RESTRICTED Report No. SA- 24a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION fCTTIPWET EGONOTMT\TAGf T.TTT UATIONT IN CEYLON (in two volumes) VOLUME I THE MAIN REPORT March 25, 1971 South Asia Department CURRENCY EQUIVALENTS Currency Unit - Ceylon Rupee Prior to November 21, 1967 US $1.00 = Rs. 4.76 Rs. 1.00 = US $ 0.21 Rs. 1 million = US $ 210,000 After November 21, 1967 US $1.00 = Rs. 5.95 Rs. 1.00 - US $ 0.17 Rs. 1 million US D 167.000 PREFACE This report was prepared hb 2 micsoinn cnmnn-riqina Mr. Manifred G. Blobel (Chief of IMission), Mr. AI fy-re S. rl ven.d tGnea Ecoomi+) Mr. Vladimir Dragomannovic (Industrial consultant), M- Bn cil G. Kavalsky (General Tconoirst), Messrs. Stanley Please and Walter B. Stolber (Fiscal Econo- _c+rA) and Mr. TeH Yn (Arlcultural Pcnrnst). The mission was in Ceylon from mid-November to ^,ly' Decemberb^ '107(. TABIE _O CUi'O±EN-TS Page No. BASIC DATA SUMMARY AND CONCLUSIONS CHAPTERS I. THE LIQUIDITY PROBLEM AND THE CONSTRAINT ON IMPORTS 1 II. THE PAKGROUND OF THE CURRENT SITUATION 5 III. THE CONFLICT OF OBJECTIVES 15 IV. POLICIES FOR GRONTH 19 V. THE IMPACT OF THE BUDGET 2 VI. IMPORT AND EXCHANGE POLICY 28 VII. CONCLUSIONS 32 STATISTICAL APPENDIX BASIC DATA Area: 25,332 square miles Population: (1970 estimate) 12.6 million Rate of growth (1970 estimate) 2.5% p.a. Popnlatiorn densit.,y: (per sq. nile) to total area 496 Gross National PIvA-,ct: (1969) Rs 11 770 411ion (at current market prices) Rate of growth at constant prices (1969) 5.7 % Ravte. of growth all constant prices (160199 4.5p Real. income growth (1960-1969) 3.5% GNPIT per cap'ita fTC(U'; ,, --iv'Ient 4 P at officia rate) f57 L5±UO UJIIOL.LA; K .L'VULL.U U- Fac or kn . U'JJ t ULJ -I n4 N inl L II±i. G1ross Domes.,ic- Produict zFactrCs 16)Rs 09v,,lo Of4 -.L4.4 (Li Agric 't-e 34.8 Marufacturing 11.7 tCon,st-U"ctin 6.oi Transport and Communication 10.0 T r a.du -.). 1 Other Services 21.9 (AVverage) % of GDP at Market Prices 1969 1961-69 Gross investment 19 15.4 Gross savings 1 131 Balance of payments current account deficit 5.9 2.3 Investment income payments 0.9 0.6 Government revenue 21.1 21.5 Resouirce gap as a percent of investment 35.6 18.1 oept. 3u, 9f7u Average Annual unange vb) Rs. million 1961-1970 Total. money supply 2,065 5.6 Time and savings deposits 933 11.9 Bank credit to public sector (net) 2,576 12.0 Commeircial Bank credit to private sector (gross) 1,232 10.1 Pvahl i ne Sectnr Oneratiolns Rev. Estimates Average Annual 1969/70 Change (%) (Rs. million) 1960/61-1969/70 Cvernmen ir-irpn+. .rtcuint A 2;760 7.3 Government current expenditure 2,576 7.1 Surplus,/Deficit- 184 Irregular Government capital expenditure 930 6.7 ±WUQ.k exterrn *assitanet pbi sector (net) 189 Sharp decrease from 1968/69 External Public Debt (US$ million) December 1970 January 1968 Total debt outstanding (including TW u L' d--a m 4 s TTC I 4~ 1 1 J. .rLJ.F UL "4ss - U1J $ £.L '........... l'0 5 74.R.. 304 Debt service ratio to export 1970 (est.) 1968 earrHigs (excludir I.. Lepurhs) c.II Short-term Debt (less than 1 year) - US$, i7iil'on -L 2 UD'p MUL.LiJ-Lon Balance of Paymerits (D$ m^illion) '970 Z199 1968 (Provisional) Total exports 335 321 332 Total imports 403 446 396 Current invisibles (net) -20 -15 - Net current account balance -88 -140 -64 Increase in exchange reserves (-) 11 56 Commodity Concentration OI' Exports 1970 1961-u6 (Provisional) Average Tea, rubber, coconut products 90% 93% ( major exports) Exchange Reserves (U$ mlliMon; 1970 1969 1961 -66 (Provisional) Average Licuid Balances Abroad 4.1h 2.6 4 IMF drawings outstanding 88 105 29 External Financial Assistance (US$ million) 1969 1968 1967 1%66-69 Average Total disbursements 129 8t 48 76 SUMMARY AND CONCLUISTONS (i) The chronic balance of payments problem which has been a fact of Geylon's~ ~~ ecn.- iefrteps ecade has becor. acte he sec_la decline in the prices of Ceylon's major exports has meant that even with sizenble aid i nflows deiring the past few yeas, the import capacity has been constant at around $,oo million. In this situation any expansion in the im- port of in-r.vestmen r.t goods nnrl industr.7ial rawnu materal- s 'kr . hadt be a t.heP' e- pense of consumer goods and particularly food imports. In the face of the polit-i+c Al dfficultes of r^ecAing cnsum imports, +th g-ovret resor to short-term borrowing abroad in order to promote a rapid growth of invest- _-_+nt _ nI - 1°A6 aTnd. 1"69. I ir.ves-et zndA growtht n that perl.od Jld exceed previous ra-tes, the pre-emption of import capacity means that the new gover.nment uWhiclh cam.e to p0w.er inM-4°1 70 hUa beenQ f-A -ith the pro-spt of a sizeable cut in imports as a consequence of the critical liquidity po- s L ijUon. (Li) The difficultbes hav-e been compounided by LnternLal polcies whILch, while promoting high levels of mass consumption have done little to increase public or prL-v-ate sa-vings. Tlhe attemUJpt to m,laintain and increase the avail- ability of free education and health, and subsidized food and transport for the whole population has required an increasing diversion oI resources, main- ly out of private savings, into public consumption. In the last two years a major proportion of investment has had to be financed by expansionary means with consequent pressure to increase supplies of imported consumer goods. Rationing and price control schemes have kept consumer goods prices low and reduced producer incentives. (iii) The new government has enunciated a number of objectives which include increasing social welfare, reducing the cost of living, achieving high levels of employment and maintaining a high rate of economic growth. To maintain growth in the present critical exchange situation and promote the re-structuring the economy will require high levels of savings and in- vestment. The government's actions so far, however, have tended to promote additional consumption. The policy decisions implicit in the exchange situ- ation were not taken into account in the framing of the budget. By and large where objectives have conflicted with growth it is growth which has been the loser. Yet in the long run a high growth rate is a precondition of further increases in social welfare and high employment rates. Mny of these decisions were taken at a time when the government did not recognize the full extent of the economic difficulties facing Ceylon. Awareness of the nature of the problem has been growing. However, there is no question that the kind of action required to overcome the present difficulties and to put the country back on the path of economic and social development will be excruciatingly difficult to take. Unavoidably it will affect the core of the econormic and social system and the principal objective of government policy since independence, namely rapid improvement in the general standard of Living. (iv). V A -e of 4 p - .oli..ci es fk,.cl, .JL 'I,I will- keI, -p Ut, the- growth o4 ta.5,i well within the limit set by the growth of income, and allow increasing resources, incluulng -4in1 patcua exhage to balocated to ir.vest..ent poe,i .LLLUL±.u..LLig ±11Li PJdi sL U-L,L-CJ. U.i.L6u Lvu 1.' C JUO.L ~ VI ..L V I A l~ u 4. ~ a necessary condition for Ceylon to weather the present crisis with its prospects for- long-ter econori grwh ag' daged-.4 Howeve, - t - i s not- a suffi= i.LU. ±V11jr IsUt.LJI! e.u IluiU.I(-; r,± ..JWULII .LdJ. -LJ U4ALL"CiIIM,Ul.L. iLt.JlV UI VJ .L V J. lL V 1 U.4 .L. cient condition. For Ceylon also needs a continuation of aid, at least at present levels, so as to pe-LiUt the present level of im.ports to be m,aintained. I. THF. LIQUIDITY PROBLEM AND THE CONSTRAINT ON IMPORTS 1. In general elections in May 1970, Ceylon's voters ousted Mr. Dudley Senanayake's coalition government which had held office since April ly65. They returned to power, with well over three quarters of the seats irn Parliament, a coalition led by the Sri Lanka FreedorQ Party, with Mrs. Sirimavo Bandararnaike as Prime MYirnister. On assuming office. the new government found the countrv in a very difficult economic situation. The most obvious - and the most immediately diangerous - manifestation of these diffinilties was the verv weak exchanne position. 2. Action on the exchange front during the second half of 1970 was in the nature of Pd hoc adjustments in the import program_ They sogh.t ortotect the immediate foreign exchange position by reducing readily compressible imports and b'nr stretc,hi-,ot anyrrmont. f'r ,-v. 4 mnr',-+.- +-.9-n-lnT cn+o+.a rpliancr on trAde credits. These measures, which are described more fully in Chapter VI, aided by a m,ild recov1e7-y in exports, cceeded in 4 fi,? the net reserves postion, and an acute crisis was averted. However, the basic wealmess of the exchange si4ua- remained, and the mnnost .- irm.edate task of the govern.ment -contirues to center around the management of the most severe external payments problem LiCeylon has expJ erince u s inLce te V-a.. 3.~~~~~~~~~~~~~~-L Inp.vk 1960 nelnsilhl SlOmlinl fi.a xh e assets ) * ±I~~~~L ±UU, ~Ue,y±UI1 S L..L.L. ~L1 II .p±l IL-L±±Lon In 1. VI.L-~. LjL JA1d4_ unencumbered by short-term liabilities. By the end of 1970, these asset, had shrunlk to UTS-$Ti2 mrillion I/, while UT$67 million of short-termn debt was owed to cormnercial banks abroad and short-term trade credits stood at about US$62 mIll4^I, +-+i.annrlin- nt rl 4ni on the+In TMW --an+.A t- TT3$ illio n. 2/ V -.n situation has changed little since last December. In particular, the Central fn nL- I 1A n,li Al *- os- .-4 n - n-ivu+e- c +to be -va- - ab. T4- 1 4-4A assets a.e LI SA. IS ..4Xi L-A -_ yj lJLJ. - A',L t 'JS LU., 3 '.' -WJr.V -_ .S 3 VVrA.a. 15 _.L~jA{L _LLU 0. u15 . below US$5 million. Under the various lines of credit with commercial banks ~~ V1..L~ ~AU4. .Llr, UIA- jJC.0 V VILL . Y00 0 .LL L A 0L. U O01 VKU. CXO UILO k.'0LL VI ± Bank's working balance, only a small amount is left to be drawn. Altogether, therefore, the Cen-tracl Ba has less than US$10 million in '-quid resoI cS with which to conduct the external finances of a country with an annual volume of -Van-.-e s 4ir the oA-d. of TjTS0. rr4114n. T 4T on-.Its obvious that 4 rCeylon i- a I_J-- J*. - IS -S5 -S VS-W9&+-- lL.J.L,L . ,. ,.LO IL VJ JAJU 1. U 'JOJ V J..ULJL -LO LJLA O very difficult liquidity position. 4. Furthermore!, the task of managing Oeylon's external finances wi:Ll almost cert I4-a,r"-- b-e Ebven more difficul.t 4ths" ye<=- thanLL it wasO Lin 1970. Creult:_ arrangetments with commercial banks abroad covering the buLk of present drawings 1/ Including US$11 million in bilateral credit balances and US$17 million in securities. The latter are at face value or cost, whichever is less; their market value would be lo-wear. 2/ In addition, Ceylon is committed to repurchase the equivalent of US$4.8 miiiion in connection with the quota increase of December 1970. - 2 - expire during the next several months. Unless they are renewed or replaced, sizeable net repayments will have to be m..de before the end of hyear. In addition, short-term trade credits of US$62 million will fall due, and US$25.4 million will have to be repaid to the I.W in the course of thee year. Agreement has just been reached with Iw on a stand-by credit of' US$24.5 million. Of this amount, US$19.5 million can be drawn through the end of 1971 so that net repa.-.onts to the Fd duing t-he ear will be liumited to US$6 million. With respect to trade credits, it should be possible to offset payme.nts by new credits , proirded the reduction in total `J.ports, hat will be necessary, does not fall disproportionately on those goods for which such financing Js usually avallable. As regards the iines of credit-w h commercial banks abroad, the Ceylonese authorities have in recent weeks taken steps to initiate discussions on future arrangements. 6. Howeveer, even i'nth arrangements that wo-uld ease the immediate pressure of repayment obligations, prudence would argue strongly for Ceylon adopting a balance of -paymnents policy cenuereu aro-uuu tihe objecti-ve of improving the country's net reserves. In conjunction with the recent stand-by agreement with the T,-, the Ceylonese author-ities have stated their intention to pursue such a policy. Specifically, they have indicated that through mid-March next year, when the stand-by agreement with the Dund expires, they will seek to raise net reserves by US$20 million - an amount slightly less than the allocation of SSDR's Ceylon can expect to receive in 1971 and 1972. At the same time, they have decided that the amount of net outstanding external debt with an original ma turiy shorter Uhan one year from the beginning of 1971 to the end of the stand-by period should not increase by more than US$20 million. 7. The minimum objective for calendar year 1971 is an increase in rnet reserves by US$? million. This improvement would be absorbed by net repurchases from the Fund. For purposes of planning this year's import program, however, it would obviously be highly desirable to provide for a substantially larger improvement in net reserves. Indeed, as future arrange- ments with respect to much of short-term credits still remain to be worked out, the uncertainties surrounding an estimate at this time of resources available for financing imports are such that any program setting aside less than, say, US$20 million for this purpose would expose Ceylon to risks that it cannot afford to take, considering the depleted state of its liquid assets. However, while circumstances may well leave the government little choice but to adopt a balance of payments policy with an improvement in net reserves in this order of magnitude as its central objective, the difficulties in carrying it through cannot be emphasized too strongly. 8. Having drawn on net reserves, including SDR's, and short-term credits to the extent of US$41 million in 1968, US$81 million in 1969 and US$3h million in 1970 to finance imports in excess of exchange earnings and medium- and long-term financing, only US$6 million would be available from this source in 1971. 1/ At the same time, there is no prospect for any significant increase -NJ exchange enng in171. T-dging Iby -un' sb rsed co-.u,,- 4-ert s ±LLUI±t,aO ±LL L.IC.1 U 1".LLA60 .LL1 _L7 f L . C U L tLLL r4 LJ u±llu.L U LL. OI AJILLW of external assistance in the pipeline, disbursements this year may total US8UV 1uLLioL - uS$P5-VU 1uLLt U11 11 an 11ruiiUdy aid adIU u0$0-L2 IUL±l±flio iLL project and other aid. At this level, they would exceed last year's receipts by about US$15 million. Unless they can be increased by fresh comumitlments of external assistance leading to disbursements this year, rough estimates suggest that, with the resources in sight, mercnandise imports in 197i will nave to be kept down to about US$385 million, roughly US$20 million less than in 1970 and as much as uS$60 million below the level of 1969. 9. In order to be able fully to appreciate the task facing the govern- ment, these bald nwnbers must be seen in perspective: at US$385 million, imports would be at their lowest level since 1959. At that time, they re- presented nearly one third of GNP; in 1971 they would be barely more than one sixth. This sharp decllne in the import rate is indicative of the tremendous strain under which the economy has operated in the 1960's and which will become even more intense in 1971 and beyond, considering the current outlook for exports and assuming gross flows of aid to continue at the level of the recent past. Of course, if Ceylon's economy did not still have many of the structural characteristics of its traditional specialization in export production and if, there:Fore, Ceylon were not spending on food imports an amount equivalent to 40 percent of its export earnings and nearly one third of total imports, the situation would be radically different: imports at roughly one sixth of GNP, spent entirely on raw materials and capital goods, would then provide a fairly comfortable basis for economic expansion. 10. Progress in this direction has been made. Increased domestic pro- duction has reduced imports of food and textiles - the two major items of consumer goods imports - from about US$200 million in 1959/1960 to US$135 million in 1971. One can,, of course, fault government policy in the 1960's for not having pushed domestic production hard enough, for having permitted an excessive share of the increase in production to go into consumption, both private and public, and for having devoted too little attention to exports. These weak-nesses in policy will be examined in the next chapter. Yet, when they are accounted for, one is still driven back to the precipitate deterioration in Ceylon's terms of trade as the overriding cause of the present difficult situation: Through price declines of its major export products alone, Ceylon lost roughly US$ 680 million in exchange earnings in the 1960's. In the period 1966-1970, earnings from merchandise exports declined in absolute amount 1/ Gross receints could be US$26 million, consisting of US$11 million inI SDR's and US$15 million in short-term credits (three fourths of the net increase of US$2O million from the beirnning' of 1971 throngh the end of the stand- by period; see para. 6 above); of this amount, US$20 million would go towards in'erasino net reserves. and in the aggregate were US$340 million lower than they would have been, had exports stayed at their 1965 level. It is a sobering fact that during the same period gross disbursements of external assistance carne to only US$290 million. Thus, they were not sufficient even to offset the decline in export earnings, let alone provide Ceylon with a margin for additional imports with which to support efforts to permit growth and re-structure the econory. 11. To obtain this margin, the previous government turned elsewhere. It turned to suppliers' credits which provided about US$60 million in medium-term financing during the period 1966-1970. And it turned to its exchange assets, the IMF, commercial banks abroad and to short-term credits. Together, these yielded another US$200 million. Very largely, funds so obtained went into supporting the acceleration in economic growth that was achieved during the period. However, from early 1969 onwards, they were used also to finance increases in supplies of consumer goods in anticipation of the general elections. 12. In the end, of course, it was this recourse to medium- and short- term credit that has led to the present acute payments problem which has been described above and which has so greatly aggravated the task confronting the government. For the government must continue to make every effort to promote increased domestic production and. in the process, effect the struc- ture changes in the economy that offer the only prospect of averting a long- term economic decline. But it must do so in a situation where not onlv it cannot rely any longer on supplementing external assistance by medium- and short-term credits. bhut must in fact allocate nart of its scarce exchange resources to improving Ceylon's net reserves. Thus, the government must not only nnonmlish what annsive governments have so far fanil to achieve, namely to effect a reconciliation between the longer-term needs of the economy for investment and adequate supplies of current inputs and strong pressures for current consumption. It must also deal with an acute payments problem that is n0ot ofr J+s ^%.m"< mng.- - 5 - II. THE BACKGROUND OF THE CURRENT SITUATION 13. The economic difficulties that have beset eylon since the late 1950's and that reached crisis proportions in 1965 and once again todav, can be traced principally to two basic structural characteristics of Ceylon's economic and social svstem: First. an economv that specialized in the Droluction of three crops for export - tea, rubber and coconuts. Economic benefits from this specialization were considerable. and when Gpevlon bhcame indenpndent in 1948, its per capita income was among the highest in the region. Second, a nnli ticnl commi tment to the wLfarp st-atep whinch wit-h differences in degreej all governments since independence have shared. In time, it has come to oe underst1ood as 2 nrmmi tment hby the government to assuring every Ceylonese a minimum standard of living. In practice, this commitment found its expres- sio^n ir tw ba s ic +.nt o,f vermcrn +. p-ol cy anr,-f ae,e supyo mass consumption goods - principally food and textiles - had to be assured at low.,. prv nes~'.O f C Chere n ary by r way4 -1, 4 Ao -ses; pulic ervices = main yr education, health and transport - have to be provided free of charge or subst va = vLaJ .. -LJJIV St,V n"saltallyj be'low coost. '4. .1 WU U- V elmUJIIItsi V U.rode the eCnor.m. -Lc Lb ase of this syst em. Lit, first was a sharp rise in the rate of growth of population that set in with the eradication of malaria on which --a ,r att-ack was launched di-i- g War. ]:n the 25 years preceding independence, Ceylon's population is estimated to have increased at an annLlal rate around 1._) percent, adding L j us u over 2 million to its size. Since independence, however, population has :-isen by about 2.7 percent a year on average ald its absolute size has nearly doublecl, from 7 million to almost 13 million in 1971. Even though exports at thle time ol' 1oftiep,uend1Uen1ce contUriutuedU direculy Rearly 4O percent o.L GlNlr? thnat sector would obviously have found it increasingly difficult in the best of circumrstances to generate the resources required, in excnange and in government revenue, to extend thie benefits of the government's social policy to a population growing at that rate. 15. As it was, the best of circumstances did not prevail ior Ceylon s exports. Following a period of flourishing export markets, 1956 saw the beginning of the second development set in, the decilne in export prices for tea and rubber. This is depicted in the following two tables: Export Prices (US $) 1954j56 1960 1965 1970_ Tea (per lb) 0.66 0.56 0.51 0.41 Rubber (per lb) 0.32 0.34 0.24 0.21 Coconut Products (per 34.2 40.0 45.4 45.4 1,OC units equivalent) - 6 - Export Earnings (US $ million) Aggregate Loss 1956-1960 1961-1965 1966-1970 1961-1970 1/ Actual 1,814 1,86h 1,670 At 195h/56 Prices 2,233 2,317 1,016 At 1960 Prices 2,069 2,148 683 At 1965 Prices 1,901 231 2/ 1/ These figures understate the loss to the extent that declines in Drices entailed also reductions in production, as occurred to a significant extent in tea after 1965. 2/ Relates to 1966-1970 only. 16. As these tables show, Ceylon has over the past 15 years endured a nwea ke_ n-g ^_ -f it- t ce mae otno_'t. wy. rotc! rtf s.t agerr p oni r r mv.qIrV-vvn+.r r t- 1 r . vp- +t earnings stagnated in the first half of the 1960's and then declined in absolute &mount as t.en n-r-ino foll h-v 9n nPPrP1n+. :nol nniiie-.A nn e rlA ovfyrrT-. 'rnl-iirmn wouv cut back by 7 percent between 1965 and 1970. These developments first eroded and then, as the market for tea collapsed, essentially destroyed the economic base of teylon's economic and social system. Indeed, towards the end of the period, +he fe -as-lbility of ad apting the sysatem grad-uall -yr a nd, oel o nf y; n n changes at the margin as a means of shifting Ceylon's economic base to other fields, A e-1.a4 increa -ig y-+4 auestor.able - yr 'arly as i anmn- cnl-a that external assistance, on soft terms, was not forthcoming in amounts suffilciientl to pro--;d the 4 ecesar room ---r _.n e n V th fceofa OU. ±..'