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“Before you study the economics, study the economists!”
Do Yashoda, Pooja, Kumar & Mahela know? – “It’s a War!”
e-Con e-News 10-16 May 2020
ee is rather curious about the South African government’s request to erect a statue of Nelson Mandela here as a model of freedom for Sri Lanka. This ee carries an excellent investigation by our Mattakkuliya Correspondent into how South Africa’s Central Bank was defanged when it was handed over to Africans after the so-called end of apartheid. This ee also examines how Sri Lanka’s only development banks were destroyed by the IMF/WB, in order to prevent us from investing in modern industry and from ever escaping their debt payments!
ee welcomes the President’s recent comments: “It is not possible to continue with the easy practice of earning profits by providing loans to import vehicles and plastic products, etc. More loans should be directed to newly identified priorities.”
The state must now more precisely identify and allocate long-term investment in advanced technology! The profits from cultivators’ harvests go not into investing in modern rural production, but into the bulging pockets of city-based import merchants and moneylenders,
Are our notorious, gangsterish import merchants and their roguish banks (making 20% of profits off pawning!) really listening to the President? Colombo’s parasite classes are happier insulting him as an: “Army man, neither a politician nor a businessman!” Yet to what depths have these businessmen and politicians sunk the country? The private sector is infinitely more corrupt & cruel than the state!
Furthermore, their ‘economists’ keep harping on ‘exports’, happily ignoring that all ‘developed’ economies went for exports AFTER capturing their own home market! England had to go to war with France for 100 years, precisely to protect their own country’s home market! Also, many of our so-called ‘exports’ depend on expensive imports!
Still, see how they whine! Banks & companies are shamelessly begging for (after years of opposing welfare), even getting, state money! What will they do with the money? Stash it again in New York, London & Switzerland? Gamble in stock markets, real-estate & cars? They say it’s to bail out companies, promising to keep employees, but under highly exploitative terms? It’s not enough. They must invest in long-term capital-intensive industry, that advances skills!
This is the only way we can repay, if we must, any debts! And it’s precisely because capital-intensive industry would enable us to pay off debts, that the IMF/World Bank and their local agents, like any bloodthirsty loansharks, wish to prevent any such industrial planning. The destruction of the development banks, discussed below, make this manifestly clear:
• “It’s a War, Howard” – One of the Worst Things Ever Done
On January 6, 2020, the new Central Bank Governor WD Lakshman said Sri Lanka needs a development bank. We have not heard anything more about it since. (economynext.com/sri-lanka-banks-not-taking-enough-risks-should-finance-startups-cb-governor-38910)
Economist Howard Nicolas, born on (very poetically) Slave Island in Colombo & founder of the (hijacked?) Institute of Policy Studies, offers insight into perhaps why Governor Lakshman cannot, or is not allowed to, govern, let alone set up such a bank:
‘One of the worst things ever done was the privatization of the development banks – NDB (National Development Bank) & the DFCC (Development Finance Corporation of Ceylon)… I was actually involved in this whole discussion about the NDB & DFCC being privatized, and at the time the IMF representative – it’s many years now so I can say this openly – he told me, “It’s a war of ideas, Howard, we need the privatization of development banks. We cannot allow any more East Asian success stories…”
Look at Singapore, Korea, Japan! You know Japan? It is built on state development banks. You cannot name any Japanese company, not one Japanese company today, that started life without a loan from a state development bank.
When China wanted to join the WTO, do you know what the number one demand of the US and Europe was? The privatization of the Bank of China! Why? Because this bank was underwriting all the advanced technology companies in China, companies that eventually became threats to the West.
We have to set up development banking in Sri Lanka! But the West would be bitterly opposed to it. I was involved in a scrap with those Western institutions, and I know of the confidential reports, which were passing between the Sri Lankan government and the IMF & World Bank. The thing they feared was state development banking, because that is the core. Once you get state development banks, then you are in a totally different ballgame. When they came in after the assassination of President Premadasa, the first thing the IMF asked for was the privatization of the NDB & DFCC – the 2 most efficient banks in Sri Lanka. Why did they want them privatized?
And after they were finished with the privatization of the DFCC & NDB, did they go after the Bank of Ceylon or the People’s Bank? They were obvious candidates. Why did they go after the DFCC and NDB? You now know. This was actually in reports. I had discussions with World Bank people, very directly, and they said, “Howard, it’s a war, it’s an economic war.”’
(see ee Focus, Development Banks; also how South Africa’s Central Bank was defanged after Africans took over)
• With trillions in assets, why are Sri Lanka’s private banks acting poor all of a sudden, saying they’ve been dealt a crippling blow. The banks are also whining for bailouts! Where have all their profits gone? They refuse to answer. Worse, they and their media don’t even think it’s a question. Yet ee asks again, where have the profits been invested all these years? Stashed in foreign banks & offshore accounts? Invested in microfinance fleecing peasants, importing cars, in real estate?
A sheer barrage of invective, by the rock‘n’roll band Murtaza, Razeen & the Advocatas, escalates in the media against the “1970”, “self-sufficiency”, “autarky”, “import controls”. Then there’s the repeated tolling of the bell of doom that, somehow after centuries of colonialism, it’s we who still owe – the debt! The debt! Yet, the song these rock n rollers refuse to sing, is that debt is no problem, if there’s local modern production!
• “It’s the rural home market, smartypants!” That’s what it’s all about!
Imagine if our superstars of screen & sport, Yashoda, Pooja, Kumar & Mahela, these ‘brand ambassadors’ for Unilever, et al, promote local production? Protect the home market? Apparently not! They’re already taken. But by whom?
When Unilever dominates ‘FMCGs’ (fast-moving consumer goods), occupying over 50% of shop shelves in every kaday, when Abans & Singer-Hayleys dominate ‘Consumer Durables’, which also flood the rural market – all of these multinationals selling us products almost 100% imported – it’s no wonder that the media they dominate (thru advertising) is all ablaze with invective against import controls! So no, there’s no way to get Yashodha et al to come out to bat for us, or Sangakkara to silkily nestle a local soap against his cheeks.
