විසර්ජන පනත් කෙටුම්පත, 1971-72 [ගරු ආචාර්ය එන්. එම්. පෙරේරා]

of income and economic activity cannot be less than Rs. 400 million. The wanton destruction of property, both public and private, can only be described as criminal. The period from April, 1971 has been a period of stagnation. It is not merely that the machinery of Government had to get into a much lower gear but the whole economy of the country had also to slow down, and, what is worse, diverted to channels which cannot be conceived as productive. Nature blessed us with a fair Maha harvest. The insurgents in their madness deprived the people of the full fruits thereof. Any taxes which would have been imposed and collected have still not got into the statute book. Income yielding Corporations like the Gem Corporation have not yet got off the mark.

A few thousand young men and women cannot be allowed to hold this country to ransom. Those who wanted a revolution in 24 hours only succeeded in pushing back revolutionary changes for a considerable time. "Haste makes waste both of time and money", is an old adge. And at no time has this been more glaringly illustrated than on this occasion in Ceylon. Even if we put the best construction on this so-called movement, no one in his senses could believe that stripling teenagers would be the ultimate repositories of power at the successful termination of this revolt. Yet it is necessary to reiterate what I have urged so often both in Parliament and outside. There are no easy short-cuts to socialism. Socialism has to be built in the hard

way. It is a scientific re-ordering of society. A socialist moving towards the building of a socialist society must understand the historical traditions of that society. He must evaluate the social consciousness of its people. We must weigh the class composition of the masses. of the masses. Any socialist who proceeds on the basis that society is a vacuum into which he can pour whatever ideas he has is a dilettante playing about with the

- දෙවන වර කියවීම

I have in my previous Budget Speech also drawn attention to the lesson of Soviet Russia after the revolution of 1917. What was true of Soviet Russia was and is true of all countries that have established or are establishing socialist societies. Let me quote a penetrating observation from one of the best analytical thinkers of socialism. I quote from Isaac Deutscher's "Stalin-A Political Biography", page 221. He refers to the defeat of the insurgents of Kronstadt in March 1921 and draws attention to the conclusion that Lenin drew from that rising. In the words of Lenin himself, "We had advanced too far. We had not secured a sufficient base. The masses had sensed that we ourselves could not as yet consciously formulate, namely, that the direct transition to purely socialist forms, to purely socialist distribution, was beyond our strength, and that, unless we proved able to retreat and to confine ourselves to easier tasks, we would be threatened with disaster". Deutscher points out that this was the time that the New Economic Policy of Lenin replaced the system of war communism that had preceded. "The N.E.P., as that policy came to be known, established a mixed economy. Large scale industry and transport remained state-owned. Private enterprise was allowed in small and medium-sized industry and in trade. Foreign concerns were invited to restart business in Russia even in largescale industry. The requisitioning of food in the countryside was stopped: It was replaced by ordinary agricul tural taxation, first in kind then in money. Later on, the rouble was established. The prime purpose of these sweeping reforms was to reequip industry almost from scratch, to renew the exchange of manufactures for food and raw materials, in a word to re-establish a functioning economy with the help of private capital. The state reserves for itself, apart from the ownership of its largescale enterprises, the overall economic control.”

"In this scheme, the socialist and private sectors of the national eco

විසර්ජන පනත් කෙටුම්පත, 1971-72 (ගරු ආචාර්ය එන්. එම්. පෙරේරා]

In accordance with the promise that this Government gave the House and the country that we shall not keep the people in the dark with regard to our foreign commitments, I placed before this House the exchange of letters with the I. M. F. We have therein indicated the policies we intend to follow in the coming years. We have there also undertaken to consult with the Fund

from time to time if any major changes are contemplated in the policy

that it set out in that declaration. As a result of a number of dialogues we have had with the representatives of the Fund, I am glad to express my appreciation of their sympathetic understanding of the efforts that we are making to solve our prob

lems.

Our difficulties are continuous. Foreign Banks and Foreign Companies have put additional obstacles in our way. Both exporters and importers in the capitalist countries have made things more difficult than they were. Exporters of goods in these countries have refused to accept Letters of Credit of our Banks unless confirmed by foreign international Banks and foreign international Banks have not responded to our appeal to help us by such confirmations. Consequently, many industrial ventures in Ceylon have found it difficult to obtain the industrial raw materials required to keep their factories in full working order. Additional burdens had been placed upon us by freight surcharges at 12 per cent. These surcharges took effect from the 1st of September, 1971. We had resisted this and a number of conferences in which our Ministers praticipated both here and in London availed us nothing. We are reaping the harvest of our own negligence. Much smaller countries which became independent very much later than we did already enjoy the advantages of their own Shipping Lines. Our previous neglect is only being repaired now.

