Sri Lanka needs a Planning Commission

by Kumar David

Socialist, Planner and Agnostic His nemesis in every way

In a previous article I quoted from a publication of the Indian Planning Commission which said: “Since 1947, the Indian economy has been premised on the concept of planning. This has been carried through Five-Year Plans, developed, executed, and monitored by the Planning Commission. Nehru was ex-officio Chairman and the commission had a Deputy Chairman of Cabinet rank. Allocation of state resources was based on a transparent and objective mechanism. The Narendra Modi government announced the dissolution of the Planning Commission and replaced it by a think-tank called the National Institution for Transforming India”.

The next government of Lanka will be what I hereafter call a Left option (JVP-NPP-Anuran) or a Right option (some sort of UNP-RW-Sajith Combo). In either case a Planning Commission is an essential tool. Yes, its tasks will be somewhat different in the two cases but to an extent, as I will explain anon, be similar. One similarity will be the composition of the Commission; people drawn from state institutions (public servants), intellectual and political strategists and persons appointed by entities like the Right to Information bodies. Sri Lanka has never had a formal Planning Commission, ever. What it did have were ad-hoc arrangements which were set-up and mucked-up by successive governments.

During the early years of independence, successive governments placed little emphasis on development planning. The National Planning Council was established in 1956 as part of the Ministry of Finance. A new Ministry of Planning and Economic Affairs (no longer in existence) established in 1965 decided not to draft another single long-term plan and instead drew up separate plans for different ministries. The National Planning Council was established in 1956 as part of the Ministry of Finance. Between 1957 and 1959, the council and the Central Bank depended excessively on a variety of foreign economists. A new Ministry of Planning and Economic Affairs (no longer in existence) was established in 1965 and decided not to draft a long-term plan. Instead, it drew up a number plans involving different ministries.

Surprisingly, it was UNP government that came to power later that shifted toward formal and comprehensive state direction of the economy. The Five-Year Plan for 1972-76 had two principal aspects. First, it sought to remove disparities in incomes and living standards. Second, the plan sought to promote economic growth and to reduce unemployment. It envisioned rapid growth in agriculture, not only in the traditional crops of rice, tea, rubber, and coconut, but in such minor crops as sunflower, manioc, cotton, cashew, pineapple, and cocoa. Like the Ten-Year Plan of 1959, this plan proved to be based on overly optimistic assumptions, and it soon ceased to exercise influence on government’s economic policy. In 1975 it was replaced by a Two-Year Plan that placed even greater emphasis on agricultural growth and less on industrial development.

After 1977 the government continued to accept the principle of state direction of economic activity, but in contrast to the 1970-77 period it encouraged the private sector to participate in the economy. Its first Five-Year Plan (1978-83) included an ambitious public investment program to be financed largely by overseas grants and loans.

A quick check of this contradictory, chequered and befuddling story is available at the following site from which I have, at my discretion, selected the information presented in the previous three paragraphs.

http://www.country-data.com/cgi-bin/query/r-13203.html#:~:text=The%20National%20Planning%20Council%20was,of%20the%20Ministry%20of%20Finance.

To repeat, Sri Lanka has never had a formal Planning Commission. It has only had unstable ad-hoc arrangements as described above. A formal Planning Commission modelled on Nehru-era Indian experience is now urgently needed. Membership will have to be drawn from intellectuals of stature, state institutions (public servants), able political strategists and persons appointed by entities like the Right to Information bodies.

In this connection two articles by Lionel Bopage in the Colombo Telegraph website on 25 Sept (Part I) 2023 and Oct. 1 (Part II) 2023 are interesting because they touch on the political side. Their theme is that devolution and the preservation of national security can both be ensured by sensible policy choices. [Sri Lanka – Nation Building, Devolution & The 13th Amendment – Part 1; Sri Lanka – Nation Building, Devolution and the 13th Amendment – Part II].

Whether what I called the Left Option or the Right Option in the second paragraph of this essay prevails at the next election there are certain continuities in national planning that must ride-through whichever the outcome. Let’s be clear, electoral victory of the Left Option will not mean revolution because the JVP-NPP will have to seek redemption through a solemn undertaking that democracy will continue and democratic elections for change of government will be held at regular intervals (otherwise it can kiss goodbye to any hopes of winning). The Anura-and-NPP are not Lenin and the Bolsheviks.

Victory does not mean a social and political revolution where opponents will be dispatched by the tumbril-load to the guillotine. There will of course be substantial policy changes (otherwise what’s the point of winning an election), but less than revolutionary. This is where the role of a Planning Commission becomes important. It makes it possible to ride-through utterly disruptive effects but still implement policy differences reflecting the priorities of different periods and different governments. That’s the trick.

The global scenario will change profoundly in the next few months due of the Hamas led attack (Palestinian uprising). These changes will affect Lanka since the US, Iran, Saudi Arabia, the UAE and Syria and Russia and China will respond in different ways. If Iran can test a nuclear device and delivery system it is likely to use the opportunity since Israel is unlikely to counterattack because of military constraints and unwillingness to provoke the Muslim world at large. Be that as it may, Netanyahu surely the most unpopular, despotic, right-wing, and undeniably the most corrupt Prime Minister Israel has ever had, will be ruthless in Gaza and bomb it to cinders. When tens of thousands of Palestinians perish the Arab world will be irate.

The UN General Assembly and the policies of China, Russia, the Muslim countries of Asia and Central Asia will all be thrown into turmoil as outrages multiply. Turkey’s Erdogan said “the intrusion of US warships into the region will encourage Israel to unleash a massacre”. India’s Modi is an appalling ass who shot his mouth off with a commitment of undying loyalty to Israel’s most reactionary and fascistic government, the Netanyahu government, which is hell-bent on a ‘final solution’ to the Palestinian question by the physical elimination or eviction of the Palestinians from their homeland.

(I do not contest the right of the Jewish people to a homeland; that is the right of Israel to statehood). But asinine Modi shot his mouth off prematurely and created huge difficulties for Indian foreign policy. However, this this article is not about world affairs and I am only painting a worst case scenario in a one paragraph to alert my readers to a fast changing world. My point is that in this context Lanka needs a well-structured Planning Commission that can sustain policy continuity and help the country ride through impending vagaries.

Planning Commission

The coming period will be filled with uncertainty. It is necessary to reduce risks to the national economy arising from uncertainties in trade, investment and supply chain disruptions. The dichotomy between state and market has always been a factor, but the enormous uncertainties that serious global conflicts in the recent period have caused increase the hazards and a flexible planning commission is a tool which can be used to address these concerns. These conflicts have intensified after the Hams-Israel conflict.

There is an added factor; IMF conditions on debt renewal will evoke different responses in say a RW led, an RW-SLPP oriented, or an Anura-NPP group. A well-staffed, intelligent and flexible planning commission is a contrivance that can navigate these uncharted waters and help the country protect itself from supply-chain disruptions and hitches arising from market vs. statist inconstancies. These dichotomies are inescapable. A rightist government will strive to use taxation as a tool to promote business entrepreneurship. A leftist one will tend to reverse these priorities. A Planning Commission staffed by intellectuals and professionals must maintain an even keel through these vicissitudes.