• Lanka is famous for the taming of ‘wild’ elephants & buffalos, considered the most irascible animals on earth, and a Sinhala synonym for stubbornness – harak! – perhaps because they love their freedom.
This domestication requires bait & snare, trapping & tethering, taunting & cajoling, goading, berating, bewailing, sweetening & the corralling. But what happens when it’s attempted on entire countries? Perhaps it’s akin to what’s gone on for the last 72 years, to prevent the functioning of any form of independent government.
So is this what’s stalling the present popular ruling coalition: everyday sees a combo of constitutional straitjacketing, judicial roadblocks, media harangues, imperialist threats, NGO whinging, bankster loansharking – demanding or lamenting debt demands – and political bickering. The government is said to have overreacted with the lockdown,, but if the virus had spread, they would’ve been accused of negligence.
In the end, in our world, the plan is to induce fatigue, paralysis, stasis. It amounts to preventing any type of industrial renaissance, which requires a recapture of the (especially, rural) home market – what this moment cries out for.
• Sri Lanka’s neighbor, India’s Communist-run state of Kerala has reported only 4 Covid-related deaths, with little over 500 cases after more than 3 months since the first outbreak in Jan. A state with over 34 million people. So what is its secret? (see ee Economists, Patnaik)
• Does England’s Foreign Office run a “Sri Lanka Reconstruction Unit” in its Foreign & Commonwealth Office (FCO)? It was recently revealed London has a “Venezuela Reconstruction Unit, FCO”, which has never been publicly acknowledged (see ee Sovereignty, Venezuela). England also stole its gold reserves & handed it over to a puppet only recognized by NATO & allies. Does Sri Lanka also have gold reserves in the Bank of England? Some say we do. If so, we should start to remove them now! The US could declare some puppet as the ‘real’ President of SL and hand over Sri Lanka’s international assets in the US or Europe, to them. This is what they did in Venezuela.
A1. Reader Comments –
• Rajapakses being softened up • Capitalist mongrels distract & mislead from building village economies • Dhammika Perera belittle farmers • Lessons of North Korea should not be lost on us
A2. Quotes of the Week – Dudley Demanded Salary Cuts too • Go back to 1960s also! • Scions Demand Officials Speak English! • Angels & my Late Husband •
A3. Random Notes – ee English only • SBD de Silva refused Media Interviews: Who is English Media for? • Promoting Fake Industrialization • Inventing Inventors, Manufacturing Manufacturers • The Strange Dr Vokes & Capital Media • EconomyNext’s Cut-Rate Editors • Ella Redoubt as Apartheid Stronghold • South Africa & SL: Sobukwe & Mandela – “One Settler, One Bullet”
B. ee Focus
B1. The Truth Behind South Africa’s Reconciliation – Fran Rodrigo
B2. “It’s a War!” – How Sri Lanka’s Development Banks were Destroyed by the IMF
C. News Index
A1. Reader Comments
• ee thanks Readers who send articles of interest. Please excerpt or summarize what is important about any article sent, or your comments, and place the e-link at the end. It’s better if you send them as email.
• “It looks like ‘the Rajapakses’ are being softened up to make concessions. They compromise and think the hegemon is no longer hostile and drop their guard. Then comes the blow to crush them. Saddam & Gaddafi fell for that line. Assad did not.”
• “Fantastic ee! Great work by all the other contributors. Very timely messages & articles overall. People should at least wake up now & listen. The PM may have has his heart in the right place, but it’s the capitalists mongrels who’re awaiting to distract and mislead from the path of building the village economies, which were self-sufficient and self-sustaining in the past including during the time of the kings prior to colonization.”
• “Dhammika Perera belittled our farmers and our agriculture sector during a discussion with Nivard and FT’s Nisthar… He ad nauseam repeated the same garbage that the IMF dishes about how unprofitable agriculture is and it does not add value to the economy, although so many people are involved in feeding this country and its citizens! Especially during the current crisis. Where would we be without our farmers? He needs to take a look at Japan, how they treat their farmers and how industrious they’ve become. Whereas successive governments have treated ours like dirt.”
• “Thanks also for that great clip on North Korea. That was very very valuable. The lessons of DPRK should not be lost on us: 20% of the population decimated and within a few decades it managed to rise up from the ashes. If anyone should look at how a country develops after it’s devastated, they should look at DPRK and not Japan for inspiration.”
A2. Quotes of the Week_
• “The veteran Marxist recalled how during Dudley Senanayake’s tenure, as the PM, in the ‘60s, the government appealed for public servants to donate a day’s pay.” (see ee Economy, DEW)
• ‘What needs to be understood is, “pre-77 era” does not only mean the 5 or 6 years during Madam Bandaranaike’s coalition government that was in power from 1970 with the LSSP & CP. It stretches from the early ’60s when industrialization was introduced with Soviet bloc technology… heavy & backward for consumer needs. Yet, this industrialization did not fail the consumer. Kelani tyres had no complaints. CTB buses ran a far better service than at present on every route and on long-distance routes as well, on Kelani tyres. DI leather products were very durable. So were Lang-lo mammoties used in all agricultural work. Handloom products through co-operatives and small-time private investments were substantial additions to rural economy.