We

-දෙවන වර කියවීම

now being carried on, we will have 3 or 4 ships to carry our own freight in the near future.

Quite naturally and perhaps quite rightly the oil producing countries

of the Middle East have succeeded in obtaining a higher bounty from the foreign companies that are operating in these countries. What was the sequel? We pay higher prices for the crude oil that we import. One would have thought that these oil companies would have

borne the burden of the extra commitment to the Middle East countries and reduced to that extent the

profits they have enjoyed for deca

des.

On the contrary, without the slightest compunction they have passed on the burdens to be carried by small developing countries like Ceylon.

The dollar crisis was not of our

seeking. Faulty and short-sighted followed by successive policies American Governments created a chronic imbalance of payments in the United States, a situtaion that has been aggravated by the enormous expenditure of resources in Vietnam. The United States Government has

adopted corrective measures and we are the hapless and helpless victims of these corrections. The whole process of exchange rate re-alignments and reserve currency deliberations have created a period of uncertainty with adverse consequences for us. The Conference Shipping Lines have used this to add on a further surcharge of freight amounting to 21 per cent.

In these and inumerable ways a small counrty like Ceylon is always We are like at the receiving end. a bird with clipped wings always fluttering to escape but never succeeding. It is this tragic situation which our impatient young men and women so often forget. With the best will in the world, we cannot progress at a rate faster than the circumstances of our position and our situation permit. Small beggars

විසර්ජන පනත් කෙටුම්පත, 1971-72 [ගරු ආචාර්ය එන්. එම්. පෙරේරා]

has therefore, a significant effect on our G.N.P. The increase in this sector was almost wholly due to increased productive activity in paddy. Subsidiary food crops and rubber. Paddy production estimated at 77 million bushels increased by 11 million bushels or 17 per cent in 1970; while the value of production of subsidiary food crops increased by 26 per cent. The increased production was especially marked in the case of pepper, chillies, potatoes and red onions. The production of rubber increased by over 5 per cent;

this increase being chiefly due to an increase in the replanted acreage coming into bearing. In contrast, the performance of tea and coconut, especially the former, has been disappointing. Tea production in 1970 was 3 per cent less than in 1969 and was a continuation of the downward trend that Ceylon has experienced since 1965. The downward trend is attributable to finer plucking and

reduced

fertilizer application. Coconut production estimated at 2,447 million nuts has increased by less than 1 per cent in 1970. Unfavourable weather conditions, absence of adequate progress in replanting schemes and reduced fertilizer application are the primary causes of this almost stagnant situation.

Because of the importance of exports and imports, the estimates of exports and imports, the estimates of G.N.P. must be adjusted for movements in the terms of trade in determining the level of National Income for 1970. Ceylon's terms of trade declined by almost 4 per cent last year. As a consequence of this adverse movement it is estimated that Ceylon has suffered a loss of

income of Rs. 903 million or almost 10 per cent of our G.N.P. When valued in terms of 1959 prices, the prices prevailing in 1970 have caused a loss of Rs. 576 million for tea, Rs. 253 million for rubber, Rs. 40 million for coconut products and Rs. 34 million for other products. The effect of this adverse movement on our import capacity can be appreciated when it is seen that any attempts on our part

-දෙවන වර කියවීම position by cutting down imports are virtually nullified by price escalations of our imported commodities. The general upward trend in the prices of raw materials as well as manufactured goods, consequent on the inflationary trends in developing countries, makes it extremely difficult to effect substantial reductions in the value of imports, even if the volume is kept well in check.

Mr. Speaker, in my last Budget Speech I tentatively assessed the likely growth in G.N.P. at constant prices in 1971 at 5 per cent. The outbreak of insurgent activities and its consequent disruption of almost every sector of the economy in varying degrees, has of necessity affected our economic performance this year. In particular, the agricultural sector is expected to have a rate of growth very much less than that of 1970. This of domestic agriculture while export is mainly due to the poor performance agriculture is not expected to do any better than in the previous year. The performance of the construction sector is expected to be lower than in the previous year and the manufacturing sector is expected to show only a very slight increase over 1970. The smaller rate of growth in these two sectors is additionally due to the lesser availability of raw materials, which in turn is almost wholly attributable to the extremely critical foreign exchange situation that has confronted us throughout the year. A out by the Central Bank, which has mid-year preliminary forecast worked taken account of these factors, estimates that G.N.P. at constant prices would now increase at a lower rate approximating 1 per cent in 1971. In absolute terms, this amounts to a loss of approximately Rs. 400 million over our expectations of the growth rate for 1971 as envisaged last year. If a population increase of 2.2 per cent is allowed for in 1971, there would be a negative per capita rate of growth of approximately 1 per cent this year.

When one considers the devastation that accompanied the insurgent activities beginning on the 4th April. 1971, and the dislocation of the