Ben Wattenberg's 1980; Sri Lanka: Second Thoughts in the Third World

<v Speaker>Ben Wattenberg's 1980 is made possible by grants from the Dow Chemical <v Speaker>Company. Conoco, Inc.. <v Speaker>And the LTV corporation. <v narrator>Thirty miles off the coast of India lies the island nation of Sri Lanka. <v narrator>Marco Polo, who visited here on one of his voyages, gave it the name Ceylon. <v Ben Wattenberg>It's a small place out of the way. <v Ben Wattenberg>But it's more important than you think. <v narrator>At first, it seems like a place just to get away from it all. <v narrator>A tropical paradise. <v narrator>Studded with monuments of a rich Buddhist heritage. <v narrator>Older than that of Rome. <v narrator>Sri Lankans are a gentle people, but they have known hardship and trouble.

<v narrator>Today, this ancient country is experimenting, searching <v narrator>for its own way to enter the modern era. <v Ben Wattenberg>I'm Ben Wattenberg and I'm in Sri Lanka because that's not just a place to get away from

<v Ben Wattenberg>it all. Sri Lanka has become somewhat of a laboratory society in the world. <v Ben Wattenberg>A laboratory where a great argument is being tested. <v Ben Wattenberg>The question before the House is this how can a poor country best become <v Ben Wattenberg>a not poor country? <v narrator>These people have heard all the fashionable arguments that third world <v narrator>progress can come only through more and more state control, <v narrator>control over the economy, the politics, the press, the unions. <v narrator>But a few years ago, they voted for a new president. <v narrator>They had learned what living in a controlled society could be like. <v narrator>He talked about freedom and a new moment in the third world. <v Lalith Athulathmundali>We are in a post socialist era, an era where slogans <v Lalith Athulathmundali>no longer, I believe, ipso facto, they have to be <v Lalith Athulathmundali>proved as it is not practical politics, practical program

<v Lalith Athulathmundali>seems to have become the order of the day. <v Lalith Athulathmundali>If we live in a country such as ours. <v Lalith Athulathmundali>A very poor country, at least 50 percent of people in poverty. <v Lalith Athulathmundali>And if you were to assess the problems of the country with your heart. <v Lalith Athulathmundali>And there is no question what is paramount is concern for the underprivileged. <v Lalith Athulathmundali>And that makes you think that a socialist philosophy <v Lalith Athulathmundali>is the way out. And I still sympathize with many young people who feel like that. <v Lalith Athulathmundali>In theory, it's perfect. There's no doubt about that. <v Lalith Athulathmundali>But what I have experienced and what the people of this country have experienced. <v Lalith Athulathmundali>That in practice, it means something quite <v Lalith Athulathmundali>different. And in practice, it often means that the poorest <v Lalith Athulathmundali>lot don't have their lot included at all. <v Lalith Athulathmundali>I mean, the poor just couldn't get nothing. <v Lalith Athulathmundali>But the same time, the preachers of socialism, the leaders were enjoying the benefits <v Lalith Athulathmundali>of commercial, commercial and political privilege.

<v Lalith Athulathmundali>To my mind today, the part that we have taken, which is, broadly <v Lalith Athulathmundali>speaking, a socialist goal. <v Lalith Athulathmundali>But in practical terms, socialism means <v Lalith Athulathmundali>whatever means can be employed to improve the lot of the poor. <v Lalith Athulathmundali>And if that includes private enterprise and that's also a good object, because <v Lalith Athulathmundali>if that gives jobs, if that increases incomes, if it gives better cultivation <v Lalith Athulathmundali>methods, if it means better management of your industries. <v Lalith Athulathmundali>Well, that's good enough socialism for me. <v narrator>The women who gathered Ceylon's famous tea come down from the hillsides to <v narrator>weigh their baskets of fresh picked leaves, as they have done since the <v narrator>British began these plantations over a century ago. <v narrator>It's tedious work, but for years it produced Sri Lanka's most important <v narrator>crop. Then in nineteen forty eight, something very important happened <v narrator>to this island, independence from Great Britain. <v Ben Wattenberg>The words Sri Lanka mean blessed island independence brought some blessed

<v Ben Wattenberg>events. A democratic government. <v Ben Wattenberg>But it also brought troubles like many developing countries, Sri Lanka, moved toward the <v Ben Wattenberg>idea of state socialism. <v Ben Wattenberg>More and more of the economy moved under the hand of a deadening government presence. <v narrator>The Sri Lankans, justifiably enough, wanted these tea plantations <v narrator>for Sri Lankans. <v narrator>But when the plantations were put under political management, something went wrong. <v narrator>Tea growers probably don't make good politicians, but politicians surely don't make <v narrator>good tea growers. Soon, in many places, the green carpet of the tea <v narrator>gardens turned brown and ragged. <v Speaker>[inaudible]. <v narrator>Less tea came to the central auction.

