I trust Sri Lankan authorities as well as our business sector, would welcome the initiative taken by Thailand to create an OPEC type rice cartel. According to reliable sources Thailand has already sounded the major producers / exporters of rice such as Myanmar, Vietnam, Cambodia and Laos. The Thai Minister has explained that while producers of rice have been selling or rather subsidizing the oil / dollar rich countries, oil and manufactured products from the developed world have to be imported at very high prices. Already Myanmar has given the green signal to the proposal.

Sri Lanka through its illustrious former Secretary General UNCTAD Dr. Gamini Corea was in the forefront fighting for the rights of developing countries whose economies were dependent on the export commodities like tea, rubber, rice etc. Dr. Corea’s proposal to establish a Common Fund to compensate exporters of commodities when necessary was opposed and sabotaged by the developed countries of the west.

I might add, Sri Lanka had the honor to lead the developing countries at UNCTAD meetings on this subject by the well known former Director General of Commerce, Douglas Jayasekera. I mention this fact since it is time for Sri Lanka to tap the talent, knowledge and experience of such persons to implement the proposal I wish to make.

My proposal very briefly is that Sri Lanka should immediately take the initiative to propose the formation of an OPEC type cartel by Natural Rubber exporters such as Indonesia, Malaysia Thailand, Vietnam, India, Nigeria and Sri Lanka. For a very long time natural rubber prices were depressed owing to the competition from synthetic rubber / a by-product of oil. There is no doubt that the developed countries used the synthetic rubber as a weapon to control the prices of natural rubber. The bargaining power of the exporters of national rubber was also weak due to their vulnerability of the economics. Rubber both natural and synthetic is as essential as oil for the developed world both for civilian and military use.

On the initiative of Sri Lanka and Malaysia a new group was established in the 1960’s for natural rubber and synthetic rubber producers to meet regularly under the auspices of International Rubber Study Group (IRSC). Although those consultations were helpful the economically powerful countries of the West particularly USA controlled and influenced the policies of that group. USA even had a buffer stock of natural rubber which was used to control the international price of rubber.

In the light of these happenings in the past, the time is most opportune for Sri Lanka to take the initiative immediately to form an OPEC type natural rubber producer’s cartel. As the first step the relevant government agencies like the Trade Ministry and other private sector organizations like the Chambers of Commerce and the planters should be consulted to formulate the proposal to be submitted to other countries. In the late 60’s Natural Rubber Producers Association was also formed on the initiative of Sri Lanka and Malaysia. All the natural rubber producers are represented in that organization. No doubt that Association could be the organization to implement this proposal.

Owing to the escalating price of oil with no hope of a significant down turn synthetic rubber prices could only increase rather than decline. Hence, the threat from synthetic rubber to natural rubber could weaken if nor disappear.

The opposition to this proposal from vested interest particularly powerful consuming countries is inevitable. President of ADB , Haruhiko Kuroda of Japan has already voice his opposition to the rice cartel proposal. Japan though is famous for jealously protecting the interest of both rice and tea farmers in Japan to protect national interests rather than permit the rice and tea makers to be ‘market oriented’! Mr. Kuroda was of course speaking for ADB and not Japan.

I trust that the relevant authorities would consider the merits and demerits of this proposal sooner than later.