Lanka Citizen

‘77 Cyanide Memories for The 2nd Coming of the 500-year Samsara

When asked during the recent campaign who was responsible? The US / UK / Canadian government which supported the UNP to the hilt, said, “Not I”, and the IMF and World Bank said, “Not I”, and the Employers’ Federation of Ceylon (sic!) said, “Not I,” and the UNP said,”Not I,” and the 200,000 murdered and the 500,000 maimed sighed, “Ah! Samsara!.” Coming soon again to a theatre of war near you. Sponsored by your local private bank.

On 23rd September 1977, Mr. JR Jayawardena introduced a constitutional amendment in Parliament to make himself President, with full executive powers.

The first act of the new regime was to release Rs. 700 million to ‘liberalize’ import laws. The UNP government then announced a guaranteed weekly ration of flour and rice, in keeping with its electoral promises. Soon after, however, the UNP Finance Minister Ronnie De Mel visited the World Bank, the IMF and the imperialist countries belonging to the “Sri Lanka Aid Consortium ” in October 1977.

Under the previous United Front government, 60% of economy was nationalized or remained under state ownership or control: Local industries were encouraged to produce goods and protected from foreign competition. There had been a complete ban on imports, which included a prohibitive tax. Imports of foodstuffs had been also banned, and farmers in the northern Wanni district also benefited.

The UNP Government’s first Budget of November 1977, which was adopted by the National State Assembly (NSA) on 1st December 1977, abolished in one stroke the guaranteed supply of flour and sugar to the people, and at the same time subsidized petrol and fertilizer for big corporations. The Minister also abolished all exchange and import controls, resulting in the abolition of all public sector monopolies for the imports of medicines, milk, yarns, textiles, oil, etc. The UNP government then unleashed a flood of foreign luxury goods and durable consumer items into the country, from canned foods to cars and television sets (though there were no television channels yet.) The budget also devalued the rupee by almost 100% of the official rate.

The UNP government of 1977 swept all controls for capital away, and relinked the country’s economy to the changing needs of the imperialist economies. These measures involved: trade and payments liberalization, currency devaluation, high interest rates, an open door to foreign capital, the setting up of a free trade zone, and the virtual removal of social welfare subsidies, all done under the dictates of the World Bank and the IMF. The state sector comprising industrial and trading corporations as well as the plantations and transport were either privatized outright or came under the control of private business .

In January 1978, parliament debated the establishment of free trade zones covering a 150 square mile area, between the Maha Oya and the Kelani Ganga, during which debate the President of the country JR Jayawardene made his famous speech:

“So, we have demarcated a certain area. In that area, I want to say quite frankly, let the people of the world including our own capitalists come and make it a ‘robber barons’ area…. Let anybody come and invest … You cannot have industrial establishments having wildcat strikes … In this area there can be no strikes. .. So, if you are going to make this area an area where capitalists … invest, certain laws have to be made non-operable in that region.” (Hansard, January 19, 1978)

S.B.D. De Silva writes that the labor market was to be “tidied up along with an informal repression of militant trade-unionism,” and the repression of democratic rights. Violence was then unleashed on workers. Hundreds of workers at Dasa Industries in Kelaniya, “mostly young women,” enrolled into the union and struck work that January 1978, in solidarity with 27 male electrical workers who had struck work and were locked out

Their union noted: “A dastardly attack by UNP thugs on leaders of the newly formed Branch Union almost immediately afterwards, did not succeed in breaking up our newly formed Branch Union, but seriously impeded its expansion. The Jathika Sevaka Sangamaya, headed by JR Jayawardene’s “strong man” Cyril Matthew, the Minister of Industries, was the only Union recognized by Dasa Industries.”

Soon after the adoption by the government of the IMF and World Bank’s economic policies, an IMF resident officer was posted to Sri Lanka for the first time. In March 1978, a visiting World Bank official praised the government for its “courageous” budget and announced it would back the establishment of the massive Mahaweli project, and back the establishment of free trade zones where unions wouldn’t be allowed to exist.