.,L~± V p UV.L'4.L VAll' ,L'l ,QQOLI J 4 1.1Ul1 4.4 hILauACLAV L' 411 VIL' 4 I ..L 'J L absolute decline in export earnings. 17. As these developmentsunfolded, Ceylon's policy response in respect ofA exportus was andL Ihas essentidally ui 3eu Ae4fensive.l. At4I. flrst s t t statement may seem at variance with the facts, for Ceylon has programs in a'lmost ar- area where government acti-vity could help promuote exports - whether in research on higher yielding planting material, in replanting, or in the pro- motion of fertilizer use. Furthermore, Ceylon has long been the leading pro- ponent of an international agreement on tea exports, and Ceylon's efforts contributed greatly to the conclusion of a short-term agreement limiting exports in 1970. Yet, these programs and efforts notwithstanding, promotion of exports was neither given the priority nor the degree of commitment that would have been necessary to ensure that targets became operational objectives. Moreover, promotion of exports has consistently ranked last among the various objectives that entered into determining exchange rate and tax policies towards the so- called "traditional" exports. 18. As regards tea, for instance, the fact that producers in the latter 1960's reduced the use of fertilizer and cut back on production - with the result that export volume declined and in 1970 remained well below permissible - 7 - level did not spur an examination whether this response to market conditions was in the best interest of the eco0riuIy as a whole and what changes in policy might be required to maximize Ceylon's earnings from tea in the short run. Similarly, although it is clear that, in order to remain competitive with the newer and rapidly growing exporters of tea elsewhere, Ceylon must undertake a massive program to modernize its tea industry, only very limited action nas so far been taken towards that end. 19. As regards rubber, the replanting program that was started in 1953 stands out as the most successful effort in the promotion of export crops and output did increase by 5.1 percent a year in the 1960's. Yet, for the last severa:L years the acreage actually replanted has remained very substantially below earlier levels. There is a good deal of speculation about the causes of this drop and possible remedies, but a concrete program of action remains to be put into effect. Furthermore, Ceylon lags far behind other producers of natural rubber in -the introduction of new technology, both in the pro- duction of latex (e.g. in the use of stimulants which elsewhere have proven capable of increasing yields dramatically) or in rubber processing (e.g. black rubber). 20. Production of coconuts has stagnated and, with rising domestic con- sumption, exports have tended to decline. This is perhaps not surprising as, until very recently, only 35 agricultural offices were responsible for pro-- viding extension services for more than one million acres under coconuts. Thus, fJhere have consistently been very large shortfalls in the fertilizer and replanting programs, although the targets set for them were by themselves considerably less than would have been required to make full use of the potential of the industry. 21. A similar tendency can be found in respect of other exports. One of the objectives of the FEEC scheme. that was introduced in 1968, was to stimulate other exports. Yet, when in connection with the 1969/70 budget the Ministry of Finance was searching for additional sources of revenue, it imposed levies on these exports which considerably reduced the benefits exporters had just begun to receive from the FEEC scheme. Furthermore, for years there were p:Lans for expanding production, for export, in a number of industries - e.g. plywood and ilmenite -, but their execution suffered from innumerable delays. 22. Clearly, the forces operating against Ceylon in its major export marketsi after the mid-1950's were such as to render anything, that might have been within the power of the government to do. incanable of ensuring continuing growth in export earnings in the 1960's. One might argue that, if taken early in the period. deterrmined action to strengthen the nrodiuction of traditional exports and to develop new ones might have begun to reverse the trend in the late 1960's. Buit this is esssntialyv a theoretical arrment for nobody had the foresight in the late 1950's to demonstrate convincingly that the decline in pynort prices thean settina in was has,.ay dff nt from. earlier cyclical down-turns. Even in 1965, nobody foresaw the catastrophic fall in the tea npirics ha+ :Ln fat r+. Tas a onlyr two y a.-a Tv. Inir-ry + entte^ pnt+ to be made here is really a different one: It is that traditionally Ceylon has treated its export agriculture as a sector that somehow takes care of itself and that, as far as government policy is concerned, export earnings are a given parameter rather than a determinate of government action. With a different attitude, it might have been possible at least to prevent the exchange situation from reaching crisis proportions. 23. Faced with a deteriorating export position and intent upon protecting its social objectives, Ceylon in 1960 opted for a similarly defensive import policy. After serious losses in exchange reserves, Ceylon abandoned the open economy and from 1961 onwards progressively tightened exchange and import restrictions. The commitment to raising the standard of living of the masses being the dominant policy objective, the restrictive system was managed essentially with a view to ensuring that adequate supplies of goods of mass consumption, mainly food and textiles, continued to be available at tradi- tionally low prices. Initially, the resources required in support of this objective came out of reductions in imports of luxury and semi-essential goods. In other words, the restrictive system simply became another element in the series of measures being taken to redistribute income. 24. At the same time, recognition grew that something needed to be done to expand domestic production more rapidly in both agriculture and industry so as to take advantage of the substantial potential for import substitution. The government elected in July 1960 made a start in that direction, although its success was limited, largely for two reasons. First, its commitment to maintaining low prices for goods of mass consumption entailed a structure of incentives completely at variance with the needs of the situation: Incentives were highest for luxury and semi-essential goods where import had been banned: thev gave a sDur to industrial development in the Drivate sector, but in a direction which Ceylon could not really support with the necessarv imnnorted innuts Tn eontrast; adenuate incentives were lacking for the production of goods of mass consumption, including especially foods, so that here nevlnn was effrec.tJively lnckedr into continuing - and rising - dependence on imports. Support prices, at levels above import prices, were used to some extent aS a means of circumventing this dc1emmn However, on the whole they were not effective, partly because they were set too low, -art!,, because they were not backed uir% hir +t h necssn- supprtiJ ngA qor-H .r including an effective procurement system - except to some extent in rice. Tn n-r v,rM, built int this appnrach ws- na conie ab lenj-ge in +tems ..* *L. V .'_ 1 ItA4.. S .* lILI I*J.L .J.r±LI . -.* lt a L-t*OL A. .- -.L. .L fla , -AU. of translating increases in production into effective import substitution b,-c--e the difference between - - nn-r- ar. seli4ngI pies LTa brne by the budget adding to the expansionary deficit and, thereby, to creation of additional pu cht Aa s ing-1 powe--r . f. ml-le second factor lmiting tbe success of' effor" in tbe first half of c _" ±1 OI.AQI. LI. I, L i -LJ- j.uu 15110 Au' o Ij . ~ -& .4 15.3 I UIIO ~.A. .31 saLA L ISI the 1960's to expand domestic production lay in the composition of investment. lnere iunve storoets in inrastructid re and heaVg ineustry dt.fatre,d and(A their contribution to output remained marginal. Altogether, therefore, GDP at constant - 9 - prices grew only by 3.6 percent a year in 1961-1965, just about 1 percent more than population. Indeed, because of falling export prices, real income rose by only 2.9 percent amnually. 26. Thus. import policy had to be conducted essentially in the context of stagnating per-capita income. As a consequence, and as exports failed to improve and external assistance remained marginal, the dvnamics of the social objectives, in the context of a rapidly rising population, soon changed the nature of the allocative problem facing Xylon's policv makers! it ceased to be a question of inter-personal distribution of consumption and became instead a conflict between total current consumntion and investment and arowth. In the end, allocations for imports of productive inputs and investment goods were cut back. With this reduction- and with reserves nenrly exhausted- Ceylon seemed in 1965 on the road to long-term economic decline. 27. It was in this context that a meeting of aid-giving countries was convened in mid-1965 It was hoped that an inflow of quick-disbuIrsing commodity aid would allow the government sufficient room for maneuver to permit some liberalization of immports for investment punposes and to re-structure the frame- work of economic policies and thus begin the task of reversing the adverse trend by acce'lerating t h-e growth of domestic production in t;he context of a genera1 strategy oriented towards import substitution. The situation appeared to call for three main lines of action: (a) tu+a'ment of the g.,ow,.th 01 conSU1er der. so as to relieve the pressure on imported and locally produced goods; (b) re- duction of the quantity of imported consumption goods, and thus release the foreign exchange resources required to reverse the decline of investment; (cu increasa in thLe vol'.WIIe and, part0cuLarly , thIe qualU.d Y L.) '--investL,ImentI so as to increase the rate of growth. From the aid donors it was hoped that a sufficien,t level of ass-stance would be pro-ided o-ver a per±od of sefve-al years to enable Ceylon to implement freely the production, consumption and fiscal policies needed to achieve more rapid growth. 28. In this tas'k of re-structuring the economy-, substantial progress was made between 1965 and 1969 as policies were re-oriented towards pushing do m e s 'V-iyc production. TI he hilatlv iV.Lnof Uth I le rice ratUon at least potentiall-y freed imnport capacity and reduced the consumer subsidy though these benefits did not actually follow, due mosQly to higher world rice prices, but also to a sharp increase in imports of flour. Nevertheless the rise in the price of free ririA-et rice -was an iriporutalt incentive to the very rapid increase in production which took place in the following two years. Similar steps were taken to create free JmIarkLets for other agricultural products. in 1967 the rupee was devalued from 4.76 to 5.95 to the dollar and in 1968 Foreign Exchange Entitlement Certificates (FEnCu's) were introduced, with their prices eventually fixed at 9.20 to the dollar, and the categories of goods subject 'bO the new rate gradually extended. A category of %zen General License was introduced operating as a free market for foreign exchange. With the fixing of the FEEC rate, however, demand for imports under O-GL began to outrun exchange availabilities. This has been a major factor in the development of the liquidity crisis. - 10 - 29. These policy changes provided an important stimulus to increased domestic production. A food production drive was mounted which increased rice production dramaticallv and substantial increases were achieved in other agricultural products. The rice ration was halved and import and price nolicies were emnloved to nrovide increased incentive for domesti G output of a number of imported foodstuffs. Irrigation facilities were imnrovedj ext.ension systems strenathened and the nse of imnr'oved nlantin' materials, fertilizer and agricultural practices was rapidly expanded. In adition, the liberalizati on of the exchange system permitted increased im- ports of raw materials, equipment and spare parts which in turn permitted exJ+nor; inelltr_al nn;+:Tr +capacit tob iliz.e1d7 muich mor f l-yn,nr andl inrdutrial1 output increased rapidly. Mbreover, fixed investment increased after years of st-nation although, most of +kt 4ncrnoe was financA 'bry inr--asA nai flows and not by increased domestic savings. In 1968 GDP at constant prices increasedI b A a- 8 percent and continued -ains in ag-J-r ula-l -nd 4inds- trial production were recorded in 1969 when GDP increased by a further A r, on4 FUJ MC1 W11 UX. ,0. In co-tras' lo Ile progress in regard to re-structing the proutv ±11 LAiiL.L U LU U1 jiL U~.~a LJ U I UJI ~ LJ JLUU...L~ I. . U IL. U.L v~ side of the economy, the management of financial affairs failed to provide the basis for sustaining this progress. Rising incomes went largely + i a consumption. Thus the increase in investment was financed largely by capital 2~~....,-. T.t....I UIUM-A M1. -,A A0-.4-I.. . ncreaseF 4 r alws. Intuerestu rates rerm-ired low and despi te sPL, ubstantULial iceael government revenues, current expenditures rose just as rapidly, since the mintenance of' social prrograms required lntUcriIiueas.Ling resoU1Ure. RFling mIoinIey incomes put added pressure on the balance of payments, in the context of Ueclining foreign exchllange earnilngs -W-U-ch more tUhian offi'setU thetC sLUUbtU(ntlaL increase in external assistance from the Aid Group. As a consequence, when the present1 govervunent carr[e oU poWer ±11 lid,ay 197(0, it found Ltsel Uofironted, as l predecessor had five years earlier, with an extremely difficult exchange situation. Furthermore, as once before in theearly 1960's, Ceylon turnled o reductions in imports of investment goods and productive inputs in order to avert an acute exchange crisis. Yet, such reductions obviously cannot pro- vide a solution to Ceylon's balance of payments, except as a short-term, emergency measure. Continued for any length of time, they threaten Ceylon with long- term economic decline. 31. In capsule form, the improvements and the continuing weaknesses in Ceylon's economic performance in the 19;60s are shown in the following table. - 11 - Economic Indicators (in npercent) end end end end end end 1961-1965 1965-1969 1961-1969 GDP at constant pricies 17.0 24¢.7 45.9 GDP pe:r capita at constant prices 5.9 13.0 19.7 Investment as % of GDP (av.) 1-4.4 16.4 15.6 Savings as % of GDP (av.) 13.2 12.5 12.9 Net resource transfer from abroad as d of G.D (av.) 1.2 70 27 As the table shows, a marked acceleration in economic growth was achieved bet-ween 1965 an.d 1969: GD? at constaant prices rose by nearly- 25 percent, or against 17 percent in the preceding four years. In fact, in per capita terms, growth was more than twice as rapid - 13 percent as against 6 percent. This is encouraging evidence of the capacity of 'eylon's economy to grow, provided government policies are geared to growth. 32. The table also draws attention to the continuing decline in the savings rate as the major weakness. In other words, throughout the 1960's 3eylon permitted consumption to grow more rapidly than output, and this trend continued unabated even when, in the latter 1960's, the growth of per- capita output, or incomes, acceleratea greatly. This means, of course, that throughout the 1960's Ceylon has never had the kind of financial policies that wculd have been necessary to buttress a development policy oriented towards production for import substitution. On the contrary, financial policies were such that a very large share of the increase in output leaked into addi- tional consumption rather than serving to effect a reduction in imports. 33. The major cause of this leakage is not difficult to identify. It lies in the management of Ceylon's public finances. In a country, where total government outlays account for 30 percent of GDP, the rate of growth and structure of public expenditures obviously plays a very large role in determining the overall allocation of resources. In ceylon in the 1960's this thrust has on the whole been to raise consumption. While GDP at constant prices was, on average, growing by 4 percent a year, government current outlays were increasing by 7 percent annually, not counting the losses made by public enterprises and corporations as a result of selling their goods and. services below economic cost. In turn, this fast growth reflects mainly the rapidly growing expenditures on social services and transfer paynents (largely the subsidy on food) which together expanded at an annual rate of 8 percent, or twice as fast as GDP at constant prices. The result was not only a very low - 12 - rate of public savings - in the order of 1-2 percent of GDP - but also, with the exception of the years 1964/65 - 1966/67, a very large expansionary deficit of the government. Over the 1960's as a whole, the annual deficit equalled nearly two thirds of the increase in real income per year, adding considerably to the expansion of purchasing power which, in the circumstances, went largely into additional consumption. 34. The government budget has, of course, been the chief instrument for putting into effect Ceylon's social policy objectives. The budgetary develop- ments described above are, therefore, principally a reflection of the ex- pansion in public outlays built into these objectives in the context of a rapidly growing population - a population, moreover, that has been well aware of its political power under a democratic system and used it effectively to further its aspirations for improvement in the general standard of living. 35. Indications are that Ceylon has been remarkably successful in aehievina the mainr nhoibtive of its n slal r-i .v, a more equal distri- bution of income. Ceylon has rather better information on income distri- bution than most developing countries In addition to the ten-yearly consumer expenditure surveys undertaken in 1953 and 1963, a survey was undertaken for 1Q9Q/7 bhv the Department of statistics. While all these surveys hav-e to be treated with great caution, particularly the estimates of income in the highest groups, the most recent survey appears to be I es s 4a-+. +.n +sHqo r-th +. rcr tism and when the detailed results are known, should prove a very useful source of i;nfornmaor%n onn the Celnesa cononimr. The surveyr suggests thnat a: mrarked t+rend toward greater equality in income distribution has taken place between 1963 and 1969. Tein conc,ntrationr forv. p rson income beorea +!ax f'ell froTm .Q in 1963 to .35 in 1969 while the ratio for income after all taxes and subsidies ar et +ake in4t y c c+ nt f r e ll fror. .m to _30 . 1/ . 1969 rO# o 4-4 among the lowest for those underdeveloped countries for which this figure is available and are comi-.nable a 4 a num,ber of devel oped countries. The t+able below shows some significant trends. The biggest increase appears to have been in the base income of the lowes+ 70 percent o'f +-h p a A c arabl an- crease took place in the second highest decile. This perhaps reflects increased 0 rn, n,,l + ,,nnl incomes. I+ is ;fficul+ to believe +ht 4-4- avag4 ncome in the highest 1 percent of the population actually fell between 1963 and 1969 an-' t1h-is point-.s 4-ao the weak-ness of Ile surveys. If h4is cas's some doull OL7' j ILL I 4411± L4J II uJ UiIV W4W\1i0 4 L'11L -L-L~y0. ± UL.1LO uc. 44 U11 L UL U 1/ Concentration ratios were derived by fitting Lorenz curves to the survey UdaLSUt . I,e Toirenz curve is da for -vi Vsua,-liz0VU lng L± LUIIIBme U.LOU1-4LUUiUlI. It shows the proportion of total income held by each percentile of the pop-ulation. liT:heuL a rea Ube -wWluen l.the curve poUUttu Lruiri L Ih act-ual income distribution and a line representing equal income distribution is the basis of the concentration ratio. The smaller is the area, the lower is the ratio and the more equal is the income distribution. - 13 - on the hypothesis that income distribution actually became substantially more eaual. the surve;y lends no support to the view that it has become more unequal during the past few years. Income Distribution Income Ilass Average Monthly Family Percentage of Total in % T Income-Rs Income befoire Tr 1963 1Q69 1963 1969Q The lowest 70 100 185 36.e A 5. Next+ 10 916 97 11 9 0.7 Next 10 300 L6l 15.5 16.1 Next e 4~38 612 ll.h 10.7 ETjX+ ghest 5981 o In 7. Highglestu 1 206 494 10.5 5.2 36. The relative equality of income distribution in Ceylon is in part the consequence of ''tle a- 0Lbs n oVf - lary 'Lge Landholdi n gs U tsd the tea ardlu ruUUer industriLes. Pablic policy, however, has also played a large role, through the promotion of high wages and agricultural incomes. Furthermore, in terms of real consuraption per capita, the relative equality of living standards in eylon C,ould be still more pronounced. Unfortunately, no data are avaiiabie on this aspect. However, it is known that the lower income groups obtain their basket of conswnption goods and services very largely at prices consider- ably be:Low the level that would prevail in a free market. To that end, the government has operated a far-ranging system of price controls and rations. To that end, too, it has devoted around 55 percent of its total outlays. In 1968/69 pUblic expenditures on sociai services and transfers to private account amounted to very nearly Rs 150 per head of population - roughly equivalent to a third of annual income for the lowest 70 percent in ~eylon's income distribution according to the table above. Furthermore, in the same year these expenditures amounted to about 16 percent of GNF and over 20 percent of total private consumplion. In short, there is no question that public policy, as effected through the budget, has had an economic impact on bringing about a relatively equal distribution of real consumption per head of population. 37. It is also clear that the distributive policies embodied in the budget and other government programs have tended to give a very strong push to total consumption. Th-is part was mitigated as long as it was possible, through - 14 - a combination of tax and import policies, to redistribute real consumption of goodq from the higher to the lower income gronuns. Judping by the import budhet. this possibility no longer exists - except possibly in industrial materials used for the production of goods for t+he hicgher income groupsn but any cut- back here would of course create its own problems in terms of unemployment. Thus, inaway, Ceylon stands ata cross road, and the choice to be m involves the policy objective that Ceylon after independence has pursued above all others - higher standards of li-ing for the greatrajority of its people. 38. There is no question that for Ceylon this poses a dilemma of excruci atl_ng .diffP4cu'l 4y, for t1he optlons --- harsh: Tf Ceylo does not- set Jxru .i U.LL U-.L.LLLI.U4 UL , I J1 U~1 kPU~ U VLL/ La dI. ~10. 1 .1. 1 .LIL1. . 