- Conversations with Sri Lanka’s Top Economists 4
Man from the plantations industry
I met Anura Ekanayake, Anura to his friends, in early 1990s when he was the Director of Planning at the Ministry of Plantations Industry. There, he was engaged in modernising Sri Lanka’s three tree crops – tea, rubber and coconut – under a number of development projects implemented by the Ministry.
One such project was the Tea Small Holder Development Project, funded by the Asian Development Bank by way of a concessionary credit line. This project aimed at increasing the extent of tea cultivation in the low country areas making tea growing an inclusive affair and modernising the private tea factories which had been in a state of total neglect due to lack of funds for investment. Both segments of the project had a credit component managed by the Central Bank under which funds were released to prospective borrowers through the country’s leading development and commercial banks.
I was the Director in charge of the credit component at the Central Bank and had to work in close collaboration with Anura who spearheaded the project at the Ministry. We had frequent meetings together to plan, execute, troubleshoot and progress-monitor the tea project which was considered important at that time in terms of Sri Lanka’s development strategies. That was how I came to know Anura.
Creating the tea smallholder sector
Our mission was to rescue the ailing tea sector and take it to a new horizon so that it could continue to be an income cum employment provider as well as a foreign exchange earner for the country. By the reckoning of ADB, the Tea Small Holder Development Project was a success story.
Hundreds of private tea factories located in the tea country were supplied with electricity, modern machinery including colour separators and technical knowhow to process green leaf bought from tea small holders into black tea. On the other side of the coin, tea cultivation was promoted among smallholders in the low country areas. Existing small private tea plantations were given support to rehabilitate soil and replant them with improved varieties, namely, vegetatively propagated or VP teas. In addition, new virgin lands in the low country area were opened for tea cultivation. The final result was the development of a new tea industry, separate from mega plantations.
The new sector was owned by smallholders from a half an acre to 50 acres and within years, it grew considerably in volume eventually carving out for itself a share of about 65% of the total tea output. Its success was demonstrated by the remarkable increase in the total tea output as well as the average yield. The output increased from about 200 million kg in late 1980s to about 300 million kg by 2000. The yield in the tea sector nearly doubled from about 950 kg per hectare to 1800 kg per hectare during this period. Of this, the attainment of tea smallholders was extremely impressive with a yield level exceeding 2,200 kg per hectare. This was one of the unique achievements of Anura, of course in a teamwork arrangement, as a bureaucrat.
A one on one meeting
To know more about Anura’s career development, thinking, views and ideologies, I met him in Colombo recently. That was a long one on one conversation. He narrated his story to me in his usual soft-spoken gentlemanly language.
A student farmer
He started his story from his school days at the Dharmaraja College in Kandy. “I travelled to Dharmaraja by train from my hometown in Wattegama, a little town located in about 10 miles away from Kandy. To come to the train station, I had to walk about a mile daily. My father was in government service working as an agricultural extension officer. He had a strict policy that I should earn my pocket money. So, supported by his technical help, I started cultivating a fruit and vegetable garden. I sold what I grew to the market and earned a good income,” he said. That exposure to scientific farming was to pay him substantial dividends in his later life as an agricultural economist.
The youth who were economically deprived thought that there was nothing to lose but everything to gain by taking up arms. To break it, countries should have a rapid economic development of which the fruits of development should be distributed among all citizens fairly. In this case, the youth will realise that there is everything to lose if they take up arms. To have a rapid economic growth, the countries in the region should cooperate with each other politically, economically, commercially and technologically. If Sri Lanka tries to live in isolation as many of the country’s leaders are preaching today, I can guarantee that there will be another youth revolt pretty soon. The groundwork for this is already being laid by the slowed down economic growth in the last 5 years.
Extra investment in math
How was his university career? I asked him. “I did arts subjects for A Level,” he said. Based on his A level results, he had joined the Peradeniya University in 1973. “I wanted to do a special degree in economics but I had two problems there. One was that I hadn’t offered economics for my A Level. The other was my inadequate knowledge of math. So, I had to make an extra effort to master both economics and math on my own. But I succeeded and could complete the degree specialising in money and banking. I had the opportunity for learning economics under such good teachers like W.D. Lakshman, Dani Atapattu and Piyasiri Wickramasekera, just to mention a few.”
