The Writings of Dr Saman Kelegama

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‘The Writings of Dr Saman Kelegama’ is a collection of the scholarly edition of his writings enriched with his intelligence, experience and outlook. This dedicated digital platform enabling access and preservation of Dr Kelegama’s writings for publications, edited works, and other unpublished papers such as scripts of keynote speeches – is a tribute for him and a treasure for readers and researchers alike with a quest for knowledge.

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Liberalization and Industrialization: The Sri Lankan Experience of the 1980s
(Institute of Policy Studies, 1992) Kelegama, Saman
In this paper, the intention is to take a broad look at the developments in the industrial sector during the 1978-89 period, and offer an explanation for the prevailing weaknesses of the manufacturing sector. The paper also explores how effective liberalization has been in enhancing the industrial growth process. Certainly, there are various other means as well that one can adopt to analyse industrial growth. The liberalization framework is used here because it appears to be the core around which the Sri Lankan policy debate revolves. There are those who say that Sri Lanka's liberalization was inadequate to achieve rapid and sustainable industrialization. On the other hand, there are others who claim that Sri Lanka has liberalized far too much and this has worked against industrial progress. The paper takes a broad look at this debate and highlights some issues that are of relevance to policy-making.
Privatization: The Sri Lankan Experience
(Institute of Policy Studies, 1992, 1992) Kelegama, Saman
This paper covers a very broad area while focussing mainly on the problems of privatization. The paper is divided as follows: Section 2 discusses the Sri Lankan privatizatin effort, with special emphsis on the background and preparatory work. Section 3 discusses the problems of pirvatization in Sri Lanka. Here the problems of the industrial sector are dealt with in detial and, in general, the problems of the plantations and the transport sectors. Section 4 briefly examines some of the achievements of the privatization programme. Section 5 gives some policy options for better prospects and the concluding remarks.
Labour Absorption in Industries: Some Observations from the Sri Lankan Experience
(1992) Kelegama, Saman; Wignaraja, Ganeshan
Eleven years have passed since liberalization began in Sri Lanka, and yet the level of unemployment remains at about the same level as in mid-1977. Even if the export industries take time to respond to policy reforms, the fact that unemployment increased to pre-1977 levels by 1985 clearly shows that export-oriented industrialization has not been able to generate employment on a large scale. Why has this been the case? This paper attempts to answer this question by examining the labour-absorptive capacity of manufacturing and how it has changed after liberalization.
Privatization in Sri Lanka: the Experience During the Early Years of Implementation
(Sri Lanka Economic Association, 1993) Kelegama, Saman
This paper covers a very broad area while focusing mainly on the problems of privatization. The paper is divided as follows. Section 2 discusses the Sri Lankan privatization effort, with special emphasis on the background and preparatory work. Section 3 discusses the problems of privatization in Sri Lanka. Here we deal with the problems of the industrial sector in detail, and then outline the problems of the plantations and the transport sectors. Section 4 briefly examines some of the achievements of the privatization programme. Section 5 sets out some policy options for better prospects and concluding remarks.
External Shocks, Adjustment Policies, and the Current Account: The Case of Sri Lanka, 1971-1991
(Institute of Policy Studies, 1993) White, Howard; Kelegama, Saman
A major methodological problem in the analysis of adjustment policies is the separation of the effects of the policies themselves from those of changing external conditions. In this study authors’ use, with some significant modifications, decomposition approach to the context of Sri Lanka for the period 1971 to 1991. The paper initially presents the methodology and its application to Sri Lanka. It also incorporates discussion of the debates concerning Sri Lanka’s macroeconomic performance in the 1980s and the impact of adjustment policies more generally. Finally the paper draws out the conclusions and policy implications of authors’ analysis.
The Interim Evaluation of the Technology Initiative for the Private Sector (TIPS) Project
(Report Submitted to US Agency for International Development, Colombo Sri Lanka, 1993) Holt, David H.; Kelegama, Saman
The USAID Mission has developed a strategic framework for assisting Sri Lanka in realizing its vision, focusing on a single strategic goal: to expand opportunities through a new private-public partnership. In order to achieve this strategic goal, USAID has implemented a portfolio of programs in Sri Lanka, but has designed and implemented the Technology Initiatives for the Private Sector (TIPS) project, complementing USAID's strategic plans through 1996. This Interim Evaluation was contracted to make a thorough analysis of TIPS activities and results to date.