That pre-77 industrialization needed “liberation” from the centralized, state-owned economy to become competitive in consumer markets… Instead the Jayawardene regime opted to sell them off as “industrial debris”, leaving nothing for the local economy to grow on. It is that aspect of the “pre-77 era” with a nationalist industrial initiative which needs attention in formulating a new economic model.’ (see ee Workers, Exit)
• ‘Among the passengers [returning from London] were children of some very affluent personalities from the Tea, Pharmaceutical, Apparel & Export industries, besides a former owner of a leading public retail company. GoSL arranged the facility for Sri Lankan students and government employees on post-graduate studies in the UK, Europe, the USA, Canada. Those wishing to avail themselves of the opportunity had to register themselves with the Ministry of Foreign Affairs web portal and the SL High Commission in the UK. Some who arrived on May 4 had reportedly demanded Airforce & Health officials attending to their formalities at the airport speak to them in English and not Sinhala. They had also complained of being delayed due to formalities.’ (see ee Sovereignty, Welfare)
• ‘Mrs Bandaranaike, who confides that Ceylon’s fortunes are in the hands of “angels and my late husband,” has vigorously assisted the heavenly host by nationalizing Roman Catholic schools, the Bank of Ceylon, transport services, life insurance and the Port of Colombo. Last week the PM touched off one of the biggest government crises since she took office…In yet another attempt to ease Ceylon’s formidable economic woes, her government last April seized almost 200 gas stations and oil depots owned by a trio of US & British firms (Esso, Caltex, Burmah-Shell). Total value of expropriated properties: $20 million.” – Miss Willis Regrets (Time magazine, 3 Aug 1962)
A3. Random Notes (‘Seeing Number in Chaos’)_
ee tries to be erudite, eloquent and respect readers’ need for clarity. Even if fumbling in the twilight of inexperience, we yet attempt to illuminate what needs to be done:
Some claim ee should not be in English, let alone use high-flown English. ee admits the weapon of English is indeed weak, yet ee uses it not for but against the ruling powers in Sri Lanka, whose language is still English, in the boardrooms, in the banks, in the higher courts, in education! Those who think ee has some worth can easily translate what’s valuable.
• Anyone who met SBD de Silva and grew fascinated by his amazing insights into the Sri Lankan economy, would always ask him why he didn’t give interviews to the media!
He would laugh, or more like give off a pitiful grimace, saying, “We should first interview the media!” His point: what on earth do reporters know about the economy, and the need for modern industry? To him, the media, totally in hock to the import mafia & their advertisers, would simply not be interested in such information at all. Yet, SB saw the dire need for a national conversation that would thrash out such issues, prioritize and plan how we should go about such endeavors.
Let us look at the state of the English media in the country. Who is it written for? Not for the people of the country. It’s written for the whites and their multinationals & embassies, written in ways so as not to embarrass them, but to make them feel good, send back clippings to their bosses back home in NY, Washington or London, to assure the natives are not restless, or if so, easily fooled & quelled.
ee recalled SB’s refusal to be interviewed by media, after reading a Daily Mirror article this week, the headline proclaiming: “100% made in Sri Lanka cars by next year: Dilantha Malagamuwa”, but 3 paragraphs later, it says they’re importing the “the engines & gearboxes”. This reflects a frequent theme in our merchant media to divert readers and confuse people about the nature of creating an industrial economy.
There are 2 lines of attacks in a media totally dedicated to the import merchants: 1) Totally ignore, decry and oppose local production. 2) To champion some isolated ‘invention’.
But as ee keeps pointing out, it’s a whole culture: it’s not invention, but how we invent inventors! Not manufacture, but how we manufacture manufacturers. Not machines, but how we make machines that make machines!
How much investment is there in machines and chemistry? Let’s take Maliban or CBL, which claim to be ‘national’. Last week’s ee carried the plaints of the palm oil and the confectionary sector. What profit does the country actually gain, considering the ecological and health costs of palm oil? Also, what machinery has this sector invested in? What do they do with their profits?
• The Strange Dr Vokes & Capital Media
Much of the capitalist online media, which decries corruption in the state sector, and extols private efficiency, is full of slapdash typos and errors, as if their owners actually do not give a damn as long as they mechanically lay down the tired gospel of laissez-faire & free trade – truly, the untried utopia!
The number of absurd errors in such media as EconomyNext, which is also used by The Island business news, is well…a comedy. In the middle of an article which allows palm oil companies to whine and then claim sarcastically they wish to follow the import-substitution policy of the government as well, EconomyNext sticks in this paragraph:
“As a result closed-economy or self-sufficiency mindset, which is now found only in North Korea (whre-denominates [sic!] its money and takes zeros off and sometimes shoots officials involved in monetary policy) and economic nationalism and import substitution, persists in Sri Lanka.” Say what?
Now this is not the first time we have noticed such high-flying online rags clearly lack proofreaders, let alone copyeditors or editors for that matter. Then there’s dogmatic insertion, within a story extolling an ecologically unhealthy product, of yankee ‘free market’ dogma, using North Korea as a convenient whipping boy, to insult self-sufficiency as a North Korean malady. Yet, the US embargos and sanctions both Cuba and NK, preventing them from interacting more fully with the world.
EconomyNext is owned by Capital Media, which trumpets ‘transparency, yet does not publicly declare its Board of Directors or source of funding. Capital Media also owns high-sounding Echelon – a militaristic & hierarchical term suggesting they’re at the top of some ladder – and is also local agent for BBC’s Top Gear magazine, as well US Hearst Corporation’s Cosmopolitan magazine. Hearst also owns Fitch Ratings Agency, which regularly mismeasures the state of our economy; the local agency being a haven also for anti-national elements.
One of the directors of Capital Media is Dr Richard Vokes, a former Country Director of the Asian Development Bank (SL), who somehow crept onto the board, of South Asia Gateway Terminals, which controls the Queen Elizabeth Quay at the Port of Colombo, and the privatized National Development Bank (NDB). Is it a conflict of interest then that EconomyNext & Echelon maintain a steady attack on Hambantota port?
Vokes is also a director of the Sarvodaya-linked Deshodaya Development Finance Co… also the purported author of the anonymous Bellwether column featured in EconomyNext. Capital Media employees have been warned not to divulge his authorship. Vokes repeats the fundamentalist capitalist doctrine of Hayek, et al, while dropping names such as Adam Smith, Ricardo etc. Much like Singapore Sally, who also drops such names to dazzle idiots, even if, like Bentham, Mill, etc, all those Englishmen were ardent statists! Several suspect Vokes to be an English intelligence spook, who has operated in Thailand, Philippines, Malaysia, Lao PDR, Vietnam, Bhutan, Maldives, Cambodia, and Myanmar.
