Privatizing State-Owned SL Banks

Privatizing State-Owned SL Banks

e-Con e-News 01-07 September 2019

Our last ee raised the ire of key-thunking akademiks, intimate and afar, requesting less ambiguity, more precision and the god-almighty footnote. And yet, a simple internet search would surely verify: that US ambassador Gufler met SWRD minutes before that fateful bullet. As for US emissaries ‘overseeing’ various destabilizations?  Well, we refer again to the meagre public records available on promoting divisions within movements, adventurism at one extreme, reaction at the other (see ee Reader Comments).

• Rockefeller’s Pathfinder, Verite, Sunday Times, National Peace Council eminences have all come out for the Millennium Compact? (see ee Sovereignty). Sovereignty is basically about controlling what enters and leaves a country. And yet, what do faux diplomatic pouches bear, a baby kangaroo may ask?

• The news that no cabinet ministers were in parliament this week to answer questions, reminds us of a quip, by a ‘chauffeur’ of one of the richest bankers in the country. He said private bankers spend most of their time in parliament, chasing away MPs to their constituencies, saying, “Your job is to win votes, our job is to write the laws.” (see ee Quotes, Elpitiya)

    So what public laws are these private bankers writing? Check the Ceylon Bank Employees Union statement on attempts to undermine state banks (see ee Focus, B2). The Englishman Shelley famously proclaimed, “poets are the unacknowledged legislators of the world.” But under capitalism, we know who the real lawmakers (& poets) are. Who steals the gold, wields the golden rule!

    In capitalist countries, bank branches – made of granite to deter dynamite and instil confidence – used to dominate all 4 corners of main intersections. Now those corners are being turned into coffee shops and grocers, with a small corner within dedicated to heavy-metal Automated Teller Machines with cameras everywhere. eBanking is the rage we are told elsewhere, yet people here still healthily distrust the digitalized digits of banks: risk perception, indeed! (also see, ee Workers)

• The liberator Robert Mugabe of Zimbabwe has passed over. He was, among recent national leaders, one of the most hated by the whites and their mouth organs, the BBC, NYT, CNN, etc. Yet, the Queen of England even knighted him Sir Robert, until he demanded they live up to the Lancaster House Accords of 1979, which promised to hand back the land by 1989, the most fertile having been stolen by the whites. When the whites refused to keep their promises, and Mugabe began to confiscate the lands, he was stripped of his knighthood in 2008, and the BBC-led chorus of hate escalated, with war-criminal English PM Tony Blair even threatening to invade Zimbabwe!

   SBD de Silva has 118 references to Zimbabwe (Rhodesia) in his The Political Economy of Underdevelopment, particularly because one of his main concepts was the difference between, what was allowed in the economies of genocidal, settler vs non-settler colonies. Yes, those differences were all about modern industrialization & serving the home market first! Unlike our still-colonized economists who demand we produce for export first! (see ee Focus, B1)

• The Bahamas is almost totally underwater, but the fake indices are great: The “richest” country in the Caribbean, & “3rd wealthiest country” in the Americas, its economy heavily depends on tourism and offshore banking. Bahamas has no income tax, corporate tax, capital gains tax, or wealth tax… and of course whites still rule this majority African ‘country’.

• An ee correspondent from Peradeniya talked to workers in the Gardens – considered the 6th loveliest in the world, for its diversity.  Heartrending is their story! One said: “No point talking to the media. The media is worse than politicians: the media makes the politicians and then breaks the politicians. The country is like a katu imbul tree, lovely flowers, looks so beautiful, but try to climb it, it’s full of sharp fat thorns. We are ‘retired’ cultivators. Our fields are attacked by environmentally protected wild boar and porcupine. So we can’t bring in worthwhile harvests. They want us to sell our land to the market. A proper government job requires payment of 500,000 rupees to the MP’s daughter. We work 24 hours a day, 15 days a month, at Rs800 a day. It’s not easy to live on that. If we complain, they say talk to the ministry. The ministry says talk to the minister. The minister says talk to the cabinet. By the time they make a decision, the governing party changes, and the new ones say that was the old lot’s promises, not ours: we have to examine the matter again. Cleaning, security, etc, all being privatized, look at the mess, no one cares. The security job is to protect the park from thieves looking for rarities. But the security themselves are not secure. Then there are the young couples who come here to do jaraa. If their parents catch them, they blame us. Not enough cleaners to keep up with the dirt, etc. Why is the side gate by the suspension bridge still closed after April? Because Zahran is the president. He closed the side gate, etc. etc. Why? There’s a Hela Bojun there. Now people can only buy Coca Cola to drink, and Nestle Maggi to eat at the front gate…”

• As the sun passes directly over us here, a fleeting moment of truth usually arrives about now, over there where the sun sets last on the world. As their industry gears up for production thru their winter (Sept), their war machine immediately demands its share (Oct). A new generation of children enter the school system, as others leave it to enter the prison world of work as a life sentence. Then from ‘giving thanks’ (for the original people not starving or drowning them), the settlers and their metropolitan (actually NATOpolitan) sponsors don their amnesia balaclava over eyes, ears, mouth and nose, proceeding to enact Horror-ween, usually on some part of the world they claim to know little of, which is about the only truth! So their old leaves fall as new skeletons rise.

    Do not be misled by their pronouncements on peace and reconciliation, their pension plans are investing in nuclear weapons! Their warmaking and refugee-making link to worker-making to ensure steady reserves for their factories, shops and offices, while making rent-paying tenants and mortgage payers for their banks, and students for their schools that do not teach of this. This is their Game.


A1. Reader Comments

A2. Random NotesCabinet Minister Sarath Amunugama’s book on Anagarika Dharmapala

A3. Quotes of the Week

B. ee Focus

B1. Mugabe, SBD de Silva, & ‘Rhodesia’s Industrial Prowess

B2. CBEU Stands Against the Privatization Moves of State-owned Banks of SL

B3. The Systemic Crisis of World Capitalism – Prabhat Patnaik

B4. 4 Readings of Article 4 of the Constitution

C. News Index

D.  1900 & Imperialism


A1. Reader Comments

• Last week’s ee was: “full of surprising new angles to ‘old’ news – perhaps the most amazing ideas from all ees so far…”

• “Gosh, where does ee get all this info?  I’ve just trawled thru ee’s list of US agents here.”

• “Sounds incredible – was SWRD assassination engineered by US? Which may also have had a hand in the original JVP insurrection of 1971?  Or are these simply fanciful suggestions of the compiler?”

• “What precisely is meant by ‘Robert Strausz-Hupé oversaw the JVP uprising in 1971, during Sirimavo Bandaranaike’s government’? This suggests guilt by the trick of juxtaposition!” 

• “Great material machang. But can the ee team writing this or the ‘El Zorro’ writing these e-Con-News give sources for the empirical statements s/he makes?  Many of these statements are probably correct. But how to quote in any book or article. Don’t empirically substantiable (& also, remember, contestable or challenged by hostile parties) statements/claims need some sources?  Whadya Think? …The 2 matters that immediately caught my attention: 1) Gufler?  source(s) for at least this chap being at SWRDB’s residence that morning? 2) Of the 500 Physics PhDs, that independent SL has produced, none work here – any source(s) for this statement/claim? It’s quite probably correct. But how to quote in any book or article if I cannot substantiate?”

    ee responds to the above comments: ee always yearn for and appreciate criticism. Yet we are not an academic publication: surely simple internet searches of the names would show, Gufler indeed met SWRD on that fateful day. As to these emissaries ‘overseeing’ other events that took place, understand that it’s an assertion open to all manner of interpretation. ee would in no way wish to cast aspersion on the dedication and sacrifice of all the actors involved, especially of those on the Left who wished for the United Front govt to succeed, in its economic program of nationalization and industrialization.

    ee’s main interest is to engender national dialogue, towards catalyzing a path to industrial transformation. ee readership is a mere handful, so these are high hopes indeed, ineffective as mere hope can be. As to whether ee indulges in sensationalism, all that can be said is, our history, when examined over the last 70 years at least, is indeed more mindboggling. ee asks readers to simply examine the historical record on such matters, and focus on assertions their main object is to prevent our modernization by industrialization.

• “Is the so-called disarray in the UNP, more than a PR tactic? With the SLPP already decided, is the UNP deploying a classic drawing back of the fist, as advocated by Chairman Mao. Appear disunited, and withdraw in the face of major attack, wait for the enemy to advance rapidly and tire, poking small holes in their advance, making them fragment, while regrouping and gathering those divided, many through fear, to reinforce that it is a common enemy, and then strike? Ofcourse the current crop of UNPers perhaps haven’t even heard of Chairman Mao!”


A2. Random Notes (‘Seeing Number in Chaos’)_________________

ee is looking for a proper review of Cabinet Minister Sarath Amunugama’s (SA) book on Anagarika Dharmapala (AD). Most reviews of A’s AD book have been either fawning or anaemic. After visually scanning a copy in a bookshop, as usually done with books: we first peeked at the index, to see what, outside of title and preface and chapter headings, the book highlights.

    Curiously, SA’s Index had no entry for industry or industrialization, but only ‘industrial schools’: 2 references. Only by looking up ‘Japan’, did ee find more references to industry, and are told that AD wanted a modern industrial country. Yet Amunugama spends very little time on this matter. He mentions that AD attempted to set up industrial schools in Rajagiriya and Saranath, but they failed, but no discussion on why. SA notes, this project was left to a ‘Dolapihilla’ and ‘Siriwardene’ (no full names given). An ee correspondent adds: “The industrial school in Rajagiriya, the Hewavitarne Textile Training School, existed up to 2017, although it may have been closed subsequently by the govt. Its first principal was UB Dolapihilla, who received training in Japan, courtesy of AD. Dolapihilla, later, started his own textile school on his village, Meewatura. UB’s brother, PB, wrote In the Days of Sri Wickrama Rajasinghe.”

