resources which they need to make a success of their lives. In that regard Sri Lankan policy at that time ran counter to some of the orthodox assumptions of the Bretton Woods Institutions which generally believed that in order to derive the maximum benefit from economic development, people must be encouraged to come close to the towns, to live in the vicinity of towns which are the growth centres. But we have done something different, we revamped our rules relating to land tenure and cultivation of land, and that was the foundation upon which we built a whole scale of values and of regulatory systems which enabled people to become major beneficiaries of the processes of contemporary development without deserting their traditional way of life and without coming into the towns.
"These changes that I am talking about, globalization, the rise of giants in Asia and the Pacific Rim, these have also had a profound impact on matters relating to the environment. In Sri Lanka, we have always believed fervently that one does not have to choose between economic development and the preservation of the environment. Our policy makers have never asked themselves the question, which of these two things are more important. Which one would you be prepared to sacrifice in order to uphold the other. It has been our deep conviction that these are complementary rather than mutually antagonistic facets. Our country right now is developing at approximately seven percent, which is a remarkable achievement given the surrounding circumstances. But we believe that economic development, to be sustainable, must necessarily be accompanied by emphasis on considerations relating to the environment. If there is degradation of the environment, if there is no attempt made to regulate industry, then the economic development that you achieve is likely to be evanescent and fleeting. It will be short term, it is not something that will become deeply entrenched in the country. In Sri Lanka, over the decades, we have endeavored to strike an equilibrium between rapid economic development on the one hand and the preservation of the environment on the other. These kinds of issues have been dealt with in your country as well. There is a very fascinating judgment of the Supreme Court of India where an organization committed to the environment went to the Supreme Court of India with a fundamental rights case and complained of the yellowing of the Taj Mahal. The complaint was that the fumes issuing from factories in the neighbourhood were bringing about irreparable damage to the Taj Mahal and the Supreme Court was invited to step in to prevent this situation from deteriorating. The owners of the factories on the other hand argued that if this application were to succeed they would have to put in place very expensive measures to deal with the problem of pollution and this would greatly diminish their capability to employ larger numbers of people. The gravamen of the argument adduced before the Supreme Court of India by the owners of the factories was that here one did however have to reluctantly make a choice between these competing objectives and if you were determined to protect the environment you would really be doing that at the expense of providing employment for larger numbers of people. By that one had to make a choice between these two things. But the Supreme Court in a particularly imaginative judgment said that no such choice needs to be made and that the course of action which would be preferable in terms of policy would be to phase out the measures that the owners of the factories would be required to take in order to repair this damage. They would not have to make the full investment immediately. The Supreme Court came out with a structured plan which would obligate the owners of these factories, over a period, in an incremental manner, to put in place a series of measures that would enable the environment to be preserved while not diminishing in an unacceptable way, their capability to provide employment for the people of the area.
"In Sri Lanka we have found that there are other corollaries to these processes of development which impact on, for example, health policy. I do not know what the situation is in India but in Sri Lanka we have come across a deeply distressing phenomenon that some diseases like diabetes mellitus are beginning to afflict very young people; school children, teenagers, and people in the villages. This was earlier regarded as an urban phenomenon but it is now spreading across the social spectrum and it is beginning to afflict young people. There are very serious problems which Governments in our part of the world have to confront with regard to non-communicable diseases. In Sri Lanka this has posed very vexed problems for the health authorities because non-communicable diseases like kidney diseases, high blood pressure, diabetes, all of these things require treatment and require drugs which are extremely expensive. If you have a limited pool of resources which you have to spread across a very wide area you then have to make extremely difficult choices. Are your going to spend millions of rupees on a drug which may be required to keep a cancer patient alive for a relatively short period of time when you know that the same sum of money can be used to provide treatment for hundreds suffering from other kinds of ailments. How do you balance these different considerations? So these are difficult policy choices that the health authorities have been confronted with in our part of the world.
"There are also cultural issues that we have had to deal with. For example, one of the manifestations of this kind of prosperity has been new kinds of employment or new avenues of employment which have become available. BPOs for example, that is, companies that outsource. Many European companies have outsourced airline ticketing for example. People in our part of the world have benefitted enormously from outsourcing; employment opportunities have been generated. But there has been quite an exorbitant price to pay in cultural terms. Young people, boys and girls, have to work throughout the night because of time differences in different parts of the world. That has had a negative impact on family life and the incidence of divorce. All of these have been concomitants of the changes that have taken place in the economies of our countries.
"In Sri Lanka we have many international schools. Moreover, education has become highly competitive. We have had the painful experience in our country where students who attend international schools, although exposed to a certain breadth of education, sometimes feels a lacuna, with regard to value systems, and things that they believe in. That can result in some cases in a sense of imbalance with regard to preparation for facing the vicissitudes and upheavals of life. How do you reconcile these kinds of developments with cultural identity which is an anchor in the troubled world in which we live?
"With regard to the economy, the governments in our part of the world have had difficult decisions to make. In Sri Lanka we have considered it very important not to focus exclusively on indices such as GDP growth and per capita income. We have insisted that this must be accompanied by social equity. Not only must there be rapid economic development, like there has been in Sri Lanka since the end of the war in May 2009. The fruits of that development must be equitably distributed among all sections of the population. We have structured a set of policies which have enabled us to achieve this result. In other words, economic development has not been solely and exclusively for the benefit of major cities, the urban and the peri-urban areas. This has been one of the pivots of economic policy in Sri Lanka, that economic development must be accompanied by social equity. Otherwise it has been the painful experience of our country which has experienced two major youth insurrections that economic development per se unless it is accompanied by the component of social equity, can generate tensions of such intensity as to tear asunder the foundations of society by polarizing society. We have gone out of our way to avoid that. As you achieve economic prosperity we have also considered it crucial to provide avenues for achieving social mobility for people to improve their lot in life by exposure to programmes of training which must be available across the board and not be confined to miniscule segments of society.
"This also underlines the necessity for safety nets. That is very important. As you have this kind of dramatic development which has been very much in evidence in our countries in the recent past, you do need systems and procedures which provide an adequate measure of protection for the more vulnerable segments of the community - safety nets. In your country one of the most fascinating experiments in that regard has been the Rural Employment Guarantee Act which yielded tremendous benefits. It is a very imaginative concept which has enabled the poorest families in the country to have the benefit of a minimum number of days of work every year which in turn enables them to purchase for their families the bare essentials of life. In Sri Lanka there is the somewhat analogous concept relating to what we have called the Divi Neguma concept. Divi Neguma, means literally the upliftment of economic conditions in a family setting. It is a coordinated programme which enables a family unit to enhance its income by resorting to avenues of ancillary employment. Something that you do at home. It may be the cultivation of flowers, of ferns, or foliage, or cake making, or hairdressing; something that you do at home to enhance the family income. It has two components; one is better nutrition for the family and the second aspect is the savings component. These kinds of innovations which are really intended to be safety nets that protect the weaker sections of the community in the midst of economic upheavals that we have been experiencing in our parts of the world are important and necessary. These sorts of ideas also need to receive expression in political institutions. In India, in Sri Lanka, in many countries of South Asia, there has been a very sharp focus on grassroots political institutions.
To be continued