UNP Calls for Foreign Intervention on Sri Lanka?
e-Con e-News 31 October 2018
1) We reproduce, at the end of this ee, a talk on the Export Development Board and Faulty Trade Policy by Sugath Kulatunga at a recent EDB Sansadaya.
2) The University of Moratuwa has invented a farming robot. Is this a top innovational priority in a farming sector where cultivators face a liquidity crisis (in debt bondage to merchants and moneylenders) and have sporadic work. Also, we have a long history of invention but cannot hold on to them, for we have no industrial policy to develop manufacture and protect such.
3) This running to explain to foreign envoys, when none of them, so concerned about ‘democracy’ now, said anything about local polls being postponed….
All this and more…but first the contents (starting with some open ended questions):
Is it money or industry we need? – ee
Is it FDI? – ee
It it exports? – ee
What of the stolen home market? – ee
Economy of Scale? – ee
Sri Lanka has more people that 150 other countries – ee
Restoring Democracy? Really? – ee
The Astrology of Counting Demonstrators – ee
Parliament on Monday? – DM
Bahu promises a riot? – DM
Tamara on Western Interventions – Thuppahi
This Slave Business of Summoning Envoys – FNO, Nalin de Silva
Selling Vital Assets – FNO
Envoys Indifferent to Delaying Polls? – TI
The Science of Selective Silences on Democracy – CT
Boxing? US weighs in on political crisis in Sri Lanka – AP
Chambers of Commerce concerned – TI
International Chamber of Commerce, too – FT
Microeconomics vs. Macroeconomics – CT
Levy on imported big onions and potatoes continues – DM
A new Appropriation Bill – FT
CB on Postponing Economic reforms -EN
New PM Mahinda discards fuel pricing formula – TI, DM
Dissolve Parliament if Vote on Account defeated – DM
CSE Recovers – TI
Trade account deficit narrows marginally – TI
Rs 3 Billion Outflow in One Day – Mangala Twitter
Sirisena rescinds Appointment of CB Deputy Governor – TI
HNB Directors – DM
University of Moratuwa invents farming robot – DM
India’s first engine-less train from Chennai – TI
Gananath O’s Dubious Protestant Buddhism – TI
Govt Spent More for English Medium Instruction – TI
China and the Number 7 – NYT
China’s yuan hits decade low – TI
India to enable rupee-yuan trade with China?
India’s Sardar Patel, World’s Tallest Statue, contracted out to Chinese foundry – Quartz
NATO pays no War Reparations – TI
We begin our ee with:
• Open-Ended Questions for an ABC on the Economy:
Money, Money, Money?
Money? Is money what Sri Lanka’s economy really needs? This is not some moral question.
We can get ‘money’ by prostitution, drugs, noh?
Will that develop people?
Money loses value, unless bolstered by modern industrial production.
Modern industrial production increases people’s skills….
(See also, Microeconomics vs. Macroeconomics)
The usual mantra is: We need more Foreign Direct Investment.
But investment for what?
To buy more luxury goods, Japanese cars? To invest in industry?
They claim we need to export?
The colonial economy was an undiversified export economy. It did not and has not helped us.
Should we depend on the viccissitudes of others’ consumption patterns?
After the destruction of local industries post-1977, did ‘export development’ become a platform for launching junkets, and do we really need to export before developing our own home market? – is one question still to explored. (See below)
• The Almighty Home Market?
We first need to secure our own (especially the rural) home market, for our own products.
Our home market has been captured by foreign goods. Evident in the sexy advertising industry that seduces us into thinking imports are better.
• Economy of Scale?
One major myth against industrialization, is that we do not have enough people to enable ‘economy of scale’.
Sri Lanka has a larger population than almost 150 other countries, including industrial Spain, Holland, Iceland, Romania, Belgium, Portugal, Sweden, Hungary, Israel, Swtizerland, Denmark, Finland, Norway and Singapore!!!!
