Gamani Corea-by Amali Wedagedara
Source:Island
“My main message is: by all means follow the logic and the imperatives of a flexible resilient, and open economy. But adapt and modify such logic to reflect the imperatives of our own society, the level of development it has come to, and the way it can evolve then or 20 years from now. What is needed today should not be jettisoned, in the name of some textbook argument, that comes from institutions in the outside world. I would say to people: take a closer look at classical economic theory, rather than the so called laissez-faire economic theory that is put before us today. Classical economic theory did have a place for protection; it did have a place for intervention in the commodity markets; it did find a role for the state in combating private monopolies, particularly in the field of infrastructure. In all these and other areas classical economic theory provided exceptions to the rule of the operation of free markets. We should not jettison all these, but rather look to these arguments and use and adapt them to our own needs.”
Gamani Corea, 1998
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A fresh encounter with Gamani Corea’s work late in life has provided me with an opportune moment to reflect on the “politics of jettisoning” in the teaching and policy making of economics in Sri Lanka. Not only that, the undergraduate economics degree curriculums have ignored the intellectual legacies of the ideas and thinking of Sri Lankan economists like Gamani Corea, S B D Silva, G V S de Silva, Buddhadasa Hewavitharana, H.A. de S. Gunasekera, I. D. S. Weerawardena, Jayantha Kelegama, Ian Vanden Driesen, and Victor Gunasekara, the political-economy approaches that these 1st and 2nd generation of economists embraced in their teaching and research on economics have also been abandoned. Lack of critical reflection on homegrown economic ideas to generate policy responses to development challenges has left us dependent on dump downs of the World Bank and the IMF and incompetent in “exercising the degree of pragmatism” that Corea instructed. In the absence of a political-economic understanding, Sri Lankan policymakers in the Treasury and the Central Bank have tended to ignore the urgency of correcting the asymmetric power relations inherent in the international order and distorted market conditions. As a result, Sri Lanka is a marooned nation – deep in debt, at the risk of recurrent defaults and entangled in neoliberal geopolitics, as a destination for cheap labour, cheap resources and a satellite.
This article is a preliminary attempt to examine the key ideas of Gamani Corea that contributed to consolidating the structural power of developing countries, such as commodity price controls, the New International Economic Order, and UNCTAD. While commemorating the 99th year of his birth anniversary and 11th death anniversary, the article proposes to revisit the works of Sri Lankan economists like Gamani Corea to formulate a Sri Lankan school of economic thought to inform policymaking that promotes Sri Lanka’s interests towards development.
Southern Order
Gamani Corea was the third Secretary General of the United Nations Conference on Trade and Development (UNCTAD) between 1974 and 1984. His career at UNCTAD began as an expert engaged in the preparatory work for the 1st session of UNCTAD in 1964. Rubens Ricuperoa, a former Secretary General of UNCTAD, captures the significance of Corea to UNCTAD when he said that Corea contributed to the preservation of UNCTAD as “the moral and intellectual conscience of development” (Corea, Khor, and South Centre 2014). Corea’s involvement in developing institutions and platforms that further the collective power of the Third World transcends UNCTAD to the South Commission and later to the South Centre.
Through years of engaging developing countries and promoting North-South dialogues, Corea had realised that “problems of the newly de-colonised countries in the third world were not in the front ranks of [developed countries’] concerns” (Corea, 1998). Hence, he advocated collective actions of the South to highlight “unity among nations of the South and their position in multilateral negotiations” (Corea, Khor, and South Centre 2014). The period in which Corea joined UNCTAD marked a jubilant period for developing countries. With the Peak Oil, OPEC countries, along with G77 countries, had come together with demands for a more responsive international order – the New International Economic Order (NIEO) that was founded in 1974. To use Corea’s own words, NIEO consisted of “two strands – the insistence on […] structural change as a necessary ingredient of the evolution of international economic relations and […] the concept of collective self-reliance” (Corea 2014). The developing countries were calling for fundamentally transforming the mechanisms and relationships that constituted global economic relations while advancing their shared strength to mobilise collective bargaining power. It also meant that the domestic economic structures of developing countries, such as plantations and mining, reflecting a character of the colonial era, should change.
Corea Plan – the Integrated Programme for Commodities and the Common Fund
On the eve of their independence, the postcolonial countries discovered they lacked the political influence to maintain commodity agreements that ensured stable prices, unlike the colonial powers. The changed relationship with consumer states, which used to be the colonial powers, eliminated the newly independent nation’s ability to maintain stable prices. Except in some cases where the consumer states like the UK and the US believed offering stable prices was essential to the political stability of a few favoured regimes in Africa and Latin America, the consumer states, too, were not willing to offer stable prices. With falling prices, developing countries heavily dependent on primary commodities like tea, natural rubber, sugar, cocoa, tin, copper, iron ore and jute for national income were at the brink of economic collapse and facing Balance of Payment crises.