    SA, who claims to be an authority on economy, only briefly reminds that AD had accused the English of failure to introduce modern industry & commerce, & science. So what has SA done as a minister?  AD also noted the parasitic role played by various Muslim, Tamil Malayali and Afghan businessmen in supporting English rule here (even as AD praises Muslims in Turkey fighting the English). The former comments, of course, made the English and their agents portray AD as reactionary, and yet SA points out the homespun ‘Arya Sinhala’ dress advocated by nationalists was derived from S India. Also, AD set up anti-poverty programs there. Even SA’s brief reference to AD visiting industrial schools, does not question why he visited Booker T Washington’s controversial Tuskegee Institute and the Carlisle Indian Industrial School. While he saw the importance of our abundant graphite, why did he settle for spinning alone, etc? 

    Interestingly, the politicians that initially upheld AD’s call for industrialization, included SWRD Bandaranaike (whose govt set up many industries), CWW Kannangara, A Ratnayake, and JR Jayawardene (who eventually vandalized local industry after 1977!)

    What is poignant in the book, is the campaign of defamation against AD by both the English and their local agents. AD was accused of being a Japanese agent, and also of having links with the Indian Communist Party Leader MN Roy. AD’s brother Edmund Hewavitarne was murdered in prison by the English in 1915, leading to AD’s exile in India.  

    Brief references tell that AD was acclaimed as the ‘first Sinhala to set foot on Japan’. He looked up to Japan, which went on to defeat a decadent Russia in 1905.  Where it writes of AD seeing industrialization as the way forward, the discussion is wholly and truly unsatisfying.

    SA’s failure to discuss AD’s economic plans is striking, given that Amunugama recently flayed the old Left leaders as humane fools who destroyed the economy (see ee, 2 June 2019)! He even appeared to be upholding China’s path to socialism, where he says socialism requires a certain development of productive forces first. He quotes “Maoist” Joan Robinson, who said Sri Lankans are fighting over how to divide the mango, before the tree is planted. But then he went on to make unsubstantiated claims that the Left somehow undermined Sinhala capitalists and the white man’s plantations (see Amunugama curiously echoed a similar criticism made by UNP MP Kiriella (which ee 23 June 2019 refuted). Even as our experiences of the last 100 years show that private capital has had absolutely no interest in truly developing industry (see, ee 17 Aug 2019)


A3.  Quotes of the Week_____________________________________

• “We are aware how the private sector business tycoons use their stakes in different companies to build empires. The listing of 10% stake in [state bank] stocks open doors for them to play” (see ee Focus B2, CBEU)

• “Elections to every single local govt authority in Galle District were held on Feb 10, 2018. Except Elpitiya. That was due to a petition by the UNP pleading relief over perceived error in their nomination list being rejected. Time passed. We had the parliamentary crisis at the end of that year. We had the Easter attacks a few months ago. Even people who were aware of that election or rather non-election forgot about Elpitiya. Not any longer. With the court directing the Elections Commission to hold elections for the Elpitiya Pradeshiya Sabhava immediately, we are seeing a rehearsal, a by-election of sorts & a referendum all rolled into one.”  –

• “The term ‘global’… needs correction. The universally recognized term that describes relations between sovereign states and is used in the UN Charter, is ‘international’ relations, meaning relations ‘between nations’, in recognition of the legal existence of nation states and their status of sovereign equality. The term ‘global’, on the contrary, belongs to the vocabulary of Washington and reflects a unilateral vision of the world in which nation States do not exist, nor sovereign equality. The US views itself as a hegemonic power with the authority to dominate the entire globe, including outer space, and to act unilaterally, preemptively and preventively imposing on other states its own ‘rule of law’. This rogue state vision of the world…” –

 • “The reality that the capitalist state doesn’t care about certain human lives is seen {where] work that actually saves those lives is valued the least by institutions. Literally everything else – writing books about those lives, teaching about those lives, sitting in policy meetings, running organizations – is valued more than actually directly helping people who are harmed by the capitalist state, living in jeopardy, living in poverty, facing deportation, criminalized, living with addiction, etc. In every profession, the people I know who work on the ground are the ones who are precarious, the lowest paid, with no stability, and expected to survive while fighting for others to live.”


B. Special Focus____________________________________________


B1. Mugabe, SBD de Silva and Rhodesia’s Industrial Prowess

SBD de Silva has 118 references to Zimbabwe (Rhodesia) in his book, The Political Economy of Underdevelopment, particularly because one of his main concepts was the difference between, what was allowed in, the economies of genocidal, settler vs nonsettler colonies. Those differences were all about modern industrialization & serving the home market first! Unlike our still-colonized economists that demand we produce for export first! (see ee Economists)

    SB also pointed out, some of the most intractable struggles faced by London and Paris, were in those countries where a white working class has become entrenched, unlike “in the expatriate colonies – e.g. India, Sri Lanka, Malaysia – [where] such a class was totally absent except as ‘transient seamen and soldiers’.” He noted how the settler bourgeoisie of Rhodesia “took measures to terminate the payment of royalties on the Rhodesian copper mines to the British South Africa Company whose shareholders were abroad”.

    “In Southern Rhodesia, European labour soon after WW1 resorted to strikes. Though white workers organized themselves on strictly racial lines, preventing competition from poorly paid Africans, their militancy in defence of their interests contrasted with the class solidarity of Europeans in the nonsettler colonies…

    “In all instances where the Europeans had forcibly occupied foreign territory, the problem of security was a paramount concern. The victims of the despoliation were a potential threat. In Rhodesia the Ndebele, though defeated in 1893, continued their armed conflicts with the Europeans for many years. The Shona… vanquished in 1896-7, rose in rebellion intermittently until 1903…

    “A crucial element in the development of the settler regions was the change in the production function in the export staples themselves. Such a change, which also occurred in the settler colonies, cannot be attributed to the presence or, absence of a cheap labour supply, but to the entrepreneurial options of the class which invested in or controlled export production… in Algeria, Kenya and Rhodesia relatively capitalized forms of agriculture were developed by the settler investors despite the presence of cheapened African labour

    Second, the dynamism of the staples base of the regions of new settlement was due to the competition from the produce of developed regions; in the settler colonies, such as Kenya and Rhodesia, the technical and scientific improvements in their agricultural system occurred in the face of cheap imports available from the USA and Canada. The settler investors went in for the growing of these crops in the context of a regime of world competition; this was not entirely the result of ecological factors, and therefore accidental, but stemmed from the relative autonomy of the settler investors which enabled them to develop economic structures which were parallel rather than complementary to those in the already developed countries. On the other hand, the technical progress in the growing of plantation crops has been essentially of an agronomic kind – raising yields per acre with little change in labour productivity and in the cost per unit of output.

    …In Rhodesia, the maize growers regarded ‘the provision of local consumption requirements as their first task.  The settlers also developed export agriculture but only as an outgrowth of production’ for the local market which had been built up under tariff protection; e.g. in Kenya and Rhodesia – grain, livestock, and meat products. Alternatively, export production was a response to a change in the relative profitability of different crops. Thus in Rhodesia, from the late 1940s the switch from maize to tobacco as the principal crop was prompted by a spectacular rise in the export price of tobacco. Nonsettler investors, on the other hand, were throughout concerned with export production to the exclusion of everything else.

    …The stimulus to industrialization came largely from the settlers… While the availability of mineral resources was a general factor conditioning Africa’s industrial growth, it was in the preponderantly settler colonies of South Africa, Southern Rhodesia and Northwest Africa that industrialization proceeded farthest.

    …Industrialization appears to have made headway only in the Federation of Rhodesia and Nyasaland, in Kenya and the Congo… Only Rhodesia and the Congo achieved notable progress in industry, as seen from the extent of industrial employment, the volume & composition of manufacturing output, and from the pattern of imports… In both Rhodesia and the Congo, industrial production comprised a high proportion of intermediate & capital goods, and imports were mainly of raw materials and equipment – with a limited share of light consumer goods.

    …In Rhodesia, several secondary industries sprang up, some of which were agro-based: food processing (bacon factories & creameries), cigarettes and tobacco, wood products, textiles, oil and oil seed crushing, soap and sugar. Another group of industries were based on imported raw materials, and comprised flour mills, breweries and garment factories. Third, there was the building materials industry – including cement, iron and steel – which arose mainly from the demand for housing by European migrants & from the construction needs of farms. Industrial growth was constrained at the outset by a dependence on imported inputs, but later when the flow of imports was interrupted, as during WW2, development surged ahead. Between 1938-45 the number of industrial employees more than doubled; 1938-49 manufacturing output increased sixfold…

    “This wartime expansion was sustained. Between 1945-52 the industrial workforce again doubled and the number of enterprises increased by 9%. Many of these outgrew the small manufactory stage, & acquired large accumulations of capital. Alongside an appreciable growth in national income, the share of manufacturing rose from ‘about 15% in the early 1950s to over 18% in the early 1960s’, while that of mining declined from about 10% to %. The postwar growth was based mainly on textiles & clothing and on the metal & building materials industry, including iron & steel… The iron and steel industry changed from imported scrap iron to local ore. The output of finished steel more than doubled 1948-53, and the metal industry was diversified with engineering works, foundries, steel window factories, aluminium and enamel works, tin smelting and manufacturing, a steel pipe-drawing plant, a nail factory, a wire-drawing plant, and a plough factory. An insufficient domestic demand for manufactures was partly overcome by the regional market in Central and South Africa, with exports comprising cigarettes, processed fish, meat, clothing, sugar, wheat flour and meal, tung oil and steel and engineering products.

    “The economic transformation of Southern Rhodesia after WW2…was brought about by the pattern of investment rather than the number of settler migrants per se or by the mere volume of investment… The shift towards industrial-cum-urban investments was linked to the dominance of the settler bourgeoisie, under whose aegis even expatriate capital entered into a relatively wide range of investments.

