ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Nationalisation of the Sugar Industry-An Economic Perspective

December 2, 1972 shall cite only one additional example. In December 1971 Ceylon was in the throes of an extremely. severe foreign exchange crisis: its reserves had dwindled to insignificance, the country was finding it difficult to meet its short-term obligations to foreign banks and the prospects of obtaining substantial aid in the near future were very uncertain. So as to take account of this situation, the Ceylonese Ministry of Industries classified industries into four categories for the purpose of allocating foreign exchange for imports of raw materials, components and spares in 1972: "vital", "essential", "semi-essential" and "nonessential''. But after all the criteria had been taken into account (whether the industry was an important supplier of materials to other industries, whether it was a large employer of labour whether it was providing an item of mass con sumption, etc.), "non-essential" categories whose allocations could be cut most severely bad in fact shrunk to industries accounting for only 1.8 per cent of total industrial output while "semi-essential" industries accounted only for another 3.0 per cent. Howsoever drastic the reductions in the allocations of exchange to these industries might have been, they could not have released much for the "vital'' and "essential" industries.

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