<v Ben Wattenberg>The economics of tea are complicated. But observers here understood what was happening <v Ben Wattenberg>as state socialism took over the tea industry. <v Ben Wattenberg>Tea sales declined. Sri Lanka's foreign earnings stagnated. <v Ben Wattenberg>The nation fell deeper and deeper into debt. <v Ben Wattenberg>The government owned the tea business all right. <v Ben Wattenberg>But it turned out to be a bitter brew. <v narrator>Sri Lanka has long been famous for its precious stones. <v narrator>King Solomon brought jewels from here for the Queen of Sheba. <v narrator>Gem mining is a highly speculative business and a dirty one. <v narrator>People do it chiefly for one reason the hope of striking it rich, <v narrator>as in the tea industry. The former government decreed that all gems were <v narrator>state property and fixed the returns that could be paid to miners and gem <v narrator>cutters.

<v narrator>As incentives disappeared, some mines were abandoned, gem production <v narrator>fell and the country's economy was hurt. <v narrator>Then came a shortage of rice. <v narrator>It's hard to imagine that a country this fertile could have a shortage of rice, <v narrator>but it did. <v narrator>Lush paddy lands once covered much of the island. <v narrator>In olden times, Sri Lanka was a land of farmer kings. <v narrator>A remarkable system of irrigation helped provide plenty of rice. <v narrator>Thousands of reservoirs called tanks were built to hold the reins of the monsoons <v narrator>for the growing season. <v narrator>Ancient wars and then colonial powers brought a ruin on the cities of the farmer <v narrator>kings. <v narrator>By the middle of the 20th century, Sri Lanka's markets were selling like foreign <v narrator>rice. <v narrator>The growing cost of rice was met by expensive government subsidies.

<v narrator>Now subsidies help the poor, but often only temporarily <v narrator>when subsidies drain money from investment. <v narrator>The poor, in the end, can be hurt the most. <v narrator>The old government did the only thing it knew how to do more controls, <v narrator>that meant armies of bureaucrats with clean fingernails and fewer people <v narrator>out in the mud, growing rice. <v Ben Wattenberg>Sri Lanka's socialist regulators and bureaucrats operated on the principle that <v Ben Wattenberg>their country's poverty was caused by inequality and foreign exploitation. <v Ben Wattenberg>The truth was their country was just plain poor and unproductive. <v Ben Wattenberg>The cures they prescribe, more socialism, more bureaucracy, more regulation <v Ben Wattenberg>only made the disease worse. <v Ben Wattenberg>But it's hard for a powerful government to admit mistakes when their blunders are pointed <v Ben Wattenberg>out, their controllers mentality turned from thoughts of economics to politics.

<v Ben Wattenberg>And the targets of their control switched from tea and rice and trade <v Ben Wattenberg>and foreign investment. To civil liberties. <v narrator>Police interrogations of subversives, both real and imagined, <v narrator>increased. And arrests were made. <v narrator>Then in 1971, a full scale insurrection broke out. <v narrator>The scope of the fighting and its savagery stunned this peaceful island.

<v narrator>Thousands died. <v narrator>The government, a coalition of socialists, Trotskyites and communists, <v narrator>rounded up the insurgents. <v narrator>This Colombo police headquarters was a lot busier then, even peaceable opponents of <v narrator>the government were grilled on the fourth floor of this building from one of these <v narrator>windows. One dissenter fell to his death. <v narrator>The government explained that he jumped. <v narrator>You might have read all about it in the newspapers, but soon they, too were brought under <v narrator>government control. Along with radio and television. <v narrator>A palatial conference center was built for the embattled government

<v narrator>by the communist Chinese. <v narrator>This statue of a former prime minister came courtesy of the Soviet <v narrator>Union. <v narrator>A grand setting, if you can't give them bread or freedom, give them circuses. <v narrator>The occasion for all this was a meeting of the Conference of Nonaligned Nations in 1975. <v narrator>That's the same nonaligned group now headed by Cuba's Fidel Castro. <v narrator>These ceremonies featured speeches denouncing neo colonialism, neo imperialism <v narrator>in the CIA and demanding freedom and more freedom. <v narrator>But meanwhile, the Sri Lankan government headed at that time by Mrs. Solomon <v narrator>Bandaranayake. He was arranging to stall free elections at home. <v narrator>In 1977, though, after two years delay, elections were finally <v narrator>held. The voters went to the polls worried that their country was <v narrator>dead in the water, that nothing worked. <v narrator>And they said, throw the rascals out.