    “The entrepreneurial orientation of settler investors in Rhodesia has so far been referred to in terms of their ability to respond to growth opportunities such as those which arose during wartime, their wide range of investments – with an emphasis on secondary production – and their concern with domestic or regional markets. Two other characteristics were manifest. First, cultivation remained on a small scale, on the homestead pattern, & involved large numbers of producers instead of corporate enterprise owned & financed abroad. From the 1940s, when tobacco replaced maize as the leading crop, Rhodesian agriculture became export based; yet cultivation remained on a small scale… In gold mining small- & medium-scale enterprises were also the rule. The geological structure facilitated small workings by those who had been employed as skilled labour in other types of mining. Second, along with the small-scale nature of their investments, the internal locus of the settler investors & their permanent interests in the host economy caused a shift of attention to different lines of investment as entrepreneurial prospects changed. This meant fairly competitive market structures, with an ‘intersectoral mobility of capital’. The response of the Rhodesian farmers to the slump in grain & cattle prices 1921-3… was typical. They turned to other lines of production some of which used the depressed staples as inputs; e.g. dairying, pig rearing, tobacco cultivation and gold mining. The settlers also improved their future prospects by investing in capital assets – farm buildings & other fixed structures such as sheds, dipping tanks, stockyards, roads, dams, canals, silos, fences, wells. The capacity to finance these expenditures was partly due to the retention of export proceeds within the country.

    “The character of settler entrepreneurs becomes even clearer when contrasted with the limited commitment of expatriates in the host economy. The latter’s interests were transitory, narrow and inflexible; and their investments were owned and controlled abroad…

    “With these limitations, urbanization & the growth of a proletariat in Africa were confined to the settler colonies, which alone underwent some degree of industrialization…

    “In both Rhodesia and Kenya rust-resistant varieties of wheat were evolved, merino ewes & cattle imported, and local pastures upgraded by the admixture of imported grass. Likewise, farm machinery was adapted to local conditions. The use of capital and technology improved the quality of agricultural produce and lowered costs.

    “A significant aspect of settler agriculture was also the secondary activities to which it gave rise in the producing areas – such as wine production, sugar refining, textile manufacture, oil extraction, fish canning, the manufacture of meat & dairy products, food processing & preserving. Such secondary production did not entail, ab initio, complex technology, large accumulations of capital and extensive markets. The technology required was relatively simple – unlike the primary products of the nonsettler colonies which were grown specifically to supply the manufacturing plants in the metropolitan countries, protected as they were by a wide technological gap between them and the suppliers of primary produce. The barriers to what is now known as the transfer of technology were thus far less formidable than in the nonsettler colonies. The settlers not merely brought the requisite technology with them but – and this is the crucial factorthey were also in a position to apply this technology in competition with metropolitan producers. The domestic market which they appropriated by means of a tariff also gave them a readymade launching pad.

    “The production structures which emerged in the settler colonies had elements of a development policy. As latecomers, these colonies had serious difficulties to contend with. Whereas the primary producers in the USA, Canada, Australia, New Zealand and the Baltic countries could rely on the British market when, after the Corn Laws repeal in 1846, the centre of gravity of the British economy shifted irrevocably from agriculture to industry, Rhodesia and Kenya, for instance, had to compete with already established primary producers. In Rhodesia, the output of wheat & dairy produce was expanded in the face of cheap imports available from the US and Canada…

    In Rhodesia, where settler agriculture had to compete with both imports & peasant production, the state favoured the settlers – e.g. by a favourable siting of railways and the fixing of rates, by providing regulated credit & guaranteed prices and, above all, by proletarianizing the peasants. Extensive evictions were possible with the active enforcement of the Land Apportionment Act amidst declining peasant productivity. The domestic labour supply was easily supplemented by an influx from Zambia and Nyasaland, where employment opportunities were limited. The government began controlling the operations of the large expatriate enterprises such as the British South Africa Company and the United Tobacco Co; the former administered the railways and the latter almost monopolized the purchase of tobacco from settler farmers. This domination of the United Tobacco Co was curbed by the Tobacco Marketing Act of 1936. Furthermore, domestic producers were assisted by tariffs and regional trading arrangements. From 1955 there was greater tariff autonomy, though even before that trading arrangements were made with the Union of South Africa to help Rhodesian manufacturers. Industrial enterprises were also sponsored and given protection. The two largest – a cotton-spinning mill and an iron & steel works – were due to government initiative. The Rhodesia Iron & Steel Commission was set up by an Act of Parliament in 1942. Finally, direct financial aid was given to selected industries, to agricultural enterprises, and for small-scale mining.

    In Rhodesia & Kenya the customs tariff was used to promote domestic production rather than as a source of public revenue. At first in Rhodesia protectionism was not necessary. The bigger internal market required by the agrarian bourgeoisie, and the employment needs of white workers, seemed to be met by the expansion of overhead capital and housing. Agriculture benefited from the overhead capital (mainly roads) as well as from public utilities and from state-sponsored industrial enterprises. Furthermore, the construction materials industry – with its cluster of secondary production activities – enjoyed a natural protection. Manufacturing in this phase was largely confined to low-quality goods for Africans. But from the early 1920s the tariff was of direct benefit to manufacturing industry. Protective duties were levied on imports of finished products, while capital equipment & industrial inputs were eligible for low duties or duty rebates. Even before WW2 when the govt was careful to give protection to manufacturing industry in general, several state enterprises were fully protected – e.g. iron foundries, cotton mills, raw material processing plants including sugar mills…”


B2. CBEU Stands Against the Privatization Moves of State-owned Banks of SL

The Sri Lankan Banking and Finance sector has significant government presence through licensed commercial, development and specialized banks. The 2018 Budget proposals included a proposal to list a 10% stake of the following institutions in the Colombo Stock Exchange.

1.Bank of Ceylon (BOC)  2.Peoples’ Bank (PB) 3.National Savings Bank (NSB) 4.Regional Development Bank (RDB) 5.State Mortgage & Investment Bank (SMIB) 6.The Housing Development Finance Corporation Bank (HDFC Bank) 7.Lankaputhra Development Bank 8.Sri Lanka Savings Bank

    Some of these institutions are fully owned by the government and at others, the controlling stake is owned by the State. The other parties to ownership have been selected as strategic partners, and none of the above are listed in the stock exchange at present.

    The original purposes of establishing these banks had been to finance identified sectors of the overall economy, which the private sector often neglected due to the risks involved and/or low profitability. The Acts of Parliament through which they were incorporated clearly defined their purposes of existence in detail. Today, owning to the volatility of the economy, there had been some deviations since their original cause of establishment, yet still continues to focus on activities which are of national interest. While catering to their purpose, these institution operate as profitable ventures adding value to Treasury. The performance of some State Banks has even benchmarked trade’s key indicators beating some prominent private sector players of the industry.

    Since the opening of the economy in 1977, one of the country’s “major achievements” is the significant rise in Govt Debt. The debt of LKR20bn of 1976 has surpassed LKR 10 trillion by end of 2017. It did not happen overnight. The end use of funds of such borrowed funds by the State has been often criticized openly. However, no or least actions have been taken to hold the alleged culprits accountable.

    Each govt that comes into power is trapped by this condition and in order to run the show, they too need to borrow more and more. As a result, the common people of the country are now tasked to pay off the borrowed funds of the country. It is said that each person of our land owes more than LKR 400k, although they know not where the majority of that money went. They do not have anything to sell to service the debt. They pay higher taxes and the country has almost reached the ceiling level of indirect taxes. The State needs to borrow more.

    A capitalist economy is a selfish operation and is not a struggle of the fittest for survival as there is no limit for consummation. Even essentials for existence have a market. No lender would just lend but grab the opportunity of the borrower’s weakness to improve its stake through diversified avenues. The lending institutions which finance the State are also the same and have no difference. They impose conditions in their favour on each possible occasion where the Govt seeks money. Their conditions include proposals to cut down State Expenditure on social welfare merely to create a profitable business avenue. Health and education are highly profitable investment opportunities, you would agree. They put forth proposals to either acquire or destroy Govt’s presence in other key profitable sectors of the country. Proposals to privatize govt corporations is a part of it. When valuable State organizations fail to deliver the purposes they were created, due to the failure and corruption of politicians, it becomes easy for the Government to convince people to either close them down or sell them out. However, Banks are not loss making ventures and are corrupted, mainly because of the presence and contributions of a strong politically independent Trade Union, CBEU.

    This is the shortest explanation we could provide for moves behind privatization proposals of State Banks. This has come under many governments in different forms and we have successfully defeated them thus far. The latest move came up as a Budget Proposal of 2018 where a 10% stake of above state banks is proposed to be listed in stocks.

Why We Stand Against the Moves to Privatization of State Banks

    The 10% is just a camel’s nose. Once gone, it’s gone forever.

    10% ownership in the Banking Sector is notable denominator prescribed in the Banking Act. This percentage is adequate to create an influence in the decision making process.

    The State ownership provides confidence in conservative depositors which is a notable stake of the country. The absence of State’s present will fail to attract these segments to active economic activities.

    National debt is rising. Where are the Assets of the Nation to support such large borrowings? Are we to sell even the least we have?

    These Banks are not loss-making organizations which are sick and need rehabilitation. So, why do you sell them?

    These banks have been established for a purpose, a national cause. When private banks ignored the wellbeing of the common man’s business, housing, consumer and other financing requirements, they were built to be their strength. Will profit-oriented shareholders care about them?

    There are mandatory lending to be done for the sustainability of the overall economy and development (10% mandatory lending for agri-business for commercial banks). The Government has limits in interfiling to a private business. Therefore, the State should take the risk and play its role in the sector where necessary. Are we to ignore such mandatory lending requirements?

    The collective stake of State banks in the economy greatly contributes for its stability and is capable of countering any potential vulnerable move of the private sector. Who is interested in loosening it?