0 I11JU 0~ U aside for economic growth the resources required to keep total output growing at, a raute miarkedly abUove 'thilat0 of ) population, irjUports tuo reet Uhthe coULIULry ' consumption needs will, with total exchange available stagnating or perhaps even ut:U | LiLLrg, tU -L:l-U.d.±Ilg±-t aIIL'U iJIijJUl- an 0 prULIU.L. LVl LUy 4oLl rLIVTe C- ment goods. Economic decline would set in which before long would prove this course self-defeatlnLg. Alternati-velyJ in order to be able to escape the prospect of long-term economic decline by aiming at a rate of economic growth above that of population, Cey'lon must keep increases in cons-um-nption well below those experienced in the 1960's. This is not a question of Ceylon having to aUbaiuon Ul U UJULU.LVt- 01. ±L bUILJdl YUj-L.Ly. nUVrJtVt-Y1 iti U±iJ.LlULU LU see how growth of total consumption can be curtailed sufficiently without a major reform that would reduce the expansion in public outlays, and thereby of total consumption, built into the system as it now exists. - J5 - III. THE CONFLICr OF CBJECTIVES 39. On conming to power in June 1970, the new government under Mrs. Bandaranaike articulated a nunber of political objectives. The argumient wfas advanced that the previous government had emphasized economic growth at the expense of distributive justice and welfare with the consequence that the increased incomes generated had gone into the hands of a few industrialists and wealthier farmers, while the problems of the rising cost of living and. large-scale unemployment had gone untreated. The new government undertook to redistribute income, reduce the cost of living and increase employment. A variety of actions have been taken in pursuit of these objectives. These in- clude the restoration of the second measure of rice to the ration; the extension of price controls to a growing list of manufactuerers; the limitation of the area of private sector industrial activity; progressive nationalization of whole- sal and foreign trade; and the fnrmiilatiorn of an emplnvment. nrogram- 4L- Th- centerpiece of the whole svstem nf' government- i nterventi n in the economr for the purpose of distributing incomes more equally has been the rice subsidy. Rice rationing began dlriing the TWAr. NlWo measuires of rice were given to each person every week, at a price which was progressively reduced over the years to 25 cents a measue by 1960n The hsub Jiy rose to nearly Rl.s 500 million in 1965/66 or about 28 percent of current expenditures. A major change ,,n a - Tlac,. mhki-. I 044 -aht an +'h4a V'f +A tn1 T z 'hn3 I trar +.^ % man 1V'-n t.iy ri t'b LT i cr1Tn cam inDeer.er1,6 when -h ration was halved toon esewhc .agin free. The expected fall in import payments and expenditures on the subsidY did not follow im-e-diat-ely ho0wever, since world rice 1prices re-ached highy' levels during the subsequent three years. 41. The cut in the rice ration led to a sharp increase in free market Yncesfr rice. 0a .-.4 o aA -S + h + 4-a;, int ase +1,a, -_- + aA -- nA -f___ 3s . \S - VL v * VII}.U . ] 1a UXtJi W- A w,l V h in. .J' 6 * _tAw 5u. w4 d p - e v - .- Rs 12 to Rs 14 a bushel, this was undoubtedly an important element in the success of rice produActi-n progra.-.s. Private rice - tra4 increased and ~ ~J4. I J.A..~ UU.UU~ %JL A JJ 6 CI 'LO.JI . £JVd I IJ .LUU V LU.LALJA -LAIJ 'OAJI. LU presumably an income transfer took place from consumers to producers and middLUUeLrJenL. As a Uc uence the rice ratLon bUecariie a d. alJtJL* isUs iL Uh electoral campaign of 1970 when the then opposition promised to restore the second ma sure if re -el ted .._ Ti w done i -- n September 197.n7 T pM i c>swlsu Iel ua | X s s |sW ,>u | 1.L.0 r,CLaO IAVLl: L.1 1X V.PVV111UV1 L7(IV. 1s1L o of the second measure was fixed at 75 cents, which is slightly higher than the I,.por pieo 0 t70 cents c.i.f. at the ----Q rat of exchange1 - th11! ..LIjIL Ua P1 AUL 'J.v I J' UV . f.t UVI U f.± _. . . lLa U UliC- jJd -L± t.yJ ±I.. U .L C Ui.l, import price having fallen sharply over the last year - though considerably lower- than the guaranteed price to the farmler of abo-ut 100 cenLts. The Food Commissioner's estimates show that Ceylon will be spending nearly Rs 120 million more this year on the rice subsidy despite the fall in world rice prices. 1/ This represents nearly 5 percent of total revenue - a major share of the j/ Excluding aDout Rs 45 miiiion in additional outlays on stocks resulting from a larger proportion being held in local rice. - 36 - automatic growth of revenues in a normal year. The government intends to inrease the actiVities of the GFS ('uuz-aranteed rrice chne;ue) so tnat a greater proportion of the total rice crop is made available for distribution through the ration. imports could then be reduced. Important thougn such a development would be, it has to be recognized that under the existing system there is a substantial additional fiscal b-urden in switching from imported to locally produced rice. 42. lnce the additional Rs 120 million of expenditure on the rice sub- sidy is distributed evenly over the whole population, it can be assumed that the average savings rate will apply to it. This means that about 90 percent of it will go into increased private consumption. The rice ration is only one of a number of measures likely to increase consumer expenditures. Since coming to power the government has conducted a series of investigations to see how far the prices of manfuactured products can be brought down. Prices of a range of commodities have subsequently been controlled. These include safety matches, barbed wire, imported textiles, soap, shirts, exercise books, toothpaste, flashlight and transistor radio batteries, bicycle tires and tubes, umbrellas and drugs. These price controls, as can be seen from the list, are not limited to necessities or items of mass consumption. Many of these items are based on imported raw materials and supply is therefore unlikely to in- crease. For some, demand would seem to be relatively inelastic for a small downward shift in prices. The effect of price controls in this situation is therefore likely to be that of transferring income from producers to consumers and increasing demand for commodities whose prices are not at present controlled. This would put pressure on the government to introduce further controls, or alternatively increase supplies which in the short run means increased imports. The price controls affect the profitability of pri- vate sector firms and thus reduce both taxation and savings. 43. Since taking office the government has taken a number of actions in pursuit of its objective of ensuring a dominant role for the public sector in industrial life. The policy has not yet been finally articulated, but appears to be to limit the private sector to existing activities and small- scale industries. Until the end of 1970 very few new investments had been authorized and no new companies had been licensed. In at least one case, an existing license for a major new investment was cancelled. The government has introduced the Business Acquisitions Bill which permits it to take over any business enterprise. The Bill itself contains no safeguards against arbitrary take-overs, but the government has stated that it will be used only against offenders. The climate is therefore not one in whlich new private in- vestment can be anticipated, except in the field of tourism where the government has welcomed private participation. 4h. The evidence suggests that a sharn fall in nprivate investment took place in 1970 and is likely to continue in 1971. A number of investors have decided not to go ahead with schemes which had been approved earlier. Th.be surge in investment during 1968 and 1969 had two main components. Firstly - 17 - ther_ was a big increase in rural housing construct;ion as a consequence of higher agricultural incomes and secondly in manufacturing as a consequence of the easier availability of foreign exchange. While housing construction can be expected to continue at a high level 1/, this will not add to the stock of productive assets. Most of the fall is taking place in private invest- ment in manufacturing. This has created a vacuum which the public sector is not ;yet in a position to fill. Public sector units are limited in the pace at which they can develop by their internal efficiency and the availability of both rupees and foreign exchange. All these three resources are in short supply at present. Many public sector units are operating at under 40 per- cent of capacity and many require operating subsidies. Some of these indus- tries, e.g. cement and steel,cater for investment clemand and will be hit by the fall in private investment. Employnent will suffer directly in the con- struction industry and in the longer run through the failure of new plants to come up. For existing plants the government has taken steps to limit the possibilities for retrenchment of labor, even if their production is affected by shortages of imported raw materials. This will tend to reduce private savings and act as a further disincentive to private investment. 45. Another direction in which the government has acted is through the nationalization of much of internal and external trade. A State Trading Organization has been set up to handle the major share of trade imports. The Co-operative Wholesale Establishment (CWE) has taken over import of subsi-diary food items which was previously in private hands; the Lanka Salu Sala will now handle all textile imports and all wholesale trade in textiles, except locally produced cotton textiles. Some public sector corporations are responsible for trade in items they produce, e.g. fertilizer. paper. steel, etc. Oil bunkering facilities have been nationalized and steps are being taken to set up a Ceylonese shipping line. A Gemming Corporation has been set up to handle all gem exports, and it is proposed to nationalize graphite mining. These actions will place an enormous strain on the public distribution system which has not in the past been notably efficient in dealing with a very much smaller burden. h6. The last area in which the policies of the new government involve a major change is that of employment. The unemployment problem has been recoznized in the past but it was imDlicitlv felt. and not only in Ceylon, that it was a facet of the general growth problem, i.e. that some attainable rate of growth would absorb the unemplyned. r.vl on'n rnnid rate of groJwth during 1968 and 1969 was possibly sufficient to employ much of the addition to tlhe labor force uiiring the npat feutfw y hs but n ba-cklog of.perhanp 1/ At least in rural areas. Construction of urban housing, both owner- cunineipci anti rental, appears to have -uiffered grett1V as proposals for far-reaching new controls on rents and occupancy rights became public. 400,0oo-500,000 unemployed remains. The government has therefore formulated a program to employ 100,000 of this number for which Rs 200 million has been provided in this year's budget. The underlying theme of the program is that employment schemes should generate continuing employment without a continuing budgetary burden. Many of the schemes worked out are imaginative and have a good chance of success, though perhaps they will take somewhat longer to get off the ground than is presently thought. These include schemes for plantation crops such as cashews, cocoa and coconuts, where money provided would cover living expenses during the period when crops are not yielding. Other schemes however are more questionable and would require budgetary support for the fore- seeable future. In some cases a major retraining effort would bep to yield the maximum benefits. Criticism of individual schemes however should not deter from what stands out as a pioneering effort in a complex and difficult field. With a view to solving the longer-term problem the government has invited an ILO team to formulate a program. The team started its work in Oeylon in late March. 47. In his budget speech, the Minister of Finance talked of the govern- ment's objectives. "It is committed", he said, "to maintain those social wel- fare measures which are an integral part of our fabric and to take all such steps as the situation demands to provide the necessities of life at reasonable prices to the mass of our people. It is committed to a program of rapid economic growth of sufficient magnitude to absorb a sizeable proportion of the unemployed and to bring the solution of this problem within sight during its term of office". He added, "The magnitude of our development effort, the rapidity with which we can increase the production of these woods and ser- vices upon which our general welfare depends and the speed at which we can effect the transformation to socialistic forms are determined by t.he extent to which we are willing to make a sacrifice now and the extent to which we are willine to increase our productive work'K h8. So far; the new directions that have been set have not been towards growth. None of the measures discussed can be represented as a sacrifice of present consmmption for future benefits. Consuwmption in 1970 grew at a faster rate than GNP and the prospects are for a similar divergence in 1971. Yet in the long run the objectives of growth and social welfare do not conflict. It is only through achieving a sufficient rate of growth that employment will be sustained and resou-ces found for increased social welfare. Obviously in the present time a balance has to be struck. In relation to the measures taken so far it has been heavily weighed on the side of increased consu,.er outlays. IV. POLICIES FOR GROWTH 49. There is no point in minimizing the difficulties of reaching these goals. Ceylon has to achieve long run growth with declining export prices and at best perhaps stationary imports. The growth record over the two (decades since independence is disappointing in relation to Ceylonts potential and the sacrifices which would be needed in the short-run to im- prove it have so far proved politicallv unacceptable. The broad measures needed are reasonably clear and uncontroversial. Firstly, the economy will have to maintain a high rate of investment. Secondlv, the quality of in- vestmnent, particularly with respect to the performance of public sector industry, will have to be improved. Thirdlvy the investment has to be di i r- ected mainLy at replacing Ceylon's current imports of food, textiles and light manufactures, and promoting export of bot.h traditional and ne-w items. 50. Ceylon began the sixties with the rate of investment at 16 pe:rcent of G])P, but this fell steadily during the first few years as a consequelace of static savings and a net external outflow from Ceylon. Both private and public investment remained at the same absolute levels till 1965, by wh:ich time the investmen1; rate had fallen to 12 percent of GNP. In 1966, how-ver, investment rose to 14.5 percent of GNP as a consequence of a revival of private investment due partly to the favorable political climate and faclli- tatecl by a sizeable net inflow from abroad. This momentum was retained (dur- ing subsequent years with the irnrvstment rate going to 16percent n 3168 and 19 percent in 1969. Although public investment rose, it was the priLvate sect(or whifc'h was minly responsible for this growth. It increased i"ts ,hare of total investment; from 60 percent in 1965 to 75 percent in 1969. 51. This increase in investment was largely made possible by net iLnflows to- anylon- vabU; cm A-Io u.ted to about US$2790 rUILLULLon bet7ween end 1965 and enid 1969, as against only US$73 million during the preceding four years. Domestic savirngs pla-yed lit4;1e or no part in tUhe-incres in in-vestment; they rose only marginally in absolute terms and fell as a percentage of GNP. This is of' course a rath.er mechanical view of the slituation. The large aid inflows made it possible for investment to be stepped up without reducing consumption. Pre- sumably some steps to increase -nvest,.ent would have been taken e-ven in the absence of aid. Irn addition, there is a statistical distortion due to ithe im- pact of devaluation which, since imports constitute a large proportion of in- vestment, leads to a considerable inflation in the figures for 1968 and 1969. UnfoTtu44tely, Ceylon does not have a constant price series for investment. A constant price series would show a much less striking variation between the two periods, though it waLld not contradict the reversal of the earlier declin- ing trend. These changes are summarized in the table below. - 20 - Economic Indicators (-in T'percent endr end~ en end end end~ 1961-1965 1965-1969 1961-1969 GDP at constant prices 17.0 24.7 45.9 GDP per capita at constant prices 5.9 13.0 19.7 Investment as % of GDP (av.) 14l.i 16.4 15.6 Savings as % of GDP (av.) 13.2 12.5 12.9 Net resource transfer from abroad 1.2 3.9 2.7 as 7% of G.Ur- (av. 52. In view of the discussion above, it is important to ask to what extent this increase in income -was on account of gr-eater effiuIucy- of invzestm,ent rather than a simple increase in the quantum. Using a somewhat crude index - a comparison of the simple capital output ratios at current prices ior tne two periods - it would appear that the capital output ratio fell from 3 to 1 in the period 1961-65 to 2 to 1 in 1965-69. Allocating these proportions to the additional growth in GDP which took place in the later period compared to the earlier, suggests that about one half of the net increase was due to the larger volume of investment and half to a higher return on a given volume. If the ana- lysis is refined by introducing a one year lag between investment and output, then the proportion which would be accounted for by increased volume of in- vestment would fall to about 15 percent. This figure would be still lower if some weighting for differential price changes in investment and GDP was taken into account. 53. The conclusion that a major share of the additional growth in recent years was a consequence of greater efficiency comes as no surprise. It is clear from all the discussions of agricultural growth that it resulted from the organization of a package or inputs, incentives and extension services rather than major additions to the capital stock. It cannot be argued that Ceylon is anywhere near the end of this particular avenue of growth. There is tremendous scope for further gains at existing investment levels, parti- cularly as a consequence of the introduction of improved rice varieties. In addition the drive to improve efficiency of public sector industries has scarcely gotten under way. Nevertheless we would argue that Ceylon continues to require a high rate of investment in general and public investment in particular. 54. Saying that there are high returns to be gained from greater efficiency does not mean that there are not high returns also from well chosen investment. There is certainly no shortage of projects with sufficienctly high returns and equally no shortage of technically quali- fied people to carry them out, though management particularly for public sector industry remains a constraint. Ceylon needs rapid investment in fieltis which will have an impact on the exchange situation and help achieve a structural balance in line with the sharply reduced role of the export sector in the econonV. Perhaps most important of all over the next few years, the rate of investment will have a primary influence on employment. It is difficult to see the government being able to achieve its employment object- ives with falling rates of investment. 55. The prob'Lem of maintaining the rate of investment with static imports is a serious one. It implies the freeing of import capacity from consiumer i-tems to investment goods, and a structure of production which emphasizes local raw materials. It may be possible, however, to reduce this requirement by changing the import coefficient of investment, i.e., concentrating on those activities which require less imports. Put in another way this implies attaching a much higher value to foreign exchange than the official rate would indicate in order to ration effectively the scarcest, of the economy's resources. The government is already looking into ways to increase the labor content of investment. The strategy wou:Ld tend for example to put weight at the margin on the side of minor irrigaition investment rather than major. Not enough thought has been given to approach- ing the investment program this way and thereby increasing the level with a given volume of imports. 56. It is going to be very difficult to maintain the rate of investment at the 15 to 16 percent of GNP level over the next two or three years. This is th,e sort of leveOl which one would intuitively think appropriate givern the short, term difficulties the country is facing. The pressure to cut imports of investment goods and raw materials, or to put it the other way, to maLin- tain the level of food and consumer imports in a situation of declining tota1 imports has already been referred to. This will reinforce the decline in private investment which is taking place. Private investmentj according to some estimates, has fallen by about 25 percent in absolute terms in 1970 as compared to 1969. There is no reason to anticinate anvthing except a further decline this year. Even if there were no decline at all in 1971, for invest- ment this year to be kept at roughlv l 5 percent of CNP, public investMent would. have to rise by an enormous 25 percent. In -this context the coun1;ry is going to be involved in a holding oneration. The real issue will be how far the decline in investment can be limited. 57. The longer-term outlook gives little cause for rejoicing. To achieve a growth of' per capita ineo-me- of 2K percent ov.er the next decade- , Ceylon needs an average growth rate of 4.-8 percent assuming population growt.h remains at tbe nresent rate. This is considerably better -han what - 22 - was achieved in the last decade. Such an increase has to be regarded as the minimum acceptable, yet it will be extremely difficult to achieve in a con- text where increased levels of exports and thus increased import capacity if available at all, will be at a rate far below the increase in domestic production. With the present structure exports are likely to fall from 17 percent of GNP in 1969 to 10 - 12 percent by the end of the decade, but hopefully by that time Ceylon will have found new export items. If the trade sector is not growing during the period, however, this means that the rate of growth of domestic production has to be at about 6 percent per annum to achieve even the minimal growth referred to above. It would not seem likely that this could be achieved without raising the investment rate and keeping it at around the 16 percent level. Assuming a roughly constant net deficit on goods and services, this means a real marginal savings rate of about 18 percent, as against a minimal 8 percent in the past decade. The implications of a constant deficit for consumption and savings can be seen in the table below. Assuming private investment can at least be held at the current level in absolute terms, public investment would have to be more than double its present level by 1975. Projecting Growth 1970 1980 GDP in real terms 100 160 GDP ner canita in real terms 100 125 Tnvestment as % nf GDP 15.1 16.0 Consnumption as % of GDP 87.9 86.0 Net resoirc-e trAnsfer frnm ahroad as % of GDP 2.9 2.0 Savings as % of GDP 12.1 1h.0 PU2Pihhli,r ,rnz q+.yy+.. 