<v narrator>Sri Lanka did not become another Cuba, and the <v narrator>forces of economic and political control gave way to the forces <v narrator>of liberty. The new president, J. <v narrator>R. Jayewardene, has a new and very different vision. <v narrator>No one knows how it will work out. <v narrator>But a lot of people are watching. <v J. R. Jayewardene>Behind the public sector, which covered about 60 percent of the economy. <v J. R. Jayewardene>Was full of corruption. <v J. R. Jayewardene>Inefficient management. <v J. R. Jayewardene>And interference by political authorities. <v J. R. Jayewardene>The private sector had been completely subordinated <v J. R. Jayewardene>to control. Import controls, <v J. R. Jayewardene>exchange control. <v J. R. Jayewardene>Control with regard to building applications. <v J. R. Jayewardene>Starting up new businesses.

<v J. R. Jayewardene>So we said we would firstly attempt to cure the corruption. <v J. R. Jayewardene>The inefficiency. <v J. R. Jayewardene>And put it in front of the public sector and free the private sector, <v J. R. Jayewardene>all controls. <v J. R. Jayewardene>Hoping it would burgeon forward in developing our resources. <v J. R. Jayewardene>On the political side, too, we found that the country had been <v J. R. Jayewardene>governed For almost six <v J. R. Jayewardene>out of the seven years. <v J. R. Jayewardene>By what I call emergency regulations. <v J. R. Jayewardene>We have a public security act. <v J. R. Jayewardene>Which when enforced takes away all democratic freedoms. <v J. R. Jayewardene>Meetings can be suppressed. <v J. R. Jayewardene>Political parties can be made illegal. <v J. R. Jayewardene>Really, it becomes a complete dictatorship and no recourse to courts <v J. R. Jayewardene>or any other. Freedom authorities. <v J. R. Jayewardene>They said we'll do away with that, and we did away with that.

<v Ben Wattenberg>Right, a freer politics, yields a freer economics yields a freer politics yields <v Ben Wattenberg>more production. That's that's the dynamic? <v J. R. Jayewardene>Yea definitely. <v J. R. Jayewardene>Definitely so. <v Ben Wattenberg>Mr. President, in the economic realm. <v Ben Wattenberg>I wonder if you could give us some specific examples of how your <v Ben Wattenberg>new programs are working. <v J. R. Jayewardene>We have new garment industries. <v J. R. Jayewardene>Gem cutting and exporting industries. <v J. R. Jayewardene>Industry based on rubber material. <v J. R. Jayewardene>Industry based on other raw material. <v J. R. Jayewardene>Produced in Sri Lanka like graphite. <v J. R. Jayewardene>We open the senator a capitalist organization. <v J. R. Jayewardene>And I often use the words, let the robber barons come to that area. <v J. R. Jayewardene>We have no other alternative. <v J. R. Jayewardene>We are still a developing nation. About 40 percent live on the borderline of starvation. <v J. R. Jayewardene>Their income is less than 300 rupees a month.

<v J. R. Jayewardene>That's about 20 dollars a month. <v J. R. Jayewardene>But ask him, that giving employment, that's the only salvation. <v J. R. Jayewardene>more and more employment. <v Ben Wattenberg>Mr. President, I've been reading in your newspapers a great deal about <v Ben Wattenberg>the value of hard work and punctuality. <v Ben Wattenberg>Is this just newspaper talk or is this a government policy <v Ben Wattenberg>designed to reinstill the work ethic in- in the Sri Lankan people? <v J. R. Jayewardene>Not on the newspapers, not on television. <v J. R. Jayewardene>It's just common sense. <v J. R. Jayewardene>I'll give you one example. To go to Japan, you see every inch of land is <v J. R. Jayewardene>cultivated. And our country so fertile, so much water, <v J. R. Jayewardene>we let things grow on their own. <v J. R. Jayewardene>We don't try to get the best out of the land, which could help a lot. <v Ben Wattenberg>What has your government done to <v Ben Wattenberg>restore freedom of the press in Sri Lanka? <v J. R. Jayewardene>Under the previous government one national newspaper was suppressed completely,