    It is a fact that the presence of strong state Banks of the country prevented the entire economy being pushed to a bank run during the fall of a few financial institutions during the last two decades. The government also had the comfort of appointing potential directors from managements of state banks to rehabilitate the troubled organizations where possible. What will happen in a similar situation without state banks?

    The annual contribution to the Treasury of nearly LKR 50 billion as profits of state banks will be divided amongst shareholders as dividends. For what reason?

    Government heavily depends on state banks for its local short term financing at favourable rates. The interest paid by the Government is again recycled within the Treasury. If privatized, these will be diverted into private hands, creating a dual impact; the expenditure will rise due to adjustments to interest rates at market levels and the profit inflow will be ceased due to change in ownership. How does the Government plan to bridge this deficit?

    We are aware how the private sector business tycoons use their stake at different companies to build empires. The listing of 10% stake in stocks open doors for them to play.

    Colombo Stock Exchange lost its credibility by alleged manipulations in the past. It now performs at very low level. Why would you risk well-established businesses by listing them in a failed stock exchange when there is absolutely no necessity?

    Our member employees at state banks enjoy better privileges than in some private banks. Employees as important stakeholders running a business are also interested in securing/improving our perks and benefits further. Yes, we fear that our privileges secured by hard fought battles with great sacrifices will be at a risk under greedy private ownership. What’s wrong with this?

    Therefore, the CBEU, being in a firm position has a duty to defeat the adverse budget proposal outright. We profoundly state that the State should provide funds for any capital deficit in these banks and should not change the prevailing stake at any of these organizations under any conditions. Focusing same, several actions have been approved by the Executive Committee of CBEU.


B3. • The Systemic Crisis of World Capitalism – Prabhat Patnaik

The hallmark of a systemic, as distinct from a cyclical or sporadic, crisis of capitalism is that every effort to resolve the crisis within the broad confines of the system, defined in terms of its prevailing class configuration, only worsens the crisis. It is in this sense that neoliberal capitalism has now entered a systemic crisis. It cannot be resolved by mere tinkering; and attempts to go beyond mere tinkering, for instance by introducing protectionism without transcending the broad framework of neoliberal globalization, i.e. without overcoming the hegemony of international finance capital which is the moving force behind this globalization, as Trump is doing in the US, will only worsen the crisis.

    The symptoms of the crisis are well known. The 2008 crisis had been followed by the pursuit of a “cheap money policy” in the US and elsewhere, so that the interest rates were brought down to almost zero. This just barely managed to provide some temporary breathing space to world capitalism; but now again it is faced with a looming recession. In the US, business investment is on the decline and industrial output in July was 0.2% lower than in the previous month. The British economy contracted during the second quarter of this year, as did Germany. The picture is much the same everywhere else, such as Italy, Brazil, Mexico, Argentina, India. Even China is witnessing a slowing down of its growth rate as a consequence of the world recession.

    The response of policymakers everywhere to this emerging recession is to move once again for a cut in interest rates. The European Central Bank which has already pushed its key interest rate to the negative region, is planning to further lower it. In India interest rates have already been cut. The idea behind such interest rate cuts is not so much that lower rates would cause larger investment; rather that lower rates would cause asset price “bubbles”, which would boost aggregate demand through larger expenditure by those who feel wealthier because of such asset price “bubbles”.

    Why this should be the typical response of policy-makers everywhere should be clarified. In the immediate post-ww2 period, i.e. before neoliberal globalization had got going, government expenditure could be increased to boost aggregate demand whenever there was a threat of recession. Governments could raise fiscal deficits if necessary, since capital controls were in place and there was no danger of any capital flight in the event of a rise in fiscal deficit.

    This had been the world visualized by John Maynard Keynes the noted economist who had been one of the architects of the post-war capitalist economic order. He had been opposed to internationalization of finance (“finance above all must be national” he’d said), on the grounds that such internationalization undermined the capacity of the nation-State to raise employment by making it a prisoner of finance which was always opposed to larger government expenditure for this purpose. As a defender of the capitalist system, Keynes had feared that unless the nation-State could raise employment sufficiently, capitalism could not survive the socialist threat.

   But with massive accumulations of finance with metropolitan banks, because of continuously large US current account deficits on the balance of payments during this period, and  also, at a later date, because of large deposits of revenues earned from the oil price hikes of the 1970s by the OPEC producers, there was enormous pressure from finance capital for a lifting of capital controls. It wanted the whole globe to be opened up for finance to move around at will, and ultimately succeeded. The hegemony of international finance capital thus got established, which also meant a withdrawal of the nation-State from its role of keeping up the level of employment through fiscal intervention. The only way of boosting aggregate demand under the regime of neoliberal capitalism that came into existence therefore was through stimulating asset-price “bubbles”; interest rate policy was used for this purpose.

    But unlike government expenditure which can be regulated at will, a “bubble” cannot be made to appear at will. For a while, in the ‘90s (the “dot-com bubble” in US) and the early years of this century (the “housing bubble” in the US), this way of stimulating aggregate demand appeared to work. But the collapse of the housing “bubble” has made people chary and no new “bubble” of a similar magnitude has appeared, despite interest rates being driven down to zero.

    Meanwhile there is another factor working powerfully in the direction of reducing aggregate demand within every country and in the world as a whole; and this is the rise in the share of surplus in total output. Globalization has meant above all the free movement of capital, including finance, across borders, and this has resulted in the relocation of a number of activities from the high-wage metropolis to the low-wage third world countries for meeting global demand. By making advanced country workers subject to competition from third world workers this has tended to keep down the wages of the former. At the same time, the wages of the latter continue to remain at a bare subsistence level, because the third world labour reserves do not get exhausted despite such relocation. The vector of wage rates across the world therefore does not increase, even as the vector of labour productivities across the world increases. This is the reason for the rise in the share of surplus within countries and in the world as a whole.

    Such a rise in the share of surplus creates a tendency towards overproduction, because consumption per unit of income is much higher among the wage earners than among the surplus earners. This tendency could have been offset through an increase in govt expenditure within each country. But since this is no longer possible, the only counteracting tendency that is possible against this tendency towards over-production is the formation of asset-price bubbles. In the absence of such bubbles, the tendency towards overproduction operates with full force, which is what we are seeing today.

    Since the conventional instrument of lowering interest rates does not work in such a situation, and since government expenditure cannot be increased to offset the deficiency of aggregate demand, the US under Donald Trump has been attempting to overcome its own crisis by exporting it to other countries, especially China, through the adoption of protectionist measures. Over a whole range of imports from China it has imposed 25% tariffs and this in turn has led to a tit-for-tat retaliation by China through the imposition of 25% tariff on a range of imports from the US.

    This trade war, which was started by the US as a way of getting out of the crisis, is now accentuating the crisis for the global economy, because it undermines whatever little incentive to invest there was among the capitalists of the world. Far from stimulating a new asset-price bubble, which was the original intention behind lowering interest rates, it has the effect of causing a collapse in sock markets across the world. Wall Street for instance witnessed the biggest fall of the year on August 14; and in response markets all over the world also registered falls.

    If govt expenditures could be increased within each country then the need for such “beggar-thy-neighbour” policies would not arise. Even if some protectionism is resorted to for ensuring that the demand increase caused by govt expenditure does not “leak out” abroad, this need not lead to any reduction in imports from other countries since the market itself would be increasing. But in the absence of increased govt expenditure which international finance capital is opposed to (because of which most countries have enacted laws restricting fiscal deficit size), beggar-thy-neighbour policies remain one of the few possible options for a country to follow; this however worsens the crisis for all.

This is precisely the hallmark of a systemic crisis. As long as the hegemony of international finance capital continues, and countries remain caught in the vortex of global financial flows, not only will the crisis continue, but every effort to overcome the crisis through whatever means are available within the system, will only aggravate the crisis. Overcoming the hegemony of international finance capital requires, however, that within each country the working people are mobilized around an alternative agenda.

(article originally published in People’s Democracy, Aug 25, 2019)


B4. 4 Readings of Article 4 of the Constitution – Sugath Kulatunga

Sovereignty of the People is the bedrock of the Sri Lanka Republican constitution. As signified in the entrenched Article 3 of the Constitution, Sovereignty is in the people and is inalienable. Sovereignty includes the powers of government, fundamental rights and franchise.

            Article 4 describes the manner how the Sovereignty is exercised:

(a) The legislative power of the People shall be exercised by Parliament, consisting of elected representatives of the People and by the People at a Referendum;

(b) The executive power of the People including the defense of Sri Lanka shall be exercised by the President of the Republic elected by the People.

At the time the 1978 Constitution was debated in the Parliament, in the Committee Stage Section 4 had been removed from the list of entrenched sections under Section 83. In common with most Committee Stage Amendments which are smuggled and rushed though the House, Section 4 continues to be interpreted differently by the Supreme Court. This has led to serious controversy in new legislation as in the 19th Amendment to the Constitution and the Bill on the 20th Amendment. It also raises the question whether a determination by a 9-judge bench can be overruled by a bench with a lesser number of judges.

1)  In 1987 in the well-known case on the 13th Amendment, (SC 7/87 (Spl) TO SC 48/87 OCT 1987) SC headed by Chief Justice Sharvananda  5 judges of a 9-judge bench held  (in obiter Dicta?): “Article 4(a) can be amended to provide for another legislative body consisting of elected representatives, so long as such amendment does not affect Articles 2 and 3.” The majority determination added that it is always open to change the agency or instrument by amending Article 4, provided such amendment has no prejudicial impact on the sovereignty of the People.” 4 judges disagreed

2) Oct 03, 2002. In SLR-2002 Vol.3-P85 A 9-Judge Bench decided that Article 4 cannot be separated from the entrenched Article 3. Their conclusion was as follows:
“(i) The powers of government are included in the sovereignty of the People as proclaimed in Article 3 of the Constitution.
(ii) These powers of government continue to be reposed in the People and they are separated and attributed to the 3 organs of government the Executive, the Legislature and the Judiciary, being the custodians who exercise such powers in trust for the People.
(iii) The powers attributed to the respective organs of govt include powers that operate as checks in relation to other organs that have been put in place to maintain and sustain the balance of power that has been struck in the Constitution, which power should be exercised only in trust for the People.
(iv) The exercise of the sovereignty of the People can only be perceived in the context of the separation of powers as contained in Article 4 and other connected provisions of the Constitution, by the respective organs of government.
(v) The transfer of a power which is attributed by the Constitution to one organ of government to another or the relinquishment or removal of such power, would be an alienation of sovereignty inconsistent with Article 3 read with Article 4 of the Constitution.”