1; m;+.a hTr +thD 'nnnri-A+tr i-fv +A)a -niil-; sector both to generate resources and to use them effectively. For the former, orx, r.r1na.T financing~e cul ofv cors be resorted~ to, b-ut at +t-e exeseo additional pressure on the balance of payments and internal prices. This is not an appropriate policy alter-nativ at th-i of t+i r.e. T,,o+ as important a limitation on public investment is the public sector's ability to use resouces effectively.1 The -public sector inutre ave b,een unabl e to operate at anything near their rated capacities in many cases. In some cases i..port's have hadV l'Cto' m.ak upI, -o shotfll in_ -o- cpoutin n ~ .LllkjJUl ~ AIc U V MAJ1LWU LI.F LUL- O11VU.L CL _L L11 UIJJ(=1L~ ,U JL-VUUL UU-LVI, CWLU expansion programs had to be delayed until existing capacity was used more efficie -.-.tly - 23 - 59. Some of the largest corporations like textiles, steel and tyre!s and tubes have had the worst rates of capacity utilization. For tyres arid tubes for example this ranged from 16 percent to 29 percent depending orL the product in 1969. There are many causes for this low capacity utilization. Labor problems come high on the list. Absenteeism, labor unrest, shortage of skills all play a major part. Other problems include inefficient manage- ment, competition from imports and the private sector, irregular supplies of raw materials and power and structural and locational deficiencies. These problems are not limited to the public sector, but where comparisons are possible, the private sector emerges as a far more efficient user of both capital and labor. These inadequacies are not inherent in public sector operations, but the government will need to take a much firmer stand against them. The measures so far announced do not go very far in this direction and some proposals such as those which would limit the autonomy of public sector managers hardly seem appropriate. However, key economic ministers in the government have taken a strong interest in the operation of public corporations. Prodnction statistics for 1970 sugg-est that these efforts have begun to make themselves felt: all corporations produced considerably more in the second half of the year than diiring the first siy months, and with few exceptions their output for the year as a whole exceeded that of 1969. 60. The final aspect of the growth equation concerns the question of where to invest. T1. I1hould bhe cl ear freom +.he fir-+. part of this report that the major constraint on growth and the overriding policy consideration in the short run is. he balance of pam .ents. Priority needs to b g ven as in the past, to imrestment which will reduce imports and promote exports. Thes 4acinera,-.o 4'vill r Ao n +~ A4+]n in +.Ha Inc+ ~n,^nmA^ nay- fIn,r l These~~~ isue wer -1.,l dealt with in the las ecoori reot on Ceylo:1 (SA-12a January 27, 1970) and are discussed in the annexes on agricultu:-e and industry. An wany An , .Ainh prnecssre c-n be +nlan off t-he hol bna a paym!nts will give Ceylon that much more room for maneuver in attempting to raise the growth rate. It is +a-t t -h-- pon .hat policies toa dal, ,- - short and 'Long term problems come together. Insofar as investment is directed toward s imor ---- n 4r exor promtion - cut-bc in ir,.p-orts of iD.nVestl- V'J a J411J9J.L U, ~O.V116V.J I~ J A~ UV ~ jJ. P JJL~ U .LII U IIl, C.L- ,UU-UCL-A' LLi .L111FJ. u. J-L Ll ment goods in the short run will in the longer run reduce Ceylon's capacity to import in total. - 24 - V. THE IMPACT OF THE BUDGET 6i. Ceylon is therefore faced with a situation where the total supply of goods from overseas must be curtailed in the short term and where, over the longer term, the Government must seek to achieve its economic ob- jectives within a more or less constant level of imports. If the economy is to continue with a high level of investment so as to achieve a rapid growth of domestic production and employment, with roughly stable prices, then the primary policy objectives must be to limit the growth of consumer expenditures and to increase public and private savings. Total savings in Ceylon have fallen from 15 percent of GDP in 1961 to about 13 percent in 1969, and if preliminary estimates are accurate, to under 12 percent in 1970. Increasing private savings is important but tends to take place gradually over time. The weight of action therefore falls to the Government which must increase savings by increasing its tax revenues relative to its con- sumption. 62. Government savings in Ceylon have fluctuated between 1 and 2 percent of GDP. This means that the Government, which controls about one third of Ceylon's total income, has contributed far less than its propor- tionate share to the total savings of the economy. Looked at another way, the public sector has been dependent on outside sources - Ceylon's private sector and foreign aid - for financing some 90 percent of its investment. In short, Government savings have been far too low to have any significant impact on investment and, thereby, on the capacity of the economy to grow. If this situation was unsatisfactory in the past, it is clearly more so now that the Government has decided to assign to the public sector a much larger role in the economy of Ceylon. 63. Seen against this background of the urgent need to increase public savings, the 1970/71 budget is a disappointing document. Even the original budget estimates show a fall in the surplus of revenues over current expen- ditures from Rs. 153 million to Rs. 76 million. Total public savings would remain at around 1 nereent of GNP. These earlier estimates have been over- taken by events, however, which strongly suggest that this budget will not onlv fail to nrovide a way miit of the nresent diffiniilt sitiation hiut will in fact lead to further deterioration. In the light of these events, the Trpeqasrv has nrpnnrprl revrised Petimates of t'h hi(irjbdtary nit] nnk for 1Q7n/71 which are shown in the table below, together with the original budget esti- mate for this year and the provisional actual for 1969/70n - 25 - (Rs. rmillion) 1969/70 1970/71 1970/71 (Prov. Act. )Budge+ Est. ) - R v 2 fRevenr1ue C_ IC 2766 2-796 Uurrent D' Su -pls- - 1,; 76 5 Extia-Budgetary Revenues 16 55 55 Public Savings 169 1_31 1 6 Capital Expenditure 910 1062 1017 Advance Payments 195 - 93 Total Financing Required 936 931 1004 Non-Expansionary Domestic (Nor-Bank) Borrowing 288 343 441 Foreign Financing (net) 220 491 338 Expansionary Domestic Financing 428 97 22512' 64. According to the Treasury's revised estinate, total public savings will fall from an unsatisfactory level of Rs. 169 million in 1969/70 to Rs. 106 million in 1970/71. This represents a fall of Rs. 63 million wihen the need to increase public savings has never been greater. While tax re- ceipts would rise by 1.6 pei'cent, current expenditures would rise 5.6 percent at a time when total income of the economy is unlikely to grow by more than 4 percent. As compared to last year, about Rs. 150 million more will be going into consumption as a result of the budget. Government measures to exlend price controls are also likely to release consumer incomes for expenditures on non-controlled items. Together, these policy shifts are certain to put heavy pressure on prices since the supply of commodities is increasing at a far slower rate than consumer demand. Inevitably there will also be pressure to increase the import of consumer goods to meet this demand. 65. The most positive feature of the budget is the projected increase in public investment from Rs. 910 million in 1969/70 to Rs. 1017 million in 1970/71, i.e. by 12 percent. However, several qualifications must be mioted. 1/ To finance this gap, the Treasury intends to borrow about Rs. 100 million fromn bank sources and to obtain Rs. 125 million in trade credits on loan purchases abroad. - 26 - First, an increase of the magnitude projected will not maintain total investment in a situation where private investment is considerably down. Thus, there would still be a decline in total investment which must affect employment in investment activity in the short run and is likely, later, to reduce economic growth. Second, public investment in 1970/71 includes Rs. 200 million for the employment program. Of this, a part is not for the creation of physical assets, but for training. This makes the figure not strictly comparable with that of last year. It also implies that physical investment will subsequently - but not much later - have to be expanded considerably if those trained are to be able to translate their training into higher productivity. Finally, the projection of a Rs. 110 million increase in investment is based on the assumption that the Govern- ment will be able to increase net foreign aid by Rs. 120 million, i.e., US$20 million, over last year. In other words, Ceylon would contribute nothing towards the increase in capital expenditures projected for this year, indicating the weak internal financial position. Furthermore, while the revised estimate of disbursements of external assistance does not appear unduly high, it must be noted that most of the increase over last year is expected to come from project aid when disbursements have been very slow in the past because numerous problems were encountered in the execution of projects. 66. According to the revised estimates, the financing gap would rise from the level of Rs. 88 million cited in the Budget Speech to Rs. 225 million. In terms of the figures shown in the table above, the finan- cing gap would even after the revision remain substantially below the 1969/70 level. However, in economic terms, this apparent improvement dwindles very considerably because last year's expansionary deficit is inflated by a sizeable accounting adjustment. This comes to Rs. 153 million in expenditures that were incurred in earlier years and financed by banks in a form which, for accounting purposes, was not considered to rep- resent expansionary financing, but which in effect was in no way different from normal bank borrowing. Thus, in real terms, the expansionary deficit in 1969/70 was Rs. 275 million, as compared to the Treasury's revised es- timate for this vear of Rs. 225 million. As noted in the footnote to the table above, the Treasury intends to keep recourse to the banking system to about Rs. 100 million - i.e., roughly in line with the original esti- mates - and to finance the balance through trade credits on food pur- chases abroad. This wavy expansionarv financing mav be kent in check this year, but repayment of the trade credits early next fiscal year would obvinously add verv considerah1v to the f'inancnion nroblem in 1971/72. 67. TirithermnreP diptaiiled se'.rtiMnv of the assumptions underlving the Treasuryts revised estimates suggests that it will be very difficult +to-n pnrev,n1t. piubhlic savinmq frnm +Tr.nin r out minh leovwpr annd the finnne-ina? gap considerably larger, unless action is taken soon either to raise addition.- revemre or to reduce expenditures. In particular, governi.ent owned corporations are now expected to pay into the Treasury, in the form o- .^ -ce of nlvd1ds i r and arw,,it , aho1t+ Rs. 15oc rili t.4 4 fI. V - - - -Lt -.tJLMAJ ... l _'. - 4u,L . J - l .A.,...% - 27 - as compared to Rs. 21 million last year. The Ceylon Transport Board, wnich enters into both this estimate as well as that of advance payments, is expected, as a result of an increase in fares and higher traffic, to be able to turn an operating deficit of Rs. 38 million in the first half of 1;he fiscal year, into an operating surplus of nearly Rs. 50 million. Furthermore, the Treasury now estimates an under-expenditure of 4 percent on current accoun-t, as against the normal 2½ percent which in the past has usually turned out to be not far off the mark. 68. Looking ahead to 1971/72 suggests an even more difficult situ- ation. The resources available to Government this year from sources other than bank borrowing have been raised by a number of measures which are once-and-for-all :in nature, such as demonetization and compulsory savings. All of the normal growth in revenues and perhaps more will be swallowed up by :increased current expenditures. Some Rs. 100 million will be needed in new resources just to replace this year's extra-ordinary measures. This wou:Ld still leave public savings and the financing gap at the unsatisfactory levels of 1970/71. If, in addition, revenues were to be raised further in order to increase investment, while at the same time reducing the financing gap, something close to the total increase in income of the economy would needi to be taxed away.- a task that would clearly be beyond the realm of reality. At the same time, whatever the prospects for external assistance, it is difficult to see it being able to provide fi-nancing for the entire actaal increase in investment. 69. Thus on the basis of present budgetary trends one can only con- clule that the budget is moving in a direction exactly opposite from that in which it should be moving: public savings are falling and the exparL- sionary deficit rising,. if not th'is year then certainly in 1971/72, above the level of 1969/70 which was clearly excessive. Thus, the budgetary- situation will further add to the excess of demand over foreseeable supply which already exists in Ceylon's economy. Thus it is going to place still greater pressure on prices of goods in the market, whether local ly prcduced or imported, or - to the extent that prices are controlled - intensify other manifestations or shortages. Given the Government's commitment to stabilizing prices and providing an adequate supply of goods of mass con- sumption. the temptation will undoubtedly be great to trv to alleviate these pressures by increasing imports of consumer goods. In Ceylon's very tight exchange situation. the consenuence must be a corresnond ng reduction in imports of goods for productive purposes, including investment. Such a steo would seriously erode the capacitv of Cevlon's economy to nrodtiCE more goods in future. Its consequences would be an the more serious since even if the budget estimates for publ-ic capital expenditures we-re ach-ieved, total investment would be quite low - certainly much too low for an economy whose on1 v ehanne of overrromli na j ts nresPn+. djiffi cut-ie Ps le i n ernaning i production. The Government insists that it will take whatever action is reui red to preven.+ these consequences and to turn budgetary trends in Yto the proper direction. To that end, consideration is being given to various proposals, particularly onr the revrenue side, but, as this report is being written, no measures have yet been announced. VI. IMPORT AND EXCHANGE POLICY 70. When the present government came to power in mid-1970, it was confronted not only with the immediate danger of an acute payments crisis, but also with an import program for the full year far in excess of resources in sight. To avert the threat of pressure on the liquidity position increasing further action was taken to cut back on imports. To this end, the system of open general license, which had been introduced in conjunction with the Foreign Exchange Entitlement Certificate (FEEC) scheme in 1968 and which, largely because of the deficient way in which it was being operated, had spurred a large increase in imports, was first suspended and then revoked. In addition. license issue for imports other than food, textiles and drugs and including in particular industrial materials, was cut back drastically, from TTS$202 million in the first half of the year to iust over IISTlO0 million in the second. Moreover, of the licenses issued, a major portion was shifted from rash resolnires to short-term trade c-redits. This shift had the effect not only of stretching payment for imports over alonger period of time and there- by helpingo e e the immei2te liniitv situation, but alsoof' redcingi imports as many importers found it difficult to arrange for the necessary credlt. Thpe effect of these measu.res was, however, to som e extent offset by an increase in the exchange allocation for food, from the original amount of US$~~~~~~~~~& 12) lo oUS19.7l o,vr agl for a d ; -loalr.ots of rice in support of the restoration of the rice ration to two measures in September. 71. Together with a modest recovery in export receipts in the second hlf-1 o P 4-ya-r, - the-s meaure succeeded Jn aerng an acute par.-Lents I I.L1 1)4. 1)110IL J oat. , UL104.)- 1110L.41.4 os ~ xn V c<. L Iu.v3 a 111 crisis and bringing about some improvement in net reserves, as shown in the 4tabl, e b1e'low: Changes in Net Foreign Eachange Assets (US $ million) Jan.-June 1970 June-Dec.1970 1970 Gross assets - 1.0 5.2 4.2 Gross liabilities 14.1 -22.5 -8.4 of which: International Institutions 0.5 -18.3 -17.8 Commercial Banks abroad 18.9 5.7 24.6 Net assets -15.1 27.7 12.6 - ?9 - 72. Yet, welcome - and desparatelv needed - as this improvement in the net reserve position was, it was achieved at very considerable cost. First, short-term trade credits outstanding increased by over US$30 million in 1970, that is by an amount substantially larger than the improvement in net reserves so tlhat Cevlon's total short-term indebtedness continued to rise. Secondlv. as shown in the table below, in reducing total imports from US$441 million in 1969Q to TTSk,ni million in 1970 imponrts for nrnid,etAive nirnposes had to be cut by US$64 million in order to make room for a concurrent increase in, imports of food and textile of TIS$2V millionn Import s (TVT- $ m.nllTinn) I1oAo 1070 1071 Original Estimated Present Ac tual Tj-c-s T>o- -tal 1 rgrw Food 143 124 167 123 Textiles 14 14 15 10 Drugs 4 4 3 4 Subtotal 161 142 185 137 Tradde Quota 32 27 10 30 Cement 3 1 1 Petroleum 34 24 17 22 Ferti.lizer 24 21 18 21 Government Departments 46 61 12 39 Home Industry Corporation 26 3y 24 40 Industrial Corporation 37 50 46 53 Priva,te Industry 67 86 37 L02 Direct Users 11 16 8 10 Unallocated OGL - - 43 Subtotal 280 325 216 :325 Grand Total 441 467 401 462 73. Although perhans unavoidable as emergency measuires in the short run- neither one of these avenues can, for obvious reasons, be relied upon to provide a way nout of the present diffiuilties. Tra'de credits are just another f'orm of short-term borrowing and, being heavily indebted already, Ceylon cannot afford to permit it shrort-term indebtedness to increase further. Similarly, imports of goods for productive purposes are the very means for overcoming the structulral lifficulties of the economyr by expanding domestic production, through investment and larger supplies of inputs. 7h. It is in devising an import program for 1971 which does not suffer fromthewe + a kTnlesses-fit 1 --+ i tr -+...- m e-re - +1,-m -eA t-- av J] - t J -.V -5ay, -I%L , A.A .-*i U JS ' *A. -- ~ J 0 furth;r reduction in total imports creates enormous difficulties. The reasons for a further reduction in imports have been discusse in Chapter T. Ther implications are summarized in the table below: (US $ million) 1970 1971 1. Own Resources 286 286 2. Medium- and Long-term Credit 84 97 a. Commodity Aid SS4 5O5 b. Project Aid and Other Aid 13 20-25 c. Suppliers Credit 16 17 d. Foreign Investment 1 - e. Others - 3. Short-term Credit and Use of Reserves 32 a. Trade Credits 32 20 b. Borrowing from Banks Abroad 25 -20 c. Use of Rieserves (incl. IMF) -25 ) 4. Total = Merchandise Imports 402 383 75. The dilemma lies in the difference between the permissible level of imports - about US$385 million - and the present size of the import program. In order to be able fully to appreciate the difficulty of the decision facing the Government, it should be noted that total import demand, after initial screening, originally came to nearly US$500 million. Thus, in its present size the import program already incorporates reductions totalling US$38 million which have been made at the official level (but had not yet been approved by Cabinet at the end of February), largely in food where it was thought possible to exploit more fully the potential for import substitution. Yet, further cuts of nearly US$80 million need to be made. It is obvious that if imports of invest- merLt goocds and productive inputs have to bear the brunt of this further re- UcU:tion Udomestic production, e.,ploymnUent and gr-owth wUld s-uf fer. Equally if other imports are cut, current supplies of goods and services, that have t-ad tlonally been considered essential, cannot be maintained at a levrel consistent with the government's objective of raising the standard of living of the average Ceylonese, perhaps not even consistent with the standard of living enjoyed dLring the last few years. These are harsh choices which, as this report is ue±nrg written, have not yet been made. VII. CONCLUSIONS It is evident from the discussion in the preceding chapters that at present a wide discrepancy exists between the direction which government economic policy appears to be taking and that which it should be taking if CGvlon's economic affairs were to be managed effectivelv in the current dif- ficult situation. In the circumstances it is obviously not possible now to rpAch anv substantive .onclusions about thp nrosnects for economir and soc-ial development in Ceylon, except to say that without a major redirection of nnlinv a1l indiit,inns noint. to 1onn-t.Prm economic' dec1ine. T-TwPvPr. thi.s, is too gloomy a prospect to contemplate, all the more so as one can see the possibility of Ceylon emergirg from a period of structural transformation with an economic base capable of sustaining growth at a pace sufficient to permit Ge-lon to satisfy its aspirations for" a riszingr stannnndrd ofr llin.Atth om time, to effect this structural transformation of the economy, there are ex- wl, a- n ,r ,i44f c l+ probnlelpms for Ceylon o raeslvre u h 6° +o +h te 1h-+ of the country's economic and social system as it has evolved since inde- pendence. 7Thus, instead olft dwel ling on thle dire consequences of inaction on the part of the government, it may be more appropriate briefly to summarize wha-t appear to ba the+ +tw c.ritical elements in anry effort to aa,ra ala an' severe difficulties and set it on the path to economic improvement. The first, and crucial, element in a renewed effort to overcome the 4. i .._n PP 14 : r- .. r I I1 .