<v J. R. Jayewardene>we've allowed it to reopen. <v J. R. Jayewardene>And it can write whatever it wishes, where it doesn't break the law. <v J. R. Jayewardene>All the private newspapers are free to write what they wish. <v Ben Wattenberg>And do they? <v J. R. Jayewardene>Yes, they do. They say a lot of things they shouldn't say. <v narrator>Now the tourists are streaming in. <v narrator>Drawn by Sri Lanka's new spirit. <v narrator>And the old a few years ago, they might have spent their dollars, francs <v narrator>and Deutschemarks to visit the temples of Angkor Wat in Cambodia. <v narrator>Now they spend them at modern hotels. <v narrator>Many being built with the encouragement of the government tourist office. <v narrator>Nearby, the tourists frolic in quiet lagoons. <v narrator>The natives, like the trade they bring in, must also be impressed by the customs <v narrator>of those from advanced civilizations.

<v narrator>More respectful tourists can enjoy the pageantry at the Buddhist shrine <v narrator>in the ancient city of Kandy. <v narrator>And a new spirit of the island has brought another kind of visitor. <v Ben Wattenberg>What is the business climate in Sri Lanka now, mr. <v Ben Wattenberg>Bolt? <v Rolf Bolt>The climate has changed since about 78, middle of 77. <v Rolf Bolt>There are new policies, that is more trade liberalization, <v Rolf Bolt>importation of consumer goods is easier than before. <v Rolf Bolt>And generally, the economic surroundings are more active than before. <v Ben Wattenberg>When you come into a country, you don't only service existing business <v Ben Wattenberg>and international business. Doesn't that lure in new business

<v Ben Wattenberg>because they now have banking services available? <v Rolf Bolt>And we like to think that people will follow us. <v Rolf Bolt>So by setting up a branch operation in Sri Lanka, we hope <v Rolf Bolt>to generate interest among international investors <v Rolf Bolt>in Sri Lanka and who hopefully will follow us to this country. <v narrator>Ships now fill the harbor at Colombo. <v narrator>It stands at the junction of the world's great East-West trade routes. <v narrator>Many of the ships berthed here have come to use the new government sponsored container <v narrator>depot. <v narrator>This special industrial zone is growing up nearby. <v narrator>The government gives foreign investors tax benefits and other incentives to locate here. <v narrator>So far, 13 new factories are in operation and some 35 more <v narrator>are now under construction.

<v narrator>Modern housing is being built for the thousands who will work here in the new industries. <v narrator>Sri Lanka's free trade unions look forward to recruiting these workers. <v narrator>With foreign capital comes foreign technology. <v narrator>A technology that may revolutionize Sri Lanka's gem industry. <v narrator>Out in the bush, dams and canals are again being built, dams and canals like those <v narrator>of the former kings of old. <v narrator>With this water, the new government hopes Sri Lanka can again grow its own <v narrator>rice.

<v Ben Wattenberg>So it's a time of political and economic ferment in Sri Lanka. <v Ben Wattenberg>But things seem to be working well in a democratic society. <v Ben Wattenberg>Ferment then change can make a politician nervous, even if things are working out <v Ben Wattenberg>on paper. <v narrator>The new president knows how fickle an electorate can be. <v narrator>About 400000 new jobs have been created. <v narrator>The real growth rate is about eight percent. <v narrator>There's less red tape and more freedom. <v narrator>But the popular food subsidies have been cut. <v narrator>And the economic boom set off a 30 percent inflation. <v narrator>When that happens, a good Democratic leader, no matter how popular, looks over <v narrator>his shoulders. Throw the Rascals Out is not the favorite slogan <v narrator>of incumbents. <v narrator>There is a well-organized opposition out there waiting for the new government to slip. <v narrator>They're able people building up their list of complaints. <v narrator>And this government lets them voice their criticisms. <v Chelliah Kumarasuriar>The actions of the government has tended to hurt

