SBD de Silva, China & the Central Bank: A Great Guru, Part 2


“Research in the social sciences in underdeveloped countries has, of late, metamorphosed into a variety of big business.”

Professor SBD de Silva

Professor SBD de Silva passed away 2 years ago. We recall his near-40-year-old suppressed classic, The Political Economy of Underdevelopment, and stories from the blog eesrilanka.wordpress.com, dedicated to him.  This series was denied publication by all the Sri Lankan media, from the mainstream to the so-called alternative.

Most of the Central Bank’s top officials opposed any attempts to link with socialist countries, with the US putting tremendous pressure on Sri Lanka to withdraw from the Rubber-Rice Pact with China. US State Department economist Theodore Morgan, in 1951-53 had been made an economic adviser to the Central Bank of Ceylon, and in 1952-53, its Deputy Governor. Morgan strenuously opposed “Sri Lanka’s most successful international trade agreement” – the Ceylon-China Rubber-Rice.

The pact with China, saved SL’s economy from disaster, said SB, as rubber prices were low and rice was short, after the wasteful consumption encouraged by Morgan’s compatriot John Exter, who set up Sri Lanka’s Central Bank and was made its first governor.

Morgan called the Rubber-Rice Pact, a “Military-Political-Economic offensive against the Free World!” He even claimed China did not have enough rice to trade with us. Whereupon, it’s legendarily retold, someone had penciled in, or ‘minuted’ next to his comments: “If each Chinese ate one grain less, there would be enough rice for all of Ceylon!” Despite the US embargo and threats, Sri Lanka became in the 1950s China’s largest trade partner, outside of the COMECON countries, with China promising it would one day, when it was strong, return Sri Lanka’s favor!

Anti-communism meant many other sources of foreign exchange remained untapped. The Ministry of Planning, with Gamani Corea as secretary, noted in the 1960s, that existing credits, mostly for project aid, were still untapped in Poland, Yugoslavia, East Germany, Hungary, and the USSR. While France, England, Italy & West Germany had major economic links with those socialist countries, they prevented Sri Lanka from doing so, even though we were officially proclaimed as “nonaligned”!

The accusation of SB being a ‘communist’ would stalk him throughout his sojourn at the Central Bank. When SB, who had taught statistics to an eminent generation of public servants at the University of Peradeniya, applied for a job at the CB’s Department of Statistics, K Williams, head of Statistics, warned fellow interviewers, SB was a communist! One of the interviewers was Wijewardena Lake House editor, UGP de Mel, who had joined the Department of Statistics to become its Deputy Director. He curtly responded to Williams by saying he thought SB’s interest in communism was “calf love…”

Regardless, an editorial appeared in the Ceylon Daily News wondering if communists were to be tolerated in such hallowed institutions as the Central Bank!

SB soon withdrew to work at the UN Economic & Social Commission for Asia & the Pacific (ESCAP) in Thailand, and at the Universiti Sains Malaysia. After returning to work at the Ministry of Industries under TB Subasinghe, SB went on to become Deputy Director of the Agrarian Research & Training Institute in Colombo. There he zeroed in on the uneven availability of work in rice production, and the need to fill those gaps for rural workers with modern industry, equipping them with modern skills. His discussions on the purana gam, and the gam sabha, on the solidarity and discipline of villagers, who worshipped their irrigation-system as sacred, was fascinating.

SB also taught at the University of Peradeniya. He eventually left (without even taking his pension). as he felt students were no longer interested in researching pressing national issues. They only wanted strips of decorated white pulp certifying they had passed, which they could get from anybody. The universities, he declared, had been turned into intellectual wastelands.

As the very first sentence of his book, The Political Economy of Underdevelopment rings out: “Research in the social sciences in underdeveloped countries has, of late, metamorphosed into a variety of big business.” And that was in 1982!

The Social Scientists Association, he helped first found as an attempt to involve academics in resolving the practical challenges of life, have been diverted. As he predicted in his book, he noted, the SSA has been taken over by NGO careerists seeking to pad their résumés, with no day-to-day links to the country’s workers and cultivators.

SBD de Silva & the Flames of ‘Cold War’: A Great Guru, Part 1

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