Smaller states (Singapore, etc) are based on modern industrial production. 1) Economy of scale is a function of the type of technology and of capital-labor relations. The optimum scale of production depends on the technology used. People made shirts before there were tailors. Yes, if you are making for self there is no market. Tailors can make a profit by making 2 or 3 shirts a day. But if you are using nuclear energy to make shoe laces, you will need a large market. But there is a continuum in the type of tech employed. 2) Cost of production determines how much of an existing market a country or industry can conquer. Where a factor of production – labor – is inexpensive, a country can produce for an even larger market at lower production cost….The way the Japanese designed the industrial production of machines and components and the inputs used was based on employing labor available especially during down times in agricultural production. If productivity is high and costs are low, there are numerous examples of new industrializers capturing market share from other producers, and even ousting them from the market.
• Restore Democracy?
Can the major parties restore democracy when they themselves are not democratic parties, yet call for rights?
When they kept postponing elections?
• Astrology of Counting Demonstrators
One ee correspondent insists there were no more than 2,500 people at the UNP rally on Tuesday, whereas the usual corporate cacophony (BBC, CNN, Reuters) insisted on ten thousand. China’s CGTN (on Thursday) went even further and declared 10s of 1,000s continuing for the last 5 days!!!!
Another ee correspondent notes mostly UNP people were bused in, and some Colombo middle class joined – “Some of whom have never been to a protest before and had spent the last 3 years demonizing student and trade union actions. They feel this segment (many of whom work for foreign-funded NGOs) are not necessarily pro-ranil but ‘pro-democracy’ or rule of law, meaning they dont care Ranil is gone… just how he went. Yet another ee correspondent notes that this same ‘democratic’ and ‘constitutionalist’ segment did not say a word when Ranil was made PM with 40 seats, while the SLFP has 140 seats in 2015, with the latter then denied lead opposition status as well?
• “President Maithripala Sirisena had said that Parliament would be re-convened on Monday, November 5, according to Prime Minister Mahinda Rajapaksa.”
• Bahu comes to his (not just ideological?) relative Ranil’s Rescue?
Nava Sama Samaja Party Leader Wickramabahu Karunaratne said yesterday they would launch a massive trade union action and a riot in protest of President’s decision to remove Ranil Wickremesinghe as Prime Minister and proroguing Parliament unconstitutionally.
• Tamara Kunanayakam slams Western Intervention in Lanka’s Political Order…. and evokes Egyptian Comparisons
“ We are facing blatant external interference in a domestic political process, an act inadmissible to any sovereign state. A climate of insecurity is being created artificially by the defeated allies of the West whose objective may be to provoke a violent situation that will provide justification for external intervention to restore them to power, if necessary, by force.”
Response: “When the Harper government in Canada prorogued parliament for nearly 2 months in December 2008, did Sri Lankan High commissioner interfere in the internal politics of Canada? There their Liberal Party, New Democratic Party and The Bloc Québécois wanted to vote a non-confidence motion.”
• Tamara: Why was West silent on wrongdoings of former regime
What is the explanation for the West’s silence on the Central Bank-Perpetual Treasuries bond scams under Ranil Wickramasinghe’s Premiership when he was Minister in charge of the Central Bank and for which his close ally, Central Bank Governor Arjuna Mahendran, has been held responsible and is evading arrest? The bond scams have been described as the biggest ever corruption scandal and biggest-ever cover-up in the history of Sri Lanka.
Why has there been no call for credible investigations by the West on information of a plot to assassinate the President and Gotabhaya Rajapaksa, a plot in which a Cabinet Minister is allegedly involved?
• “All Sri Lankan leaders, including Mahinda Rajapaksa, have had this habit of seeking validation from the western world. After ending the war, Rajapaksa invited representatives of international organizations and appointed nonsensical committees like the Lessons Learnt and Reconciliation Commission (LLRC).
“Why this slave mentality? This is also because we export a lot to the West. We need to sever this economic umbilical cord with the West by moving away from capitalism.”
• “That draft Constitution as well as the sale of our vital assets were among the biggest crimes perpetrated by the Wickremesinghe administration. If that Constitution drafted at the behest of Western nations is passed, the country will be divided and foreign powers will be able to exploit its natural resources.”
The new government must also try to reclaim sold assets like the Hambantota Port…
Convener of the Federation of National Organizations (FNO) Gunadasa Amarasekara said that only the Chinese ambassador had acted with proper decorum and respect. “This is an internal matter of the country and the government can sort it out.”