-_4., -_ t_ 4_ - 1_ AA _1 _ -A 1-- 41 - sL tULu uraL LLL .L_L.U UlU es oL ke yLoUn sI DecUoLiUiI1- iIIU.S UU U 1LUII U01U±LUlDLULILiU I,y U1LU government of a policy framework that promises to be effective in promoting Ulie stuructuUaraXl transfUMlU atIid.U-1 of the ecoLny IU UlathI.ereby Ut seU LeY_LILL on the path to economic and social development. Such a framework must provide for strong emphasis on prom-Qoting rapid growth of agricultural production, while industrial development, because of the large demands for imports asso- ciated with it, must probably for the tnie beLng be kept to a minor role. It must point the way to more efficient use of existing productive assets, part- cularly in the pUblic sector which will require, inLer aiia, higher productivity of labor and more effective management. However, as has been the major theme of this report, none of these components oI the policy framework are iikely to be as effective as circumstances require, unless they are accompanied by a program of action enabling the government to curtail the growth of consumption, private and public together, to the point where the major share in the addi- tional income generated over the next several years is cnanneled into savings and reductions in imports of consumer goods, including in particular food. Altogether, these various elements of a viable framework of domestic economic policies amount to a formidable challenge to the perseverance and ingenuity of the government whose magnitude it is difficult to exaggerate. The second element is external assistance. There is no question of the government being able to cope with the present difficulties on its own, without continuing support from abroad on a substantial scale. Any appreciable shortfall, for any length of time, in imports below US$400 million will threaten to strain beyond tolerable limits the government's capacity for curtailing - 33 - domestic consumption. Yet, without fresh commitments of aid, Ceylon's import capacity will fall to about US$330 million in 1972 and thereafter level off around US$300 million. Thus, it is essential that disbursements of aid be at least maintained at their estimated level of us$80 million in 1971. Mcnre- over, they will have to continue at this level not just for a couple of years, but for some time tc, come. It is sobering to note that all the aid Ceylon received during the.past five years did not make up for the fall, in exchange earnings that resulted from the decline in prices of tea and rubber. These annual aid f7lows have been large for a country with a population of 12-13 million. They will be difficult to mobilize in any event. They will almost certainly not continue to flowv, for any length of time unless the government establishes a framework of policies in which aid can be shown to be effective in supporting a structural transformation of the economy. However, as the government is searching for a way out of the country's deep-seated problems, any decline in external assistance, which now finances about one fifth of total imports, would immensely complicate the government's task which is difficult enough as it is. It would, therefore, seem essential. that, for the immediate future, external assistance be at least maintained at current levels. STATISTICAL APPENDIX TABLE NO. TTrLE Population 1.1 Population Estimates 1.2 Vital Statistics 1.3 Growth of Employment by Sectors 1.4 Unemployment in 1966 - Distribution by Age and Sex 1.5 Unemployment in 1968 - Distribution by Area National Accounts 2.1 Gross Domestic Product by Industrial Origin at Current Factor Cost Prices 2.2 Gross Domestic Product by Industrial Origin at Constant 1959 Factor Cost Drices 2.3 Exbpenditure on Gross National Product at Current Prices and its Composition Balance of Payments, External Trade, External Assistance 3.1 Balance of Payments 3.2 Composition of Exports 3.3 Actual and Projected Exports 3.4 Composition of Imports 3.5 Status of Aid Group Assistance 3.6 Status of Aid Group Commodity Assistance 3.7 Terms of Aid Group Commodity Assistance 3.8 Status of other Countries'l Official Assistance 3.9 External Assets - 2 - External Debt I.1 Ceylon-External Public Debt Outstanding as of' December 31, 1'369 LI.") Ceylon - Estimated Future lervice payments on External Public Debt Outstanding including Uindisbursed as of December 31, 1969 L4.i 'Past Tiransactions on Txternal Public Debt 19`5-19O9 L4.Ll Cey]on Goverrnment Estimate of' External `ublic Debt nOUtstanding as of September 30, 1970 Ceylon Government Estimate of Future 9ervice -'avrents on External Public Debt Outstanding Tncluding Undisbursea as oIf September j., 1970 Fiscal Statistics 5. IL Summary of Government Accounts 5.2 Financing of the Deficit 5.:3 Government Revenue 5.Ji Current Expenditure of the Government l96L6/65 to 1970/71 5.', Cppital Expenditure 5.S6 Government N'et Food .!ubsidy 5.'7 Public Expenditures on Health and Education 5.83 Government Enterprises 5.9 Interest Rates on Central Government Domestic Borrowing Monetary Statistics 6.1. Analysis of Factors Affecting M4oney Supply 6.2 Cost of Living Index -3- Agricultural Statistics 7.1 V!'lue of Agricultural Output - 1963-69 st Current Market Prices 7.2 Value of Agricultural Output - 1963-69 at Constant (1963) lMarket Prices 7.3 Value of Minor Crops at Current Prices 7.h Producers' Prices for Principal Agricultural Products 7.5 Retail Market Prices for Selected 4gricultural Products 7.6 Rice - Basic Statistics 7.7 Tea - Basic Statistics 7.8 Changes in Livestock Population nnd lroductior 7.9 Major Export Crops: Production and Yields 7.10 Exports of Minor 'gricultural Products 7.11 Fertilizer Consumption - Ceylon 1965-1969 7.12 Plan for Self-Sufficiency in Rice, 1971-77 Industrial Stati.stics 8.1 State Industri..l Corporations; Canacity, Production and mpln.oyment 8.2 State Industrial Corporations; Capital, .Profits/Tosses and Return on Investments 8.3 State Industrial Corporations; Value of Production and Shares in Troduction and Enployment 8.4 State Industrial Corporations; Foreign Trade Component of Production in 1969/70 8.5 Exports of Industrial Goods, 1965-1969 Ta1e 1. 4p. ~ I POPULATION &3TIMATES Year Mid-Year Population 1 871 2,400,380 1881 2,759,75a 1 891 3,007,789 1901 3,565,954 1911 4,106,350 1921 14,498,605 1 931 5,306,871 1946 6,657,339 1953 8,097,895 1963 10,590,o60 1964 1o,965,000 1 965 11,228,000 1966 11,439,000 1967 11,701,000 1968 11,976,000 1969 12,270,300 1970 12,571,900 1975 114,174,300 1980 15,917,400 Source: 1871 to 1963, Department of Census and Statistics Population Census. 1964 to 1980, Ministry of Planning and Enploypent. Table I. 2 VITAL STATI STICS Crude Birth Crude Death Natural ;Iet Orowth of Year Rate Rate Increase 141 :ratiork I'opllation (perl,000) (per 1,000) ( , 0) per 1,00e0) p 19L6 38.4 20.3 18.1 +8.5 2.7 197 39.4 1L.3 25.1 +3.2 2.8 194B ljo.6 13.2 27.l +2.8 3.0 19l19 39.9 12.6 27.3 +i, . 3.1 1950 L0.4 12.6 29.8 +2.6 3.? 1951 b0.5 12.9 27.6 -1.7 2.6 1952 39.5 12.0 27.5 -1.9 2.6 1953 39.4 1-0.9 28.5 -1.6 2.7 195)j 36.2 l0.lt 25.8 -0.9 2.5 1955 37.9 11.0 26.9 -1.1i 2.6 1956 36.4 9.8 26.6 -2.0 2.5 1957 36.5 10.1 26.4 -1.3 2.5 1958 35.8 9.7 26.1 -1.5 2.5 1959 37.8 9.1 27.9 -o.B 2.7 1960 36.0 8.6 27.L -o.6 2.7 1961 35.8 8.o 27.8 -0.9 2.7 1962 35.5 8.5 27.0 -0.9 2.6 3963 34.6 8.6 26.0 -0.6 2.5 196b 33.3 8.7 211.6 -0.6 2.i4 1965 33.2 8.2 25--) -0.5 2.5 1966 32.3 8.3 2L.0 -o.5 2.4 1967 31.6 7.5 2b.1 -o.6 2.1 1968 32.1 8.1 21.6 -0.7 2.3 1969 31.7 1/ 8.1 1/ 23.6 - - 1/ Provisional. Source: Administration Reports Registrar-General, UN Demographic Yearbook. 1966. Department of Census and Statistics and provisional figures by Dr. N.'r. Wright. Table 1.3 GRC;WiTH Or 3,PLOYLTENT BY SEC 2)ORS 19)6,-1970 (Numrbers in thousands) 1946 19531 1963 1968 1970 Numbers % Numbers % Nunbers % Numbers % Numlbers % 1. Agriculture, Forestry and Fishing 1,381 53.8 1,58)4 53.0 1,692 5z2.9 1,916 52.2 1,972 50.2 2. Nining and Quarrying 9 0.3 13 0.1 10 0.3 18 0.5 22 o.6 3. Vanufacturing 1/ 259 10.1 303 10.1 312 9.8 :387 10.6 14A6 11.3 Construction - - 56 1.5 80 2.5 l)48 14.0 1657 L.3 5. Banking, Trade aind CommIlerce 2C5 8.C 2)46 8.2 287 9.0 1203 11.0 )4i5 11.3 6. Tra-nsoort and Communication 93 3.6 104 3.5 132 )4.1 209 5.7 221 5.6 7. Ser-ices incl. Utilities 3)42 13.3 )487 16.3 51.0 16.0 86 16.0 658 16.7 8. Not elsewhere classified 279 10.9 197 6.6 174 5.- - - 9. Total - All Sectors 2,568 100.0 2,990 100.0 3,197 100.0 3,667 100.0 3,9:31 iCO.0 1/ Consist of factori industries, cottage industries, and the processing of tea, rubber and coconut products. Sources: 19)6 to 1963, Bepartment of Census and Statistics, Census Data. 1968 to 1970, Projections by the Nliinistry of Planning and E.mploymernt. Table 1.4 TUEMPTOYMENT TN 1968 - DTSTRIBUTTON BY AGE AND SEX (numbhers in thousqnds) Male Female Total Age - Group Numbers Numbers % Numbers % 10-lb 5,739 1.8 2,706 2.0 8,!45 ].9 15-19 129,7964 41.3 15,051 33.6 176,816 39.0 20-26 110,679 35.2 57,681 6J3.1 168,160 37.5 25-29 31,025 9.9 18,2h0 13.6 49,265 11.0 30-3L 13,956 1.5 5,918 6.6 19,872 -.5 35 and over 23,025 7.3 6,378 3.3 27,603 6.1 '211. mA -ion0 133,9'I 07L -100 0 1.1.7 ,90 1i00r r. 15-26 260,273 76.5 102,732 76.7 363,005 76.5 15-29 271,298 86.6 120,972 90.3 392,270 87.5 Source: Department of Census and Statistics, The Labor Force Survey, 1968. T a.e 1 .5 UWPLO0YM:ENT IN 1968 - DISTRIBUTION BY AREA (in thousarids) Akge GruM All Island Ulrban RuTral Estate Total Males Females Total. Males Femal-es Total Males Females Total Males Females 10 14 8,445 5,739 2,7U6 331 331 - 7,,223 4,517 2,706 891 891 - 15 15 174,845 129,794 45,051 32,165 23,671 8,4904 109,103 78,,408 30,695 33,577 27,715 5,862' 20 *- 24 168,160 110,479 57,681 39,264 26,938 12,326 122,128 78,862 43,266 6,768 4,679 2,089 25 29 49,265 31,025 18,240 10,557 7,001 3,556 38,,220 23,536 14,684 488 488 - 30 34 19,872 13,954 5,918 3,992 3,130 862 15,,253 10,197 5,056 627 627 - 35 and over 27,403 23,025 4,378 7,802 6,969 833 17,373 15,165 2,208 2,228 891 1,337 447,990 31!.,016 133,974 914,111 68,04lo 26,071 309,300 210,685 98,615 44,579 35,291 91,28E8 Sou:rce: Department of Census ard Statistics, The Labor Force Stuvey, 1968. Table 2.i GROSS DOMESTIC PRODUCT BY INDUSTMIAL ORIQrN AT C1JRRENT FACTOR COST PRICES ( Rs an ili 11 - | -1 | | - | | _ | Perc entage change over I ioh~~~~7 I,~~L5 ~ ~reio uyea, 11960 1?61 1 7 79 1 1%3 1 1965 1 96 1968 17eou 1yer 7 19iS t 7 1. Agriculture, Forestry, Hunting, & Fishing 2390 2L56 2392 2600 ;7661L 2523 261LL 2879 3656 3801 + 3.6 +10.1 +27'.0 + 1.O 2. Mining and Quarrving 32 32 33 39 33 35 38 10 47 5,2 + 8.6 + 5.3 +17.5 +10.6 3. Manufacturing 712 710 789 78h 819 919 866 911 1160 12711 - 5.7 + 5.2 +27.3 + 9.8 1. Construction 283 279 297 285 306 g 277 313 350 509 655 +10., +19.9 +..9 +287 5. Electricity, Gas, Water and 9 2 Sanitary Services 10 10 11 11 13 114 1L 15 16 19 ... + 7.1 + 6.7 +18.8 6. Transport, Storage and Commnunication 587 579 631 637 706 776 829 812 911 1091 + 6.8 + 1.6 + 81.2 +19.8 7. Wholesale a.nd Retail Trade 937 873 954 971 11 li 1191 1238 1273 1361 1715 + 3.9 + 2.8 + 7'.2 +25.7 8. Banking, Insuranc: e and Real Estate 52 58 65 69 76 93 86 107 139 1 8 - 7.5 +214. +259 . 9 + 6.5 9. Ownership cOf Dwellings 211 233 219 260 275 294 31 336 366 375 6.8 7.0 .9 + 2.5 10. Publiz Administration and Defence 311 .324 31L 365 363 372 397 403 L4 l7 69 + 6.7 + 1;5 +17.6 - _ .1 11. Services 801 800 822 837 92| 997 1.328 1092 1227 1327 + 3.2 + 6.2 +12.4 + 8.1 12. Gross Domestic Product 6331 6:353 6549 6819 |7326 7199 7712b 8277 9369 10925 13. Annual Rate of GDP Growth (Percentage) 0.4 3.1 4.6 7.0 2.4 3.2 6.9 19.2 10.7 Due to improvement cf estimates, this Table does not coincide with previous corresponding tables. Source: Annual Report - 1969, Central Bank of Ce!ylon, Appendix II Statistical Table L. Table 2.2 GROSS DO ESTIC PRODUCT BY INDUSTRIAL CiRIGIN AT CONSTANT 1959 ?ACImR COST PRICES (Rupees Million) _________________ ____________ _____ ______ - ~~~~~~~~~~~~ ~~Percentage change over pre.- vioiis year. -< 196D 1961 962 1563 i 904 196.2 1966 1969 1 1969 -'?11 7 T- 1. Agriculture, Forestry, Hunting & ?ishing 24W36 2614 :2695 2846 2946 2773 2821 301i3 3248 3321 + 1.7 + 7.8 + 6.8 + 2.2 2. Mining & Quarrying 32 32 33 30 32 34 37 :37 37 50 + 13.8 ... ... 5.1 3. Manufacturing 728 7h6 798 853 901l 937 1008 130;2 1l54 1221 + 7.6 + 4.4 + 9.7 + 5.8 4. Oonstruction 281 269 282 272 283 266 293 351 446 527 +10.2 +19.8 +27.1 +18.2 5. Electricity, Gas, Water & Sanita-ry Services 10 10 11 11 1:3 14 14 15 15 18 ... + 7.1 ... +20.0 6. Transport, Storage & Commtunication 585 566 608 592 64'1 740 792 782 824 923 + 7;0 - 1.3 + 5.4 +12.0 7. Wholesale and Retail Trade 929 839 892 875 1003 1105 1144 117h 1253 1380 + 3.5 + 2.6 + 6.7 +10.1 8. Banking, Insurance, and Real 3state 52 59 64 67 71, 90 83 100 110 118 - 7.8 +20.5 +10.0 + 7.3 9. Ownership of Dwellings 212 22h 236 227 255 273 273 265 275 281 +10.0 - 3.0 + 3.8 + 2.2 10. Public Adininistration & Detfence 314 324 344 365 363 372 397 389 432 446 + 6.7 - 2.0 +11.1 + 3.2 11. Services 754 783 798 812 886 961 992 1021 1105 1152 + ,3.2 + 2.9 + 8.2 + 4.3 12. Gross Doemestic Product 6332 6465 6760 6951 7397 7565 785J 8226 8900 9h35 13. Annual Rate of GDP Growth (Percentage) 2.1 4.6 2.8 6.l, 2.3 3.8 44.7 8.2 6.o Source: Annual Report - 1969, Central Bank of Ceylon - Appendix II, Statistical Table - 5. Table 2.3 EXPENDITUOE UON '3RD33 NATIONAL PRODUCT AT CURRiENT PRICES AND IT) COMPOSITION4 (ne Million & Percentage) 1 96 0 19 61 1 962 196 36 965 19is6 1 9 67 1 9A8 '9Q6 9 1.ConsuLmptioni Expenditure 5931 88.6 5838 87.2 59139 85.6 *S3So 87.2 6845 88.o 7038 87.8 7432 89.2 79O 87.7 8958 88.6 10221 86.8 Private 5~020 75.0 4912 73.3 5010 71.6 5339 73.3 5755; 78.0 5881 '73.8 6278 75.3 6712 74.1 7550 71.3 8749 74. 3 Governmeont 911 13.6 926 13.8 979 1~.0 1011)l 13. 1O5 I09 14.0 1157 14.8 1158 13.9 1228 13.6 1408 13.3 1472 12.5 2. Gross Domestic 3apital Formation1l-' 978 18.6 1102 16.5 loBo 1.t8L 1161 15.95 1113I 18,3 1018 12.6 11 95 18.-3 1 3 77 15.2 1668 15.7 2232 19.0 Private & Plublic Corporations 675 10. -1 707 10o.6 677 9.7 772 i O. 6 777i 10.0 6i o 7.6 882 10.1 931 10.3 1137 10.7 1693 18.8, Govt. & Public Enterprises 303 8.-5 395 5.9 803 5.8 389 5.3 3 36 8.3 8108 5.0 353 8.2 836 4.9 531 5.0 539 4.6 3. Net kaports off Goods & Non- factor Servrices -1 95 -3.0 -65 -1.0 -99 -1.AL -128 -1.8 - 165~ -2.1 +38 +0. 4 -290 -3.5 -257 -2.8 -309 -2.9 -691 -5.9~ Exports 2011 30.0 1907 28.5 1 971 23.2 1903 26.1 1 937l 28.9 2095 26.1 1865 22.8i 1889 20.8 2165 20.8 2158L 18.3 Imports 2209 33.0 1972 29.8 2070 29-6 2031 27.9 2102 27.0 2061 25.7 2155 25.9 210L6 23.3 2878 23.3 288!5 28.2 8. 0DP aLt Markcet Frices 6,711 6875 6970 7382 779-3 8088 8337 9060 10318 1 176~3 5. Net Flactor Income From Abroad -88 -0.7 -80 -0. 6 -47 -0.7 -53 -0.7-~ -36 -0.,5 --15 -0.2 -37 -0.8 -58 -0o.6 -61 -0.6 -10o4 -0.9 6. Residtual: Unidenitified changes in stocks and statistical dis- crepaLncy +28 *0.4 -137 -2.0 *70 *1,0 -87 -0.6, +1 8 ±0..2 -56 -0.7 +33 +0.4 '-1 -0.5 +339 +3.2 +111 +0.9 7. GNP ELt Market Prices 6,698 100.0 6698 100. 6993 100.0 7282 100.0 7775 100.0D 8013 100.0 8333 100.0 9052 100.0 '10596 100.0 1177) 100.0 8. Annual Rate of GNe Gro-wth (Percentage) o.i 4.8 4.1 6.8 3.1 4.0 8.6 17.1 11.1 I / Inclukdes chianges i-n stocks So-urce : Annual Report - 1969, Central Bankic of Ceylon: Appendix TI,, Table, 9. Table 3.1 BALANCE OF PAYMENTS 1/ (U.S. $ milli on ) 1961 1962 1963 1964 1965 1966 1967 1965 1969 1970 1971 siena) I. Current A ccount A. Receipts ho7 420 404 411 444 396 392 375 364 379 386 1. Merchandise, Exports, f.o.b. 359 370 359 371 401 352 3147 332 321 335 336 2. Port Expenditure, Transport end Insurance 25 25 24 22 25 25 27 23 19 20 24 3. Foreign Travel 2 1 1 1 1 1 1 2 3 4 5 4. Investment Income 5 4 3 2 3 3 2 2 3 2 2 5. Goverrnent EXpendit-res 6 8 5 $ 6 6 5 5 5 5 5 6. Other Services 10 10 11 7 7 8 8 10 12 11 11 7. Private Remittances 2 1 1 1 2 1 1 1 3 2 2 B. Payments 435 457 449 460 446 470 462 439 504 467 528 1. Merchandise, Imports, c.i.f. 377 400 393 412 404 424 427 396 446 403 461 2. Port Expenditure, Transport and Insurance 10 10 10 9 8 7 3 6 5 5 5 3. Foreign Travel 5 4 5 3 3 3 4 3 4 3 3 4. Investment Income 13 14 14 10 6 10 14 11 20 26 29 .Govern,mn.,t 4 enditues 8 7 5 5 5 3 3 4 4 5 6. Other Services 15 13 114 12 14 15 16 17 22 20 18 7. Private Remittances 8 8 8 9 7 7 6 4 4 5 8 NET CURiENT ACCOUNT -28 -37 -44 -50 -1 -74 -70- 64 -140- 88 -142 II. Capital Account. A. Net Private Capital Monrn,,+c l - - - 2 5 - 7 + 1 - 3 - 3 - 2 - 1. Direct Investment -1 - 1 - - 3 - 1 -2 -2 -2 - 2. Other Long-term Capital - - - - - l - - - - - - 3. Other Stiort-term Capital 3 - -1 -2 4 2 -1 -2 -1 - B. Net Official Capital Movements 25 25 26 25 38 52 69 71 85 76 136 l. 3rants 9 8 9 16 13 13 10 5 8 7) 2. Loans received by Central Govt. 4 8 16 2 8 32 35 39 48 4 102 3. Short-term Liabilities of Central Cov-t. 1 1 1 7 6 9 1 -2 28 314 33 4. IMF Transactions 11 11 - - 12 16 23 29 2 - 14 1 C. Net External Assets (w.nus=increase) 6 3 17 2z 32 33 3 - 56 11 - 6 1. Central Bank Assets 3 5 9 - 5 - 33 30 - 25 4 12 - 5 - 2. Central Bank Liabilities 8 - 2 9 5 - 15 7 30 2 42 8 - 16 3. Central Govt. Assets/Liabilities - 6 - 1 - 25 11 - 1 - 3 - 1 - 1 - 3 - 1 4. Cormmercial Bank Assets 2 1 -1 - 3 -L - 2 -6 3 -2 - 5. Commercial Bank Liabilities - - 1 - - 2 2 3 + 1 - - - 6. S.D.R.'s - 13 11 iNET CAFITAL ACCOUNT 32 30 44 51 2 78 73 68 137 85 130 = ~ _ . . . III.Errors and Omissions -4 7 1 -1 -1 -14 - 3 - 3 3 12 _/ Up to the end of 1967 all figures have been converted into dollars at the rate of $pl = Rs. 4.76. For 1968 - 1971 the current exchange rate of $1 = Rs. 5.95 has been used. Due to rounding the sum of individual figures may differ from totals. 2// Financing Gap. Source: Table 27, Anmnual Report (1963-1966) of the Ban.r-l fnnl of Ceylon for 1961-1965 Cimres; Table 28, Annual Report (1967) of the Central Bank of Ceylon for 1966 figures; Table 43, Annual Report (1969) of the Central Bank of Ceylon for 1967-1968 figures; Kinistry of PLanning and Fapployment for 96oy-±y97 figures and 1971 estimates. Table 3.2 CONP(STITION CF ElICORTS (U.S. $ million) V 1960 1962 19653 1964 1965 1966 1967 1968 1969 15,70 1971 (Provisional) TWro j. Tea 230.3 241.4 239.7 239.9 2';4.2 215.8 219.0 195.1 178.,3 188.0 187.6 Rubber 79.14 60.9 54.0 60.9 63.9 70.8 58.3 55.6 72.4 73.9 65.7 Major Coconut Products 38.6 47.7 41.6 57.4 57.8 41.2 34.4 55.5 37.2 35'.9 47.6 Other Exports 2/ 24.6 21.0 23.1 28.8 26.7 24. 4 25.o 25.7 27.2 33.5 35.3 Total Exports 372.9 371.0 358.4 387.0 402.5 352.1 336.7 331.9 315.1 335.3 336.2 Percenrtage of Ecports Tea 61.7 65.1 66.9 62.0 63.2 61.3 65.CI 58.8 56.6 56.1 55.8 Thbber 21.:3 16.4 15.1 15.7 15.9 20.1 17.3 16.8 23.0 22.0 19.5 Major Coconut Products 10.41 12.8 11.6 ]L.9 L4.4 11.7 10.2 16.7 11.8 11.9 14.2 Suib-Total 93.1, 94.3 93.6 92.6 93.4 93.1 92.6 92.3 91.4 90).0 89.5 Other Exparts 6.6 5.7 6.4 _7.4 6.6 6.9 7.4 7.7 8.6 1). 0 10.5 Total Exp ts 100.( 100.0 100.0 100.0 l()0.O 100.0 1100. 100.O 100.0 10C).0 100.0 1/ Up to the erdl of November :1967 allL export figures have been converted into dollars at the rate of U.S. $ 1 = Rs,.476. From Dcember 15967 onawards the figares have been converted into dollars at the rate o.f U.S. $ :L = Rs.5.95. 2/ The followirn; commodities have been included under "Other Exports" - Coir Fibre; 'oconut Shell Charcoal; Coconuts (Fresh); Cinnamon; Pepper; Cardamons; Cloves; GraphLite; Ilmenite; Cocoa; Tobacco; Citronella; Chycerol; C:Lycerin; Ieather; Precious Stones; Jewelery; Clothing; Footwetar. Source: Ceylon Customs aznd Ministrn of' Planning & ETnployment, Ceylon. Table 3.3 Actual and ProJected Exportsl/ 1960 1964 1965 1966 1967 1968 1969 1970 1971 ___ ____ (Prov T.onal)T(ro-j) Tea Productioni mil.lbs. 435 082 503 490 487 496 4814 446 500 .-orts ms c 010 hlC6 095 Olil 078 060 05 L4;'9 065 Unit Price US$ per lY. o.56 0.53 0.51 0.49 o.46 0.42 0.40 0.11 0.40 Export Value US$ mil. 230.2 239.9 254.2 215.8 219.0 193.2 178.3 185.0 187.6 Rul:ber Productio s mil.lbs. 218 246 261 289 316 328 333 351 360 ort rll.lbs. 235 253 267 208 291 328 315 355 Unit Price US$ per lb. 0.34 0.24 0.24 0.214 0.20 0.17 0.23 0.21 0.18 Fxoort Value US$t mil. 79.0 60.9 63.9 70.8 58.3 55.7 72.4 73.9 65.7 Coconut Products; Production mil.nuts eiquiv. 2,183 3,000 2,61 2,086 2,416 2,600 2,616 n.a. 2,843 EXports mil,nuts eq-uiv. 976 1,626 1 ,27114 1, 0,28 ,51 1,096 895 878 1,050O Average Expor-t. US$ thous,/mil nut Value equiv. 40 35.3 45.4 s4 -.1 36.2 51.0 40.6 05.4 145.3 Exports Tha.ue -U$ mifl. 38.7 57.4 57.8 41.2 34.4 55.9 37.2 39.9 147.6 of which Copra Exports thousand -vwt. 583 1162 819 416 316 1425 381 .05 Unit Price US$ per cwt. 11.6 10.0 12.4 12.6 12.3 13.4 11.5 12.5 EXport Value US$ mil. 6.8 11.6 10.1 5.3 3.9 5.7 *4.4 8 Coconut Oil Exports thousand cwts. 1,110 2,351 1,738 1,457 1,354 1,261 1,105 1,103 Unit Price US$ per cwt. 15.1 13.8 17.5 15.6 13.6 17.8 16.4 17.1 Export Value US$ mil. 16.8 32.4 30.5 22.7 18.1 22.0 18.1 19.6 Dessicated Coconut Exoorts thousand cwt. 1,099 1I080 1,0IA 930 926 1,382 1,017 978 Unit Price US$ per cwt. 13.6 12.4 16.5 10.2 13.5 20.0 10.0 1 6.9 Export Value US$ mil. 15.0 13.4 17.2 13.2 12.5 27.6 14.7 16.5 Other Exports3/ US$ joil. 2L.6 28.8 26.7 2L.11 25.0 25.5 27.2 33.'; 35.2 Total EXpots US ..il. 372.5 387.0 002.5 3512 .1 336.7 330J.3 31.1 33i j3 336 .1 1/Up tc tne end of 1,671 all excport figu-cs 1have been converted into do-lla-rs atthe rate of =L .76, and the~reafter at the cirrent rate of $ = lOs. 5.95. A/ JUe tc ro-undiing the s-ua, of trie irndividual figures r,ay differ fro,,. the totals, and for the s,,ie reason the product of unit prices and export volumses may differ from export values. 3/ The followinC, commodities have been included under ;;Other Exports'. Coir Fibre, Coconut Shell, Charcoal, Coconuts (Fresh), Cinnamon, Pepper, Cardamons, Cloves, Graphite, Ilnienite, Cocoa, Tobacco, Citronella, Glycerel, Glycerin, Leather, Precious Stones, Jewellery, Clothing, Footwear. Source: Ceylon Customs and Ministry of Planning and hmployment, Ceylon. Table 3. 4 COOMOSITION OF IMPORTS 1/ (U.S. f$ million) 1963 1964 1965 Miy 1967 1i68 1969 1. Rice 50.0 47.1 58.2 56.3 4L.2 52.2 43.2 2. Flour 19.3 20.6 29.8 28.9 48.0 38.4 40.8 3. Sugar 29.6 33.8 15.8 14.7 15.7 13.7 19.3 4. Dairy Products 16.2 19.6 22.0 15.4 18.6 14.9 9.2 5. Fish and Fish Preparations 10.0 12.4 9.6 13.7 13.0 13.0 12.3 6. Currvstuffs 18.6 23.9 19.1 19.6 14.6 12.6) ) 27.9 7. Other Food 16.L 13.9 17.5 19.8 15.7 19.5) 8. Tobacco & Beverages 3.9 3.9 6.7 2.1 1.8 2.2 1.7 9. Textiles 31.2 41.2 34.2 38.4 23.3 21.6 34.5 10. Medical & Pharmaceutical 5.1 5.9 6.3 7.0 L.5 1.7 6.o 11. Papnr and Cardboard 1.5 7.4 6.4 8.0 5.9 4.? 8.o 12. PAtro1pnim Prrinoduts 21) A 25.8 2q.0 23.6 27.5 21.3 28.6 11 - Fay-t I i7.pr 0-7 11= -) ), 8 17-7 19=1 18A) 1 7-0 IL4. CO+.hwer Mqphemcls 9.4 11. 109 1.4 16 166 2. 15. c'zm.zn+ 3 *83.9 2 2 6.0 33 IA T-I.n &2 q+-l 318 I 18.5 11.9 1.1 I1 I 12.O 17. Machirery L Eq L,rent 33 A .L o 3A A 6 53 . 4 '3 . 5 59 o9 .L I JdULLIV.L L.Lj.LJr~1 ~ .. .J4 L 4 ,J-J 7 7 18. Transport & EquipLent 13.1 11.1 13.9 18.9 23.0 17.7 47.5 19. uwier 7U.L4 44.4 4f. U'.4 47. 40) . Total i.eexcludirig mairii y Government Freight) 384.2 401.8 391.7 412.6 1404.2 382.6 436.3 Total Imports c.i.f. (392.0) (411.0) (404.0) (424.0) (417.0) (393.0) (445.7) 1/ On payments basis. Source: Central Bank of Ceylon. Tabe 3.5 3TAMUS OF AID SiOCLP ASST3TAI.. (U.S. M Million) As of' September 3D, 1970 Australia ;anada Denmark Fran,e :ernany rindia It aly Japan United United IPRD IDA ADB Total First, Prograamme - 196,5 K _ __ _ingdom States Consmitmenrts 1.56 5.16 1--, ,15. 2.67 - !.9. 101.0 12.225 O - _ h9.32 Disbursements 1.L6 h.16 _ _ l.