Then we have US Advocata’s Sarath Rajapatirana, last week waxing on the economy and Covid in the FT. He starts by lamenting the fate of Samurdhi recipients, but then proceeds to hammer the ‘70-77 government. Rajapatirana, who was an Economic Advisor to President Sirisena, was also on the board of the IPS, and a visiting scholar of the American Enterprise Institute, a reactionary capitalist thinktank.
• Ella is a strategic location in the highlands, with direct access to Diyatalava, Badulla, Vellavaya. It was a lookout, backdoor, rearguard and logistical passage, leading to the southeast and east, providing sustenance to the Udarata, to fight for almost 4 centuries against European invasion of Lanka’s maritimes. One of the greatest battles fought was in 1530 in Randeniwala, devastating the Portuguese army, who attempted this ‘back entrance’, along the road to Uva, which the English devastated in 1818.
In recent times, Ella has been turned into an almost whites-only tourist resort. And last week, a video went ‘viral’ proclaiming Sri Lanka as the most generous country, based on the hospitality of Ella residents looking after stranded tourists. The video was produced by a suspected US-Israeli agent, Nas, who but recently was publishing videos claiming China had taken over Lanka. Nas (supposedly Arab-Israeli) has also been accused of selling out the Palestinian national liberation struggle against the US-& Euro-backed white settler state of Zionist Israel, by claiming it’s merely a cultural conflict (see ee Sovereignty, Erasure)
• Last week, the South African government is said to have requested a statue of Nelson Mandela be erected in his honor in Sri Lanka. SL sits & stands between great Africa & China. ee always maintains that even-closer relations between our ancient civilizations must be strengthened and solidified to ensure liberation from imperialism. May the Lions & the Dragons awake from their deep slumber!
ee is still unsure why this statue request was made. Most relations between our lands are still on a trader-to-trader basis, not exactly the most endurable of foundations to construct such solidarity. The penchant for liberals to uphold South Africa as a model for liberation, while at the same time promoting ‘Kaffir’ culture in Sri Lanka, shows the shallowness of such understanding. (‘Kaffir is a derogatory white appellation for Africans, our liberals remain staunchly ignorant of. It shows how much they know about that land & people, even as they claim it a model for truth & reconciliation!)
Mandela, after Lenin & Mao, was one of the most famous names symbolizing freedom across the world. Lenin and Mao’s fame did not depend on the white media. Yet, unlike them, Mandela and the forces of the African National Congress he represented, have been unable so far to truly liberate their country from colonialism and capitalism. Also, while the world knows about Mandela and the ANC, they know little about the Pan Africanist Congress, whose leader Robert Sobukwe also spent long years on Robben Island. One famous PAC slogan was: “One settler, one bullet.”
Mandela’s release from prison, and the negotiations to free Namibia and end apartheid in South Africa, were hastened after the defeat of the white South African Army by Angolan & Cuban forces at Cuito Cuanavale in 1988. The release of Mandela did not complete the liberation of South Africa, as our correspondent clearly and crucially shows. Amandla – the rallying cry for power – is still not theirs to be had. Yet.
Vast South Africa is also both a mine and a minefield. ee’s correspondent digs deeper than what the capitalist media offers in their retail shop of fake jewels. South Africa is being promoted as a model of freedom for Sri Lanka – to promote ‘reconciliation’. Its constitution is being upheld as a beacon, but underneath the fine words, South Africa is still controlled by whites. ee’s Mattakkuliya Correspondent burrows underneath its sad saga, to expose its roots in a central bank defanged of its ability to economically empower Africans. South Africa is still run by the Oppenheimer family’s Anglo-American Corporation, based in Luxembourg, where the secretive European Central Bank is also headquartered (see: ee Focus, Truth Behind Reconciliation; also, ee Sovereignty, Mandela).
B. Special Focus___
B1. The Truth Behind South Africa’s Reconciliation – Fran Rodrigo
When Nelson Mandela became the first African President of the Republic of South Africa in 1994, Black political power was seen as a stepping stone to subverting the economic basis of apartheid – namely, the fact 87% of the country’s land was owned by a white minority who comprised 10% of the population.
Most accounts of white minority rule and apartheid stop at 1994, painting modern South Africa as a utopic ‘Rainbow Nation’ with a multilingual national anthem and a source of so many inane Desmond Tutu quotes.
What is not mentioned is that decades after the end of political apartheid, South Africa’s white minority, now 7.8% of the population, still owns 72% of agricultural land, 49% of urban land, & 45% of “Individual Sectional Title” (units within an estate or complex, gated communities), according to a 2017 Land Audit Report.
The South African Land Restitution Commission, 1996-2008, spent 7.8 billion rand to acquire the lands of white farmers, while a meagre 4.9bn rand was paid to Africans who were dispossessed of their land.
Compromises – When Mandela was released from Robben Island in the 1980s, he had a private lunch with South African capitalists, during which he stated his goal of nationalization as redress for apartheid. The Johannesburg Stock Exchange’s All-Gold Index dropped 5%.
By the 1990s, Mandela was singing a different tune. “Let me assure you that the ANC is not an enemy of private enterprise,” Mandela told capitalists in Pittsburgh, Pennsylvania, in 1991, assuring the security of investments and the importance of foreign capital inflows.
The compromises of Mandela and the ANC meant, economic apartheid continues in South Africa, and is protected by the country’s post-apartheid liberal constitution and independent Central Bank, both hailed as models for decolonizing countries such as Sri Lanka.