• Nalin de Silva:
This busines of exaggerating the power of the foreign over local accountability, is also evident in the former PM summoning diplomats to complain and insist he is stil the PM. While the President then summons them and also responds…
• Change in premiership – Upsets countries indifferent to polls delay: Dullas
2018-10-30 19:31:31 0 704
It is deplorable to find the foreign countries and organisations, which remained silent about the delay in holding elections appearing concerned about the change of premiership, MP Dullas Alahapperuma said today.
He told a news briefing that the US State Department and the European Union (EU) had failed to issue a single statement about the delay in holding provincial council elections.
– http://www.dailymirror.lk/article/Change-in-premiership-Upsets-countries-indifferent-to-polls-delay-Dullas-157635.htmlJoint Chambers of Commerce statement
• Here is a long list of past silences by the whites and their supporters:
“Amongst a few recent instances of undemocratic practices, there were no protests when former President JR Jayewardene obtained signed undated letters of resignation from members of Parliament of his party, the UNP after his victory in 1977, the very same party led by the very same leader was complicit in organising the infamous 1983 programme against the Tamil community in Sri Lanka, and they have never been held accountable for that and there have been no public protests against the UNP. Prime Minister Sirimavo Bandaranaike’s civic rights were taken away by a Kangaroo court appointed by the government of President J R Jayewardena. There were no protests against this indecent act. The current leader of the UNP, who is a nephew of then leader JR Jayewardene, and who was a member of the cabinet of that government has never been called into account for his role in the infamous massacre of suspected JVP members in Batalanda and the public has been silent. The same leader, who as Prime Minister signed an agreement with the LTTE in 2002 without the approval of the Parliament or the Executive President of the country, and no one called that undemocratic, the same leader being appointed as the Prime Minister in January 2015 with only 46 members out of 225 supporting him was not called undemocratic or unconstitutional. There were no street protests by the civil society and no one called the President undemocratic then.”
• US weighs in on political crisis in Sri Lanka
Vermont’s Sen. Patrick Leahy, the top-ranking Democrat on the powerful Appropriations Committee, said that if the appointment of Rajapaksa as prime minister stands, “it will pose a grave challenge to U.S. engagement with that government.”
He said that when Rajapaksa was in power, he ran “the government as a criminal enterprise, making sweetheart deals with China, persecuting the Tamil minority and wrongly imprisoning political opponents and journalists.”
• Chambers of Commerce are concerned that the current political uncertainty will result in many adverse consequences to the country, if it remains unresolved. We request the political authorities to resolve issues through the democratically established Institutions as early as possible. We appeal to the political Parties to ensure that law and order prevails and that danger to the life and property of citizens is prevented. All parties should act in the best interests of our country, our people and the national economy.
• The International Chamber of Commerce Sri Lanka (ICCSL) in a statement said it was very concerned with the current political crisis in the country.
“The current political crisis can result in adverse economic consequences to the country if it remains unresolved in the next few days. We request the key political authorities to resolve the current political crisis through the democratically established and tested institutions, as early as possible, and in the best interest of the country,” it said. ICCSL is the domestic chapter of the International Chamber of Commerce Paris, the largest and most representative business organisation in the world. Its six million members in over 100 countries have interests spanning every sector of private enterprise.
• Microeconomic vs. Macroeconomics
“Mahinda, as far as I know, believes in microeconomic maneuvers (business level decisions), when it comes to economic governance…One entrepreneur has promised him to bring in about 70 million dollars in each month so that he might think that will ease the depreciative pressure on the rupee. Any inward transfer of USD is good. But the economy is a bigger system. That is why I insist that matrix of macroeconomic fundamentals be put right so that rest of the things would be just details.
Ranil also did the same thing. One stock broker who is an operative in a few international financial markets, told Ranil that he would list and trade Sri Lanka’s sovereign (rupee) bonds in international financial markets. The effect of it would be the purchase of rupee bonds in dollars or euro by foreign investors, so that inflow of foreign currencies might increase. So, Ranil appointed that man namely, Arjuna Mahendran as the Governor of the Central Bank without thinking or not knowing that Sri Lanka cannot do it while having a depreciating currency resulted from increasing current account deficit. I guess, Ranil never asked him what he would do differently to put the macroeconomic fundamentals right. The result was that he messed up the very fundamentals which he himself must have taken care of….”