-.9 2.67 - 5.95 10.30 11.68 - _ - 58.96 Amortization Payments _ - _ 2.67 - 2.97 o.i6 - - _ - S Interest and Commitment Pav,sents - 0.Oh - _ 1.1D 0.13 - D.86 - 3.21 - - _ 2.3h Second Programme 1966 Zommiuments 1.07 5.16 - 7.70 6.25 - h.99 13.00 15.0o - - - h9.17 Dis;bursemients 1.07 h.i6 - 7.29 6.25 - - h.95 l3.oO 15.i303 - -8.72 Amortization Paymnents - - - 2.97 - - - 2.27 0.D7 - - - - 5.31 Interest and Commitmeint Payments - 0.05 - 1.03 0.62 _ - D.92 - 0.79 _ _ - 3.h1 Third Programme - 1967 C'onmnitments 1.03 45.17 - - 3.38 6.67 - 5.99 57 13.87 ..2D - - i6.3J Disbursements 1.03 3.91 - - 2.9F6 5.7!, - 5.39 5.1_ 13.89 2.39 - - h2.98 Amortization Payments - - J.- - 0.22 - - - 0. D.v8 - - J.50 Interest and Commitmeint Payments - - - - 3.13 ).26 - 1.53 - 3.'5 Lb - _ 1.21 Fourt,h Proramme - 1968 Commnitrments 1.86 5.17 ( 6.8b 3.6)2 - 5.O3 h.95 8.ho 17.c81 5.90 6,90 2.OC 6h.89 Disbursements 1.86 5.15 - 5.52 3.3,2 - 0,62 5.89 7.56 15.0o1 0.22 0.51 1.155 43-71 Amortization Payments - - - 0.37 _ - - - - 0.01 - - - 0.38 Interest and Commitmenat Payrments - - - 0.15 0.07 - 0.03 0.27 - 0 28 0.05 - 0.06 0.91 Fifth Programme - 1969 Sonami;tments 1.12 5.36 2.63 8.89 3.57 6.67 1, 1 - 13*;; ,J _ 8.60 135.63 Disibursements 1.03 5.08 1.39 1.52 2.61 3.19 - 3.25 B.36c 5.59 - 3.31 31.02 Amcrtization Payments - - - 0.63 - - - - 3.03 Interest and Cosnvitment Paymients - - - .3D1 0. l2 3.71 -12 - 0.15 - - 0.21 Sixth. Programme - 1970 Conrmitments Di!sbursements - - - '- Amcrtization Payments - - - - - - - - - - - - - - Interest and Commitment Payments - - - - - - - - - - - - - Grand Total Comnmitments 6.54 26,65 2.63 23.53 33.22 16.-1 5.2 25.,55 57.2i 77.75 52.5A 23.1,. 10.66- 357.71 Disbursements 6.55 20.56 1.39 13.23 28.8 11.61 0.62 23.D6 >!7. 61.5 2.55 0.52 1.55 215.39 Amortization Pavment.s: - - 3.Io1 -D .8; .3Oj -2 ".Ju - _ 1.95 Interest and Coassitment Payments - 0.07 - 1.10 1.25 ,'!5 .3 9.6 _ 1.53 0.35 - o.Df 8.08 - Includes loans and grants fcr commodity aid, project aid, and technical assist.ance. The figures for disbursements, amortization and interest payments are against each rograms. Oonnnitments refer to agreements signed. Source: Ministry of PlaLnning and Employmenit. Table 3.6 STATUS OF AID GROUP COMMODITY ASSISTANCE (U1.S. C Milli-on) As of September^ 30, 1970 Australia Canada Derurark France Germany India Italy Jan U.K. U.S.A. Total First Aid Program (1965) ;omrvLitxaeyLs 1.5 3.1 - _ 8.0 2.7 - 5.0 10.0 12.0 42.3 Arrivals-, 1.5 3.1 - 8.o 2.7 - 5.0 10.0 11.7 412.3 Arrivals in % of Comritments 100 100 - - 10D 100 - 100 100 97 99 Sec(nd Aid Program (1966) CorrnitmenFs 1.D 2)4. - 7.7 6.3 - - 5.0 10.0 14.9 ,47.3 Arrivals27 1.0 2.4 - 7.3 6.3 - - 4.9 10.0 11.9 ,6..8 Arrivals in % of Comritments 100 1C)0 - 95 100 - - 98 100 10O 99 Third Aid Prog ran (1967) Coramitmers 1.0 3.0 - - 2.5 6.7 - 5.C' 8.6 13.9 .40.7 Arrivals2 1.0 3.0 - - 2.5 5.7 - 5.0' 8.1 13.9 39.2 Arrivals in % of Comrnitments 1 09 1')0 - - 100 85 - 10C 9i 1D00 96 Fourth Aid Program (1968) ComrrLitme W>s 1.7 3.7 - 6.8 3.1 - 4.0 5.^ 8.4L 17.5 50.2 Arritvalsz. 1.7 3.7 - 4.4 3.0 - O.6 4. 7.6 1 I . 7 4o. 6 Arrivals in % of Commitments 100 1,0 _ 65 97 - 15 98 90 84 79 Fifth Aid Program (1969) Co°mitme2 s 0.9 5., 2.7 c,.9 3.6 6.7 1.2 5.5 13.1 19.0 57.0 Arrivals' 0.8 4.1 1.14 1.5 2.6 3.2 - 3.2 8.4 5.6 30.8 Arrivals tn % of Commitments 89 76 52 17 72 48 - 58 63 29 45 Sixth Aicl Program (1970) ComLitnents Arrivals2/ - - - ' Arrivals in % of Commitments - - - - - - - - - - - Grand Total CommIlitmer Ltts 6.1 22.2 2.7 2 3.L4 23.5 16.1 5.2 25-5 64.5 77.3 266.5 Arrivalste 6.0 164, 1.4 1 3.2 22.4 11.6 o.6 23.0 44.1 60.8 199-5 of which 1965 1.5 - _ . - - - - - - 1.5 66 1.0 2.7 - - 6.2 1.5 - 4.6 5.8 3.5 25.3 67 0.7 4.9 - 4.6 5.9 1.1 - 4.2 10.6 11.6 43.6 68 1.0 1.9 - 2.5 4.3 1.1 - 4.C 9.6 18.2 )4O3.6 69 9.8 2.9 0.7 2.0 5.2 3.7 - 5.2 9.6' 20.1 49.3 70 1.0 4.8 0.7 _1.2 0.8 4.2 0.6 4L. 2 8.1 7.4 35.0 1/The U.S. dolLar equivalent of comrLtments frorn the Third Aid Prograrm onwards have besn calculated at the rate of i-. U.S. $02.40) 2/On the basis of Counterpart Fund i'ecords. Source: Ministry of Planning & Employment. Table 3.7 TEr; OF AIO G0RUU GOMHDIJDrI ASSISTANCA Total Commitments (U.S. $ Mllion) Interest Raie rcentai) G-ace Period (Years) Repayment PeriDd after Gra:e Period (Years) 1st 2nd 3rd Lith 5th 1st 2nd 3rd 4th 5th Ist 2nd 3rd 4th 5th 1st 2nd 3rd 4th 5th Austra:Lia grant 1.5 1.0 1.0 1.7 0.9 - - - _ _ _ _ _ _ _ _ _ _ _ Canada loan 0.9 0.5 1.2 1.9 1.9 - - - - - 10.0 10.0 10.0 10.D 10.0 0. 0 40.0 40.0 40.0 40.0 grant 2.1 1.9 1.9 1.9 3.5 - - - - - _- - - - - - - - Denmark loan - - - - 2. 7 - - - - - - - - 7.0 - - - - 18.0 France loan - 7.7 - 6.8 8.1 6.0 - 5.5 5.5 - 1.5 - 0.5 0.5 - 4-.0 8.0 8.0 grant - - - - 0.8 - - - - - - - - - - - - - - - Germany loan 8.0 6.3 2.5 2.5 2.5 3.0 3.0 3.0 3.0 2.5 7.0 7. 0 7.0 7.0 - 13.0 13.0 18.0 18.0 22.0 granTs - - - D.6 7.1 - - - - - - - - - - - - - - ]:ndia loan 2.7 - 6.7 - 6.7 3.0 - 5.0 - 5.0 - - 1.0 - 1.0 3.0 - 9.0 - 9.0 ]:taly loan - - - 4.0 - - - - 4.6 - _ - 2.0 - _ - - 12.0 - grant - - - - 1.2 - - - - - - - - - - - - ,Japan loan 5.0 5.0 5.0 5.0 5.0 5.5 5.5 5.25 5.25 5.25 :2.0 2.0 4.0 5.0 5.0 5.0 5.0 6.0 13.0 13.0 grant - - - - 0.5 - - - - - - - - - - - - - - IJ.K. loan '10.0' 10.0 8.6 6.0 10.6 - _ 3.0 3.0 3.0 3.0 3.0 22.0 22.0 22.0 22.0 22.0 grant - - - 2.4 2.5 - - - -- - - - - - - - l1nited States lDan 7.5 7.4 13.8 17.5 5:0 2.5.L/ 3511 2.53/ 3.03/ 3.o3/ 5 0 5.0 2.0 2.0 10.0 20.0 20.0 19.0J/ 19.0_1 30.0 loan 4.5 7,6 - - 1.0 _2/ 2.5- - - 3.03/ _2/ 2.0 - - 2.0 -2/ 19.0/ - - 19.0Wt' Total: 42.2 47.4 40,7 50.3 67.0 I/Interest rate dwring grace period is 1 percent. 2/PL 480 food assistance against local currency. 3/Interest rate during grace period is 2 percent. Il/u.s. $100,000 each during tlx first three years, and the balance in 16 equal installments. Source: Ministry of Planming and Employment. STAT'US OF OTHER CO0TRIESI' OFFICIAL ASSISTANCE 1' FU.- 7mil=on F- Peoples' Republic DemocratLc Resp. Po:Land U.S.5S.R. Thgoslavia Total of ChinaL of Genaq _ -_ Prior to 1966 1. :DisbLi.rsements 7'.9 0.7 17.8 1.2 27'.6 2. Amortization Payments C).4 - 0.1 0.1 0.2 0.8 3. Interest Payments - - 0.4 - C0.4 6 '29 1. :Disiarsements 2.9 0.1 2.0 0.4 5 .4 2. Amortization Payments C).9 0.2 - 0.3 1.4 3. Interest Payments - 0o4 - 0.4 1,967 1. :Disbarssments - 0.3 0.2 0.3 0.2 1.0 2 Amortization Payments 1.0 0.1 2.4 0.3 3.8 3. 'Interest Payments - - 0.5 - 0.5 1968 1. Disbursements 1 .4 0.3 0.1 0.2 21.0 2. Amortization Payments 0.9 0.1 1.7 0.3 3.0 3. :Interest Payments - - 0.5 - cl.5 19 69 1. Disbursements 9.7 - - 0.1 91.8 2. Amortization Payments C0.9 0.1' 0.2 1.6 0.3 3.1 3. :Interest Payments - 0.11 - 0.4 - 0.5 1970 2/ 1. Disbursaments 1.7 0.4 _ - 0.2 21.3 2. kAortization Payments 0.9 0.3 0.1 1.5 0.1 2.9 3. Interest Payments 0.3 - 0.4 - 0.7 Total 1. DiUbU18aentB 12.5 11.8 1 .3 20.2 2.3 48.1 2. Auortization Payments 5.0 0.4 0.8 7.3 1.5 15.0 3. :Interest Payments - 0.4 - 2.6 - 3.0 1/ lEncludes Goveriment to Government assistance provided by other than Aid Grouap countries. I/ UP to 30th September. Sowrce: Extrernal Resources Division, M.nist.ry of LanniLng iand 1 0ployment. EXTERNAL ASSETS (U.S. $ million) End Dec. End Sept. E:nd of Year 1961 1962 196:3 1964 1965 1966 1267 18 1969 .97L_ 1. Government and Goverment Agencies 51 53 51 23 14 13 12 12 12 10 2. Commercial. Barnks 22 21 22 23 19 24, 20 26 23 26 3. Central Bank 39 32 24 29 59 30 414 40 .28 32 of which: (a) Securities 19 14 14 14 21 21 18 17 .17 17 (b) Balances due to Ceylon on Bilateral Accoiuts 4 5 3 4 4 5 3 ! 8 10 (c) Cash aLnd Balances Abiroadl 16 13 7 11 33 4 2 3 113 3 5 TOTAL ASSETS 112 106 97 74 92 67 76 78 163 68. Anmal Change -6 -9 -23 19 -26 9 ;2 -14 +5 I.M.F. Drawings OutstandiLng 11 22 'P 22 38 57 79 107 105 95 Drawings Outstanding on lines of Credit from Foreign Commercial Bariks. _ 5 10 43 65 1/ Provisional. Sources Central Bank of C eylon. Table L.1 CEYLON-EXTERNAL PUBLIC DEBT OUTSTANDING AS OF DECEMBER 31, 1969 1/ Debt Repayable in Foreign Currency (In thousands of U.S. dollars) Debt Outstanding December 31. 1969 Source Disbursed Including only undisbursed TOTAL EXTERNAL PUBLIC DEBT 2/ 303,30S 469,632 Privately held debt 75,21 Puclicly issued bonds 3/ 6,662 6,662 Suppliers 07.492 63.918 Australia 37X 370 Austria 58 58 Belgium 28 28 France 3,94I 5,751 Germany (Fed. Rep. Of) 11,29:i 16,165 Italy 12,362 12,362 Japan 5,243 7,937 United Kingdom 11,8O:1 15,389 United States 1,1L46 1,310 Others 1,250 4,546 Financial institutions 660 h,660 Italy , 14,000 United Kingdom 660 660 Loans from international organizations 48,417 83,372 Asian Development Bank 4014 10,590 IBRD 47,858 63,382 IDA 155 9,400 Loans from governments 200,0'74 311,020 Calanada 9,34-1 1505 China (Mainland) 5,763 8,070 Czechos1 rvakia -137F 1.990 Denmark 591 2,667 France 6,103 20,791 Germany ':Dem. Rep. of) 1L9,639 30,845 Germany (Fed. Rep. of) 31,135 35,874 Hungary 6c 65 Japan 16,559 22,416 Poland 569 6,266 Rumania 629 3,348 lJnited Kingdom 32.374 42.252 United States 52,872 65,670 U.S.S.R. 14,212 24,246 Others 8,844 31,462 _/ t Th+. th +i ,r t-n i nog l or% exte,PndAer mn+.,,i +.u tof over on year. 2/ Excludes the unallocated portion of a frame agreement from Germany (Dem. Rep. of) in the amount of $13,636,000. 3/ Net of accumulated sinking fund of $8,338,ooo. Statistical Services Division Economics Department October 28, 1970 Table 4.2 CEYLON - ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DECEMBER 31. 1969 Debt Repavable in Foreign Currency (Tn thousands rf U.S. sDolars) Page 1 DEBT' OUTSTANDING (BnrIN OF PRPTnD) PAYMFNTR DTrRTNr', PF.RTOT) INCLUDING A1ORTI- YEJtR LT IM ISB TJ?SDn ZATION INTEWPqT TOTAT. TOTAL EXTERNAL PUBLIC DFEBT 1970 4O. 322 1i2,483 9;388 51 .871 1971 397,544 37,789 11,377 49,166 1972 359,511 33,937 11, 3h46 J) 28) 19 73 325,313 30,742 10,335 41,078 1974) 29)h2Q2 27 - A3 9 Q 36, 5f 2^1 1975 266,732 30,664 8,333 38,997 1 '6 23, 012 25, 790 7 15 52 o)3 9 197lt7 210,123 25,788 6,229 321 017 19 8~ 1 F) v331' 10 E37 5v348 F4jHA 197>9 164,797 19,101 4,773 23,874 19o80 145,695 14,832 1 115 iR 0,7 1981 130,863 12,190 3,661 15,851 19II2 118,673 11,672 3,255 14 927 1983 107,002 11,403 2,870 14,273 19f!4 O95 C5oi 11 (Ov 0 2 n0 13 A6l Note: T-lue sevrc -on a'' q b I l-+isted 4n Table I read Octber 2c) 17 -* u - - ~~ . _. CJ. %~L__ ~. LQ ~ V~I Li £OL.L L~ .J. pi C.,Lt-U UQLUUt U j± I ( with the exception of the following, for which repayment terms are not av ailabe: Suppliers: u ±UaikJ kI(eU. itjep. of.). $ U 53,u.AV Irdia 4,133,000 TT_. 4AJ 4 4 e ~ 1 -3 T United States 21 000 4 O.)O,ULJV Loars from governments: -zechoslov- ka- 240,000 France 13,1034,000 Germany (Dem. Rep. of) ii ,ui0uuu 24,475,000 Total. 29,3i1,000 Statistical Services Division Economics Department October 28, 1970 Table 4.2 Page 2 DWWR1 nT"qTANnTWr. (BEGIN OF PERIOD) PAYMENTS DURING PERIOD I NC-LTMTT r. AMnRTT- YEAR UNDISBURSED ZATION INTEREST TOTAL PRIVATEL-Y-HE-In DEBTr 1970 70) ,nl5 11,729. 2,970 14, '703 1971 58,385 10,4422 2,928 13,350 1072 47,720 10rn, 0c 9 2,64 12 707 1973 37,394 9,137 2,109 11,246 19742. ,97 070 1 AAA 7 ,l0! 1975 22,338 8,935 1,149 1o,o84 19 76 13, 24 71)L7 491. A 1. '71.1. 1977 9,156 3,877 427 4,304 1 n,7.q E 0707 0') 7A ')2A '7 Al l. 1979 2,902 651 133 985 I7LA no J.J.in)117" 1980 2,;50 %85 92 7772 I 1981 1,370 680 57 737 1982 ~ ~ ~ ~~~4 690 27628L0 1983 414 276 16 291 19084 141 PUBLlfCLY-ISSUED BONDS 1970 6,662 J3I 55 90uo 1971 6,015 180 480 660 1972 5,592 180 480 660 1973 5,151 180 480 660 1974 4,692 180 480 660 1975 4,215 4,060 240 4,300 Table 4.2 Page 3 DEBT OUTSTANDING (BEXIN OF PERlOD) PADME;NTS D-U-1LNNG PERiLOD INCLUDI:NG AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL PRIVATELY HELD DEBT SUPPLIERS 1970 59,083 11,097 2,381 13,478 1971 47,986 9,966 2,328 12,294 1972 38,020 9,444 1,988 11,432 1973 28,576 8,516 1,474 9,990 1974 20,060 4,723 1,048 5,772 1975 15,336 4,434 790 5,224 1976 10,902 3,815 550 4,366 1977 7,087 3,601 337 3,938 1978 3,486 2,102 158 2,260 1979 1,384 575 68 644 1980 80g 405 39 444 1981 404 404 17 421 FINANCIAL INSTITUTIONS 1970 1.660 276 12 318 197i1 4,384 276 120 396 1972 4. 1 o8 441 174 615 1973 3;667 441 156 596 1974 3.227 "iL 137 578 1975 2,786 441 119 560 1976 2;3L45 276 102 378 1977 2,069 276 90 366 1978 1-793 276 78 353 1979 1,517 276 65 341 1980 1,211 276 53 329 1981 966 276 40 316 1982 690 276 28 3o0 1983 414 276 16 291 1984 138 138 3 1 Table 4.2 Page 4 DEBT OUTSTANDING (BiTIN OF PEIOD) PAYME,NTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSFL ZATION INTURIT TOTAL LOANS FROM INTECRNATIONAL ORGANIZATIONS 1970 83,372 1,783 1,584 3,367 1971 81,589 1,965 3,281 5,246 1972 79,624 2,397 3,541 5,938 1973 77,227 2,621 3,697 6,318 1974 74,606 3,435 3,639 7,074 1975 71,171 3,761 3,479 7,240 1976 67,410 4,271 3,298 7,569 1977 63,139 4,782 3,088 7,870 1978 58,357 4,743 2,848 7,591 1979 53,614 4,768 2,587 7,355 1980 48,846 3,712 2,334 6,046 1981 45,134 3,564 2,119 5,683 1982 41,570 3,436 1,917 5,353 1983 38,134 3,163 1,719 4,882 1984 34,971 2,979 1,544 4,523 ASIAN DEVELOMENT BANK 1970 1o.59o - 69 69 1971 10,590 55 232 287 1972 10.535 115 336 451 1973 10,420 123 399 522 1974 10.297 164 4oll 568 1975 10,133 208 395 603 1 976 Q9,25 437 380 817 1 977 9,488 667 355 1,022 1 978 8,821 681 325 1,oo6 1979 8,140 700 295 995 1980 7,4-)40 717 263 980 1981 6,723 741 230 971 1982 5,982 765 1 o9 960 1983 5,217 662 159 821 9 V-4 .4,555 48-8 '4 Table 4.2 Page 5 DEBT OUTSTANDING (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL LOANS FROM INTERNATIONAL ORGANIZATIONS I BRD 1970 63,382 1,753 1,509 3,292 1971 61,599 1,910 3,024 4,934 1Q972 59689 2;282 3,163 5.45 1973 57,407 2,1498 3,236 5,734 1974 54,909 3,271 3,166 6437 1975 51,638 3,553 3,014 6,567 1976 48,085 3,834 2-807 6;681 1 977 44,251 4,115 2,663 6,778 1978 4,.52 2,663 6,5oU 1979 36,o84 3,986 2,222 6,608 1980 32,098 2,901 2,001 4,902 1 981 29,1 97 2,729 1,820 4,549 1982~~-) ).AA 68 2,577 1,5 )A 231 1983 23,891 2,407 1,493 3,900 1 n84. '1 I2 .), '2 IO7 1 43) 7).0 IDA 1970 9,400 - 6 6 I ~-7 , I. rv% '21. 1 971 9J73I4J - 2-'4 2-'4 1972 9,400 - 43 43 1 973 93J/O =62 62 1974 9J,40 - 69 69 -i n-7r' e% 7 -4' I 1976 9JI400 - 71 71 1 976 9X400 - 1 721 1 977 9,400U - I- 7' 1978 9,400 10 71 81 1979 9),390 82 70 1 52 1980 9,309 94 70 164 1981 9,215 94 69 163 1982 9,1121 94 68 162 1983 9,027 94 68 16 2 1984 8,933 94 67 141 Table 4.2 Page 6 DEBT OUTSTANDING (BESGIN OF P-ERIOD j PAYtME-NTS D-UR-ING PERIOD INCLUDING AMORTI- YEAR UNDISBU-RSED ZATION INTIREST TOTAL LOANS FROM GOVERNMENTS 1970 286,545 28,976 4,825 33,801 1971 257,569 25,402 5,16b8 30,570 1972 232,167 21,475 5,163 26,639 1973 210,692 18,985 4,529 23,514 1974 191,707 18,484 3,954 22,437 1975 173,223 17,968 3,704 21,673 1976 155,255 17,428 3,205 20,632 1977 137,828 17,130 2,713 19,843 1978 120,698 12,417 2,264 14,681 1979 108,281 13,483 2,052 15,535 1980 94,799 10,439 1,690 12,129 1981 84,359 7,946 1,484 9,430 1982 76,413 7,960 1,310 9,270 1983 68,454 7,964 1,136 9,100 1984 60,489 7,976 961 8,938 CANADA 1970 15,055 792 299 1,091 1971 14.264 792 314 1,106 1972 13,472 792 314 1,106 1973 12.680 792 267 1.059 1974 11,888 792 219 1,011 1975 11,096 792 172 964 1976 10,305 849 124 73 1977 9.455 863 76 940 1978 8,592 522 28 551 1979 8-070 173 16 189 1980 7,897 207 16 223 1981 7 ,689 207 15 223 1982 7,482 207 15 222 1983 7,275 207 14 222 1984 7,067 207 14 221 Table 4.2 Page 7 DEBT OUTSTANDING (Br.TIN OF PPPTOD) PAYMNTqS DTTRING PpPTOD INCLUDING AMORTI- V1ATD TT TMTTTPtC'n 7 APT t ATIN T1TmTP 'T'CYI'AT LOANS FRC(M GOVERNMENTS CHINA (MAINLAND) 1970 .,070 1 ,214 123 1,337 1971 6,8!56 1,214 103 1,316 1972 5,6142 1,214 82 1,296 1973 4,4:28 1,214 62 1 ,275 1974 3,215 1,214 41 1,255 1975 2,001 1,214 21 1,234 1 976 7137 394 - 394 1977 39?4 394 - 394 CZECHOSLOVAKIA 19710 1, 750 L58 46 50a 1 971 1, 2R91 362 39 401 1972 929 365 31 396 1973 564 314 19 333 1974 250 202 8 210 1 975 148 48 1 49 Table 4.2 Page 8 DEBT OTYSTANDING (BEGIN OF PERIOD) PAYMENTS fUUEING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL LOANS FRQC GOVEtNMYitNTS DENMARK 1970 2,667 - - - 1971 2,667 - - - 1972 2,667 - - - 1973 2,667 - - - 197L 2,667 - - - 1975 2,667 - - - 1976 2,667 148 - 148 1977 2,519 148 - 148 1978 2,370 148 - 148 1979 2,222 148 - 148 1980 2,074 1L8 - 148 1981 1,926 148 - 148 1982 1.778 148 - 1h8 1983 1,630 148 - 148 1984 1,481 148 - 148 P~R A Nr F, 19070 7 7A6 1,85n '36 2,1RA 197 5,9~11 1,891 264 2,155 1072 4,020 1 790 184 1 oi3 1973 2,291 541 114 655 1O'71. 1 75 I2 A86A 1975 1,227 466 55 521 196 Ju71 37931 410 1977 383 341 12 353 1978 L42 41 1 v) Table 4.2 Page 9 DEBT OUTSTANDING (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL LOANS FROM GOVERNMENTS GERMANY (DE4. RaP. OF) 1970 19.611 1.979 48LL 2.L63 191 17,665 2,027 442,41 1972 15,639 2,027 393 2,420 1973 13,612 2,027 342 2,368 1974 11.586 2.027 290 2.317 1975 9,559 1,979 239 2,218 1976 7;580 1,979 190 21(R 1977 .,6o2 1,979 140 2,119 1978 3,623 1, 979 91 2n069 1979 1,644 1,644 41 1,686 GERMANY (FED. REP. OF) 1970 35,874 984 992 1,976 1071 '2), %ni OA . c i!1. I n 0 171 3)_4,8J9 71L4 7,94 1i,9)3 1972 33,907 847 916 1,763 1 n7-3 2'2 fl r i\ 1 r")r C Q ) 1 .- '7 1) -)-),IJuV I1. _ ) uuc_ L,LIj (V 1974 31,535 2,009 827 2,836 1'71 2)l,527 1) ' ), 79 Lj 1976 27,292 2,418 747 3,165 19n7-7 2 7. 2'7, "2 I023 685 '711 LL+,.JI) ~ ~ C- C- UV) e- vJu 1978 22,752 1,719 656 2,376 t I7e% t11 >'l I 7i 1 tAM Z r 1n 17 7 2,03 c 2 1, 7 60uv 2,3 1980 19,313 1,719 555 2,274 1981 17,594 1,719 504 2,223 1982 15,875 1,719 453 2,172 1983 14,155 1,719 402 2,121 1984 12,436 1,719 351 2,070 Table 4.2 Page 10 DEBT OUTSTANDING (BEGIN OF PERIOD) PAYMENTS DURING PERIOD INCLUDING AMORTI- YEAR UNDISBURSED ZATION INTEREST TOTAL LOANS FRaM GOVERNMENTS HUNGARY 1970 65 50 5 55 1971 14 12 2 14 1972 2 2 - 2 JAPAN 1907 99 I16 1A lQ7kA 27733 1971 20,438 1,978 766 2,744 1979 18 ,460A 29 Q2 9 3,351 1973 15,767 2,195 524 2,719 1907. 1 73 1,099 436 13535 1975 12,474 1,484 635 2,119 107A 1° 1,48 5 2,0 1977 9,506 1,484 480 1,063 1978 8,02 1,8 1.0R188 1979 6,539 769 333 1,102 1980 5I IV 769 29' 1,062 1981 5,000 769 252 1,022 4 no'l 1. '7vn I c Q1 I9I8C 4,2317 712 871J3 1983 3,462 769 172 941 . ^a n rO- .,L- i n I IyU4 (07'- ,3 I) 7v' DEBT OUTSTANIDING IjBBkIN OF PERIOD) PAfl'IiNETS iLuriING PERIOD INCLUDING AMORTI- YEAR UN t)IS BuRS E) ZATION IN WI ;T TOTAL LOANS FROM GOVERNMENTS POLAND 1970 6,266 2,089 50 2,139 1971 4,178 2,9019 69 2,158 1972 2,0o89 2,089 52 2,141 RUMANIA 1970 3,348 507 15 522 1971 2,841 507 52 558 1972 2,335 507 69 575 1973 1,828 507 51 558 1974 1,321 507 34 541 1975 814 281 19 300 1976 533 266 12 278 1977 66 266 5 271 C\M b.0 co P. V\ (~~~~~~- r--C\jc ,-4\ ON -H-l1H..--H\ H 0 -4 - CJ\CIS J 0 CN r-4 CN t--C\\0 ~PO--.0 C-- -Z H- oc) rH CN A 'i.r V\ lP-- r- r-, r- C- r- r-- C'- \0 CN~ CJ co C'- 0 CD) 4 - H~-4 -- -C Co C\j N ~~~~c\1 H -C 0 ON\0(ON, N 1.ON oll(N o\ON -Z ON C\ 7('`\C\JCMHr4C \O-\4CO \- II` II, I I IN I, INI If INIC) a) IeJH I C ^ I IN CD pw ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~'.t) '. - I 0 CX) t 1: 0 CJ -Z LC 5U\ 0 OCM H S>%2 ~- c o , Ir f MCC -Z CI r-r- r-r- r- rO- r- rC) C)CJa ^DOon, r-4 Oc) \ urn O N Cui , 1So O Ch O Ch 0 Ch. Os cr. 0s C s Ch _: CC) \ co, c CO , CH O e r-4 00 N-JO J Ez , H , - 1 k .9 ~~~~~~~ .^ .k H - 1 ,# H r-l r-l c>4 ^ _: w _:t 2-J 2 - In : sO '-I o oco SD \0 < --:J r-H aO r Ir--74 r- H rH r-4 r-H 1-4~~E E- I H,6 0 1-4 Co- \0ON H- -4r-i-. H--- - CC) M -.'-O Co Oa: a G \0 CZ'r 0 ON NO E-4 0 -t- H ONIF\ C\ N--N- C'- t'-- C- V-- '- V U\s Ho r-4N C\O) O;l O Ho r-\M (n -\ ffi~~~~~~~~~~~I rH Nf ~ r%-: f ^ ft ft INI NI I %I ^ ft ^ ft X ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 4-CH ZC 0) H'-ONOHHH*H , . * 44 F C r--4 .-4 H H Hr- r-H r-H H H r-H r-- r C\M CM (n ¢' C'r\ In O Cc\ M ,\1 A (n X(' 'rv P, N ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~E-4 F-, H ~~~~~C'.J -: HCONO't-fV),ONOCO'J\ ff C0N,CO (\I 0 0C)M\ C)\ I' CK Cj C --* -~ 00 -If40 Z0'CM P4 I E\ C- 0, CN N-4 H \.O0 Co Hs -C\ ON CM V\ r-oo (,- ON O- Co 0 H H ,-4 OC V4 H-D co ~~3 Mi ~CMj 0 CO'.0 0 C\M InI .Jr_ -r_TJ\tr\L( ') H-4 -4:: - (-r\ C\. CM H4 4ON In '.0 VJ\ -- IM E-X 4 I IN IN I. ^ a a .a % .I a N a a ^ ,a a a a a a a a N a a ^ a a 0 e ON c C--4 CM H O,,4 *4( O * H r-O - C-- i\ OIN rN , C4 , O L\ CM ON 'D C 0\ --OC) kJ\ CM ON M-:t- (-v- c' M M- M ( '% C\M C\M CMj C CMi H- H- \0 O'0 u) A \ tN -zt -.- --- ('n (" CM I'M C\M Hr 0 H- CMjI --,IUv, 0 '-- co ON, 0 HI CMj r-0 CMI r "-ZtV\'\4 C-c COCN 0 H 4: IN''4.--f N- N'- N- N- C'- C'- N- N-- N- r-. OC 0, CO Co Co r' - N- t'- t- N- N- N- N- N- co co acO Co 3Co eN (N. 0- $ ON a, ON ON ¢ as, NON ll ONNN ON ON C ONON CN JON NN ON ON CN H r-+ r oD rJ-4 H aD rHH J O r- r-I r- r--rH H¢ rH rH rH -rO4 r-4 .-4 rH ¢ r *4 OH TaDLe 4.2 Page 13 DEBT aJTS'.'ANDING (BEGIN OF PERIOD) PAYMENTS DURING PERICD INCLUDING AMORTI- YEAR U`NDISBURSED ZATION INTEREST TOTAL LOANS FROM GOVERNMENTS U. S. S. R. 1970 24,246 3,102 355 3,456 1971 21,145 3,022 403 3,426 1972 18,122 3,022 453 3,475 1973 15.100 3,020 377 3.35'7 1974 L2,080 3,020 302 3,322 1975 9.060 3.020 226 3,2h.6 1976 6,040 3,020 151 3,171 1977 3,020 3.020 75 3,095 OTHERS 1970 31),62 11 -'1 352 11 j662 1971 20,153 6,499 502 7,001 1972 13,654 2jl),4 621 2,765 1973 :L1,510 2,143 527 2,670 197h 9;367 2;1l,3 __ 2,j575 1975 7,224 1,45 343 1,788 1976 5j779 1,4L5 271 1716 1977 4,334 1,445 199 1,603 1978 2,890 1,445 126 1,5 1 1979 1,445 1,445 54 1,49 Table )4.3 PAST TRANSACT:IONS ON EXTERNAL PUBLIC DEBT 1965-1969 1/ Delbt R3payable in .Foreign Currency (In thousands of U.S. dollars) ]Debt outstanding bJiLL,ing of priod Transactions during period IncLudinw Disbursed Undi sbursed Author- Disburse- Payments lear undis. onLy ization ment mlort,. Inte restI Tota. G-RX'TD TOTAL277 1l565 1L 8143Li 75728 72706 31103 1,9211 5635 31659 88(o4 1-966 173322 88720 8.4602 9920L 37326 765,: 3257' 1O9:L2 1]967 26L450 117800 lL67 6 6602.6 o-o568 10085 3,55 136'49 1]968 3011529 1441.31 :L87398 109601 76566 1988 6o473' 2636O J1969 3826)47 202092 :L80555 108682 12)943 223:45 8218 30563 1]970 469632 30330D6 :L66327 TOTAI, PBTVATELY ILELD DTEB_T _7 _ 1965 17908 152:18 2690 8923 2396 206S' 971! 3o14 1]966 211:82 164966 9217 20950 1956 963 826C 1789 1]967 3'861 15367 280493 16277 6307 2599 832 3143: 1968 51j 329 17061|; 37288 3)40)42 36961 906L)L 190 7 :L0951 1 969 78913 O3097 358:16 6097 21675 996 3 3061 L302)4 1-970 752!h1 5)415 2oL4:26 -PUBLICLY-ISSUa BNIDS 2…- 1-965 12928 12928 - - - 1627 96 9sc 2596 1966 10721 107:21 _- - 2)46 73)4 980 1-967 988L, 98814 _- - 2UL[ 7311 977 1-968 7956 79.56 - _ - 211. 622 840 1]969 7:332 73.32 - _ - 211 63i 8)42 1]970 6662 6662 - .7_e_ 7oo. ii_o _,77 E_ . Znd Table l.3 Page 2 Debt outstanding beginning of period Transactions durin:g period Including Disbursed Undi sbursed Author- Disburse- Payments Y,ear undis. onLly ization ment ATort. Interest Total PRIVATELY HEL) DEBT SUTIPLIMS 1965 4980 22591 26c90 89?23 2396) bi2 6 L48 1966 13461 L2LbW 921]7 20950 i9 56 717 92 809 1967 33977 5L83 284513 16277 6307 2355 98 2,5 1968 h6373 9085 37288 29382 3630:L 8833 1108 99L0 1969 66921 351C)5 3181 6 6(97 21675 9752 2L.06 121 8 1970 63918 M7152 16)426 FINANC IAL ITSTITUTIO;NS 1965 - - - - - _ 1966 - - - - - - 1967 - _- - - 1968 - - - b66o 660 o 170 170 1969 466o 660 o(o- - - 24 2L 1970 b66o 660 Low .MTALJ LOAlS FROM IVBMTrNATIONAL T,]RGMIZATIONS 1965 3bb32 28W13 6019 -601 2327 1382 1L76 2858 1966 32)53 29359 309- 1266 1292 1507 2936 1967 31022 291593 182,9 3012 5)2 lb55 1);08 295`3 1968 32579 28579 LO(O 13800 I 1509 13141 2850 1969 hL870 27070 17800 O0D90 22935 i, 1)23 2991 1970 83372 48 1.7 349t.5 Talble L.3 Page 3 Debt outstandi.ng be r' rnirL peri od -i ransactLions durin7 period Includirng Disbursed lUndisbursed Author- DisbuLrse- Pay ments Year undis. orL - izat"ion ment Anort. Interest. Total ,LOANS FROM INTEIA'TIONAL ORGAN'IZATIONS ASIAN DEVRELOPlE.JNT BAMK, 1965 . . . 