Constitution – South Africa’s 1996 constitution enshrined the following:
- That Africans dispossessed of their land during apartheid are entitled “either to restitution of that property or to equitable redress”
- That land owned by whites can only be acquired by the state on a market basis (with a willing seller at a market rate that includes the value of capital improvements)
- That the South African Reserve Bank (SARB) should “protect the value of the currency… independently and without fear, favor or prejudice”.
So, the state is meant to deliver justice to disenfranchised Africans. However, land cannot be taken away from whites unless they are willing, and unless the government pays full market prices. Naturally, even if all white landowners were willing to sell, no state would have the fiscal space to purchase the large quantities of lands that were stolen from Africans.
In 2010, for example, South Africa’s Land Restitution Commission requested the South African Treasury for 5.3 billion rand to repay white landowners, but was only allocated 1.9bn rand. The Commission was later sued by white landowners for not paying dues on land acquisitions.
The state could resort to pressuring the Central Bank to print funds to purchase land for redistribution, but the constitution has been designed to ensure SARB remains out of the realm of political control.
SARB – For most of its history, SARB was an unabashedly political institution, with credit being provisioned according to politically set goals of industrial development & employment generation.
In the 1970s, interest rates were regarded as politically sensitive and were not always allowed to reflect market rates. Monetary policy was formulated in conjunction with fiscal authorities.
In the 1980s, SARB moved towards marketization, but prioritizing the 4 monetary policy objectives of: promoting economic growth, stabilizing price, maintaining balance of payments equilibrium, and enhancing employment, required political intervention.
In 1990, under Governor Chris Stals, SARB moved towards greater ‘independence’, and SARB’s mission statement said its primary objective was to protect the domestic and external value of the rand (ie, control inflation), dispensing with social objectives.
When political power passed to the African majority in 1994, the white man Stals remained at the helm of SARB. It was only in 1999 that Tito Mboweni, the first Black man, became SARB Governor, but by then the Central Banks’ ‘independence’ was entrenched.
“Some people think that, as a former Cabinet Minister, my appointment heralds the start of a cheap money era in the Bank. I must say it here, loud and clear, they are wrong,” Mboweni said.
Negotiations – During negotiations between the ANC and the National Party in the early ‘90s, the status of SARB was a key issue. A study by the ANC thinktank Macroeconomic Research Group (MERG) in 1993 recommended that SARB be subordinate to the National Treasury.
This recommendation was rejected by deputy head of the ANC Department of Economic Planning Tito Mboweni (later becoming 1st Black SARB governor). Mboweni’s rejection was overturned by the ANC’s National Executive Committee, who agreed SARB should be subject to parliamentary control.
However, ‘independence’ was granted in terms of the interim 1994 Constitution, and confirmed in 1995 during a parliamentary debate over the final constitution, and SARB’s ‘independence’ was enshrined in the final 1996 Constitution.
Sri Lanka – The 2015 Yahapalanaya (‘Good Governance’) regime, with the backing of NGOs, and the blessings of Western governments, aimed to deliver “Transitional Justice” and a new constitution, promoting the South African model as one worthy of emulation. We must ask, Why?
It is clear, the South African model is one which privileges bourgeois property rights while denying the democratization of monetary policy & land ownership. These material obscenities are hidden by the idealist decor of multiculturalism, fundamental rights, equality & other empty slogans.
Law students in Sri Lanka are taught that President JR Jayawardene’s 1978 constitution is superior to that 1972 Republican Constitution enacted by PM Sirimavo Bandaranaike (the world’s first female head of government). They are now taught that South Africa’s model of constitutional rights and transitional justice is worthy of emulation. Why, and to whose benefit?
In many ways the land reforms achieved by the Bandaranaike constitution are more radical than those achieved by Mandela. Not to mention the radical reforms by Black leaders killed or demonized, like Patrice Lumumba, Thomas Sankara and Robert Mugabe, whose statues will not be built in ‘liberal’ Colombo.
It is clear that the liberalism of post-apartheid South Africa is politically, economically & socially untenable. Just last year, the country’s constitution was changed to allow for expropriation of land without compensation. Yet some in Sri Lanka promote to us a failed model that has been rejected by those who have had to endure it for decades.
For more information:
B2. “It’s a War!” – How Lanka’s Development Banks were Destroyed by the IMF, etc
On 6 Jan 2020, new Central Bank governor WD Lakshman said Sri Lanka needed a development bank. Lakshman was headlined: “SL banks not taking enough risks; should finance startups”. He was quoted as saying, banks should drop a “risk averse” mindset and finance startups, and a development bank was needed. “[Lakshman’s] comments came as the Monetary Policy Roadmap said licensed specialized banks (typically saving & development banks) would cease to exist and all banks would be lumped together into licensed commercial banks.”
“Sri Lanka built 2 development banks: [Development Finance Corporation of Ceylon] DFCC in 1955 on the World Bank’s behest when ‘development economics’ was taking off after WWII, and later [National Development Bank] NDB after the economy was re-opened in 1978.” Both development banks funded Premadasa’s limited attempt at export-oriented industrialization.
Here’s the sorry tale of the development banks, as reported by economist Howard Nicholas, who apparently ran afoul of both the IMF/WB, and R Paskaralingam (Finance Ministry Secretary (1989-94) of President R Premadasa, senior advisor to SL PM Ranil Wickremasinghe (2002-4) and again, Advisor to the Ministry of National Policy Planning & Economic Affairs (2015-9)).
“If I had any recommendation to Sri Lanka, it would be to go back to development banking. One of the worst things ever done was the privatization of the NDB & the DFCC. The reason is all successful countries had one policy only: the bedrock of all that they did – state development banking.
Development banking is important because it allows a company to acquire advanced technology, as China did in night-vision technology. As one of the most advanced technologies in the world, you wouldn’t automatically identify it with a low-labour cost environment like China. But what the Chinese did was they said, we’re not interested in only low-value-added manufacturing, we want to go after the higher added-value manufacturing as well. The key to that is the development bank.