• The special commodity levy on imported big onions and potatoes would be extended for a period of one month with effect from today, the Finance Ministry announced.
• Discussions to formulate a new Appropriation Bill, to be presented to Parliament as part of the interim-Budget planned, have already begun, a top official of the United People’s Freedom Alliance (UPFA) said yesterday, adding that the much-talked about fuel price formula may also be scrapped to ease public pressure.
• Postponing planned economic reforms will make Sri Lanka more vulnerable to external and internal shocks and stall growth, causing the island to lag behind regional peers, the central bank has warned.
“It is important to facilitate private sector led growth with prudent, consistent and far reaching reforms that support increased productivity in the economy,” it said in its half yearly report on recent economic developments and prospects for 2019.
• Mahinda discards fuel pricing formula
• The fuel pricing formula is likely to be scrapped from next month, MP Dullas Alahapperuma said today.
• Newly-sworn in Education and Higher Education Minister Wijeyadasa Rajapakshe said today President Maithripala Sirisena had ‘inherent powers’ to dissolve Parliament in case the Vote on Account to be presented by the new government was defeated.
• CSE in last minute recovery; turnover tops Rs. 1 billion
The CSE performed negatively when it commenced trading last morning but showed sudden investor interest in the last one hour, which assisted the market to recover from the morning’s setback, stock market analysts said
• Trade account deficit narrows marginally
External Sector Performance – August 2018
• While the stock market went up by 1.9% yesterday,there were foreign sales of Rs 3.6 Billion (US$20.6M). This is a significant net out flow of more than Rs 3 Billion in one day. Comparatively,net out flow for the entire 90 day period from June-Sep was only Rs 4.5 Billion”
• The government, yesterday, at the inaugural Cabinet meeting chaired by President Maithripala Sirisena at the Presidential Secretariat yesterday, rescinded former Finance Minister Mangala Samaraweea’s decision to appoint Deputy Governor of the Central Bank Ajith Siriwardena as the Commissioner General of Inland Revenue.
• Does HNB belong to the Catholic Church, the 3rd largest landlord in Sri Lanka?
Hatton National Bank PLC (HNB) yesterday announced the appointment of Madu Ratnayake and Damien Fernando to its director board with effect from October 25, 2018. Ratnayake is Group CIO and Centre Head for Virtusa Sri Lanka. He is responsible for Virtusa’s global digital strategy and Sri Lankan operations.
• The latest addition to the long record of innovations by University of Moratuwa, the university pioneer in technological innovations and advanced engineering implementations in Sri Lanka, is the farming robot – SAASbot (Scalable Autonomous Agronomical Smartbot). SAASbot is a fully autonomous robot, which is capable of maintaining home gardens to medium scale farms from the point of planting seeds, up to the point of harvesting.
• SAASbot Introduction:
• Operation video:
• For additional information, the team can be contacted on firstname.lastname@example.org .
• India’s first engine-less train is set to hit the tracks for trials on Monday, October 29.….Developed by Chennai-based, government-owned Integral Coach Factory (ICF) in 18 months…
• What on earth is Protestant Buddhism?
Max Weber’s take on Protestantism implied that non-Protestant countries like those in Asia could not develop. But today, one hundred years after Weber’s views, we are witnessing a civilisational shift towards Asia. Rejecting Weber, Asian countries have today become industrialists to the world and the West.
• The instruction provided in English medium schools cost the government many times more than what it spent on vernacular education…This was deliberate government policy. To prevent poor parents from sending their progeny to English medium schools, the authorities introduced a fee levying system. The fee charged was not very high, but it was high enough to be too prohibitive for poor parents to afford. The Education Minister of the State Council C.W.W. Kannangara succeeded in 1944 in seeing his free education bill through the State Council after an intense six-year struggle against elite opposition. Initially, his reforms benefited the minority of children attending English medium schools more than it did rural children, because the former didn’t have to pay for their education any longer. But this was insignificant compared to the immense benefit that the free education policy brought to the rural children studying in the Swabhasha mediums. It was not possible to provide English medium education to all the children at that time, and it is not possible even today.