International Banks and imperialist countries attending the “Aid Consortium” meeting in April then pledged a record Rs. 6.8 billion to back the government’s Ôcourage.’ The government’s subsequent budget then announced tax holidays for corporations, abolished price controls on most goods, and imposed heavier export duties on tea alone, ensuring continued low wage levels for almost 1 million plantation workers. The acceptance of economic control by the IMF and World Bank had unleashed unparalleled repression in many countries, and Sri Lanka would also soon be overwhelmed by political violence.

After a circular was issued on 15th September by the Ministry of Public Administration to all Government departments, services and corporations, meetings of employees in or near their workplaces were banned, and trade union militants were arbitrarily transferred or interdicted on various pretexts.

One union noted: “All this was done to prevent free discussion of the question of participation in the strike amongst the employees in the public sector. In the meantime, newspaper propaganda was given to alleged threats of racial and other disturbances being created in the context of the token strike, and volunteer units of the Army were called out. All this was for the purpose of building up a state of public alarm, and was obviously designed to pave the way for the declaration of a State of Emergency ultimately, if the Government thought it necessary to prevent the strike taking place by that means, or to resort to repression if it did.”

At their Annual General Meeting on 29th September, the Chairman of the Employers’ Federation of Ceylon had “seized upon the situation created by the Government’s actions and statements” in relation to the call for the token strike on 28th September, to call upon the Government, “to consider enacting as a matter of priority the necessary legislation to deal with political strikes in the private sector without the declaration of an Emergency.” The Chairman added that it might be desirable:

“To introduce legislation enforcing a total ban on strikes and lock-outs in essential services with provision for compulsory adjudication or arbitration and the requirement of a sixty per cent support of the workers through secret ballot for strike action in non-essential services.”

The Free Trade Zone had exacerbated other problems. Domestic production was seriously affected by the removal of protection after 1977. Export-oriented industrialization relegated indigenous enterprises ‘to the role of subcontractors to foreign firms.’

S.B.D. De Silva writes that the Free Trade Zone was dominated by a ready-made garments industry, and foreign firms enjoying tax holidays and other concessions “asserted themselves over established local firms.” De Silva points to a parliamentary committee discussion n 1979:

“Hon De Mel [Minister of Finance]: …Korea has exhausted her quota. Hong Kong has exhausted, Singapore is exhausting; so the only thing [the foreign investors] find attractive in Sri Lanka is to collar Sri Lanka’s quota. Do you agree?

Mr. A. Gnanam [a leading Sri Lankan industrialist] : I agree.

Hon. De Mel: Could Sri Lankan industrialists not have got the quota and done this industry without any foreign help?

Mr. Gnanam: … Sri Lanka has the best garment industries … If they were allowed to export [with a tax holiday] they would have done without the Free Trade Zone.

Hon. De Mel: In other words, the Free Trade Zone has only deprived the Sri Lankan industrialists!” (Hansard)

Meanwhile, the rise in imports, far exceeding tourism income and remittances from Sri Lankan workers in the Middle East, caused a rapid rundown in foreign exchange reserves. A trade deficit in 1978 was followed by a massive deficit in 1979. The foreign debt burden expanded drastically. The deepening crisis then led the government into “strategies of repression” in the eighties and after (De Silva).

Mass firings of workers, the cataclysm of war and mass murder followed.

When asked during the recent campaign who was responsible? The US / UK / Canadian government which supported the UNP to the hilt, said, “Not I”, and the IMF and World Bank said, “Not I”, and the Employers’ Federation of Ceylon (sic!) said, “Not I,” and the UNP said,”Not I,” and the 200,000 murdered and the 500,000 maimed sighed, “Ah! Samsara!.”

Coming soon again to a theatre of war near you. Sponsored by your local private bank.