I know this as a firsthand case study, because one of my students was involved in the company that was developing night-vision technology. They got a massive loan from the Bank of China and their job was to acquire the foreign technology & expertise to develop this advanced night-vision technology.
And this is where the development bank was so vital because the Bank of China gave this company the money to develop in a way that they wanted them to corner the market in night-vision technology. Within 20 years this company had become number two! You wouldn’t naturally associate a low-wage-cost environment with the acquisition of this very advanced technology, but the point about China is that they’re not interested in just having low-wage or low-remunerative tasks. What they want is a holistic approach, and this is why development banking is so important.
I’m sorry to say this but I have actually been involved in this whole discussion about the NDB and DFCC being privatized, and at the time the IMF representative – it’s many years now so I can say this openly – he told me, “It’s a war of ideas, Howard, we need the privatization of development banks. We cannot allow any more East Asian success stories.”
Look at Singapore, Korea, Japan! You know Japan? It is built on state development banks. You cannot name any Japanese company, not one Japanese company today, that didn’t start life with a loan from a state development bank.
When China wanted to join the WTO, do you know what the number one demand of the US and Europe was: the privatization of the Bank of China! Why? Because this bank was underwriting all the advanced technology companies in China, the companies that eventually became threats to the West.
The low-wage-cost companies were not that important; it’s the companies that were using the same technology as in the West that they are worried about… It’s possible that some industries will relocate, but it’s not inevitable and not necessary, we just have to have the right tools.
You must set up development banking in Sri Lanka! But the West would be bitterly opposed to it. Because I was involved in a scrap with the Western institutions, 16 years ago, I know some of the confidential reports, which were passing between the SL government and the IMF & World Bank.
They thing they feared was state development banking, because that is the core. Once you get state development banks, then you are in a totally different ballgame. When they came in after the assassination of President Premadasa, the first thing the IMF asked for was the privatization of the NDB & DFCC – the 2 most efficient banks in Sri Lanka. Why did they want them privatized?
And after they were finished with the privatization of the DFCC & NDB, did they go after the Bank of Ceylon or the People’s Bank? They were obvious candidates. Why did they go after the DFCC & NDB? You now know. This was actually in reports. I had discussions with World Bank people, very directly, and they said, “Howard, it’s a war, it’s an economic war!”
I don’t blame the foreigners, I don’t blame the Western countries. It is an economic war. Who do I blame? I blame our people – if you forgive me for saying that – I don’t blame the foreigners. This is their job, to block you. The question is what are we doing about it? This is what is important!”
• Nicholas appears to be a fan (like most of those economists who at least recommend some form of manufacture) of export-led growth, while ee insists on not depending on the caprice of foreign tastes, but recapturing the home market as a basis for industrialization.
Nicholas also notes in another interview (see ee Economists, Derana), that though the destruction of the development banks was ordered by the IMF/WB/WTO, whose rules now explicitly forbid government funding of such banks, it is still possible for central governments to pursue such investment through provincial and city governments.
• So who stole the NDB and DFCC? Here are the directors now. Note their Europeanized training, links to HSBC, Citibank, etc, as well as real-estate and auto & machinery importers, let alone accountancy & legal bodies.
NDB Board of Directors:
– Dimantha Seneviratne, PanAsia Banking Corporation, HSBC Group, Sampath Bank, Overseas Trust Bank, Saudi British Bank, Harvard Business School, Association of Professional Bankers, SL Banks’ Association (Guarantee), & Development Holdings, Credit Information Bureau, Lanka Clear.
– Dinal Phillips, University of London, International Pacific Bar Association, Bar Association of SL, Gestetner, Intellectual Property Advisory Commission, involved in Drafting Regulations for the Intellectual Property Act.
– Sriyan Cooray, HSBC, Speville M&W, KPMG Ford Rhodes Thornton & Co, Chartered Institute of Management Accountants.
– Bernard Sinniah, Citibank, FX Corporate Sales, Macquarie University, Australia.
– D Panditaratne, Lakshman Kadirgamar Institute, University of HK, Milbank, Tweed, Hadley & McCloy LLP, Asia-Pacific Leadership Network for Nuclear Non-Proliferation & Disarmament, Verité Research, Centre for Rights & Justice in Hong Kong, Asian University for Women in Bangladesh, University of Oxford, Yale Law School.
– Sujeewa Mudalige, PwC, Institute of Chartered Accountants of SL, Securities & Exchange Commission, Hatton National Bank.
– Hiransa Kaluthantri, SL Administrative Service, Dept of Management Services & Dept of Trade & Investment Policy, Dept of National Budget, General Treasury, James Cook University, Australia,
– Hiran Perera, HSBC, Softlogic Finance.
DFCC Board of Directors
– J Durairatnam, Commercial Bank of Ceylon, Commercial Development Co, Lanka Financial Services Bureau.
– LHAL Silva, Dept of Inland Revenue of SL, Lanka Financial Services Bureau, SL Banks Association (Guarantee), Synapsys, Acuity Partners, Acuity Securities, Lanka Industrial Estates, Lanka Ventures, LVL Energy Fund & DFCC Consulting, Association of Professional Bankers of SL.
– PMB Fernando, Laugfs Lubricants, Asia Asset Finance, KPMG Ford, Rhodes, Thornton, Confifi Group, Virtusa, Capital Reach Group, Softlogic Finance, Institute of Chartered Accountants of SL, Chartered Institute of Management Accountants of UK
– T Dharmarajah, Amarasekera & Co, Raigam Wayamba Salterns, TKS Finance & TKS Securities, Postgraduate Institute of Management, National Institute of Education, Council of the Institute of Chartered Accountants, Association of Accounting Technicians, Institute of Public Finance & Development Accountancy.
– SR Thambiayah, Renuka Hotels, Cargo Boat Development Co, Crescent Launderers & Dry Cleaners, Lancaster Holdings, Portfolio Management Services & Renuka Land, University of Nottingham, UK, Cornell University’s School of Hotel Administration, US.