3) In spite of the 2002 9-Judge Bench determination, in April 2015, a 3-member Bench of the Supreme Court headed by Chief Justice Sripavan unanimously held that Parliament could, without the approval of the people at a referendum:

– Reduce the term of office of the President elected by the People from 6 years to 5 years; prohibit a President from seeking election by the People for a third term; remove the legal immunity enjoyed by the President.

– But they allowed the restriction of the powers of the President to dissolve the Parliament. (vide Article 17 (i).

4) In Oct 2018, a 3-judge Bench of the Supreme Court in the case of the Bill on 20th Amendment held that amendments to Article 4 were required to be passed not only by a two-third majority in Parliament, but also with the approval of the people at a referendum.

They held that if a Bill violates executive power of the People [Article 4(b) of the Constitution] and franchise of the people that would be exercised at a Presidential Election, a Parliamentary and a Referendum, it would violate the Sovereignty of the People and thereby would violate Article 3 of the Constitution.

They also held that Clauses in the Bill relating to the removal or reduction of the executive power of the People which would be exercised by the President of the Republic would directly violate Article 3 of the Constitution and that therefore they should be approved by the People at a Referendum. A lucid statement on the issue was made by the eminent Justice Wanasunderain his dissenting address in the case on the 13th Amendment:

“Article 3 declares that the Sovereignty of Sri Lanka is in the People and is inalienable and that this Sovereignty includes the powers of government, fundamental rights and the franchise. Article 4, although not mentioned specifically in Article 83, is consequential to and an elaboration of article 3 and spells out the concept of Sovereignty of the People and how it should be exercised. There is in Article 4 the laying down of the structure of Government in the form of the three great departments of Government, namely, the Legislature, the Executive, and the Judiciary. Article 4 spells out also the earlier reference in Article 3 both to fundamental rights and the franchise.”

     As an individual I hate to surrender my right of franchise to vote in an election of a President to an erratic Legislature which is in the habit of approving controversial legislation at Committee Stage of Sessions of Parliament. It is hoped that the President requests the Supreme Court under Section 129(1) of the Constitution to make a final determination on this issue, preventing future confusion.


C. News Index______________________________________________

C1. Sovereignty (ee is pro-politics, pro-politician, pro-nation-state, anti-corporatist, anti-expert, anti-NGO)

ee Sovereignty news emphasizes sovereignty as economic sovereignty – a strong nation is built on modern industrialization fueled by a producer culture.

• Wimal: What did those mystery boxes contain? Dispute over US refusal to allow scanning of ‘cargo’ at Hilton Colombo

• 6 US persons refuse their bags checked in SL: Wimal

• US Embassy responds to Wimal’s allegations

“We are aware of a misunderstanding that took place at the JAIC Hilton over a month ago”

• Civil society warns of ‘thunderstorm’ …in the wake of Shavendra’s appointment:

“Earlier phases of the war cannot be inquired into without examining India’s role in the destabilization of Sri Lanka in the early ‘80s. India undermined SL’s security to such an extent then President JR Jayewardene was forced to accept the deployment of the Indian Army in the Northern and Eastern Provinces. India quit SL, in March 1990, having caused massive destruction.”

• India’s leading travel writers & social media influencers on Lanka’s legendary Ramayana Trail

• Is Ladakh Part of Pro-US Buddhist Ring Encircling China?

One complicating factor is the divergent foreign policy preferences of the President, a votary of China’s Belt & Road initiative, and PM Ranil Wickremesinghe who has exerted every muscle to sign the Status of Forces Agreement which would give the US Military a free run of an island… The PM is keen that SOFA is signed before the Island’s general elections next year.

• Maximum powers to Provincial Councils: Sajith

“Political leaders spoke in foreign countries that they would grant 13 plus while they uttered about 13 minuses in Sri Lanka.”

• FBI report submitted to CID

FBI had supported in retrieving vital data from the telephones used by Easter bombers… that Sri Lanka did not have advanced technology to recover such data.

• Govt in fresh bid to get MCC grant approved before Sept17 review

• MCC Projects in Sri Lanka

“It is intriguing to note that Jenner Edelman, Resident Country Director of MCC Projects in Sri Lanka, is keeping her fingers crossed on MCC projects…”

• MCC, Land Reforms & You

“The entire landscape of rural Sri Lanka will change drastically. There will be no ‘Gam Medda’ – not even a ‘Gam Vatiya’ left!”

• “If the MCC compact is really advantageous to SL as the govt claims, then it should be made open to proper public & parliamentary scrutiny. The manner in which the govt sought to ink it aroused suspicion… among the reasons the US has given for helping develop Sri Lanka’s public transport sector is sexual harassment female commuters undergo.”

• Pathfinder Foundation urges rational look at MCC Compact

• Statement by US Chamber of Commerce on MCC

• Millions of rupees spent to draft new constitution is in vain: Prez

A new constitution is essential for the country. Commenting on the 19th Amendment to the constitution, he said it only created 3 powerful posts in the country… the presidential powers were curtailed and vested with the Prime Minister and the Speaker. He said the Speaker had control over the independent commissions today.

• Ray of hope falls on Sri Lanka for US$480mn MCC grant

Millennium Challenge Corporation (MCC) directors may determine next month to extend the US$480 million grant term if Cabinet approval is further delayed.

• MCC grant must not become a lost opportunity – National Peace Council’s Jehan Perera

• Shame of migration to Australia

“It was toe-curling to see Rear Admiral Attygalle standing besides the Australians. He was exposed for failure to tackle the problem and allowing the officers of another country to come here.”

• “Negotiating access to land in eastern Sri Lanka”

• UNP crisis deepens; SLFP, SLPP wrap up new SLPEP Alliance

The week saw another move made… to convey a message to Colombo’s diplomatic community whilst avoiding possible accusations of breaching protocol. The idea was to allow Wickremesinghe to possibly promote his preferred presidential candidate, if he does not contest — Speaker Karu Jayasuriya. He was to be “launched as the presidential candidate”. Minister Ravi Karunanayake and his wife sent out printed invitations to envoys in Colombo for an “informal” dinner. Dress was “casual”.

• PM urges protection of undersea cables, says current laws inadequate

• Nothing sweeter than freedom – Ho Chi Minh

• The Fog of Intervention – Samantha Power did not set out to justify war

‘Power has dedicated her life to promoting humanitarian intervention – the idea that the US, as the world’s “indispensable nation has the moral duty to use its awesome military capabilities to prevent or halt atrocities.”

• Examining 9/11 & America’s “War on Terrorism”


C2. Security (the state beyond ‘a pair of handcuffs’, monopolies of violence)

ee Security section focuses on the state (a pair of handcuffs, which sposedly has the monopoly of violence), and how the ‘national security’ doctrine is undermined by private interests, with no interest in divulging or fighting the real enemy, whose chief aim is to prevent an industrial renaissance.

• Restrictions imposed on protests in & around Hulftsdrop

• JVP says cops have got wrong idea about ICCPR, urges PM to take remedial action

• 500,000 Lankans without IDs

• Intelligence outfits warned Defence Secy, IGP of terror attacks 97 times – Counsel

• Assets exceeding Rs6bn, Rs134mn in 100 bank accounts of suspects: Police

• 42 countries including the US, Canada, & several countries of the EU did not attend the Defence Seminar 2019, as opposed to 87 countries in 2018. Military Spokesman Brigadier Sumith Atapattu said there was no connection between the appointment of the new Army Commander and the countries not attending the seminar.

• Military minds discuss security threats, response strategies

800 local & worldwide defence partners, strategists, policymakers, security experts & analysts, collectively evaluated fast-changing global security concerns at the 2-day conference

• Harm that good strongmen can do

Modi by his moves on Kashmir has demonstrated a military coup, political or diplomatic conspiracy is not needed to act in a dictatorial manner. A sweeping parliamentary majority is sufficient…

• EU, SL agree to strengthen cooperation & dialogue on counter-terrorism

The 4th meeting of the Working Group on Governance, Rule of Law & Human Rights under the European Union-Sri Lanka Joint Commission in Colombo. SL delegation was led by Dhammika Semasinghe, Director-General for EU & Commonwealth Division of the SL Ministry of Foreign Affairs. The delegation of the E U was led by Caroline Vinot, Head of Division for Regional Affairs and South Asia of the European External Action Service.

• SL, Philippine to develop bilateral military training, diplomacy against insurgencies

• Colombo, Canberra join forces to curb human smuggling operations

The Australian Delegation, which also included High Commissioner of Australia to SL, David Holly, Australia’s Ambassador for People Smuggling & Human Trafficking, Bryce Hutchesson and Manager, National Response Operations of the Australian Federal Police Commander, Jason Williams, thanked the Govt of Sri Lanka for its continued cooperation to counter illegal migration.

Director General, East Asia, South East Asia & Oceania, Damayanthie Rajapakse, Director General, International Security and Counter Terrorism, Himalee Arunatilaka, Acting Director General, Public Diplomacy, Ruwanthi Delpitiya, Assistant Legal Advisor, Sanjika Kammanankada and relevant officials of the Ministry of Foreign Affairs were associated with the Foreign Secretary during the talks.