The instability of commodity prices was a major point of deliberation at the Havana Conference in 1946. The agreement to form an International Trade Organisation as an outcome of the Havana Conference shows the urgency of attaining price stability from the developing country’s perspective. Discussions lasted until the UNCTAD IV meeting in Nairobi in 1976, which assembled “a new constellation of forces”, as Corea called it, to capture the rise of OPEC countries and the configuration of global south forces along the New International Economic Order (Henrikson and Corea 1986). The UNCTAD secretariat proposed the Integrated Programme for Commodities to create a framework to strengthen and stabilise international commodity markets. Instead of an ad hoc approach to negotiation, the new programme proposed an overall framework of principles which look at commodities as a whole. It also entailed the establishment of the Common Fund, an international institution with a greater voice and representation of developing countries, to raise finance to facilitate buffer stocks in developing countries, enabling them to stabilise prices and promote research and development to improve structural conditions in commodity markets. The Common Fund was also expected to provide “compensatory financing to provide loans for shortfalls of export earnings from the expected levels” (Henrikson and Corea 1986). In subsequent meetings at UNCTAD V in Manila in 1979 and UNCTAD VI in Belgrade in 1983, more resolutions were adopted to progress the programme for commodity stabilisation. As the history of reforms in international trade, finance and development reveals, the non-committal and agnostic behaviour of the developed countries has been an impediment to the progress of both the integrated framework and the Common Fund. In his writings, Corea also exposes “old and familiar demons” that composed the attitude of the developed consumer countries and transnational companies, ranging from the idea of the free market, producer cartels, consequences of rising commodity prices, and intervening in the private grain and minerals trade markets (Henrikson and Corea 1986). Devoid of comparative facilities available to the OECD and European Economic Commission, the developing countries also demonstrated a sense of unpreparedness and lack of confidence that they had any influence on international negotiations on commodities.
The challenges that Corea recognised as affecting developing countries, particularly the prices of agricultural commodities and minerals, continue to this day. His vision for stabilising prices also lives in the dissent and contention of developing countries and peasant movements in the WTO processes.
Sri Lankan School of Economic Thought
Gamani Corea, even though hailing from the planning era, was not a Marxist or a leftist economist who advocated for Import Substitution policies and State control of the economy. Neither was he a neoliberal economist who blindly believed that the market cures all ills, the private sector is sacrosanct, and the IMF and the World Bank are God sent. Resurrecting the intellectual legacies of people like Corea, who are globally reputed for their work towards strengthening the positionality of developing countries by alleviating negative terms of trade through rules and systems of the global South, is important as there is a call for greater cooperation between developing countries. These ideas amount to the soft power of Sri Lanka that we should project to the rest of the developing world by integrating them into our diplomacy and taking the leadership in lobbying and building consensus on debt relief, stabilising commodity prices, and attaining overall development aspirations.
Corea’s work was grounded in the everyday problems of developing countries. He drew connections to developing countries’ experiences, from Sri Lanka to El Salvador to the Soloman Islands. His praxis was closely aligned with the rise of Dependency School and the influence of Raúl Prebisch. Unfortunately, thinking of underdevelopment is almost non-existent in Sri Lankan departments of economics, which also explains the sense of paralysis in economics teaching, failing to connect to the everyday experiences of people. Sri Lankan economics teaching also contrasts with the new waves in Europe – rethinking and new economics thinking, emerging to encounter challenges posed by the 2008 global financial crisis. Corea also had the advantage of the interdisciplinary eco-system that economics departments offered in the early years before being compartmentalised into different disciplines. The intellectual tradition and historical approach afforded by interdisciplinary thinking made Corea what he was.
My generation of economics undergraduates, even younger generations now employed either as school teachers, university lecturers, researchers, civil servants, private sector professionals or Central Bankers, would have certainly felt the limitations in our training when attempting to address the current challenges. Our training in neoconservative economic theory decapitates our skills to bring about the “structural change” that a developing country like Sri Lanka needs. Nurturing a renaissance in economics teaching in Sri Lanka by incorporating the ideas and thinking of people like Gamani Corea into the curriculum could be a first step in the right direction.
References:
Corea, Gamani. 2014. Need for Change: Towards the New International Economic Order. 1. Aufl. s.l.: Elsevier Reference Monographs.
Corea, Gamani, Martin Khor, and South Centre, eds. 2014. A Tribute to Gamani Corea: His Life, Work and Legacy. Geneva: South Centre.
Henrikson, Alan K., and Gamani Corea, eds. 1986. Negotiating World Order: The Artisanship and Architecture of Global Diplomacy. Wilmington, Del: Scholarly Resources.
Corea, Gamani. 1998. 50 Years of Economic Development in Sri Lanka. Occasional Papers No. 27. Central Bank of Sri Lanka.
Amali Wedagedara (PhD, Hawaii) is a feminist political economist. She works as a senior researcher at the Bandaranaike Centre for International Studies (BCIS).
The BCIS is organising a Gamani Corea Retrospective on November 22 between 4.00 pm and 6.00 pm at the Kolamba Kamatha