• There is nothing particularly threatening about the number 7 itself. The renminbi at 7.002 to the dollar is pretty similar to the currency at 6.998 to the dollar. But passing that number would be significant symbolically. It would suggest China is prepared to let its currency weaken further still. That would give China’s factory owners an advantage when they sell their goods in the United States. It would also undermine the tariffs the Trump administration has levied on more than $250 billion in Chinese-made products. Three years ago, as its economy slowed, China devalued the renminbi in part to give its factories a helping hand. The financial world was shocked. Markets plunged. As Chinese officials hurried to explain themselves, people and companies began shifting their money — money that China’s economy needed — outside the country. A year later, China had spent more than $500 billion from its reserves in an effort to shore up the renminbi. It later tightened controls on the financial system to shut off many ways people used to get money out of the country.
Should the trade war intensify, China may look to make more aggressive moves with its currency. But as history shows, there can be a price to pay.
• China’s yuan hits decade low on trade, economy fears
October 30, 2018, 8:23 pm
The Chinese yuan weakened to a decade low on Tuesday on concerns over China’s slowing economy and the US trade war, but Beijing was expected to prevent it breaking the psychologically important 7 yuan per dollar barrier.
The yuan drifted past 6.96 to the dollar, hitting its weakest levels since May 2008.
Breaking 7 could further undermine market confidence and potentially trigger fresh US accusations that China was allowing the yuan to weaken to blunt the impact of tariffs that Washington has imposed on Chinese goods.
A weaker yuan makes Chinese exports less expensive overseas, ameliorating some of the higher costs brought by the tariffs.
• India to allow rupee-yuan trade with China?
October 30, 2018, 11:54 pm
NEW DELHI, October 29: India is considering allowing some imports from China to be settled in yuan as it moves to limit its currency’s loss against the American dollar. The plan will enable direct convertibility between the rupee and yuan and will help cut transaction and hedging costs, according to people familiar with the proposal.
The proposal will allow Indian exports of pharmaceuticals, oilseeds and sugar to China to be settled in rupee, while keeping out trade in high volume products such as electronics, Bloomberg quoted them as saying.
India-China trade is mainly settled in US dollars since currencies between the two nations are not directly convertible. By allowing Indian importers to pay for Chinese goods in yuan, India will be able to save on dollars to pay for escalating oil import costs in the face of higher crude prices and the rupee’s slump to a record low.
• The Statue of Unity portrays Sardar Vallabhbhai Patel, nearly 600 feet tall—about twice the size of New York’s iconic Statue of Liberty. This new landmark of Indian patriotism owes China. The bronze cladding work was contracted out to Chinese foundry Jiangxi Tongqing Metal Handicrafts.
• It is also common knowledge that there has been no reparation for victims of war crimes committed by the NATO super-powers in the course of their interventions in many ‘regional wars’ and ‘internal conflicts’ of Asia, Africa and Latin America.
• Export Development Board, National Export Strategy and New Trade Policy
Sugath Kulatunga shared critical views on export development at a recent Sansadaya on the Export Development Board’s sponsorship of the NES (National Export Strategy)….He points out that “what is relevant about the East Asian ‘Tiger Economies” is what they did in the early stages… and not what they are doing now. While, Singapore, Taiwan and Malaysia depended more on FDI, South Korea restricted FDI. Korea’s then President Park went against most accepted theories of export development, and rejected neoliberal principles.”
Kulatunga also has very serious reservations in aligning NES with the NTP (New Trade Policy), which is “based on an outmoded neoliberal economic philosophy, whose repeated message is to remove the protection on domestic industries. … The NTP also does not recognize that the present crisis in our trade balance where the value of our imports is close to double the value of exports… is a direct result of the liberalization and opening the flood gates to imports in 1977. Import of dairy products, sugar and fruits costs us over USD 2 billion. In Korea and Taiwan during the early period the effective rates of protection of the local economy were high… The argument against protection is that it favors domestic industries and investors are attracted away from investment in export industries to that of domestic industries. But what really happened [with opening the floodgates]….is investors put their money into the thriving import business where the risks were less and returns were rapid and banks were keen to finance them. What is happening today is funds for new investments are crowded out by investments in property development…”
Copies of full speech on request