Examination of Priority Export Products and Identification of New Export Products for Development and Promotion in Sri Lanka
(1993) Kelegama, Saman; Wignaraja, Ganeshan
Examination of Priority Export Products and Identification of New Export Products for Development and Promotion in Sri Lanka
(1993) Kelegama, Saman; Wignaraja, Ganeshan
The main objective of this study is to rank the priority export products list identified by the EDB according to the criteria: high labour intensity; high local resource intensity, high market potential, and high supply potential. The ranking exercise was done through using Non-Parametric Methods of Statistical Theory. The study also aims to identify new products that could be developed on the basis of exports made by countries that have/had similar initial conditions as that of Sri Lanka, and on the basis of imports demanded by major markets in the world.
External Shocks, Adjustment Policies and the Current account: The Case of Sri Lanka, 1971-1991
(Institute of Policy Studies, 1993) White, Howard; Kelegama, Saman
A major methodological problem in the analysis of adjustment policies is the separation of the effects of the policies themselves from those of changing external conditions. In this study authors’ use, with some significant modifications, decomposition approach to the context of Sri Lanka for the period 1971 to 1991. The paper initially presents the methodology and its application to Sri Lanka. It also incorporates discussion of the debates concerning Sri Lanka’s macroeconomic performance in the 1980s and the impact of adjustment policies more generally. Finally the paper draws out the conclusions and policy implications of authors’ analysis.
North American Free Trade Agreement and Its Implications for Sri Lanka: With Special Reference to the Garment Industry
(Institute of Policy Studies, 1994) Kelegama, Saman; Unamboowe, Indira
The only available literature that gives at least some indication of NAFTA’s implications for Sri Lanka is a study done for the World Bank by Safadi and Yeats (1993) on NAFTA and South Asia. The study is more focussed on South Asia and the conclusions are based on aggregate statistics. An aggregate analysis for the South Asian region is always biased by the inclusion of Indian statistics. Moreover, the analysis of Sri Lanka’s case is based on the regional model which may not necessarily be valid for a small country like Sri Lanka. In this study we have re-examined in detail NAFTA’s implications for Sri Lanka. In particular, we have investigated Sri Lanka’s competitiveness vis-à-vis Mexico in the US market. While supporting the basic conclusion of Safadi and Yeats, they go on to show that NAFTA, and the gradual abolition of the MFA, give new opportunities to further expand the apparel industry of Sri Lanka. However, we argue that this will not happen merely by the market mechanism. Substantial work needs to be done both on the marketing side as well as on the supply side, the latter being weak needing more attention. In regard to the Uruguay Round, our analysis shows that there are gains for Sri Lanka, but the gains are not very significant as argued by Safadi and Yeats (1993).
Stabilization and Liberalization: A Closer Look at the Sri Lankan Experience 1977-93
(Institute of Policy Studies, 1994) Dunham, David; Kelegama, Saman
Three years before the World Bank introduced its first structural adjustment loan in 1980, Sri Lanka had embarked on a process of economic liberalization. The results of this have been documented at the end of the 1980s. The events illustrate the difficulties of managing the transition from a closed to an open economy. However, tensions between different needs of stabilization and adjustment have received very little attention in the literature. Why Sri Lankan liberalization faltered during this period has still not been adequately answered. This paper attempts to provide an answer to this crucial question.
External Shocks and Domestic Policy Adjustment: The Case of Sri Lanka
(The Indian Institute of the Economics, 1994) White, Howard; Kelegama, Saman
A major methodological problem in the analysis of adjustment policies is the separation of the effects of the policies themselves from those changing external conditions. But such a separation can be clearly made by decomposing the sources of change in the current account. In this paper authors apply methodology, with a number of important modifications to the experience of Sri Lanka for the period 1971 to 1991. By extending the decomposition analysis to cover the capital account authors are able to address a further important issue in the adjustment debate: namely distinguishing the impact of external finance given to support domestic policy adjustment efforts from that of the efforts themselves.
The Impact of Privatization on Distributional Equity: The Case of Sri Lanka
(Routledge, 1995) Kelegama, Saman
This paper will analyse the Sri Lankan experience within the framework outlined by Ramanadham (1993) in the working paper titled ‘The impact of privatization on distributional equity’. Since the data available on certain areas pertaining to distribution are inadequate, it is not possible to attempt a comprehensive study. Thus some areas of the study are of a descriptive nature and provide information for more analytical and comprehensive studies in the future.