1966 0 1967 - - - . _ _ _ _. 1968 -, - - 200)0 - - - - 1969 2C00 - 2000 8g9o 140, - 1L 1 4 1970 1C590 1COL 10186 I BP2D 1965 3L132 28Lo-3 6019 -6rl 2327 1382 1476 285,8 1966 32L453 293,59 30954 1266 1L29 1507 2936 1967 31022 2,91 93 1829 30O12 8L2 11455 1498 2953 1968 32 7 9 285791 0ooo 1900 - 1509 13U1 28 50 1969 35970 27070 8900 29000 22376 1588 1389 29777 1970 633`82 78581 155214 IDA 1965 -, 1966 , 1967 . 1968 - - - 6900 - - - 1969 6900 - 6900 2 500 15, - - 1970 9400 155 921,5 Table 1.3 Pag Debt outstanding beginni.n of pE'riodc 'Transactions during period Including Disbursed Undi sbursed Author- Disburse- Payments fear undis;. only ization ment Amort. Interest Total T(TAL LOANS FROM GOVERIMIJTq 1965 96091, 32097 63997 22781 14487 21814 718 25102 1966 116687 141496 72291 78253 3h11l)4 5263 925 6187 1967 189677 73239 1161438 4S736 3311I9 6036 1229 72,65 1968 2114622 98511 116:11 52759 396014 9334 3225 12560 1969 258863 131924 126939 62494 76804 10794 37514 1L 5l14 1970 311.020 200074 110o96 CANADA 1965' 1C0773 1560 9213 _ 2596 261 116 3176 1966 10513 3895 6617 2313 1987 1060 327 1387 1967 11761 18021 69143 1X63 3179 799 126 5'25 1968 11.427 72'01 h4226 :1850 1859 1086 306 1,392 1969 12'192 7"7 14218 3700 2203 836 308 11414 1970 15055 9341 5715 CHINA (TMAI-LAND) 1965 1L4276 7507 6769 _ 2514 - - _ 1966 14,276 10(51 4.225 _ 1313 1876 _ 1876 1967 121400 9518 2883 - - - _ 1968 9'920 76114 2:306 _ 925 5 125 1969 8995 6689 2306 - 926 926 1970 8070 5763 2306 Table A1 Pa6 _ Debt; outstandingJ begi ling of reriod _ Transactions duriryi period Including Di sbursed Undisburse(T Aiutno r- Disburse- Payments Year undis. only ization ment Amort. Interest lotal. ILW.US FROM GOVERNM,4iTS CZEC.iOSLOVIEIA 1965 1700 2 1 1Lh76 _ 1 47 6 14 14 1966 16 86 1686 -- - - - -- 1967 1686 1686 -- 619 - 90 - 90 1968 1901 1370 530 S5b - 183 19 199 1969 2266 1195 10u70 278 38 317 1970 19,90 1378 612 DENM~ARIK 1965 _ _ 1966 - 19P7 - -_-____ 1968 - - 2667 - - - 1969 2667 - 2667 - 593 - - 1970 2667 593 20Th1'L FRAI CE 1965 - I 1966 - - 8:Lo2 612 - - 1967 8102 C612 7LQ - - - - 1 968 8102 381L L288 81LO2 288 277 200 477 1969 15927 65960 8967 9:L15 1302 1618 6 3 2291 1970 2079h 6103 1t691 Table L.3 Pa,ge 6 Debt outstanding L2Linning of' period Transactions during period Including Disbursed Undisbursed Athor- D:isburse- Faymients Year undis. orLy ization _ mnt Anort. Interest, Total LOANlS F:F>M GOVE:RNiENTS GE.RMilANY (DEM. REP. OF) 1965 -. . - 13068 - - -- 1966 13068 .. 1L3068 19071 - - - 1967 3213F8 .. :32138 3077 - - _ 1968 30185 :3018& -12 5630 262 - 262 1969 30727 5369 2535 8 192 1L3b2 72 3L 1,06 1970 30815 19639 :L1206 GERWM7Y;E D . R .f T 1965 9875 3092 678,3 - 2L18 575 125 7'0L 1966 9300 50(01 1300 18750 1'0521 900 326 12'26 1967 27150 14622 12528 2500 6137 L45 b6' 9'' 1968 29200 20609 8592 2500 523l3 135C' 121. 25,91 1.969 30350 2)112 585i 3375 8 897 900 916) 2.16 1970 358T _ 311:35 _ L739 HUNGARY 1.965 . . 1.966 -- - 1.967 - *- - l l _ . 1,968 1]2 L2 _ 82 42 .. 1969 91 91 - - 26 - 26 1970 655 65 Table k . :3 Paze 7 iDebt outstanding b_irming, ~_2eriod Transactions during perLod Including Disbursed Undisbursed Athor- Di sburse- Paymen-ts Year undis. onlly i2iation meint Amort. Interest To al LOANS FRCM CGVEIRMET'I'S JAFAZ 196 5 - - 1966 - 10- 1001 7772 6 6 1967 10,001 7772 2229 50Cao 121 15 3:20 320 1968 15001 8987 60114 1933 537)4 50( 5.38 1D38 19697 190b3 13361 5573 iU982 46598 2000 769 2769 1970 22L~16 16559c~ 587 PC) LAND, 1965 7980 286 769L 28 3392 - 56 i9666 7952 622 7330 ) 145 120 8 129 1-967 7829 5)49 7280 --120 207 62 _ 62 1968 6552 593 5959 - 2,9 1215 1 130 1969 6)27 727 5700 16,3 31 19 1970 6266 569 5698 RUMAN IA 1965 - - - 196,5 - - - 1967 - - - 196l3 - - - '3908 662 662 - 162 1969 3286 32'86 166 73)4 106 _ 106 19710 3308 629 2719 TTabl 1 4 .3 Page S Debt outstanding Ibeginning of' -neriod Transactions during period Including Disbursed Undisbursed Author- Disburse- Payments Year undi . or nly ization ment Amort. Interest Total LOANS F1ROM GOTIR1ME4NTS T r:3II(Df MNT' TED, KINGDOM 1965 6062 1522 1510 5600 490 1050 235 1 85 19i6 l061.2 39 6 2 66"50 9996 95148 1162 221 1 386 1967 1914L 6 123118 7098 106.51 9313 13614 218 15 82 1968 2)463,1 171400 7231 9768 9005 1037 139 1176 1969 3336 2 2536)8 7 9 9 14 960Do0 7714 710 91 802 ly"73 - 122552 32374 987q8- Yi:-TED STATES 1965/-.-- 1966 - -- - 75900 - _ 1967 7500 - 7500 17170 10313 - 12 12 1968J 214970 10313 114657 18377 9982 - 217 217 1.969 033L46 20296 23050 225,00 32753 177 336 513 1970 656705 528&72 12798 U.S.S.R. 1965 3o11i8 11o401 16108 - 141406 86 2214 310 1966 30031 18329 1:L702 31 1305 72 3 75 1967 29991 19562 101429 269 503 2512 3 2 515 1.968 2770)5 175:L1 10193 - 108 17)40 1467 2 07 1969 25967 15881 10086 51 172C0 L22 2112 1970 242L16 1121-2 100314 _ Table 4.3 Pace 9 Debt outstanding begi nnirn f period Transactions durineriod Including Disbursed Undisbursed Autr,or- Disburse- Paymrents Year undis. o0iLy ization ment Amort. interest, Total LOANiS .FROM GOVERNMNM -TTS YUJGOSLAVIA 12965 1531-0 89R6 :LU411 bo85 101 1b3 1. 1-57 1.966 192'50 811 :L839' -176 185' 7 3 2 98 1.967 lo0).o 963 :L80b0 123 358 3159 2&8 37 1968 16121 85 9 :L5262 - 1C 307 26 334 1.969 1581L 562 15252 2198 363L 276 17 293 1-970 177-36 39:L9 1L3817 OTHERS 1.965 - - - . 1.966 -- - - 2667 787 - 5 1967 2667 787 1880) 6 668 188c0 bc, 8 Lo98 1,968 8895 22:28 6667 - 11 12 88c) 62 902 1.969 80L5 24 60 5555 6667 3h20 950, 5 iL9 lob 2.970 1372,6 b925 8802 1/ Debt with an original or extended maturity of over one year. 2/ Net of accumiLated sinking fund ofE $8,338,000. Statistical Services Division Economics DepartMnent November 5, 1970 (IT?Vr(,E G(M L;, .1 At qpT ESi, jV I2sI\AI T)TTTTY T) T94-TP1'^ PUBIr ET UT= UDIL if-l'JiV ' flIJX .1 ~ LL s ~ Ws- Jl.J__ STAN1DINIG AS OF SEPTEMBER 30, 1970 1/ Debt Repayable in Foreign Currency ('S ep te U4.1 nd.iIU Source Debt Outstanding 9/30/1970 Disbursed Inclu(ding Only Undisbursed Total Eyternal Public Debt 21/ .310,900 91,215 Privately held deb-t 60,025 73,8L5 t'ublicly issued bonds 3/ 57 5,970 up2Ii.ers 5L4,CU53 72,875 Australia 283 283 Austria 38 38 Belgium 23 23 Czechoslovakia 1,722 1,757 i-iungary 65 65 France 3,233 I,,827 Germany, Democratic Republic of 2,1) 7 2,317 Germany, Federal Republic of 10,0$8 9,176 Italy 10,735 10, 735 India 65b 3,51T2 Japan 7,295 13,051 Rurnania 1,632 3,863 United Kingdom 12,309 1,522 United States 1,1S4 5,96b USSR 5 30 Yugoslavia 2,6'82 2,682 Financial Institutions - 3,362 Ioans Loans from Inter:national Ortzanizations Li I:BRMD 21t.277 29.177 IDA 998 9,bOO AsiLan Development Bank - 8,590 L.oans from Governments 225.680 265.8)41 Canada 10.268 16,059 De:nmark 1,607 2,667 Ma:inland Chinq na 6067 13,838 France 8,078 8,283 Ge:rmany- Federal Republir of 33,985 35,382 Germany, Democratic Republic of 19,703 20,122 -(4ont'd ) Table i,.4 (coitt'd) Source Debt Outstanding 9/30/1970 Disbursed Incluiding Only Undisbursed India 8,58 13,115 Italy 619 ),00O Japan 17, ,13 20,295) Poland 51i 51i United Kingdom 38,135 LJ9,826 United States 5/ 66,771 88,372 USSR 12,723 12,723 Yugoslavia b39 65; 1/ Debt with an original or extended maturity of one year or more. 2/ Excludes the following unallocated portions of "frame agreemen-ts": $10,109,000 from Geririany, Federal Republic of $21,L98,ooo from East Germany $ 6,790,000 from Poland $ 9,986,000 from USSR $11,553,000 from Yugoslavia $1;n9q8-Oo from France I/ Npt. of qcciimum1qt. sinkinf fiunds of .6fl3fl.n)fl. i/T Includes rnl loans received by the GoverInmpent of Ceylon w3ith the exception of an IBRD Loan of 41bi,500,000, an IDA Credit of $Pl,500,000 And an B L oan- orf $2 I6 nO Or r T5/ , Include $15l C03,3 73, dlisbre orly , andl $15,1.O3,373 incliiMin- iin- 6isbursed which are payable in Ceylon rupees or US dollars at the tno the Gove,r r-,-n-- oP Cy1 on. -ore Cent u. a Bari- of Cejylon. Table 4.5 CEYLON GOERVM N1 MET LITiMATE OF FUT'URtE SRVICE PrAnIMEN1S ON EXTERNAL PUBLIC DE3T OUTSTANDING INCLIJDING UNDISBURSED AS OF SFPriE5BER 30, 1970 Debt Repayable in Foreign Currency (LS $ thousands) Year Debt Outstanding (Beginning of Period) Payments During Period Including Undisbursed Amortization Interest Total TOTAL EXTERNAL PUBLIC DEBT 1970 411,8532/ 28,855 10,909 39,764 1971 399,607 27,923 11,444 39,367 1972 371,684 30,533 11,842 42,375 1973 341 ,151 29,984 10,344 40,328 1974 311,167 25,560 9,253 34,813 1975 285,607 27,231 7,996 35,227 1976 2'58,376 26,431 6,869 33.300 1977 2:31.9h5 26,272 5,819 32,091 1978 205,673 21.707 4,902 26.609 1979 183.966 19,811 4,216 24L027 1980 161; 14593 3j673 18,266 1981 149,562 13,725 3,257 16.982 1982 1:35;837 12,268 2,909 15l177 1983 13)- 56Q 12 ,349 2 <7)4 1), 923 1984 111,220 12,283 2,245 14,528 Note: Includes service on a-l debt listed in Table 1;.3 wI--th the exception of a Loan of $3,362,000 from the U.S. Export-Import Bank for Twhiceh rep-mQment teM.,.s are r.ot av,lable /A-,,oun+ outst-'Andn is as of September 30, 1970; pay. ents are for the entire year. Source: Central Bank of Ceylon. Table 5. 1 SUMILARY OF GOVERNMENT ACCOUNTS ( Rs . Mill-ionj) -…9D57TT7 T7 t,162__ 52/67T7973777 196$/6 15667 1996 T57 r777T9,-1977o19-70/71 (Rev. (Orig. est. Ljest.) Financial Year Oct. 1-Sept. 30 1. Revenme 1,454 1,607 1,583 1,617 1,775 1,804 1,970 2,157 2,482 2,737 2,766 2. CuLrrent Expenditure 1,392 1,470 1,512 1,588 1,654 1,741 1,836 2, 095 2,309 2,576 2,689 3. SurpluLs oi Goverrraent Enterprises 1/ -19 -8 -12 -3 -2 1 4 -10 7 -4 14 4. Eytra--budgretary Revenue 1/ 27 20 20 31 32 33 26 20 23 27 40 5;. CuLrrerit SUrplus (11+3+14-2) 71 L49 30 57 151 _ 97 164 72 203 184 131 6. Tcotal Capi-tal Expenditure 519 586 489 518 574 634 734 81 7 949 930 1,054 7. Adlvance Pazyments (net) 2/ 14 19 -18 -1 6 23 33 -29 54 161 - 8. Net CaLsh Deficit (6+7--5) 462 456 _391 _460 430 562 607 716 788 908 922 1/Total c:apital expendituLre Ln Item 6 includes outlays from extra-budgetary funds. Hence extra.-budpetary funds have been included as revenue under 3 arun 4. 2/Advance Payments (net) as in Table II (F) 3, Central Bank Annual Report (1968), and Table II (F) 4 Report 1969 plus advance Payrmert;s on behalf of the Food Comnissioner. Note: Current expenditures have been reclassified until 1964/65 which increased public expenditures by about Rs. 10 Irailioni per alnum. Dle ta rouvidlng th-ie individ-tual riguleb -rnay icot preciisely aud up st tnhe total5. FINANCI]NG O:F THE DEFICIT (Rs .m.illio T_ 1160/o61 1-961/'62 1962?/63 1963/64 1964/65 1965/66 1966/67 15967/68 1968/69 1965/70 1970/71 (Rer. (Orig. Est-.) Est Financial Year Oct.1-Sep.30 (a )Non Expansionary 1.Adxninistrative borrow- in.g. 29 105 -:34 -2 50 112 72 10 $2 -- 2.Net Foreign Loans and, Grants 27 56 93 95 100 98 190 19C 354 189 491 3.Non-Bank Borrowing 165 109 1'4 :208 243 256 297 248 203 228 343 Sub-Total 221 27( 21l3 301 393 466 559 448 6c09 41J7 3_3 (b )Expansionary 1.Borrowing from Central Bank & Commercial Banks 2h2 226 178 115 18 162 51 304 6E8 L491 '8 2.Decline in Cash Balance 2 -40 1 45 20 -17 22 -X48 63 - 3.Decline in Commodity Aid Counterpart Fund.s - - - - - -35 -44 ) ) ) 12 ) h8 - 4.Decline in US Aid, Coun- ) ) terpart Funds _ - - - 20 19 ) )__ __-_ Sub-Total 242 186 179 160 38 100 48 268 17?> 4,1 38 TOTAL 463 456 392 461 431 566 607 716 -78$i qC)9 922 Cuirrent expenditures have beeni reclassified unitil 19614/65 increasing the expe,.diTwre- ow7ci -n_~ :e r ;nnuln. Due tc rounding the individual figures mlay not precisely add up to the totals. GOVERMENT REVENUE (Rs .Mill ion) 1960/61 1961/62 :1962/63 196V/64 1964/65 1965/66 1966/67 1967/68 :1968/69 19659/70 (Revut. est.) Finiancial Year Oct.l-Sep.30 I.(ustoms duties3 733 759 679 762 752 736 777 836 807 6773 Export duties 298 294 281 280 316 259 233 322 347 37'2 Import duties 435 465 398 482 436 4177 544 511 460 301 of which:license fees - - 8 10- 13 13 34 67 7 6 II.Receipts from FEEC Sa:Les - - - -- - - - 77 285 44h7 I:II.Excise Duties 136 169 211 21]8 239 279 283 315 37L 381 IV.Turnover Tax - - - 1.6 35 39 72 79 111 242 V.Profits f'rom Food Sales 132 190 200 84 187 216 265 274 28:3 252 VI.Taxes on Income and Profits 283 288 290 303 321 290 326 334 358 453 of which:Income Tax 259 262 259 285 293 '277 312 316 34:3 4Lo VII.Other Taxes 60 58 614 73 98 66 62 64 71s 69 V:III.Miscellarneous Receipts 110 150 12'7 160 1144 220 184 223 232 220 lTOTAI REVENUE 1,454 1.,614 1,569 1,616 1,775 1,B48 1.970 2,203 :2,52:L 2,737 C.Bo Adjustment 1/ - - 7 14 1 - - -46 -39 ADJUSTED TOTAL REVENUE 1,454 1.,607 1,583 1,617 1,775 1,804 1,970 2,157 2,4827 2,737 Duc to roundLing tvh^ idividual ficures ay nor precisely add up tu tue iota1s. 1/ A few items in the revenue figures :in the Government Accounts do not reflect resources available t,o the Governmer spending. These are omitted in. the adjustments made by the Central Bank to tohe f'igures in the Government Accounts. I revenue from -the National Development Tax, which isz excluded in the Government Accounts, is included by the Central (See Table 32 in Annual Relport 1969 of the Central Bank of Ceylon). Source: Estimates of the Revenue and Expenditure of' the Government of Ceylon. Table 5.L mUi.RIotor =XPNDITURE OF TIlE GOVERNMENT 1964/65 to 1970 _ i964/65 i96','66 L966'6;', 1967,/69 '9693"6q Rev'ired Fs,L- - rig: ;al Es-. lkmoktnt ~ Amount AmoaLnt Amoun t AonmutAon ITRMS Rs.rnn. %Rs.mn. % s.mn. I lFs.sn. R s.mn. Rs.mr. Rs.mn. Yja:r ear Oct.! - Ser,t.30 1. Administration 260.1[ 15.7 '275. 9 15 . 237.9 [5.7 32B. 4 15.7 39. 4' 147 .12.2 5 C i vil 19). 1 12.0 2.9 12.1 221.1 12.0 2532.9) 12.0 2>56.6 L~. 1 33~. 2 1-3.1 33).2 2.2 O)efense 61.0O 3. 65.0 3.7 66.7 3.7 764 3.7 92.7 3.6 '02.5 47' 97.~ 3. 2. S,27 Interes'L on Publ'e Debt 105i.0 6S.4 1-23.2 . '43.57s 7,7 ~ j 2.2 3.2 5 13 10.' 3'. '1.5 Pensixos 126.2 7. 7 1-25.' 7.2 12--.7 7.0 154.; 7.4 616. 7. 2 '2'3 '.4 1 1,. 3 7. Direct Rtelief 9.6 0.6 12.1 O2. IS. 19oX .4 2.,' 0.1 I 1,.6 O .6 Other 51 .2 3.1 54.9 3.2 J0.. . o 3.7 16.. 5.1 130.6 5 2' 127.6 4?~ Other Transfers 52?.8 3.2 5. 3.- 66. 3.7 72.5 3.5 ~ 7.1 3.~ i96.1 4.1. 1 4 2 4.? To~ Lbocal Avthburities 311.5 2'.3 43.5 2.5 42.0 2.3 50.5 2.4 62.~ 2.L 67.5 2' 59. 7 .2 T2- Public Corporations - - i-.o 0.1 4.s, 0.2 6,. 6 0.3 12.4 0.5 12.5 0)5 23 9. Tn Other Inistitutions 12.7 0.13 12.4 0).7 15.5 (1.3 12.5 0.6 10.4 0.5 16.2 ' I D. Abrnad 1. 6 0.1 1.9 0.I 41.4 0.2 2.") I.1 3.6 2.2 -.6 4 4-2 9. 7. Under-expendituire Prow~siino '".0 4.2 00 2.3 31. Ttota) Currentt Expenditure 165t.1i 100.0 1740.0) 1 00.0 1836.4 100.0 209)5.2 1 0.0 2302.7 09.0 2575.4 11 4 91 1.0 S-'urce: Central Ban' of' Ceylon Table 5.5 CAPITAL Ex,:NDITURR (R r . M j I ] . i_ 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 (Rvi:3ed (:Ori einal _Est.) Erst.) Financial Year Oct.l - Sept.30 1. Civil Administration 7 8 12 13 17 25 19 2. Social Services 74 56 80 914 113 147 203 Education 31 22 2; 33 32 3 ~7 Health 16 16 21 257 37 46 47 Housing 1? 11 26 31L 36 38 56c Special Welfare Services 3 3 2 3 3 3 Community Services 3 3 4 3 5 a 314 3. Econtomic Services 16) 20) 227 271 301 425 469 Agriculture and Irrigation 1/ 127 9(751 X -29 Fishieries 1 4 - - 2 18 Manufacture and MIining 1; 1( 8 214 5 11 17 Trade 3 3 2 31l 9 34 Communication 50 68 90 814 92 149 111 4. Acquisition of Real Assets (]+2+3) 25(. 273 31 372 430 597 691 5. Capital Transfers 161 -9a 244 271L 343 316 35( 6. Acquisition of Financial Assets 33 41 45 2 7 144 414 52 7. Under-expenditure Pro-)vision - - - 15 ? 170 ia T_t.1 fclHi-,,i DxSenWituLeS fI.K-.i7\ I 6r7 817 3 2/ 93 2 / -~ tn~ ~C4-J-A- ~O-L J2I~JC4L¼W bu 4-41 __. t2 7Includes extra-budgetary expenditure 2/ Totals for 1969/70 and 1970/71 include unall)cated FEEC dxoenditurc amounting t;o Rs.34 million and Rs.li million. resnectively Snurce: Central Bankr f Ceyl-n Tablea 5.6 GOVSRNNEiqT NET FOOD SUBSIDY (Rmilli-on) -- 1T-r7 - 6 - 19657//W 6 1u 169767967i70-/ 1967F0l197/771 ]L970/77V- (Actual (Oria. (REVISED (Orign. (REVISED Provi - Estimate) ESTTDIATE) Estimate) ESTIMATE) IT'l4S sional) 6/ 1. 3ubsidy to the consumer -n imoerted r i. c 18O.3 1/ 218.5 279.-9 276.1 237.2 263,9 ) 2. Subsidy to the producer and consumer ) 524±.8 2/ 6o4.0 2J on local r;ce 269.9 2(06.1 2'50.3 269.2 312.6 252.5 ) 3. Subsidy cn l,cally pro!du :ed red onions 5.3 6.3 6.8 6.8 8.o a.o 8.5 8.5 I.. Distribution exu)enses andCi rother charges 314.1± S .6 37 2' 51.8 48.5 61.1 79.9 79. 9 5. Va Lue of rice reotion ccupcns surrender- ed in repayment cf 1 cans is.sued by Co-operative Socletles - - 0..4 11.] 10.0 - 6. Rice Subsidy Tax ° ' 0.3 0.3 1.9 3.1 2.0 3.0 3-0 3. C_ 7. Total Gross Subsidy (1 to 5 - 6) 487.1 465.2 5 72.7 611.9 611.3 592.5 61G.2 689.1_ 8. P.rofit on sale of sugar 20L,.1 1/ 221s.3 239.5 254.6 210.6 222.6 1;20.1 3/ 124.8 3/ 9. Profit on sale of flour 0.5 35.8 41.0) 33.9 4±9.1 14/ 33.0 32.2 37. 4 10,. Profit on sale cf other g;odjY 5/VS 14 / 2.7 1/ -4±.1 -5.4 -8.2 -3.6 -1.2 -1.2 11. rotal (0l - lO ) _ 203.7 263.3 276.h 283.1 2'51.5 252.0 151.1l 161.1 12. Net Food Subsid,y 277.4 201.8 1/ 296.3 328.3 359.3 340.5 4,59.1 528. 1 (E-: The "Net Subsi.dy iglres givan in this Table will differ from thcse publish)ed in the Government Acccunts on acccunt of the fac.t that collecionns from Rice Subsidy Tax are nettcd against the food subsidy. 1/ These f:igures wi:Ll differ fran th:ose published in Tabl-e TI(F)5 -f 12)63 and II(F)7 oi 126? of the Central Bank Annual Rep ort because of certain Subsequent adjiustments. 2/ It is not possible to provide ; reliable estimat,e of issues (imported and loral) under the f-Lrst and second measure. Hence item 1 and 2 are not compluted. 31/ Net of a sum of Rsa.36.1 m:illiron being cost of FEECs on imiports of sugar. 1Includes rebate on irnport of fLour under U.S. PL.4±80 amounting to Rs. 20.6 million. 5/Include lenltils, maldive fish, red onions aLnd whole wheat. Z/Figures not official-Ly announced yet. Source: Food Connissioner Table '7 PUiBLIC; EXFPENDITURES ON HEMLTH AND EDUCATION (177 96 3/76-97('71,) (Rs .rmillion) H E A L T H E D U C A T I O N iecurrent Capital Total Per Capita Recurrent Capital Total Per Capita Fiscal Year Oct.:L-Sep)t.30 1)63/56 147.? 11.5 159.4 14.)62 309.3 4865 357.8 32.83 153.5 3 162.8 14. 58 329. 0 40.9 369.9 33.13 1i965/56 159.6 11.2 170'.38 1).,93 331.6 31.0- 362.6 31.70 1966/6 7170.2 1.6 187.8 16 . 5 347.7 35,1 332.3 32.72 1967/68 194.4 20.6 215.0C 17.'97 397.6 4h,4 438.r 36.61 1968/!9 210.0 37.3 247.3 2ui . 1-7 415.? 31,.3 447. C 36.45 1)069/7 (Revised) 240.4 46.3 2865.7 22.88 471.0 52.2 523.2 41.75 1970/71 (Original) 240.1 47.3 237.4 22. h44 490-7 68,2 553.8 43.24 3ource: Ceentral Bank of Ceylon Table 5.8 GOVERMENT ENTERPRISES (Rs .Million3 1364/65 1965/66 1966/67 1967/68 1968/69 1)69/70 1970/71 Est.) Est.) I. Railway Revenue 97 100 102 107 110 111 112 Recurrent Expenditure 125 128 125 130 141 134 153 Surplus -28 -28 -23 -23 -31 -23 -41 Capital Expenditure 31 22 23 26 29 31 47 II. Electrica-1Tl-,Derartm-ent 1/ Revenue 2/ 4 54 66 70 86 8 - Recurrent Exoenditure 3/ 27 31 29 38 44 11 - Surplus 22 23 37 32 42 -3 - Capital Expenditure 4 26 41 57 68 52 7 - III. Port,Harbor,Warehouse Revenue 29 34 34 360 41 4 52 Recurrent Expenditure 22 22 24 23 27 31 33 Surplus 7 12 10 13 1X 6 19 Capital Expenditure 11 13 15 13 12 16 21 IV. Post a Telecommunications Revenue 50 55 57 65 71 78 94 Recurrent Expenditure 70 73 78 80 91 98 1C8 Surplus -20 -18 -21 -15 -20 -20 -14 Capital Expenditure 4 5 9 17 1 V. Broadcasting & Information / Revenue 9 o 2 - - - - Recurrent Expenditure 6 7 3 - - Surplus 3 1 -1 - - - - Capital Expenditure 0 C) 3 - - - TOTAL Revanue 234 250 261 27R 308 265 258 Recurrent Expenditure o/ 250 261 259 271 303 273 294 Adiusted Current Exoend. 7/ 236 2h9 257 288 301 259 250 Under-expend.?roveision - - - - - 9 7 Adjusted surplus/deficit 8/ -2 1 4 -19 7 -4 14 Capital Expenditure 72 81 107 113 102 71 89 Under-expend.Provision - - - - - 14 14 Adjusted Capital Expend. 7/ 127 121 127 1-40 131 100 118 Due en), ti; ndv; ,uan1 fi ,re r m n c ly .A up to t+h tot als 1/ Commercialized and nPn-commercialized activities. In the course of 1969/70 the Electric Department was converted into a Government Corporation 2/ Net revenue plus capital expenditure out of RERF in that year. 3/ Exclusive of anniities. 4/ Includes exoenditure out of Reserve, Extensions and Renewals Fund. §/ In the ccurse of 1966/67, Broadcasting was converted from a Government enterprise into a Government corporation, as as from 1967/68, eCenditure of the Department f Inform-ationl are included in Civil Administration expenditures. 6,' This is the total recurrent expenditure under Votes 1,2,4 and 6 of the Government enterprises; these figures do not include depreciation allowances. 7/ Adjusted current expenditure excludes sinking fund contributions and direct repayments, while expenditure under recurrent votes but of a capital nature is included under adjusted expenditure. Extra-budgetary capital outlays fromr the Electrical Departmentts Reserve, Extension and Renewals are included. 8/ Revenue minus qH!.t.id Gmrrent. expenditure= Source: Estimates of the Revenue and Expenditure of the Government of Ceylon. Table 5.9 INThREST. PA[M r rnF?GM5T'PAT. PUlrn)TMw,uT nD._STTrI 1nRRnWACJTN 1,OA /IA ,°A6I/67 1076 /A 19 6o8/A 1/QAQ/70 A n-.,, A. eeie Loans - i - n3n ULU C..)_ year }d'DLJULIU,' 4-2 4-D ( 2) 12 - 15 years bjonds -3- _ _ 3) ', -7 years bonds 3V - - 6% B. Treasury Bills ( 3 months) 3% 3% 3% to 3.6-% 3.6104 to 3.64% 6.76% C. Tax Reserve Certi.icates l'9 1 1½% to 2% 2% & 3% 2% D. Central Bank Advances --Interest Free-- l/April, 1968X 2/January, 1970. 3/March, 1970. Source: Central Bank of Ceylon. Table 6.1 ANALYSIS OF FACTORS AFFECTING MONEY SUPPLY (R. M`1i-ionF - As of September 30 15'61 1962 196 3 1966 1965 1966 1967 19568 1 969 1970 (?-rov.j A. Public Sec tor 'E. Gcvernmenit Central Bank Aclvances 186.5 165.6 202.'5 183.:3 213.1 262.6 271.6 303.5 329.3 376.6 Governmeint Securities in Central Bank 696.6 878.2 997.0 1,161.9 1,115.6 1,2ts6.l 1,386.6 1,653.6 1,738.0 2,066. Li Governmenit Securities in Cosnmercial Banks 3640.1 h07.7 630.1 395-.' 502.61/' _36 O1/ 686.91/ 476 .O1/ 6550.6/ 11. ,1/ Gross Bank Creclit 1,2231.2 1,651.5 1,629.6 1,760.7 2,831.1 2,062.7 2,163.1 2,631.9 2,517.9 2,850.( 'e duc ti o:.s Government Rupe ' 110.2 166.1 195.6 202.5 186.5 193.8 155.3 236'.1 180.7 218.5; Counterpart Funds - 57. 9 53 .8 70. 3 68.2 70.7 _65 .1 Ec3 87.8 3 5 1.6 Net Credit to CGovernment 1,055'.1 1,231.6 1,363.7 1,670.0 1,575.9 1,783.8 1,906.7 2,106.0 2,333.7 2,629.9 II. Government Corporationsa4 Coimmercial Bank Credit to Govt. Corporations n.a. n.EL. n.a 55. 8 50.5 69.2 78.5 173:.3 222.3 276.;6 Deductions Time and Savings Deposits n.a. n.EL. n.a. 70.6 76.9 29.2 52.5 103.7 89.2 66.2 III. Net Credit to Government & Govt. Corporations 1,055'.1 1,231.6 1,363.7 1,655.2 1,551.5 1.c623.8 1,930.7 2,175.6 2,666.8 2,383.3 Deduc tions Other Liabilities (net) Central Bank 125 .7 140.0 1561. L 213. j5 201.0 200.1 156.6 175'.0 182.9 262.64 IV. Net Credit to Public Sector 929.46 1,091.6 1,209.6 1,241.7 1,350. 