• China’s growing presence in Indian ocean a source of concern for India – Ranil

• PM Boris Johnson on a ‘do or die’ mode – Britain in political turmoil

“Details of Operation Yellow Hammer have been gradually appearing in the public domain. It is a contingency plan being developed by the Treasury for cross-govt civil contingency planning in the event of a ‘No-deal Brexit.’ It covers a base case scenario of Food, Medicine & Fuel shortages. Worst-case scenario planning is also believed to include responding to food riots, among other things.

• Epstein’s Death & the Investigation of Powerful Networks

“A number of royal palaces and grand residences of former presidents and prime ministers where the inhabitants have a little bit more spring in their step following the death”

• Canadian Liberals use RCMP in attempt to silence critics of their foreign policy


C3. Economists (Study the Economists before you study the Economics)

ee Economists shows how paid capitalist/academic ‘professionals’ confuse (misdefinitions, etc) and divert (with false indices, etc) from the steps needed to achieve an industrial country.

• Who is the best presidential candidate for the economy?

Gotabaya Rajapaksa is the best candidate for the economy… Countries at our level of economic development need a govt that is capable, competent and forceful enough to act as the catalyst of economic development. It has been empirically proven that the economic success of East & South-East Asian countries such as S Korea, Taiwan, Singapore, Malaysia, post-reform China.

• Politics of Surrender – Kadirigamar

Politics today is one of tremendous ideological confrontation. IMF and WB were forced to concede on failures of their market oriented policies…

• Economic policies must address external sector risks facing the economy –  Samarakoon

Many of the export-oriented Asian economies saw their exports grow at much higher rates than what was recorded by Sri Lanka during recent years… Foreign direct investments must increase substantially to meet investment requirements for growth

• Declining trade deficit could improve external finances – Sanderatne

The trade deficit that has widened in recent years owing to the growth in imports being higher than the growth in exports has been reversed in the first half of this year.

• A different airport – Abeyratne

The driving forces of the demand for duty-free household appliances are all related ultimately to either a poor economy or poor management of economic affairs. Until and unless there is a major breakthrough in the country’s development drive, the current state-of-affairs is likely to continue.

• Infrastructure alone won’t lead to economic development – Abeyratne

“If we like to see other locations of Sri Lanka such as Hambantota and Trincomalee grow, there should be connectivity – not just infrastructure”

• Pakistan to Accept $6Bn Bailout from IMF

• The Systemic Crisis of World Capitalism – Prabhat Patnaik

• A Revolutionary from the OECD – the Castoriadis/Poulantzas debate

In 1977, an intense debate raged in the Greek press between Nicos Poulantzas and Cornelius Castoriadis, sparked by Poulantzas in an article that questioned Castoriadis political commitment to ending the dictatorship in Greece, and his position as a high-level economist for the OECD.


• Milinda reminds7 cold economic truths as politicians go into overdrive with promises

90% of Government revenues are required to be spent on servicing the National Debt.

• The Govt is also unmistakably on the path of bringing in the desired structural change in our economy from an import-dependent one to an export-oriented one. Goodwill among the global leaders had been restored and with that came a gradual removal of barriers to our exports like GSP Plus and fish exports. Our tourism and economy began looking up despite the debt backlog. Tourism boomed until the Easter attack.


C4. Economy (usually reported in monetary terms)

ee Economy section shows how the economy is usually measured by false indices like GDP, etc, and in monetary terms, confusing money and capital, while calling for privatization and deregulation, etc.  

Description of the JVP Ideologically. Is it for a Centralized Economy Domestically & Free Trade Internationally?: “Considering the geographical positioning and natural resources, a country formulates its economic policy on these factors. No country in the world has either completely shut down or open its market. The decision on opening or closing markets is based on the nature of the country’s production levels. Our policies will be based on these fundamentals and we will present an economic policy that would be unique to the country.”

• Treasury playing double game

With elections round the corner, the Finance Ministry wants to play Santa Claus. The Treasury’s latest proposal is to provide duty-free cars to senior public servants on retirement.

• Govt will present VoA: Govt

Prime Minister yesterday confirmed to Parliament the Government will not follow the traditional Budget program but will present a Vote on Account (VoA) that will cover expenses in 2020.

• Govt at last gets Customs to review its FTA with Singapore

The Customs Media Spokesman stressed that the department was keen to send back the 260-odd containers with hazardous waste to the country of origin.

• SL-Singapore Business Council leads delegation of 26 companies to Singapore


C5. Workers (Inadequate Stats, Wasteful Transport, Unmodern Plantations, Services)

ee Workers attempts to correct the massive gaps and disinformation about workers, urban and rural and their representatives (trade unions, etc), and to highlight the need for organized worker power

• Tampering with People’s Bank Act amounts to ‘allowing the camel’s nose into the tent’ – CBEU

“At this critical juncture, all responsible citizens and institutions need to understand this privatization threat and come together to prevent the damage that could lead to interested parties owning 10% of the People’s Bank at the outset and subsequently buying larger equity by and by and start running the bank like a corporate bank with no heart or feelings for the rural and suburban people in Sri Lanka”

• CBEU expresses deep concern, warns of trade union action

The CBEU said that the new Bill proposed to do away with the provision that enabled the Monetary Board of the Central Bank to issue debentures and the abolition of government guarantee for debenture issues and the removal of the powers of the Finance Minister in deciding the nature of debentures were all matters for concern…

• Mahinda asks Speaker not to take up People’s Bank bill this week

Moving the Bill, State Minister of Finance Eran Wickramaratne assured that the Bill was not an attempt to privatize the People’s Bank, which had assets worth Rs1.75 trillion, 7,900 employees in 737 branches serving over 10 million customers, enabling the government to collect Rs140 million as dividends during the last 10 years.

• People’s Bank privatization rumour: baseless & politically motivated – Finance Ministry

•  17 trade unions launch sick leave campaign

Members of the Joint Committee of Govt Executive Officers have gone on sick leave to highlight several demands including a resolution to the issue of salary anomalies…

• New study shows 2.5 million Sri Lankans vulnerable to poverty

• New poverty measurements after change in country income status

The Ministry of Economic Reforms & Public Distribution – through the Dept of Census & Statistics – is working with UNICEF along with the Centre for Poverty Analysis and Oxford Policy & Human Development Initiative to develop an appropriate method of measuring multidimensional child poverty… more boys are leaving education than girls. According to data, 57% of new entrants to universities are women.

• How the poor pay for the national debt & for corruption?

One of the most frequent practices in the public hospitals now is, patients have to pay for everything. e.g., a patient undergoing an operation has to buy everything from outside shops, even the plaster that is used to cover the wound caused by the operation. This explains to the extent to which public health system has become privatized to the great disadvantage of the poorest section of SL society.

• Crisis at Osu-sala shops

19 out of the 37 outlets have incurred a loss of Rs41.29mn, a govt audit inspection revealed… SL’s pharmaceutical market is estimated at Rs80bn with 50% coming from private sector imports, 10% from domestic manufacturers & state pharmaceutical chains, and the rest accounted for by sales to state hospitals.

• International Workers’ Meeting in Solidarity with Venezuela

900 delegates participating came from 25 countries in Europe, Africa, Latin America and Caribbean.

• Portuguese socialist party polls at 44% after bringing the economy back from the dead

• Off the beaten track but you can’t rule it out, Hong Kong: Is this the future?

A majority of Chinese people are furious with Hong Kong and want the Central Govt to act to end the “riots”; support for the CPC among the people is overwhelming on this issue.

• Theodor W Adorno – Aspects of Contemporary Right-wing Radicalism


C6. Agriculture (Robbery of rural home market; Machines, if used, mainly imported)

ee Agriculture emphasizes the failure to industrialize on an agriculture that keeps the cultivator impoverished under moneylender and merchant, and the need to protect the rural home market. Also, importation of agricultural machinery, lack of rural monetization and commercialization, etc.

• PCoI queries how big farms crept into subsidized scheme meant to uplift small dairy farmers

• Sinha-Le asks govt to launch special probe into rotgut menace

“One facet of the illicit liquor business came to light following the recent tragic deaths of 15 persons in Meerigama. It is just the tip of the iceberg…” recently Businesman Harry J also complained


C7. Industry (false definitions, anti-industrial sermons, rentier/entrepreneur, etc)

ee Industry section notes the ignorance about industrialization, the buying of foreign machinery, the need to make machines that make machines, build a producer culture. False definitions of industry, entrepreneur, etc, abound.

• Making a buzz with science

Buried in the dim mists of time are the foundations on which Sri Lanka has built up its science programs, beginning in 1944 with the birth of the Ceylon Association of Science, which had been mooted by the Chemical Society which many believe is the “oldest” science society in SL.

• ‘Big saving for country from latest South African coal shipment’ – Ravi


C8. Finance (Making money from money, banks, lack of investment in modernity)

ee Finance tracks the effects of financialization, pointing to the curious role of ratings agencies, again false indices, etc.

• Sri Lanka prints Rs2.2bn 10-month money below overnight policy rate

POLICY REVERSAL: The central bank halted regularly draining liquidity to keep overnight rates above the policy floor rate on July 17. From Aug 7, money was actively printed to boost excess money in the banking system.

• Rupee falls to its lowest in 7 months as foreign funds flow out of govt securities


• Rupee weakens amid fund outflows; stocks edge up

The rupee closed weaker on Tues, hovering near a 7-month closing low hit last week, as continued foreign fund outflows from govt securities after a surprise rate cut last month weighed on the currency.

• Sri Lanka bank profitability under pressure: Moody’s

• State funds to buy SL Telecom stocks for minimum public float

Sri Lanka’s cabinet has cleared the way for state-run funds and banks to buy Sri Lanka Telecom stock to meet a public float requirement, the state information office said.


