Ceylon with Sterling reserves at the time of getting its Independence from Britain in 1948 went on its own path of economic growth based on its agricultural base of tea, rubber and coconut.
The British South-East command still in Ceylon under the British with Naval and Air Bases in Trincomalee and Katunayake everything was going smoothly till the arrival of the Oxford educated SWRD Bandaranaike as Prime Minister in 1956.
He initiated severe political and socio-economic policy reform which was implemented rapidly starting with the ‘Sinhala ‘only policy and driving the British out of its military bases in the country, thus Lord Mountbatten moving the British S-E command to Singapore which was the start of our decline.
However, after the assassination of SWRD Bandaranaike in September 1959, his wife Madame Sirima Bandaranaike took over his reins and continued the policy agenda and nationalised business enterprises run by the British/US such as the nascent petroleum industry which prevailed in Ceylon prior to 1948 and was under British/US control.
Major shift
Through the Ceylon Petroleum Corporation Act No. 28 of 1961, the government took over the wholesale/retail operations of Shell, Esso and Caltex on January 1, 1964, and these three companies moved their operations also to Singapore to help the Lee Kwan Yu dream for Singapore seeing our Port in 1956 against his which was left a wreck after WW2 with its Port reduced to shambles by the Japanese Navy.
Today, in 2022 this CPC Act No. 28 of 1961 has left Sri Lanka 61 years later in shambles sans a US$ denominated economic output from petroleum.
The IMF Macroeconomic Levers to be applied are basically structural changes applied to countries that seek its assistance to put them back on track to economic recovery, but these are successful only if tied to other socio-economic reforms in the fields of energy and logistics.
We are now living day-to-day with regard to petroleum/electricity needs with the CPC requiring crude oil shipments to fire its only refinery built in 1969 and coal shipments to fire coal fired power plant in Norochcholai built in 2011.
Logistics
When it comes to logistics, at a recently held seminar on logistics in Colombo, the main speaker, a renowned Sri Lankan born Economist from Singapore said that there is no hope or future in Sri Lanka for logistics. Today, Sri Lanka is considered a poor economy such as Myanma in the Asia Pacific.
With the changing energy dynamics in the Asia Pacific, all this economic turmoil for Sri Lanka could change with changing circumstances within the Asia Pacific region which may not be in Sri Lanka’s power but could happen in Sri Lanka’s favour due to the energy security of two big Asia Pacific countries, India and China requiring an Eurasian alignment offering cheaper crude oil.
With the world population reaching eight billion, these two economies become the twin economic engines of the Asian century and Sri Lanka, their natural logistics pivot lying between as the vital cog considering its common heritage within the entire Asia Pacific hemisphere and sacrosanct to the big picture.