On April 22, cabinet spokesperson, Minister Bandula Gunawardana announced that the government would be taking steps to limit imported goods into the country. He added this action had become necessary to stabilise the local currency.
The reason for the import ban - which took many by surprise - was that the country did not have sufficient reserves of foreign exchange. The falling value of the rupee vis-a-vis the dollar, was also a reason forcing the government to ban the import of particular goods which ‘could be produced locally and those it felt were ‘nonessential.’ Among the banned items were fruits and vegetables which could be produced locally, including pepper and orid.
The Government had also decided to ban the import of vehicles, refrigerators and a variety of unspecified ‘luxury goods’. Cabinet spokesperson was quick to assure all small, medium and large-scale industrialists that import raw material needed to keep their factories operational would be unhidered and there would be no shortage of raw materials required for industrial production.
In an effort to attract foreign remittances, the government is to commence special bank accounts offering interest rates of 2% points higher than regular interest rates for deposits for over six months and in this way stablise the falling value of the rupee bringing back memories of the pre-1977 era, when due to an acute shortage of foreign exchange, general imports were limited or banned.
All imported articles were subject to a ‘quota system’. We witnessed what was called a ‘paan polima’ (bread queue) where people stood from early morning and sometimes came back empty-handed. It was also a time when bakers did not have sufficient stocks of wheat flour to meet the daily requirement of bread. A time bakers had to produce their products out of flour made from manioc flour - which was to put it mildly, quite unpalatable.
It was also a time of the ‘haal polla’ where police manned road blocks to prevent citizens transporting rice/paddy from one part of the country to another. It was an era when on particular days of the week, restaurants and eateries were prohibited from serving rice to customers.
The then government too, assured industrialists that exchange needed to import raw materials needed for industrial production would be readily available. But there was a catch, the amount of exchange was determined by Ministry officials. Invariably the exchange allocated was totally inadequate as recalled by Elmo de Silva, the then Senior Deputy Controller Imports and Exports (DCIE).
Locally manufactured products turned out by state corporations, produced low quality products. For instance mammoties for farmers were not capable of cutting the soil! Government loyalists were granted permits to set up local industries; for instance, razor blades produced by local industrialists were so bad the blade only cut the skin of the user and not the follicles.
Government also set up an Import Restriction Committee which believed all imported items could be manufactured locally. Unfortunately, these fly-by-night industrialists enjoying monopoly status, produced extremely low quality products. One of the best examples was the ban on the import of margarine. One local firm had a monopoly of manufacturing the product, which was described as tasting like solidified coconut oil!
Essentials like cloth needed for clothing were rationed, and the ‘masses’ were obliged to run from pillar to post filling numerous forms before they could ultimately stand for hours in long queues to purchase requirements. The material sold was of low quality, but people had no choice but to procure it. The shortages resulting from the ban on imports and dependence on bureaucrats to get the tiniest job done, gave rise to rampant bribery and corruption. Palms had to be oiled to get the tiniest job done.
Today’s context is worse, many workers in the private sector have lost their jobs, many others are on less than half-pay. Persons dependent on a daily wage have no way to feed their families except through petty crime. In these days of coronavirus, one cannot even beg on the street for fear of being arrested. For the government, the pandemic could not have come at a worse time. It’s election year, shortages, scarcities, unemployment, shortage of medicament are making life for a majority of people impossible.
At the elections of 1977, the then government was kicked out by the ‘suffering masses’. Unless the present regime can avoid repeating the mistakes of the pre-77 regime, they are likely to face the same fate, come the general election of June 2020.