At PGIA of Peradeniya University
Immediately after completing his Bachelor’s degree, Anura joined the Postgraduate Institute of Agriculture at Peradeniya to do a Master’s degree in Agricultural Economics. That degree he completed in 1978. It paved way for him to join the newly established Mahaweli Authority in 1979 as an economist.
Settling Mahaweli farmers
What did he do at Mahaweli? I asked him. “At that time, Mahaweli was fully staffed by engineers. There were no economists or social scientists, though it had to complete human settlements in the new lands fed by Mahaweli waters. My job was to do the cost-benefit analyses of Mahaweli settlements and advise the management. It was a new area and I developed my liking to agricultural economics because of the practical experience I got.” So, Anura did practice agriculture as a school boy, was coached in scientific farming by his father at home, improved knowledge of agriculture at postgraduate level and became an ever-lover of agriculture through his first job.
Research on farmer productivity
While being at Mahaweli, Anura secured a placement in the doctoral programme at the Australian National University to do further research in agricultural economics for a PhD Degree. “My thesis was on human capital and economic efficiency for which I studied the efficiency levels of newly settled Mahaweli farmers,” he said. “It was an econometric model that used input and output levels in farming. I built a production possibility frontier for such farmers given the availability of an optimal resource base that included farming technology as well. The findings were startling. Mahaweli farmers were about 30% below the potential output they could have got, meaning that the whole operation needed productivity improvement. This was understandable because the farmers had been selected on an ad hoc basis without reference to their previous experience or training in farming. My research pointed to the need for introducing extensive training in farm techniques, including water management, to new settlers.”
The Job at the Ministry of Plantations Industry
This is an instance where developing countries commonly fail. They are poor not only in terms of resources and knowledge, but also in terms of their ability to transfer knowledge into effective action. Within the politicised bureaucracy in Mahaweli, Anura’s findings got themselves buried. This made him look for new avenues to put his agri-knowledge to practice.
That door was open for him when he was taken in as the Director of Planning at the Ministry of Plantations Industry in 1989. “I was in charge of the three tree crop sector at the Ministry,” he started explaining to me. “I was able to steer through the Tea Small Holder Project, while getting engaged in a global buffer stock scheme for rubber. Tea project was a success in opening new land in the low country area for tea cultivation and modernising the private tea factories that had been in a dilapidated state. My most effective contribution was concerned with the establishment of the buffer stock scheme for rubber. It ensured price stability for both rubber growers and rubber users. I was the Chairman of the Buffer Stock Scheme for two years. At that time, when rubber prices had fallen due to overproduction, we bought that excess rubber at a floor price, stockpiled it and released to the market during lean years. It prevented the prices from going up and also assured a safe supply to rubber users at a predetermined price. Unfortunately, the scheme is no more there and that is why the rubber growers today face innumerable difficulties due to collapsing market prices.”
Can the public sector emulate the private sector? I asked him. “The question should be ‘should the public sector emulate the private sector’ instead of ‘can the public sector emulate the private sector’,” he corrected me. “The answer is yes, because the public sector managers have a lot to learn from private sector managers. The foresight, timely delivery, cost-efficacy and forward planning are the essential weapons which private sector managers should have in order to do business. These are relevant to public sector managers as well. They are supposed to do the best for the public out of the scarce tax money the government has placed at their disposal. I was a beneficiary of receiving training in both places. Let the others too have the same opportunity”.
Joining the private sector
In 1998, Anura left the public sector to join the private sector as Director cum Human Resource Man at Unilever in Colombo. That was a major breakthrough in his career. By that time, he had worked nearly 20 years in the public sector and gained enough experience in its working. Then, how could he adjust himself to the work ethics and working culture of a leading multinational firm? I wondered. “Unilever was a different world for me. I had come predominantly from an agriculture based social environment. I myself had been an agricultural economist who had done human productivity for the doctorate. That was my plus point. Multinational corporations, unlike the government sector, are interested in modelling human productivity and finding ways for its improvement. That is because at the end, the bottom-line of the business is determined by the productivity and efficiency of its work force. Hence, I could easily fit into that culture and make positive contribution to its upkeep. Hence, those ten years I was with the Unilever were the best period in my professional development,” he said.
