Towards Greater Economic Productivity and Social Sustainability

2 April 2016 12:05 am - 0     - {{hitsCtrl.values.hits}}

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Production and application of knowledge, development of techniques of all forms and the adoption of more efficient organizational forms have helped modern societies to drastically reduce difficult, dangerous and monotonous labour while at the same time dramatically improving productivity in all spheres of human activity. While people in primitive societies, spent much of their time to secure basic necessities of life, colonization of large parts of the world at least since the early 16th century was accompanied by the mobilization of slave and indentured labour in many colonies of western powers. Millions of people who were so mobilized engaged in hard labour under very difficult conditions, to build infrastructure, clear forests for plantation agriculture, mine precious metals and provide all forms of personal services to elite families. 


In traditional feudal societies, there existed different forms of labour mobilization for production and other activities. In south Asian caste societies, division of labour was largely based on the caste hierarchy. Certain caste groups were assigned dirty, difficult and dangerous work such as carrying loads, washing clothes, removal of human waste, cultivation of crops, etc. Yet, the development of scientific technologies and gradual or revolutionary social transformations changed the above patterns in many parts of the world at least over the last two centuries. We know that societal development has not always been linear, as the rise and fall of world civilizations have shown. 


The application of modern scientific and social knowledge has helped many societies to not only release most people from hard manual work but also provide broadly equitable living conditions for the entire population. Such societies have in turn become attractive destinations for many people from developing countries where the working and living conditions for the vast majority are much to be desired. On the other hand, in most developing societies, the limited development and application of scientific techniques have left many production and other activities in a state or underdevelopment, making such activities less productive and unattractive, both socially and economically. As a result, more and more people have tended to move away from such activities. Continuing exodus of labour from rural and plantation areas in Sri Lanka in favour of urban and overseas labour markets is a clear case in point.


The shift of labour from manual work to non-manual work was made possible by the development of labour saving technologies such as industrial automation and electrical equipment used in diverse spheres. But, when workers move away from manual work in agriculture and handicrafts production in rural areas, the result often is a decline in production. This is evident from the abandonment of large tracts of paddy land in all parts of Sri Lanka. As is well known, plantation production in the country is still highly labour intensive. So, when there is a reduction in labour supply, it is production that suffers. So, unless new labour replacement or labour saving techniques are developed, it is not possible to maintain the level of production required to make plantations or agriculture profitable. On the other hand, during the colonial period and thereafter, the plantation sector had the benefit of a captive labour force due to specific social and political conditions that prevailed. So, there was no pressing need to develop techniques of labour productivity improvement. 

 

When workers move away from manual work in agriculture and handicrafts production in rural areas, the result often is a decline in production 


The developments in the peasant agricultural sector after independence have not been helpful to develop and apply modern labour saving techniques. Egalitarian land policies adopted from the time of independence have facilitated the development and maintenance of the smallholding agricultural sector. The state policy has been to distribute small parcels of land to landless or near landless people. Given the small scale of such agricultural operations, often managed using family labour, small holding farmers did not produce a large surplus for sale and therefore often remained indebted due to mounting production and consumer credit. 


In the absence of large commercial farms producing non-plantation crops, production of basic staples like rice, vegetables and fruits depended mostly on a multitude of small holding farmers who faced numerous problems. Given the size of the population involved in such agricultural activities,  successive governments have been compelled to offer many subsidies to rural smallholders. 


When the British left in 1948, Sri Lanka remained a primary producing country, exporting a few plantation crops to earn foreign exchange. The structure of the economy remained largely intact in the next few decades, though a significant attempt was made by the governments since the mid 1950’s to promote import substitution industrialization. A number of primary industries were established in several parts of the country, though these by no means led to significant industrialization in the country. It was against this backdrop that an export led industrialization strategy was adopted by the post-1977 regime that was committed to an open economic policy.
Whether Sri Lanka’s export-led development policy had the potential to transform its largely primary producing economy into  a more industrialized one remains a hypothetical question that cannot be easily answered. The decades-long war ended in 2009 but lost opportunities could never be regained.

The economic, social and political crises that we confront even today are to a large measure connected to the consequences of the war.  The nationalist sentiments that were reinforced during the conflict continue to obstruct much needed post-war reconciliation, thereby threatening peaceful coexistence. The political groups that derive their legitimacy and popular appeal from  the war victory  remain a major obstacle preventing the country from adopting much needed economic, political and social reforms on a rational basis. 


Given the seriousness of the current economic and social issues facing the country, there is no easy way out of the present predicament. Integration of the country with the global economy via labour migration, trade, credit and inflow of capital enabled many people to have easy access to financial resources through both legitimate and illegitimate means, often resulting in corruption and unsustainable private consumption. Monetary expansion, in the absence of a highly productive economy, has been largely inflationary and many people engaged in traditional economic activities have found it difficult to survive. The result is the understandable expansion of the more lucrative service sector, including the public service. Low technology-based, labour intensive production activities have become the least remunerative. These activities could become attractive only if significant productivity improvements are effected through the introduction of new techniques. This requires mobilization and reallocation of public finances in favour of technology development and institutional reforms. Higher income groups such as business executives, medical doctors, lawyers and other professional consultants, instead of asking for more and more concessions at public expense like duty-free cars, should pay a fair share of taxes to augment public finances that are needed for productive investments to create lucrative employment for youth. In the absence of a constructive public discourse on the current state of affairs in the  economy, society, polity and culture, ordinary masses are more than likely to get attracted to the empty political rhetoric of self-serving politicians. A country that has suffered enough due to the conflict, economic stagnation and pressing social issues can easily slide back to a state of violent conflict, economic ruin and collapse of rule of law. 


The media and civil society organizations have a great responsibility to elevate political debates to a higher level of policy analysis so that politicians cannot get away with cheap public pronouncements aimed at unsuspecting masses.           

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