– KP Cooray, Ceylinco Group, Richard Peiris Group, Maharaja Organisation, Rivira Media Corporation, University of Middlesex.
– VJ Senaratne, Distilleries Co, Periceyl, Paradise Resort Pasikudah, Amethyst Leisure, Melstacorp, SL Insurance Corporation, Central Bank of SL.
– LKAH Fernando, Kreston MNS & Co, Grant Thornton International, RIL Property, Readywear Industries, Foodbuzz, RIL Trust, United Motors Lanka, TVS Lanka, Unimo Enterprises, Orient Motor Co, & UML Heavy Equipment, Institute of Chartered Accountants, Institute of Certified Management Accountants of SL.
– NKGK Nemmawatta, Ministry of Tourism, Wildlife & Christian Religious Affairs, Director General – Dept of Public Enterprises, Ministry of Finance, Additional Secretary to Ministry of Higher Education & Highways ande Ministry of Environment, SL Samurdhi Authority, SL Customs & Dept of Trade, Tariff & Investment Policy, ICASL.
– NHTI Perera, HSBC Group, Commercial Bank of Qatar, Barclays Bank, UAE, & Hatton National Bank, Acuity Partners, Synapsys, & Acuity Stock Brokers, HNB Assurance, HNB General Insurance, HNB Grameen Finance.
So enmeshed are these directors in colonial networks & quick rentier profits, there’s no way they would allow a bank to really develop the economy.
C. News Index______________________________________________
• ee News Index provides headlines and links to gain a sense of the weekly focus of published English ‘business news’ mainly to expose the backwardness of a multinationally controlled ‘local media’:
(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.
• Hypocrites and opportunists fishing in troubled waters
‘So-called forerunners of democracy are obviously conspiring to overthrow the present minority regime, with narrow-minded hairsplitting arguments and petitions based on constitutional suppositions.’
• OIC Statement and drowning local politicians clutching at straws – Wasala
‘Opinion in the Muslim world about cremating bodies of dead Muslim Covid-19 victims, is divided. Most sensible Muslims accept cremation as a scientific imperative’
• This is no laughing matter! That Mandela Statue… – Wasala
‘It is true that South Africans have played a tenuous supplementary role in the interventionist Western interest in Sri Lanka’s internal problem between the state and the Tamil separatists.’
• UK Guardian travel quiz says Eelam is an indigenous name for SL
• Did the Tigers form TNA in 2001? – Jeyaraj
• Lanka has better managed pandemic than all its neighbours
• Has the US Seized Power in a Silent Coup by Making Gota a Captive in their Web of Blackmail and Inducting Moragoda as the De Facto President? (Part 1)
‘Moragoda in the meantime unsolicitedly drew up and gave Gota for implementation, Sri Lanka’s National Security Doctrine and Sri Lanka’s Foreign Policy Doctrine; he is due to hand over to Gota, on 30 Apr 2020, Sri Lanka’s Post-Covid Economic Policy Doctrine.’
• Has the US Captured Sri Lankan State Power Neutralising Gota in a Web of Blackmail and Choreographing Agent-Moragoda’s Moves as De Facto President?-(Part 2)
‘Agent-Moragoda, basing his arguments on several fallacious assumptions and drafting his unsolicited paper in the immediate aftermath of the Easter bombings last year, has floated the notion that Sri Lanka’s National Security should be handed over to the US!!’
• Which direction for the Gotabaya presidency? – Jayatilleka
‘Sri Lanka’s contending politico-ideological constellations do not think there are “objective” phenomena, laws or tendencies. They permanently inhabit the realm of subjectivity…. It is this subjectivist swerve from centrist realism that opened space for the triumph of the militarist Sinhala Right, its project dating back to N.Q. Dias and Richard Udugama in the 1960s. If the Sinhala New Right has its way, the country will not wind up achieving Asian/Eurasian modernity, but following and surpassing the Myanmar model. Myanmar however shares a border with China. We don’t.’
• Facebook apologizes for role in Sri Lankan violence
• TNA assures fullest cooperation to new Indian HC
• Indian HC holds video conference on economic recovery
‘Head of Economic and Commercial Wing, High Commission of India, Suja K. Menon, interacted with the Board members of Indian CEO Forum (ICF), in Sri Lanka, over a video conference’
• New Indian Envoy Gopal Baglay arrives with a plane-load of medicines
‘Baglay succeeds Taranjit Singh Sandhu, who is now India’s Ambassador to the US. Earlier, he served as Joint Secretary in Prime Minister’s Office (PMO) since 2017. In a distinguished career spanning nearly three decades in the Indian Foreign Service (IFS), he has served in various capacities in the Ministry of External Affairs (MEA)…’
• Indian HC designate to Sri Lanka offers prayers to the Buddha via video calls to chief prelates
• Lawyer Hizbullah’s arrest linked to involvement in high profile cases?
• Sajith calls for end to racist attacks on Muslims, discriminatory last rites
• (Sajith) Making a mountain out of a molehill to hide behind?
• Sumanthiran meets PM to discuss plight of Tamil prisoners
• Promoting LTTE under guise of charity in London
• TNA dumps opposition parties by attending PM’s meeting
‘The first to file was Charitha Gunaratne, an attorney at law and backer of the SJB. The other petitions are…from: Victor Ivan and 7 others – T.M Premawardena, Prof Anton Meemana, A.M. Jiffry, S. Sivagurunathan, Mahinda Hattaka, M.S. Jayakodi and Dr H.D.S.F.D. Herath, the Centre for Policy Alternatives (CPA) and its Executive Director, Dr. Paikiasothy Saravanamuttu and the SJB General Secretary Ranjith Madduma Bandara.’
• No land in place called home
‘Around 90,000 Sri Lankan refugees are living in India. The Indian authorities maintain that Sri Lanka can take back as many as 60,000 of them.’