C9. Business  (Rentierism: money via imports, real-estate, tourism, insurance, fear, privatization)

ee Business aka ee Rentier focuses on diversions of the oligarchy, making money from unproductive land selling, tourism, insurance, advertising, etc. – the charade of press releases disguised as ‘news’

• Questionable deals & lame excuses

The Dept of Motor Traffic has arbitrarily extended a contract secured by a private company for printing smart driving licences – a staggering loss of Rs4bn to the state coffers… Out of Rs1,700 an applicant pays for a licence to the DMT, Rs1,340 goes to the private company.

• Land Price Index for Colombo District, compiled by the Central Bank of SL

• Industry experts call for shift in policy focus at future of condominium living seminar

Land scarcity, increasing land prices, and high population density are all decisive factors arguing for condominiums as the solution to Colombo’s growing housing problem… young professionals are greater incentivized to invest first in their own mode of transport than a roof above their heads… The society-urban ills that follow include hours – that accumulate into nearly a decade of your life – spent in traffic, parking spaces taking up nearly 40% of both residential or commercial developments, and children residing in these land-intensive places left with no space to play.


C10. Politics (Anti-parliament discourse, unelected constitution)

ee Politics points to the constant media diversions and the mercantile and financial forces behind the political actors, of policy taken over by private interests minus public oversight.

• President Sirisena thrashing around looking for survival strategies.

“What will he do once he gets the Supreme Court opinion on the holding of PC elections? What is the opinion that the SC is likely to give? Will the SLPP-SLFP coalition talks bear fruit or fail? Will Sajith succeed in getting the UNP’s presidential candidacy and will Sirisena opt to join him instead of the SLPP? Will Sajith break away from the UNP and contest on his own with Sirisena’s help? Will Sirisena ask for another opinion from the Supreme Court as to whether his term ends on the 9 Jan 2020 or on the 5th anniversary of the signing of the 19th Amendment, which would extend his tenure in office till 15 May 2020? Whichever way we look at it, President Sirisena is at the centre of everything. Certainly, a fire burns brighter before it goes out.”

• 19A: Half a Prez & half a PM: 4 decades of constitutional folly & failure

The idea was to prevent the President from arbitrarily dissolving Parliament, but they have ended up making it virtually impossible for the Parliamentary govt or even Parliament to recommend dissolution of itself. We are sitting on a ticking Constitutional time bomb…

• Ministers play truant again: All 15 queries go unanswered

• Black Day in Parliament: Bimal

The absence of all ministers from whom oral questions were raised during today’s session

• Parliament sessions suspended

The parliament session was suspended due to a tense situation during the vote on the regulations imposed under the Sri Lanka Export Development Act.

• SLFP Celebrates 68th Anniversary

Sri Nissanka and Bandaranaike started a discussion at the ‘Yamuna’ residence at Kirillapone to build the SLFP on the theme of social democracy. The end result was the formation of the SLFP in 1951.

• Presidential Elections & the Peoples’ Options

Despite many official Commissions appointed and their findings, the public still has questions in regard to his conduct in relation to what is commonly referred to as the “Bond Scam”. Ranil has not explained to the country his dealings with Arjuna Mahendran or with Minister Ravi Karunanayake…

• Resolution passed to remove Ranil from Kelaniya Temple Dayaka Sabha

• Opinion: the Relevance of Ranil Wickremesinghe

“Ranil stands for democracy, peace, inclusiveness, an open economy, globalism, a free press, minority rights.”

The CCF, instead of doing its duty by restricting itself to disbursing funds to the DG/A for archaeological works, continues to use its considerable payroll to engage the required staff, and takes in hand the very works that constitute the DG/A’s legitimate duties. The DG/A who has relieved himself of field responsibilities in the century-old large main work stations of Anuradhapura, Polonnaruva & Sigiriya (with the exception of guarding the fresco pocket), has thus effectively abdicated his duties in these archaeological reserves. He enjoys a much reduced workload but is paid his usual salary.

• Parliament & President – Sam Wijesinha Oration delivered by Dr Sarath Amunugama

“No Constitution can succeed unless the Executive, Legislature and Judiciary seek to abide by it and not find ways and means of subverting it. In this sense our Judiciary has set an example. Even if the President has diminished powers in the future a person who has earned the respect of the country could use his moral authority to safeguard the Constitution and achieve its ideals…”

• The looming Rajapaksa vs Premadasa contest

“In any event, national security does not mean that military officials should become commanders in chief. That would be like making security guards school principals because there have been recurrent break-ins and burglaries in schools.”

• Killer Clowns

Why are so many nations now led by extravagant buffoons? Because the nature of capitalism has changed.


C11. Media (Mis/Coverage of economics, technology, science and art)

ee Media shows how corporate media monopoly determines what is news, art, culture, etc. The media is part of the public relations (corporate propaganda) industry. The failure to highlight our priorities, the need to read between the lines. To set new perspectives and priorities.

The sun will be directly over the latitudes of Sri Lanka till Sept 7. The nearest towns of Sri Lanka over which the sun is overhead today (01) are Ottapanai, Kohombagaswewa, Daladagama, Talakiriyagama, Yakkure, Mahaulpota and Kilanguppalai about 12.11 noon.

•  Rhythms of Sri Lankan Drums & Folk Songs


D. History in the World______________________________________________

By 1900: While the main battles in the world were against Black workers, the division of the loot among the robbers led battles between settlers to 2 huge wars, and several covert wars in the 19th, 20th and 21st centuries (as well as the development of ‘globalizing’ institutions like the UN, World Bank, IMF & WTO to mediate the loot division).

•1650-1900, whereas Europe’s population went from 103 to 423 million, and Asia’s 257-857 mn, Africa’s population went from 100mn to a mere 120mn in 350 years. From the slave trade and world looting arose great European and English banks and corporations of Barclays, Barings, Lloyds, Unilever (which run Lanka) etc.

• The 20thC would be the most murderous on record, both by scale, frequency and length of warfare, with unparalleled catastrophe: the greatest famines to systematic genocide. More people were killed or allowed to die by human decision than ever before. Wars were increasingly waged not against other armed men but against economies & infrastructures of states plus their civilian populations.

• Yet, the inexorable shift began back to the centre of the world where most people of the world live from a dominant Europe, despite the rise and decline of the USA. Technological progress had accelerated since industrial revolution, as did the European economies, with an increasing international division of labor with increasing networks of flows and exchanges, yet it then fell into decline after 1914 and crashed in 1929-33, yet growing, though at half the rate of the previous quarter century. Dramatic recession of the North American industrial economy then spread to industrial Germany. 1931: England abandoned free trade (from 1840s!). US, England, Canada, Scandinavians also abandoned gold standard then.

• By 1900, >1,100 of 1,328 schools in Ceylon were run by Christian missionary organizations.

Futures market for rice trade in Rangoon.

Guthrie & Co agencies included 6 banks, 5 insurance companies, 2 shipping companies and 23 new ‘general’ agencies. These concerned tin mines, gold mines, tobacco estates, sugar, flour cement, tea and coffee machinery, whiskies, beers, wines and spirits, Jeyes’ Fluid and Lipton’s Tea. They would also invest in manufacture of tramways, motorcycles and motorcars (but not in Asia!) ! By E20thC, Guthrie & Co was agent for new rubber plantation companies with estates in Malaya, Borneo, Sumatra.

• There were 9 foreign banks with 45 branches in China’s treaty ports.

• China was largest importer of cotton yarn and second largest importer of cotton cloth in the world.

• Khuzestan, Bushehr and many other cities in south Iran (Persia) were occupied by England, with central government in Tehran was controlled by the Anglo consulate.

90% of Africa seized, the entire world divided up; inevitably ushered in monopoly control of colonies (concentration of production given rise to monopolies).

• In the settler colonies, the indigenous economy was denuded of both land & labor. By 1900, French settlers in Algeria owned 40% of the most fertile cultivated land. By 1956, ~90% of South Africa’s land, ~50% of Swaziland & Rhodesia (Zimbabwe) was owned by white settlers. In nonsettler Africa, Europeans owned less than 5% of the land.

• French colons in Algeria feared hiring Arabs as farm workers until ~1900.

• Population of ‘Indian Territory’ in US ~400,000, but 6 times as many whites. 1901 Act forced all 1st peoples of Territory to become US citizens (1907, ‘Indian Territory’ added to Oklahoma & ceased to officially exist).

• Labor in the US empire was divided into 3 separate nationally distinct boxes: 1) labor aristocracy of ‘native-born’ Euro-Amerikan workers in better-paid craft trades & restrictive AFL Unions; 2) new poorly paid proletarian stratum recruited from East & South Europe comprising 50-75% of N US industrial workforce; and 3) the bottom, of everybody else, a colonial proletariat of Afrikan, Mexicano, Amerindian and Asian workers, earning one half the white man’s pay. By 1900 the US empire claimed Hawai’i, Cuba, Puerto Rico, Philippines.

• Afrikans in US were to be removed from industry, particularly mechanical trades, and forced back into agriculture: to the South, where cotton still king, as top US export (25%). Over 50% of Afrikan workers labored in fields; over 40% in domestic labor: cooking, raising the children of upper half of the settler society.

• In southwest, Native Amerindian labor predominated in the fields, mines and ranches, with Mexicans brought back to their national lands as immigrant contract labor. Chinese labor had been forced into the ghetto economies of laundries and food service. Newer Asian workers from Japan, the Philippines & Korea were to toil on the railroads, canneries and the fields.

Barings again returned to major issuing, concentrating on securities in the US and Argentina. (1994: Barings crashed. 1995: Dutch ING purchased Barings Bank. 2001: ING sold ING Barings’ US-based operations to ABN Amro for $275mn, keeping Baring Asset Management (BAM). 2005: BAM sold to MassMutual & Northern Trust.)