5 1,623.7 1,77463 2,000.6 2,283.9 2,575.9 El. Private Sector_/ Sommercial Banl Credit 520.9 583.4 634.0 765.1 699.5 759.8 822.6 998.8 1,135.5 1,232.5 Deductions Time and Savings Deposits6/ 338.8 381.6 u66.2 431.3 477.2 ;59.6 612.2 7116.1 831.3 933.5 Other Liabilities (net) of Commercial Banks 68.!, ?6.1 68.9 76.7 116.2 110.0 1'35.4 189.1 209.3 188.3 Net Credit to 'lrivate Sector 113.7 570.9 119 236 108.1 90.7 7f7 9T 5T9 110.7 C. Net Dormestic Credit 1,043.1 1,197.5 1,326.5 1,478.3 1,456.6 1,714 i ,o849.i 2,095.2 2,378.8 2,686.6 Adjustment for items in Tranisit -1.2 -6.2 -1.1 2.1 _ 3.0 _-0.1 0.8 -14.1 -6.7 -1.9 Net Domestic Credit (Adjusted) 1,061.9 1,193.3 1,327.7 1,68o.7 1,661.6 17116.0 1IJ9.9 32. 2,372.1 -2,71.77 Chiange between periods 187.0 151.J 134.1 153-3 -19.1 2'52.5 135.9 232.3 290.0 312.5 D. Net External Banking Assets7/ 226J.3 106.1 171.9 68.1 213.2 -32.6 -16J9.5 -232.0 -686.9 -619.5 B. Total Money Supply 1,266.2 1,299.1. 1,699.3 1,5L8.8 1,671.8 1,681.5 1,700.6 1,852.1 1,885.2 2,065.1 Percentage Change between Periods 2.6 15.L 3.3 6.1 0.6 11 8.8 1.9 9.6 1/ Includes Govt. irmport bills and cash items purchased from 1969. 2/ These figu-es equal the figures in Table 2 Arnual Report (1968) of tie Central Bark of Ceylon rinus other '.ommodity Aid 'ounterpart Rinds; the latter was nil before ieptember 1966. 3/ Swn of other Commodity Aid Counterpart FLnds a.d 3.S. account of Co-rterpart Pounds. I/ Separate figures not available before September 1966. tp to September 1963 included in the Private Sector. U' tip to September 1963 (ijiclusive) includes Govt. Corporations. Inclucts i:o-operative institutions. Includes both Resident and Non-resident constitue:ts. / These figLu-es equal the figures in Table 2 Annual Report (1968) of the Central Sarik of Ceylon plus the U.S. account of C-ounteroart Ponds. T'his means that the Net External Banking Assets, as d-fined here, do not incllude the U.S. account of Counterpart Ponis, which is an iten on the liab:.lity side of the Net External BSnking Assets as defined in Table 2, Annual Report (1368). Source: Centr-al Bank of Ceylon. Table 6.2 COST OF LIVING INDEX1/ (15'52 - 00 1970 Weights 1960 1 961 1962 1963 1 96L 19?65 1966 1967 1 968 1 969 (September) A:Ll Items 100.0 103.5 104.8 106.3 108.8 112.2 112 .5 112.3 111,.8 121.5 13(.5 138.7 Food 61.9 100.8 99.8 103.9 103.0 106.d1 107.3 109.1 112.7 121.2 127.9 136.7 ClothIng 9-4 95.1 103.9 108.2 118.2 127.2 126.8 117.0 116.7 120.1 130.9 138.9 Rent 5.7 101.5 101.5 101.5 101.5 101.i 10l.5 101.5 101.5 101.5 108.4 109.8 Fuel and Light L.3 102.7 1011.4 105.6 103.0 103.2 100,7 95.9 96.5 103.2 121J.9 138.3 Miscellaneous 18.7 117.5 122.8 12L.9 126.6 129.3 128.3 127.3 128.9 133.6 14b7.1 153.9 Domestic Group (a) 60.0 108.9 112.3 113.9 113.l 116.7 116.4 116.8 117.1 123.2 131i.3 1143.6 Irnport Group (b) 35.0 93.7 9h.6 96.7 102.5 106.6 106.4L 15.4L 111.2 117.3 12:3.5 1,30.5 Export Group (c) 5.0 138.L 119.1 113.8 117.7 115.3 127.2 127.6 123.9 102.h 1108.2 1iA8.2 1/Index refers to Colombo Town. Figures represent 12-month averages unless otherwise noted. The index is based on surveys of household expenditures of low-income families in 1949/50. It gives heavy weight to goods whose prices until the November 1967 devaluation were held alnost, constant by the Government through subsi,dies, price controls or a combination of both. It is, therefore, riot an accurate indicator of market price movements. (a) Weight 60 per cent from 1968. Previous weight 51 per cent. (b) Weight 35 per cent. Previous weight 44 per cent. (c) Weight 5 per cent. Source: Central Bank of Ceylon and Department of Census and Statistics. Table 7.1 VALUE OF AGRICULTURAL OUTPUT - 1963 - 1969 kT CURRENT MARKET PRICES (Rs. Millions) Crop or Product 1963 1961 1965 1966 1967 1968 1969 Tea 916.7 910.4 92I1.7 837.7 791.1 915.6 818.14 Rubber 225.6 2211.7 242.7 260.6 23)4.7 256.9 381.6 Coconut 255.1 307.5 347.1 327.6 317.8 1214.1 1437.0 Minor export crops 38.o 50.6 16.6 15.8 43.5 53.5 66.7 Rice 506.0 520.8 376.6 175.9 663.0 890.1 900.2 Other food crops 369.7 105.5 405.8 h214.3 159.0 540.2 573.5 Tobacco 17.7 18.1 23.8 25.7 27.5 29.M 34.1 Betel & Arecanuts 35.3 32.8 29.6 28.4 29.7 29.9 314.3 Midscellaneous agricultural products 18.5 20.3 20.3 211.2 22.3 27.0 28.2 Livestock 181.7 192.1 193.5 198.9 223.0 251.7 258,5 Firewood & Forestry 88.6 95.7 102.3 10.3.0 109.9 123.2 151.2 Fish 130.5 127.1 148.0 1614.0 187.4 221.7 215,5 Total: 2783.7 2905.6 2861.0 2913.1 3108.9 3769.6 3929.5 Source: Ministry of Planning and Employment, Department of Census & Statistics. * Provisional. TablA 7.2 VAT.I) OF A;RTMrrr.T[rRA1, NUTNIT -1Q IQ, -1 AT COT.-TANT (1(963) MARKIj`T PRITCI Crop or Product 1963 1964 1965 1966 1967 1968 1969 ? Tea 916.7 911.2 951.5 926.8 920.8 937.8 915.8 Rubber 225.6 263.6 279.2 309.6 307.6 319.5 3),'I.0 Coconuts 255.4 28).3 267.2 203.0 235.1 243.6 23)4.3 Minor export crops 38.0 )9.1 !I2.2 43.5 )12.2 )48.1 57.3 Rice 506.0 519.M ),65.9 470.0 565.3 66)4.3 677.3 Other food crops 369.7 389.M 368.9 376.7 397.3 L437.8 )450.0 Tobacco 17.7 16.8 22.9 22.8 2).0 24.7 28.7 Betel & Areconuts 35.3 36.2 37.1 37.9 39.1 39.6 39.9 Misc. Agricultural Products 18.5 20.3 20. 21.2 22.3 27.0 28.2 Livestocks 181.7 188.5 186.0 189.6 211.8 2 2 Firewood & Forestry 88.6 95.4 103.4 105.1 I1.7 102.8 0i8.3 Fish 130.5 121.3 136.7 141.L4 15)4.7 169.0 1-0.5 Total: 2783.7 2895.5 2881.9 2887.6 3031.9 3233.14 3264.1 Source: Ministry of Planning and Emnployment, Department of Census & Statistics. * Provisional. Table 7.3 VALUE OF MINOR CROPS AT CURRENT PRICES 1/ (Rs. Millions) Crops 1965 1966 1967 1968 19692/ Kurakkan 6.5 7.2 9.0 7.5 9.9 Maize 4.1 4.7 5.0 6.5 9.3 Green Gram 2.7 1.6 1.8 2.4 2.9 Cow Pea 1.4 1.6 1.6 1.5 2.0 Gingelly 6.1 4.4 5.8 8.8 7.9 Ground Nuts 1.8 1.3 2.2 5.5 4.1 Manioc 41.3 41.7 65.3 89.4 87.5 Sweet Potatoes 8.6 11.6 19.3 22.5 18.6 Potatoes 1.3 2.8 7.9 26.7 32.4 Mustard 2.6 2.4 1.6 2.0 2.2 Pepper 33.5 33.7 30.7 31.5 41.1 Chillies Dried 1.0 1.5 5.7 8.9 10.3 Red Onions 16.6 19.3 19.2 19.9 22.7 Total: 127.5 133.8 175.1 233.1 250.9 Source: Ministry of Planning and Emplovment. Deoartment of Census & Stat-Istins. 1/ Exc:ludino meneri. sorgham;- ainger. tumeric, green n.hillies and coffee.. 2/ Provisional. Table 7.4 PRODUCERS' PRICES FOR PRINCIPAL AGRICULTURAL PRODUCTS (Rupees) Commo4ity Unit 1958 6 1964 1965 1966 1967 1968 1969 Tea Lb. 1.89 1.82 1.81 1.76 1.67 1.54 1.80 1.68 Rubber Lb. .96 .74 .70 .71 .71 .71 .72 .73 Coconuts Per'000 - 116.00 124.00 145.00 152.00 152.00 190.00 202.00 Rice Measure - .72 .72 .76 .78 .91 1.03 1.02 Other Crops Kurakkan Bushel 7.59 10.85 9.77 9.54 10.29 12.98 14.05 15.18 Maize tt 11.66 10.32 9.56 10.88 12.65 12.63 14.43 14.39 Green Gram if 25.00 20.92 20.65 19.98 17.34 22.29 27.17 29.87 Gingelly " 19.80 22.17 25.56 25.38 18.99 22.56 27.54 22.58 Manioc Cwt. 7.42 7.73 7.13 7.14 7.48 9.48 10.70 11.05 Sweet Potatoes " 10.92 11.75 9.29 8.92 9.62 13.38 15.04 14.27 Mustard " 106.30 95.20 105.28 114.24 110.42 75.05 67.20 92.50 Pepper " 129.40 122.64 118.64 193.76 172.84 140.00 140.00 160.00 Chillies Dried " 94.29 95.85 102.74 103.01 152.65 252.00 268.85 228.15 Red Onions 28.52 26.49 32.21 26.38 31.11 30.40 29.00 30.75 Cow Pea " - 15.96 17.64 17.90 19.01 16.51 17.00 17.43 Ground Nuts " - 14.73 14.13 14.36 12.51 16.33 19.51 18.66 Potatoes " - - - - - 52.16 74.20 61.15 Fish " 66.61 72-49 75.98 78.47 84.05 87.82 96.38 98-57 Source: Ministrv of Planning and Employment, Department of Census & Statistics * Prnv rj nnal Table '7.5 RET'AIL MARKET IRICIE FOR SIMECTED AGRICULTURAL PRODUCTS (Rupees ) 1 5+i5 1966 1967 1968 1969 15970 Jan.-Oct., '. 1/ M. Ci } . O-M. 0j. O.M. 0. I.M. C. 0.M Rice (raw & parboiled) (per measure of 2 lbs.) .85 .82 1.11 1.19 1.20 1.21 Dried ChillJies (per lb.) 1.26 1.4l1 1.L47 1.50 1.6:3 3.2'7 1.60 4.00 1.60 3.02 1.60 3.86 Red Onions (per lb.) .30 .35 .28 .29 .28 .34 .28 .42 .28 .35 .28 .1 Bombay Onions (per lb.) .25 .28 .26 .29 .26 .32 .31 .41 .27 .31 .32 .37 Potatoes (per lb.) .25 .32 .26 .,,2 .47 .7 - '.01 .65 .86 .76 .o5 1/ C. = Controlled price; a re!gulated price as at co-operative stores, etc. 2/ O.M. = Open market price Source: Ministry of Planning aLnd fnployment, I)epartment of Census & Statistics, Colombo, Ceylon. Table 7.6 RICE: BASIC STATISTICS FRce Procducti.on Net Acr2age Harvested 1/ Average Yield Per Net (nillions bushels) 7,000 acres Acre Hanrested ( bushels YeaLr Mahza Yala Total Kaha Yala Total MahaL Yala 1959 21.59 14.5 36.14 6145.1 398.7 1,043.8 34.1 36.L 1960 26.3 16,7 43.0 728.5 455.5 1,184.0 36.1 36.8 1961 27.1 16.0 -4:3.1 754.4 441h.4 1,195'.8 35.9 36.5 1962 30. 3 17.8 43.1 7,95.9 472.6 1,268.5 38.c) 37.7 1963 31.-6 17.6 149.2 8314.5 462.1 1,296.6 37.8 38.o 1964 32.1 18.4 50.5 832.8 1471.7 1,3014.5 38.6 '38.9 1965 23.1 13.2 36t.3 676.3 379.9 1,056.2 3L .1 3L.7 1966 30. 7 15.0 145.7 856.0 429.5 1,285.5 35.95 35.0 1967 34.c9 20.1 55 .0 855.4 476.5 1,331.9 140.9 142.0 1968 543.5 21.1 614.6 9'16.2 472.8 1,359.0 147.5 14L4.6 1969 46. 9 18.9 6 .8 916.7 460.9 1,308, 512 51.2 L46.2 1970 49.'5 23.8 * 713.3 * 947.941 501.057 * 1,448,958 52.2 17.55' * 1971 ** 53.921 25.56 79?.417 992.5g90 5114.556 1,507,116 5b. 31 949.68 iT7The net acreage harvested is estimated to be 85% of the gross area planted. Sources: Annual Report 1L968 Central Bank of Ceylon; Statistical Abstract of Cetylon. irnistry of Agriculture andJ Food. * 'Provisional ** I'argei ts Table 7.7 BASIC STATISTICS - TEA (i) (ix (iii) (_-) (v) (vi) mvii) Seedling Area in Bearing Clonal Area in Bearing Year Total Acreage Acreage of tea (a) (b) (c) (a) (b) Total registered uprooted and in 1bearinp Yield Acreage Output-lbs. Acreage Output - lbs. Output tea acreage immature tea (clonal an! per acre lbs. seedling) lbs. 1965 .- 594,308 19,008 575,300 872 572,943 500,143,339 2,357 3,031,000 503,174,335 1966 .. 596,445 21,618 574,827 848 569,950) 483,385,925 4,877 6,729,500 490,115,425 1967 .. 598,814 25,680 57.3,134 839 565,8514 475,081,350 7,280 11,571,000 486,652,35C 1968 .. 597,490 26,261 571,229 851 560,85, 447,356,782 10,375 18,248,500 495,605,282 1969 .. 597,500 27,958 569,542 824 555,854 457,752,464 1 3,688 26,469,500 484,221,9624 197O* .. 597,500 28,189 569,311 n.a. 550,3514 n.a. 18,957 n.a. 47°,ooo,ooo Estimated Sourne: Kinistry of Plantation Industries, Office of Tea Control. Table 1. 8 CHAIxG_,S I1Si LHESSTOCK POPULATION A-iD FRODUCTIOTIs Population Year Cat tle B3uff ;Lo Poultjrv P-.cs shee' 1965 1.903,576 1,) 1,009 6,0,9,933 116 , 9 ) 4 5 3i,,86 1966 1,745,754 7 32, 6 6 .,503, 29 L22, 0 2j,930 1957 1,659,226 56) ,5)43 6c255,77 128, :L9 21 ,.93 1963 1,659,603 783,228 6,7)47,873 :2),377 2)1,819 1969 1,58 4, 6 2 765,L37 6,573.,032 -Lo8, 313 28,26o Produc tion ;numbers siaughr,ered) Sheep IIutton 1ilk Year Cat,tle ,Buffalo Pou:Ltry P:L Goat (rmil. bottles) 1965 189,756 17, 878 2,152,22).! 13,735 .110,1o'6 223.0 196 22.),6)47 18,,500 2,3L42,92l! 17,:162 139,282 233.2 19G7 221,91)0 21,000 2,258,708 19,790 160,228 2Lh5.) 196c18 227,082 23,500 2,).09,93S 18,926 16o,622 257.8 1969 236,735 2Li, (23 2,369,062 18°,5)42 125,203 270.G SourceF 2inistry of P:Lanning and Employment, Delpart;ment of Census and Statistics. MAJOR EKPORT CROPS: PRODUCTION ANU 'YIELDS EDT. 1965 E 966 1967 1968 1969 1970 Production Tea (m. lbs.) 503 490 487 496 484 476 Rubber (m. lbs.) 261 289 316 328 332 356 Coconut (m. mnts) 2,841 2,630 2,589 2,778 2,616 2,800 Yields Tea (lbs. per acre) 872 848 839 851 824 n.a. Rubber (lbs. per acre) 590 618 643 671 n.a. n.a. Source: Ministry of Plantation Industries. Table 7.10 EXPORTS OF MINOR AGRICULTURAL PRODUCTS 1967 1968 1969 1. Coir fiber mattress ('000 cwt.) 1,065 1,260 1,180 2. Coir fiber bristle ('DoO cwt.) 538 564 507 3. Tobacco, unmrfg. ('o00 lbs.) 942 1,340 709 4. Citronella oil (t000 lbs.) 338 298 403 5. Cinnamon oil (1000 lbs.) 45.0 80.6 95.1 6. Cinnamon quills ('000 cwt.) 52.8 61.8 65.9 7. Cocoa beans ('000 cwt.) 23.2 3h.8 25.4 8. Cinnamon chips ('000 cwt.) 7.9 16.6 21.6 9. Pepper ('000 cwt.) 2.0 16.2 17.9 10. Leather ('000 cwt.) 10.2 13.4 11.9 11. Coir yarn ('000 cwt.) 7.0 5.7 8.9 12. Cloves ('000 cwt.) o.85 0.95 4.6 13. Chocolate & cocoa preps. ('000 lbs.) 0.49 4.6 n.a. 14. Fruit, tinned or bottled ('000 cwt.) 0.8 4.5 3.7 15. Cardamoms ('000 cwt.) 2.4 2.5 3.2 16. Fish ('000 cwt.) 3.7 3.1 2.6 17. Nutmeg ('000 cwt.) 0.76 2.1 2.5 Source: Ceylon Customs Returns and Annual Reports of the Central Bank of Ceylon for 1968 and 1969. Table 7.11 FERTILIZER CONSUMPTION IN CEYLON: 1965 - 1969 Fertiiizer Nutrients ~~~~~~~~+__ " _ _> ___ A ........._+_ / A/ __ -\ Sulphate of Rioc k lmurialtv, of Ammonia Urea hosphate P;tash OtLhers N '?2Or K20 1. Tea 1965 107,605 125 22,054 27,332 4,0o46 22.2 ,.1 15.0 1966 102,562 135 1 3,728 26,555 10,631 21.1 5.1 14.6 1967 106,111 625 1,s,689 20,824 5,244 21.9 14.6 11.4 1968 95,033 6,346 14,j998 20,529 9,752 22.5 11.1 11.3 1969 71 755 10,209 13,727 18,5le5 7,493 193 3.8 *o=2 2. Rabber 1965 7,961 3 7,959 2,646 3,214 1.7 2.2 1.4 1966 8,405 4 8,291 2,927 3,038 1.7 2.3 1.6 1967 8,794 15 3,204 3,154 3,112 1.8 2.3 1.8 1968 8,655 - 6,122 3,183 2,771 1.8 1.8 1.7 1969 8,160 15 5,084 3,784 2,716 1.7 2.2 2.1 3. Coconut 1965 16,143 165,142 16,142 - 3.3 4-4 8.9 1966 17,497 17,498 17,197 - 3.6 4.8 9.6 1967 16,529 16,5,9 10,C29 - 3.4 .5 9.1 1968 29,849 16,567 / ,58 5 6.1 1.5 9.1 1969 29,850 - 1l,950 14,929 6.2 1.1 8.2 4. Raddy 1965 17,529 5,538 10,825 4,690 710 6.1 3.0 2.5 1966 19,181 8,780 10,369 6,094 1,379 8.0 2.8 3.3 1967 26,155 15,6597 18,118 12,213 4,827 12.6 5.0 6.7 1968 26,701 25,681 11,250 8,106 15,790 17.3 3.1 1.5 1969 23,288 26,223 7,784 9,089 18,513 16.9 2.1 5.2 5. Others 1965 11,721 20 7,311 3,746 11,568 2.4 2.0 2.0 1966 13,085 20 10,015 4,881 9,791 2.7 2.8 2.6 1967 16,871 9,381 8,C31 7,223 3.5 2.6 1.4 1968 17,168 676 14,808 8,157 11,099 3.5 14.1 14.5 1969 18,657 1,112 118,278 7,103 10,515 4.3 5.0 1.1 6. Total 1965 160,962 5,686 64,291 51,556 19,558 35.8 17.7 30.0 19$6 160,730 8,939 64,901 57,954 24,889 37.2 17.8 31.8 1967 174,463 16,338 68,921 60,751 20,1,06 u3.4 19.0 33.l, 1966 177,406 32,706 61,025 56,513 39,420 51.3 17.6 31.1 1969 151,690 37,559 62,823 54,109 39,235 18.4 17.2 29.8 Source: Ministry of Plantation Industry. fable 7.1 2 PLAN4FO 05 SLF-SUF'PICIEN=S :N RICE (1971 77)1/ Net Area Harvested Yield ner Pr-oduction Deraand Self- Difference 11-12 ______________________ ~~~~~~~~Acre __ _ _ _ _ _ _ _ _ _ _for- sufficiency Popu'lation Area laid Mlaha Yfala Total M___ aha Yala Total Paddy Paddy Ric e c___ ut for Maha Yala padcly M~illiLon Million cultivation Acres Acres Acres Million Blushels Bushels Bushels Tonas Acres Bushels Year Millions 2 3 056 7 8 9 10 11 12 13 1L 1 5 1 96 7-68 12,072 1,31,9,056 91 6, 175 472,80L2 1,3.89,0171 47.L9 400.59, 1,3.51 21.08 60. 59 99.3 65.0,4 -30.71 -092,619 1968-69 12,3L1 1,386,709 916,760 391,752 1,308,512 151.23 08.2.4 046.96 18.69 65.85 99.9 65.85 -30.10 -080L, 530 1969-70 12,616 1,386,753 907, 961 5,01 ,057* 1,4L8,998* 2 .2 1 ) 7 .55* 09. 09 23.82e 73.31I* 102.22 71.71 -28.91 -410,3C3 1970-71 12,896 1,u09,753 992, 590-* 510,556* 1,507,1h6* 150.31* -19.68* 93.71* 25.56* 79.L7* 100.51 76.04 -25 .001 -355,378 1971-7,2 13,185 1,029,753 I1,500D,373 56.71 87.35 106.53 81.76 -19,08 -276,068 1972-73 13,080 1,050,253 1,568,373 6a.58 95.00 '109.23 86.937 -10~,23 -201,958 1973-74 13,758 1,0469,253 1,592,373 6.13 3 102.013 111.1,8 91.88 - 9.05 -128,001 197-75 14,003 1,087,253 1,621 ,903' 60.20 11 0.67 1 13.-78 97.26 - 3 .11I - 00,1 38 1975-76 10,330 1,500L,253 1,1653,871, 7. 38 11.7 116.1I0~ 103.-06 3.56 + 50,525 I1976-77 10,630 1,51h,253 1 (,,6 65001 (5.-54 v) ! ~ 18,5L 10,75' 8.93 -126~738 1/ This table has been a,pdated wherever necessary but, in recard to columns 05,,9 and 1-, tO iu'tueit r>sodscCtl or the twat seascrc- for the year 1971 to i 9;77 as no projections are'available seasonwtse. Hiowever. thre averagce f'igar-cr fo- tt seas.,:* are s,t: F rov-isiorial. Source: Miniistry of Agriculture and Lands. STATE INDUSTRIAL CORPORATIONIS AACY,PRODU.CTION AND EMPLOYM4ENT 1969/70 AND8 -70/7i ,OE1TN10TED) Corpo...tion in,stalled % S1Llisation Producti-n C.p.city 1969/70 19169/70 1970/71 (Ent) 1969/711 1970/71 (Ent) (3 shifts) Nationa.l Textile 2,1,2. tOS22 Spinning (Mhi. Lbs.) 3.1, 77.7 2,663,962 3,200,200o Weanng (sn. yis.) I16.0 61.6 8,663,953 12.090,0.30O Finishi.ng (Mn,. ydo.) 3h.0 31.3 10),651,603 6,000,0,00 Ceylon Cement 2,379a. Cement (tons) 285,000 96.2 268,635 1,17,5o0 Clinker (toon) 270,000 91.1, 24., 096 na.. CeylnnCrsnc 998 Crockery (tons) 2,5L0 a 79 2,003 2,01,0 Kaolin (icons) 5,000 61, 3,235 3,600 Sanitary-are (icona) 500 91 653 500 Wall til- (ton) 300 67 201 31,0 2-~~~~~~~~~lo- St-1 )~~~~~~~~~~~~~~~~~~~~~~~~~61 1,010 Rolled Sc1n (~.n.) 60,000 36.5 20,688.66 36,800 'dire (ton) 12,000 h1 6,925.15 9,625 Nationael Snull Indonsrle- 1,560 2,329 l'iles an1d brcink 17,726 98 17,286 00 ianternPcr Ii 1 1,2 2,007 Paper (tono) 9,000 99 8,3212 3.61,0 0.3~lon Tire 1,302 1,4,83 liro (non.) 25n.001 29 71.1,03 10,5)00 Toben (no.: 250,000) 16 38,91,6 130,700 Flaps (n-nj. 88,003 29 25,297 Lo,0,10 State Hard.are 1.06l, I,1 Agricultiiral InPlm-ents (pi-ese) 573,000 3 15,592 1,6,022 BniilIcr hard--r (ple-c) 3,635.000 18 652,099 663.661 Water Fitting (no,s.) 269,000 13 3b,331 81,321, Cutlery (non.) 600,007 26 163,667 171,805 Engineering Tools (non.) 600,000 8 68,903 109,4,17 Ni3cellanooe., 7teccs (nc.). 800,000 0.7 5,907 5,000 Paranthan Checoica3l 309 679 C-austic Soda (ton,c 1 S5ll 57 953 ii400 Chilorion (icon3) 1,320 38 505 500 TebO., Salt (t-r.) 600 72 288 600 Foctucar (pairn) 345,007 82 281,200 n-e Chromne icathar (17. ft.) 720,000 97 697,887 l.a. Ceylon Mineral Sando 637 456 I ',;ate (lao) 1:iO,007 64 7357 9C, em IlOtilin (tone) 10.800 16 1,569 3,000 zlrn,- 9.500 13 1,200 a.a. "ils & Fat- 773 A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~68 Provender (icons) 60,000 82 51,234, 61,500 Oil Exapeller (tone) 51,000 21 10,535 16,090 .0t,.--id ..ons 510 Cn3 66P, c0 Refinery (tnow) 9,000 6.5 591 na.. Na.tional Salt 1,099 1,599 Salt (tans) 97,650 115 112,352 91,100 Ceylo PYO&ru ~n.L'Sancn5,nCtA,n.n1,182 1,626 trea cst (an)1,262,1,56 72 90'3,650 1,208,0003 Flunh doers (non.) 12,000 86.4, 10,369 18,000 Teneer (sq. fi.) 300,000 169 509,330 1,390,000 Block boards (nos-)I33,000 61 49,300o State Flou' Millina 4,25 1,66 Flour (ans) 50,7,00, 82 61, 756 na.. By-products (tcon) 18,830 81 15,309 .. CeyonFiheia 1,308a .a Fi.h meal (toons) 320 22 69 n.a. Shark liver nil (golloon~) 10,000 18 1,762 n.a. ice (icons) 17,280 56.5 9,1,12 l.a. Fish cans (00(0) 933 ro6 '119 n.a. 'I1968/65 Source, Ministry ,,f todaniries and Scientific Affaires and Central Bank of Ceylo.. Table 8.2 STATE INDUSTRIAL CORPORATIONS CAPITAL PRO!ITS/LOSSES AND RErURN ON INVESTMENTS1/ Public Corporations- Capital Employed in Production 1969/70 Profit/Loss (in Rs. 000) Return on Investment before Tax (in %) 'lin Rs 000) 1965/66 1966/67 1967/68 1968/69 1969/70 1 970/71.-/ 1968/69 1969/70 1970/714/ National TextiLe h2,600 1 1j82 667 2,89L 2, '73 2,126 9,280 7 5 22 Ceylon Cement 96,355 9, 628 8,285 13,875 13,1397 26,oo9 36,033 22 27 37.5 Ceylon Ceramics 19,852 W.f2 765 3,000 4,000 3,502 3,502 20 16 18 Ceylon Steel 117,923 - - 2,018 2,350 L,132 9,433 2 3.5 8 National Small Industries 18,960 -1 000 -660 -645 -15Is -1 ,06 358 Loss Loss 2 Eastern Paper Milis 29,000 3,565 5,882 3,919 6,661 3,15D 2,098 23 11 7 Ceylon Tlrre 67,525 - - 805 1,000 3,335 8,823 1.5 5 13 Ceylon State Hardware 18,'725 - -878 -379 -'7065/ -1,922 828 Loss Loss 4 Paranthan ChemiLcals 11 3802 -:265 203 667 398 -853 823 3 Loss 7 Ceylon Mineral Sands 15,225 -203 54 192 b88 1,28!i 2,06Li 5 8.4 13.5 CeYlon L1,ather Products 6,245 293 391 187 335 -206 n.a. 5 Loss n.a. Ceylon Oi ls and Fats 22,695 568 20L 1,600 2,188 1,173 1,493 11 5 6 National Salt 10,llh9 182/ 860 1,713 2,07h 2,200 2,271 26 21.6 21.7 Ceylon Plywoods 5,772 11 60D 557 2,386 565 1,598 41 9.7 26 Ceylon Fisheries 36,o95 -1 285 -h, 61 D -3,600 -2, 800 -3, 4 n.a. Loss Loss n.a. State Flour MiLling 26_396 _- _ _ n-a. 213 n.a. n.a. 0.8 n.a. Total (net) 545,319 13,853 11,807 26,803 3[4,731 39,862 78,60o 7.5 7.3 1t41 1/Profits from trading activities are excluded. Profits are before taxes. 2/There are about tern more public: corporations engaged in industrial processing, assembling or serv.icing activities. Some of them are of minor importance, and the others are not included due to lac:k of inforMLtion. 3/Budgeted. I/Budgeted prof'it expressed as percentages of invested capital. 5/Annual Report of the Central Banlk of Ceylon, 1969. SouLrce: Ministry of Industries and Scientific Affaires. Toable: 8.1 STATE INDUSTRIAI. CORP)RATIONS VAUJE OF' PRODIJCTION AND SHARES IN PRODUCTION AND EMPLO'YMENT Value of Productioni, 1969/70 Shares in Production (in %) Shares in increase between Shares in Employment (in %r) (Rs 000, at, sale prices) 1967/68 1968/69 1969/70 1967/68 and 1969/70 (in %) 1969/70 National. Textile 34,471 6.1 5.6 6.1 6.2 10.6 Ceylon Cement 58,754 17.2 14.7 10.; 6.0o 1.4 Ceylon Ceramics 14,913 4.8 4.4 2.7 1.3 4.4 Ceylon Steel 34,569 13.6 9.7 6.2 1.2 4.2 National. Smal:L Industries 8,399 3.9 2.3 1.; -.0.1 8.2 Eastern Paper Mills 25,223 8.5 5.9 4.'5 1.8 6.5 Ceylon Tyre 28,624 7.0 5.6 5 .1 3.9 5.7 State Hardware 2',468 2.3 1.3 0.h -.0.8 4t.7 Ceylon MineraL Sands 5, 862 0.7 1.8 1.0 1.3 1.9 Paranthan Chemicals 2,487 1.1 0.6 o.4 --0.0 1.4 Ceylon Leather Products 59,808 3.4 2.2 1.7 o.6 3.1 Ceylon Cils and Fats 30,604 9.6 9.1 5.h 2.7 3.4 National Salt 11,235 3.0 2.6 2.0 1.3 4.8 Ceylon F'lywoods 8,656 3.3 2.8 1.; 0.4 5.2 Ceylon F'isherLes 11,550 3.1 4.3 2. I 1.3 5.8a Ceylon Ayurvedic Drugs 1,248 - - 0.2 0.4 -.7 State Flour Milling 30C 581 - 1.1 5.4i 9.0 1.9 Sri Inka Sugar 7,286 7.6 4.4 1.3 -.2.9 9.8 National. Milk Board 40,,117 4.8 6.o 7.1 8.7 5.1 Ceylon Fetroleum Refinery 19h.809 - 15.6 34 ';7.7 2.2 Total 561,665 100.0 100.0 100.( 10oo.0 100.0 aBased on emp:Loyment in 1968/69. Source: Ministry or Industries and Scientific Affaires and Central Bank of Ceylon. Table 8.4 STATE INDUSTRIAL CORPORAIIONS FOREIGN TRADE COMPONEN'T OF PRODUCTION IN 1969/70 Importedl material as % of Exports as % of Total raw material usage Value of Prodluction Value of Production National Textile 91.2 29.7 CE'ylon1 Ceiment 31.1 2.2 Ceylon Ceraunics 20.8 7.0 0.2 Ceylon1 Steel 89.1 35.14 National SmaLL IndLustries 10.5 2.6 Eastern Paper Mills 63.5 23*5 Ceylon Tyre 72.0 26.3 State Hardware 70.0 ,51. 9 :2.0 Ceyloni Mineral Sands - - 77.1 Paranthan Chemicals Ceylon Leather Products 39.3 116.8 n.a. Ceylon Oils anid Fats 13.7 111.0 8.7 National Salt Ceylon Plywoods 15.14 5.6 0.9 Ceylon Fi sheries n. a. 1.6 14.5 State Flour Milling n. aL. 71.6 !6.5a Total 5oP 2)1.21 1_8c aiEstimated[ bOf tkhe corparations listed. Of 20 corporations listed in Tab,le 8.3. For the corporations liste(i above, the per-entage is 3.1. Source: Ministry of Industries and Scientific Affaires and Central Bank of Ceylon. Table 8.5 EXPORTS OF INUJSTRIAL GOODS*, i65-1969 *7In Rs . 000) 1965 1966 1.967 11968 1969 Food, Beverages & Tobacco h98 636 6L1 668 bio Textiles I Wearing Appare:L 1,]66 629 1,h16 5, 325 L,2h5 Leather ?; Rubber Products 2,72M 3,285 2,770 3L, L61 5,378 alnufacture of Wood 221 267 226 717 Pubp and Paper 18 1 10 2- Chemicals 2 Chemical Products 1,?71 1,313 2,061 L.,022 2,2)01 Plastuic Products - - - 252 mion-metal:Lic Yineral Products 7,203 7,283 8,250 10L89 12,L30 'Metal Droducts other than Machir.eTy - 700 705 1.,231 1,C098 Machinery other than Electrical -77 150 528- Electrical Machinery & Appliances 388 162 2Gb 30 330 Total 13, 89 lb,L53 16,L33 26,085 27,061 * Manufactures and semi-manufactures. Source: Ministry of Industries and Scientific Affaires.