Ceylon's first experience with imperialism was, as elsewhere in the colonial world, bound up with the search of European merchant capital for new goods and new markets for trade. The island attracted the Portugese and the Dutch, who came to exploit Ceylon's production of cinnamon, from the early sixteenth century onwards. It was, however, British imperialism that had the biggest economic impact in Ceylon, after gaining control of the whole island in 1815. What developed under the British was a typical export economy, oriented to producing primary products for export onto the world market.
Ceylon became a major producer of tea, rubber and coconut, which together make up about 90% of its exports. The production of these exports in turn accounts for about ¼ of Ceylon's National Income, but this figure probably underestimates Ceylon's dependence on them, because a large part of the commercial, administrative and trading network is based around servicing them. What did not develop under imperialist rule, was any substantial manufacturing industry, as this would have been competitive with industries in Britain which supplied the Ceylonese and Indian markets.
In such an economic structure, the rhythm of growth is dependent upon the rhythm of growth of the imperialist metropolis. In the crisis of the inter-war period the market for Ceylon's exports dropped catastrophically and created severe problems. In the post war period attempts at development have made very little headway, and in fact, as shown below, have ended up by benefiting the imperialist COLTURES ROOTS OF THE CRISIS An economy structured in this way did not arise gradually or peacefully as the outcome simply of the responser of individuals to supply and demand forces so elegantly pictured in the economic textbooks. As Rosa Luxemburg explained a long time ago: "Bourgeois liberal theory takes into account only one aspect of economic development: the realm of peaceful competition', the marvel of technology and pure commodity exchange; it separates it strictly from the other aspect: the realm of capital's blustering violence which is regarded as more or less incidental to foreign policy and quite independent of the economic sphere of capital". In the case of Ceylon, the plantation economy was established by the expropriation of the Kandyan peasantry of vast tracts of forest on the higher slopes of the Kanyan valley, which had been traditionally used by the villagers as common lands for fuel and fruit gathering. To work plantations, labour is necessary, but the British attempts to proletarianise the peasantry were stubbornly resisted, so as elsewhere in the Empire, thinly disguised force and bribery was used to get labour under the contract labour system - in this case from South India. In the 1840s and 1850s, 1,000,000 Tamils were transported to the estates.
The death rate was 250 per thousand.
An economy such as this remains dependent on the imperialist countries that created it.
If trusty clients can be found, an illusory "independence' can easily be given, and will usualiy be less trouble than the exercise of direct colonial rule. If the 'independent' countries try to develop, they must then de so by attempting to increase output of the commodities they already produce. By selling increased quantities of tea, it was hoped that Ceylon would be able to raise sufficient resources to be able to create other sectors of production. What has actually happened since independence, however, is that the volume of tea exports has almost doubled, but the dollar value is only a little above what it was in 1947. And of course, what one dollar will buy in terms of imports is a lot less now than it was in 1947. The situation is similar with respect to Ceylon's other export crops, rubber and coconut. The magnitude of the loss was indicated in the 1970 Annual Report of the Central Bank of Ceylon, which calculated what Ceylon's National Income would have been if the prices of exports had remained at the 1959 levels. By 1970 the loss through the fall in export prices since 1959 was running at Rs.902,700,000. 1959 factor cost prices). In other words, if exports had continued to be sold at 1959 prices. then in recent years Ceylon would have. had a National Income almost 10% higher than in fact it is.
What is actually happening here is that in attempting to push its existing lines of production, Ceylon is driving an increased supply of primary commodities onto the world market, where the demand for these commodities is stagnating or growing only very slowly. This demand originates in the main from the imperialist countries. If supply grows more rapidly than demand, then prices fall. What makes the situation even worse, is that other countries are in the same situation, and are attempting to push primary commodities onto the world market. Thus East African and Indian producers are competing with the Ceylonese in tea production for export, and this competition pushes tea prices down still further. Those who gain from lower tea prices are the imperialist countries.
As Ceylon is beginning to outlive its usefulness to the imperialist corporations, they are beginning to take their capital elsewhere. As argued above, Ceylon is trapped in a given structure of world economic relations fashioned by imperialism. This is not, of course, true of the foreign corporations, who operate there and are able to take their capital elsewhere. Investment income in Ceylon fell between 1960 and 1968 from $12million to $4 million while net outflow of direct investment increased According to the United Nations Economic Commission for Asia and the Far East, "attempts by the government to encourage replanting, especially in high-yielding, high-quality, vegetatively propagated cloves, have not met with any significant success". This has led to government threats to the effect that "tea estates which do not evince any interest in developing their holdings, will be liable to be taken over by the state".
But even this would not solve Ceylon's problems. Unprofitable primary producing sectors have been nationalised before, for instance in Latin America, and provided sufficient compensation is given, this is not so unpalatable to imperalist capital, as it helps to reorient it to more profitable lines of production. If the government did take over and promote the estates, this would simply put more output onto the stagnant market, and the problem of falling prices would reappear.
THE FAILURE OF INDUSTRIALISATION There have been attempts in Ceylon to establish a limited industrialisation, mainly by establishing tariffs against foreign supplies and seeking to replace such supplies with domestically-produced goods. At this late stage in the game, attempts at industrialisation too are thwarted by dependence upon imperialism. For one thing, Ceylon and so has to import basic machinery, equipment and spare parts from abroad. But this foreign equipment has often been produced to suit different conditions in the imperialist countries. In particular, it is designed to suit a large market, and conditions of greater labour scarcity. Hence it is labour saving. Plants adapted to supplying large markets very soon become the basis of monopolies in the small Ceylonese market. This probably accounts for the following tendency noted by the Central Bank report: "An evaluation of data relating to size distribution of firms based on value of output indicates a definite trend of polarisation of output among the larger firms. In 1970, of the total number, from Ceylon Government Gazette, 20 August 1971 my No. PA/MD/52 DEPARTMENT OF SOCIAL SERVICES Tenders for the Burial of Dead Bodies, House of Detention, Boralesgamuwa. Tenders are invited for the burial of dead bodies from the House of Detention, Gang odawila, Boralesgamuwa, for the period 1.10.71 to 31.12.72