• Attitudes of US judges toward corporations remained consistent until L1870s, with early wariness toward corporate power. By 1900, a new generation of judges embraced the corporation as the engine of US economic progress. A series of cases had given corporations the right to challenge state legislation under the 14th Amendment and federal legislation under the 5th Amendment. Under the old charter system, a US corporation was not allowed to own stock in another, which ruled out hostile takeovers, as well as spinoffs from one corporation to another. By 1900, all these restrictions had vanished. By 1902, anyone in the US could receive a corporate charter by merely filing some papers with the state. The removal of restrictive clauses and new rules permitting holding companies heralded two types of corporations not permitted under the classic corporation system: 1) The conglomerate, a holding company that owned a diversity of companies. 2) The vertically integrated company, which attempted to control the entire process from production through distribution and retail. The end of the charter system also marked arrival of the doctrine of limited liability, which ended any legal incentive for corporate shareholder responsibility to their investments.

Lenin: Monopolist capitalist associations, cartels, syndicates and trusts first divided the home market among themselves, obtaining more or less complete possession of their own country’s industry. Yet under capitalism the home market is inevitably bound up with the foreign market, for capitalism long ago created a world market. As the export of capital increased, and as the foreign and colonial connections and “spheres of influence” of the big monopolist associations expanded in all ways, things “naturally” gravitated towards an international agreement among these associations, and towards the formation of international cartels.

• There were 7 or 8 “groups” in the German electrical industry before 1900. During the 1900 crisis, the banks, fairly well merged with industry, enormously accelerated and intensified the ruin of relatively small firms and their absorption by the large ones. They refused to help firms in greatest need of capital, bringing on a frenzied boom and then the hopeless failure of those companies not closely connected with them. After 1900, concentration in Germany progressed with giant strides. Each group consisted of several companies (altogether 28), each backed by from 2 to 11 banks. Between 1908-12, all 8 groups merged into two, or one. • By 1904 the amount of capital invested abroad by the German electrical industry was estimated at 233 million marks. Of this sum, 62 million were invested in Russia.

• AEG (General Electric Co) controlled 175-200 companies (thru the “holding” system), with a total capital of ~1,500 million marks, with 34 direct agencies (12 were joint-stock companies) in more than 10 countries. AEG was a huge “combine”, with 16 manufacturing companies producing diverse articles, from cables and insulators to motorcars and flying machines.

• The capitalists divided the world, “not out of any particular malice, but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits”. They divide it “in proportion to capital”, “in proportion to strength”, because there could be no other method of division under commodity production and capitalism. Yet strength varied “with the degree of economic and political development”.

• Lenin: “The epoch of the latest stage of capitalism shows us” certain relations between capitalist associations grow up, based on the economic division of the world; while parallel to and in connection with it, certain relations grow up between political alliances, between states, on the basis of the territorial division of the world, of the struggle for colonies, of the “struggle for spheres of influence”.


Lenin dates modern imperialism – the latest stage capitalism had reached – at 1900 (noting of course that all boundaries in nature & in politics are arbitrary and re-divisible!). This modern imperialism was quite different from the old ‘classical’ imperialism of the Romans, etc. Roman imperialism was based on small peasant and artisan production as well as commercial capital. Modern imperialism was based on machine production and monopoly capital. The difference was enormous:

Modern Imperialism is best seen through the role of the banks in the rise of finance capital. Originally an intermediary in the making of payments, banks grew into all-powerful monopolists controlling all the money capital of all the capitalists and small businesses, as well as most of the means of production, and the sources of raw materials in one or several countries.

• The banks were represented by their directors on the boards of all major industrial & commercial enterprises. Banks’ boards of directors were also reserved for ‘high-sounding names’ and ex-civil servants who knew how to control the state. Through their banking connections, they ascertained the standings of various capitalists, then controlled those capitalists by helping or preventing credit; then completely determined their fate, either ruining or massively investing in them.

• Industrialists used banks, and banks became investors in industrial capital. Thus ‘finance capital’ was born, capital controlled by banks and used by industry. The so-called selling of small shares signalled ‘democracy’ to social-democrats, but Lenin showed, how with small amounts of capital and through ownership of parent company and subsidiaries, it became possible for a bank to control a large company by acquiring 40% (now 25%) of its shares.

• The participation of small investors, billed as ‘democratization’ of the capitalist system under finance capitalism, was a way to buy off the upper section of working classes toindulge in the profits of slavery and imperialism, thus putting off the revolution inevitable in capitalist countries. Financial king Siemens told the Reichstag in 1900: “The one-pound share is the basis of English imperialism.” The stock market became a casino, either to reward collaborators in the system, or rob them if they became too troublesome.

• This rapid transformation of banks from small intermediaries into a handful of monopolists was one of the main causes of imperialism. The beginning of the 20thC marked the turning point from the old capitalism to the new, from the domination of capitalism in general, to the domination of finance capital, which now controlled governments and information.

• The export of capital and not just commodities, became extremely important. A few 100 white men in 4 countries, owned 80% of the world’s finance capital, while Germany was ‘governed’ by ~300 magnates controlling the entire economy, with this number constantly diminishing. Money capital was separated from industrial or productive capital.

• The rentier, living on dividends, was cut off from the entrepreneur and management of capital. Rentier income was 5 times as great as income from foreign trade in the largest trading country, England. The financier predominated over merchant, with the world divided into usurer states and debtor states. Living off finance capitalism, the rentier state – dependent on revenues from interests & dividends, profits from issues, commissions & speculations – represents a state of parasitic decaying capitalism. Combined with the formation of armies composed of subject peoples, this usually led to the weakening of empires, ancient and modern.

• With the boom at 19thC end, combines, cartels, syndicates & trusts became the foundation of all economic life. These international monopoly combines (cartels, trusts) of capitalists had been formed to completely divide up the world’s territories. The remaining 20thC up to today has been an attempt to re-divide this robbery of the world, and manage the competition between several imperialisms.

• The economic crisis caused by falling prices and falling demand, resulted in further concentration of industry by 1900. Capitalism was here transformed into imperialism, and resulted throughout the 20thC in annexationist, predatory & plundering wars for the partition of the world, for the distribution and redistribution of colonies, and of ‘spheres of influence’ of finance capital, etc.

• The great monopolists in iron & steel, coal, chemicals, textiles, food, automobile & transport, arose because they also controlled 10,000s of patents of the new inventions. Thus the fruits of science played a decisive role in economic life. Westinghouse started by patenting railway automatic airbrakes & coupling; then securing the monopoly in electrical manufacturing with Hungarian inventor Nikola Tesla’s multiphase alternating current system & William Stanley’s transformers. Edison & Thomson’s patents on the electric lamp, generator & meter gave a monopoly to General Electric. The McCormick reaper was the base for International Harvester’s monopoly. Patents in synthetic products and manufacturing processes gave Dupont (“feudal refugees from French & Haitian revolutions”) their monopoly. Alexander Bell’s telephone gave rise to powerful Bell, AT&T & ITT monopolies.

• The monopoly combines divided, first, the domestic market of a country; as export capital increased, making international agreements with each other that led to the formation of cartels, e.g. in electricity (GE, Siemens), oil (Rockefeller, Rothschild & Nobel), shipping (Morgan), iron & steel (US Steel, Bethlehem, Vickers). US Steel industry was the most highly mechanized, efficient and profitable in the world.

• “The Unilever Margarine Trust of Britain” combined palm and other plantations for oil seed, dairy farms, whale-hunting companies, numerous margarine, soap & glycerine factories, as well as factories for conversion of by-products; also owning transport for raw materials, finished products and commercial companies.

State monopoly in capitalist society became a means “of increasing and guaranteeing the income of millionaires on the edge of bankruptcy” in any branch of industry. • Unless political struggle was aimed at the capitalist combines, it would regress into ‘pious hopes.’ • Imperialism, said Lenin, was a striving towards war & violence. For this truth, it is Lenin instead who was portrayed as ‘violent and bellicose,’ even though he also opposed terrorism. • Monopoly capitalism, rather than smooth out the inevitable stagnation and decay of capitalism, would never completely eliminate competition on the world market. Thus, the rise of cartels would lead to horrific world wars, still continuing today.

Imperialism in Lanka

State power “underlay the transformation of the feudal mode of production into the capitalist mode”; state intervention in the colonies was predominantly on behalf of metropolitan investors. ‘Votaries of free enterprise’ used the government machinery to influence economic trends in the colonies. A large proportion of the revenue of Lanka was drawn from sources condemned in London itself.

• A massive amount of profits & capital was repatriated from tea and rubber companies as dividends to England, without any exchange control restrictions, nor any compunction to invest such profits back into the industry or country. ‘Efficiency’ meant the ‘maximum repatriation of profits’ was the sole objective of these companies. Agency House commission fees, head-office expenses, shipping, insurance & brokerage fees were also expatriated. In times of political resistance, many companies in Lanka invested in East Africa and Malaysia, yet regardless, the robbery of the country continued; the economy made to benefit England’s needs.

• Using ‘fair price’ agreements, the English held down export prices below free-market levels, thus getting the Lankan economy to directly subsidize the English economy, causing colossal losses for the local industries. While export prices were held down, imports flooded the country. (Later, ‘aid’ was also used for the selling of English goods and services to SL, and to thereby move capital out of the country. For every 1 rupee of aid, Rs100 taken out.)

• Another method was devaluation: The price of silver, on which the Indian rupee was based, was adjusted resulting in a decrease in the value of the Lankan rupee (tied to Indian rupee) thereby reducing Lankan purchasing power.

• Using the system of ‘Imperial Preferences’, which came into use after the decline of laissez-faire, ensured the monopoly of the marketing of tea and rubber through the London market. International Commodity Agreements were also used to control production levels and prices of these commodities, if and when inflationary or deflationary devices were needed, to benefit the English economy. Such commodity quota systems then drove the smallholders out of production. Sri Lanka was also to be forced to make loans and then not utilize credit balances, so as to bolster the English balance of payments when they had economic trouble.

– Excerpts from A Very Personal Ingrisi History of the World, Krisantha Sri Bhaggiyadatta _________________________________________________

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This site was inspired by the dedicated scholarship and work of S.B.D. de Silva, author of "The Political Economy of Underdevelopment"

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