Seamless transformation from public to private
This was a fine transformation from public sector to private sector. In the case of public organisations, decision making is retarded because there are many hurdles which managers have to pass. It is a rule-based rigid decision making process. There is no flexibility for managers to make decisions. But in the private sector, managers are encouraged to make decisions quickly. They take a fair amount of risk when they make those decisions. Yet, managers are encouraged to make those decisions.
Public sector should emulate private sector
Can the public sector emulate the private sector? I asked him. “The question should be ‘should the public sector emulate the private sector’ instead of ‘can the public sector emulate the private sector’,” he corrected me. “The answer is yes, because the public sector managers have a lot to learn from private sector managers. The foresight, timely delivery, cost-efficacy and forward planning are the essential weapons which private sector managers should have in order to do business. These are relevant to public sector managers as well. They are supposed to do the best for the public out of the scarce tax money the government has placed at their disposal. I was a beneficiary of receiving training in both places. Let the others too have the same opportunity.”
Anura retired from Unilever in 2009 but was very active in private sector businesses. He joined the Ceylon Chamber of Commerce, and was elected to be its Vice Chair, Senior Vice Chair and finally its Chair. That is the highest position which a private sector entrepreneur can aspire to get. “I was the Chair of the chamber during 2009 to 2010. That was a very challenging period since it marked the end of the war and the birth of a new era. We had to work in cooperation with the government to rebuild the nation which had been destroyed by the 50 year long destructive war. We did our maximum to help the government,” Anura revealed.
A youth conflict not an ethnic conflict
I recalled Anura addressing a conference of the Institute for Defence Studies and Analysis, commonly known as IDSA, in 2012 on the political economy of four decades of conflict in Sri Lanka. That was an analysis done in retrospect since in 2012, the conflict in Sri Lanka had to a large extent been resolved. I asked him about his view on the subject.
“I presented a paper to the conference and saw the armed conflict in Sri Lanka primarily as a youth phenomenon and not an ethnic or political one. There were youth uprisings among both the Southern youth and the Northern youth. Both had the beginning in mid-1960s supported by two main reasons. One was the relative deprivation of the youth in the country. The other was the possibility of making an uprising due to the availability of organisational power, finances and military capability. In 1940s and 1950s, Sri Lanka’s population increased tremendously. Thus, by 1960s and 1970s, the country’s labour force too ballooned.
“But the economy didn’t grow at a rate that could meet the aspirations of the youth that joined the labour force. Unemployment rose, with a heavy concentration in rural areas. The Northern youth translated this in terms of ethnic discrimination and took up arms to eliminate it. But the Northern youth revolt was continued for a longer period because they got support from the geopolitical interests of the Indian regimes as well as the friendly Diaspora living abroad. Contrary to what many believe that it is a 30 year war, it is exactly a 50 year war. During this period, Sri Lanka may have lost full ten years of GDP,” he explained.
Rapid growth is necessary to avoid the next youth revolt
He then spoke of the way forward strategy for Sri Lanka as well as the other South Asian countries. “The youth who were economically deprived thought that there was nothing to lose but everything to gain by taking up arms. To break it, countries should have a rapid economic development of which the fruits of development should be distributed among all citizens fairly. In this case, the youth will realise that there is everything to lose if they take up arms. To have a rapid economic growth, the countries in the region should cooperate with each other politically, economically, commercially and technologically. If Sri Lanka tries to live in isolation as many of the country’s leaders are preaching today, I can guarantee that there will be another youth revolt pretty soon. The groundwork for this is already being laid by the slowed down economic growth in the last 5 years.”
Anura, the social democrat
Though Anura is a liberal minded economist, his economic philosophy is neither neoliberal nor statist. He believes in a social democratic system in which there are safety nets for the poor, while incentives are for the rich to invest and create wealth. He says: “After all, how can the poor be sustained unless the rich reinvest their earnings in enterprises that will create prosperity for the nation? It should be a world of collaborative living rather than continual fighting.”
A man who can never retire
Anura started his life from a humble beginning. He had to work hard as a farmer producing for the market when he was schooling. In his adult life too, he had to labour hard. Even after his retirement, he continues to work hard. What it means is that leisure is a relatively deprived luxury for him.
(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at email@example.com.)