Economic Reform and Governance: Second Wave of Liberalization in Sri Lanka 1989 - 93
(Institute of Policy Studies, 1995) Dunham, David; Kelegama, Saman
This paper examines the second wave of economic liberalization in Sri Lanka from 1989-93 (President Premadasa years) from both a traditional economic and from a governance perspective, looking at political and technical determinants of economic policy. Authors argue that the two dimensions are interwined, that political will is an weight from “bad” to “good” governance, a government can improve economic performance may be misconceived. The paper is also first attempt to fill a gap in the literature on Sri Lankan economic policy.
The Uruguay Round Agreement on Agriculture: Implications for Sri Lanka
(Institute of Policy Studies, 1996, 1996) Athukorala, Prema-Chandr; Kelegama, Saman
The paper begins with an introduction to the agricultural sector in the Sri Lankan economy (Section 2). Section 3 provides an account of the current agricultural production and trade policies while paying attention to their roots in Sri Lanka's economic policy history and the related socio-political considerations. Section 4 is the core of the paper. It examines Sri Lanka's commitments to date to the URAA and constraints to further compliance with URAA provisions, followed by an assessment of the impact of URAA on world agricultural trade from the perspective of global trading opportunities for Sri Lanka. The paper ends in Section 5 with some concluding remarks.
Policy Issues on Promoting Backward Linkages from the Garment Industry in Sri Lanka
(Institute of Policy Studies, 1996, 1996) Kelegama, Saman; Foley, Fritz
This paper examines the slow growth of local supplies to the garment industry in Sri Lanka. We have shown that the overall investment environment in Sri Lanka and international demand patterns constrain the formation of competitive local producers of fabric and garment accessories. We have also shown that building and maintaining sources of competitive advantage among producers of garment inputs are crucial to their development and viability in a highly integrated global economic environment. From the Sri Lankan garment industry experience and from the available evidence from other countries, we have argued, in general, that the empasis on backward linkages industrialization is somewhat misplaced. Changes in the global environment and international demand patterns have made backward linkage effects less powerful than they were for import-substitution industrialization strategy in a closed economy. Although local supplies are useful and vluable, they cannot function unless conditions exist which allow them to be competitive.
SAPTA and Its Future
(Sage, 1996) Kelegama, Saman
This paper is structured in a way that first section gives the background to SAPTA. Section 2 examines the impediments to the progress of SAPTA and the validity of the preferential trade assumption to South Asia. Section 3 examines the international experience with preferential trading arrangements. The next section looks at policy options for more effective economic cooperation among SAARC countries. Some concluding remarks are given in the last section.
Does Leadership Matter in the Economic Reform Process? Liberalization and Governance in Sri Lanka, 1989-1993
(Elsevier, 1997) Dunham, David; Kelegama, Saman
Governance assumptions of the East Asian miracle may not be a sufficient or a necessary condition for effective economic reform or for solid growth to emerge in other Asian economies. This paper argues that in Sri Lanka, where the state is not strong, where it is not well coordinated, and is neither cohesive nor disciplined in organizational terms, strong political leadership proved critical in the second wave of reform from 1989-93 - even if it was essentially illiberal in the process of implementation. Technical and political imperatives are seen to be interrelated and parts of a single reform package.
Stabilization and Adjustment: A Second Look at the Sri Lankan Experience, 1977–93
(John Wiley, 1997) Dunham, David; Kelegama, Saman
Mainstream thinking on economic policy assumes a logical progression from stabilization to liberalization and adjustment that is rarely attainable in practice. Most developing countries have been forced to undertake them simultaneously with a resulting tension between them, and with conflicting demands being made on economic policy. This paper reexamines Sri Lankan economic performance in the 1980s from this perspective. It argues that the pristine application of theory is not an appropriate yardstick and that “economic mismanagement” is at best an incomplete explanation of what was happening. It contends that incompatible demands were at the time being made on economic policy, and stresses the importance of external shocks and the political sustainability of the reform process.
Privatization and the Public Exchequer: Some Observations from the Sri Lankan Experience
(United Nations ESCAP, 1997) White, Howard; Kelegama, Saman
This paper examines the Sri Lankan experience with privatization from 1989 to 1996 and argues that its short-run fiscal benefits have not been significant even when the direct and indirect costs of privatization are ignored. Fiscal gains from privatization should be considered long-term benefits and greater importance should be given to designing a transparent privatization programme to promote competition and to stimulate the capital market. Such a strategy can address the problem of the fiscal burden of subsidizing State-owned enterprises more effectively than a privatization programme that is designed for speedy execution in a non-transparent manner or one whose objective is to achieve revenue targets according to short-term budgetary needs.

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