<v Chelliah Kumarasuriar>the weaker sections of our society. <v Chelliah Kumarasuriar>[Ben Wattenberg: The poor people?] The poor people, the not so poor, even needing the <v Chelliah Kumarasuriar>middle class. <v Chelliah Kumarasuriar>Has been hurt. <v Ben Wattenberg>This is primarily bread prices? <v Chelliah Kumarasuriar>Yes, bread. Then there are even bus fares. <v Chelliah Kumarasuriar>Train fares, infant milk, foods, flour, <v Chelliah Kumarasuriar>imported flour, that is, all sorts of things. <v Siva Obeyesekere>Then they have liberalized certain areas. <v Siva Obeyesekere>Which are welcome. But I do feel that they should be controlled. <v Siva Obeyesekere>And also some of the development projects and maybe eventually <v Siva Obeyesekere>very harmful to the way of life of our people. <v Siva Obeyesekere>And whatever he's done must be done. <v Siva Obeyesekere>Taking into consideration this very important aspect, and that is, the <v Siva Obeyesekere>eastern way of life, of our urban and rural people. <v Ben Wattenberg>In what way do you think that this government policies have <v Ben Wattenberg>hurt the traditional Sri Lankan way of life?

<v Siva Obeyesekere>It was divulged that more than six million worth of valuable foreign exchange, was drawn, <v Siva Obeyesekere>utilized to bringing plastic toys and confectionery and sweets <v Siva Obeyesekere>and the TV sets, which I think would have been more gainfully utilized <v Siva Obeyesekere>in helping to subsidize some of the basic food <v Siva Obeyesekere>needs of our people. <v Ben Wattenberg>What do you think of the current tourists in Sri Lanka? <v Siva Obeyesekere>The tourism, I think we should come to a halt on this. <v Siva Obeyesekere>I think we have enough of tourism and I don't think we should <v Siva Obeyesekere>look for money in tourism only. <v Siva Obeyesekere>I think we have. We may be wanting somewhat economically. <v Siva Obeyesekere>We may be somewhat poor, but we do not want charity. <v Ben Wattenberg>Mrs. Obeyesekere, I picked up in the hotel earlier today. <v Ben Wattenberg>This little banner, Democratic Socialist Republic of Sri Lanka. <v Ben Wattenberg>And I was wondering whether, given this government's presence, stress on a free market <v Ben Wattenberg>economy and capitalism on foreign investment.

<v Ben Wattenberg>Do they still, in your judgment, deserve the term socialist? <v Siva Obeyesekere>I think they're far away from socialism. <v Siva Obeyesekere>And I do think that there is <v Siva Obeyesekere>much to be learned yet, what really socialism stands for. <v Siva Obeyesekere>I think whatever government may do now, I think the people in this country <v Siva Obeyesekere>have socialism in their minds that cannot be erased. <v Siva Obeyesekere>I think there's too much tendency now to make Colombo, for <v Siva Obeyesekere>instance, and Singapore or make some of the rural areas look like <v Siva Obeyesekere>county councils of various developed countries. <v Siva Obeyesekere>I don't think our people are- are inclined to think that way, and live that <v Siva Obeyesekere>way. We are a different type of people. <v Siva Obeyesekere>And that should be preserved. Otherwise, you will never go to say it's Sri Lanka, isle of <v Siva Obeyesekere>paradise. <v narrator>Island of paradise. Not always. <v narrator>But today, not withstanding the critics, the nets are coming up full in Sri Lanka.

<v narrator>Today, the markets here are bustling. <v narrator>The new government argues that it's a result of free economics. <v narrator>Let the robber barons come, says the president. <v narrator>Let the tourists come and the banks and the factories and the jobs and the rise in <v narrator>living standards. They've placed a big, risky bet here <v narrator>that freedom, not control, yields progress. <v Ben Wattenberg>After all, it's the three developed countries that are still the world's leaders. <v Ben Wattenberg>The success stories in the poor world have had open economies and <v Ben Wattenberg>relatively free politics in this part of the world, South Korea, Taiwan, <v Ben Wattenberg>Singapore. <v Ben Wattenberg>Maybe the history of this era will record that it was really freedom <v Ben Wattenberg>that was making its move.

<v Ben Wattenberg>That's what the Sri Lankan laboratory society is all about. <v Ben Wattenberg>Can freedom cure poverty? <v Ben Wattenberg>It's a little early to tell, but so far, from here, it <v Ben Wattenberg>looks pretty good. <v Ben Wattenberg>Good night, I'm Ben Wattenberg. <v Speaker>For a transcript of this program, send one dollar to transcripts,

<v Speaker>post office box three three two, Columbia, Maryland, two one <v Speaker>oh four five. Please specify program topic. <v Speaker>This program was produced by W ETA, which is solely responsible <v Speaker>for its content. <v Speaker>Ben Wattenberg's 1980 was made possible by grants from the Dow Chemical <v Speaker>Company. <v Speaker>Conoco, Inc.. <v Speaker>And the LTV corporation.