• Tale of a Tiger: Facets of LTTE Chief Prabhakaran’s life
‘One person who opined that Prabhakaran had inculcated the philosophy of the ‘Gita’ was former Indian High Commissioner to Sri Lanka Jyotindra Nath Dixit.’
• Chinese President telephones President Goatabaya (sic!)
‘Xi calls for gradual resumption of China-SL practical cooperation’
• SriLankan airlifts 45 tons of cargo including 7mn face masks from China to S. Africa
• Pathfinder-TV1 to exchange knowledge on China-Sri Lanka Covid-19 fighting experience
‘TV1..Pathfinder Foundation, and the highly regarded Friends of the Silk Road Club of China, will broadcast…The Chinese side will consist of Prof. Wang Yiwei, Jean Monnet Chair Professor, Director of Institute of International Affairs, Director of Centre for European Studies at Renmin University of China, and Prof. Dr. Dai Yonghong Director, Institute of Bay of Bengal Studies, Shenzhen University, and the SL side will consist of Admiral Prof. Jayanath Colombage, Additional Secretary to the President for Foreign Relations, and Dr. Jeewaka C. Premaraja, CEO of ACME Academy of Science and Member of the Presidential Task Force for Covid-19 control in SL…’
• Welfare state without ethics
• Reorientalism: How White Passports Became Worthless
‘A Canadian passport gives you visa-free access to 95% of the world. A Sri Lankan passport only gives access to 22%. For anywhere else we have to beg, grovel, show bank statements, and pay for the privilege of rejection.’
• The US Military is Hell-Bent on Trying to Overpower China
‘The US has 6,185 nuclear warheads, while China has 290 nuclear warheads…but the US now understands that while it can bomb a country to smithereens, it can no longer subordinate all countries’
• Why Xi won’t repeat Ming Dynasty mistakes
‘With hybrid warfare 2.0 against China reaching fever pitch, the New Silk Roads, or Belt and Road Initiative, will continue to be demonized 24/7 as the proverbial evil communist plot for economic and geopolitical domination of the “free” world, boosted by a sinister disinformation campaign.’
• China: If We Have to Pay for Coronavirus, U.S. Has to Pay for AIDS, 2008 Financial Crisis
• Why is Taiwan excluded from the WHO?
‘Only 15 nations still recognise Taiwan over China, most of them economic minnows in Latin America and the Pacific.’
• The Erasure of Politics
‘Nas tries to avoid the unavoidable by turning the deeply unequal political relationship between Israel and the Palestinians into a cultural misunderstanding between Jews and Arabs’
• Nelson Mandela sells out Black Australia in 1990
• Bolivia’s Minister for GMOs and Privatization
‘He’s long been an opponent of Bolivia’s state industries. Between 1997 and 1999 he was a senior advisor in the Ministry of Foreign Trade and Investment in the government of former military dictator Hugo Banzer. During that period, a number of state companies were privatized, including water, which was sold to foreign multinationals after recommendations from the World Bank in 1997…Ortiz also has links to the U.S. government. He was president of an NGO called the ‘New Democracy Foundation’ which received $122,000 in grants from the State Department’s National Endowment for Democracy (NED), in 2016 and 2017 under his tenure.’
• Revealed: Secretive British unit planning for ‘reconstruction’ of Venezuela
‘In late January 2019, for example, the UK Foreign & Commonwealth Office (FCO) urged the Bank of England to grant Guaidó access to £1.2bn of Venezuelan gold reserves. The Department for International Development (DFID) has also pledged some £40m of ‘humanitarian assistance’ to Venezuela, but it has refused to reveal where this assistance is going…. On his visit, Guaidó met with foreign secretary Dominic Raab, minister for the Americas Christopher Pincher, and director for the Americas Hugo Shorter. Notably, the list also includes “Head [of the] Venezuela Reconstruction Unit, FCO”, John Saville. The existence of this unit has never been publicly acknowledged…’
• A Dirty Military Incursion into Venezuela
‘The US, Canada, Colombia, and a list of other countries governed by the far-right and subordinated to Washington formed the Lima Group. The Lima Group tried to maintain a liberal patina: to “contribute to the restoration of democracy in [Venezuela] through a peaceful and negotiated settlement.” Trump ripped aside the fig leaf of this kind of liberal language; he interpreted the phrase “restoration of democracy” quite rightly as a military coup or an armed intervention to overthrow the government.’
• Ex-Green Beret led failed attempt to oust Venezuela’s Maduro
‘Leaders of Venezuela’s U.S.-backed opposition knew of the covert force, even if they dismissed its prospects….One person who allegedly promised support was Roen Kraft, an eccentric descendant of the cheese-making family who — along with former Trump bodyguard Schiller — was among those meeting with opposition envoys in Miami and Washington.’
• The Plandemic?
‘ee does not believe in conspiracy ‘theories’, we believe capitalism plans events all the time: The Coronavirus Aid, Relief, and Economic Security (CARES) Act which gave 2.2 trillion dollars to banks and corporations in the USA in March 2020, was originally introduced in the US Congress as HR748 on January 24, 2019, a whole year before the outbreak. Meanwhile, the Rockefeller foundation also had a plan for a possible pandemic.
• ICC to arraign USA for war crimes – Chandraprema
• The Sheepdog Caucus and So-Called “Democratic” Socialists
‘The “democratic” socialist worldview supports socialism except in places where people are actually trying to build it.’
(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 legitimate 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 as the basis of a turlu independent nation.
• Why private sector when Govt. labs can do it?
‘President of the Joint Council for Professionals of Supplementary Medicine, Ravi Kumudesh, said that the government labs had the capacity to conduct 2000 PCR tests a day and that there was no reason to outsource PCR tests to other institutions. Kumudesh said that those institutions had issued around 1000 erroneous test reports and that the government labs had to redo the tests.’
• The Covid-19 Debrief – Experts discuss Sri Lanka’s unique approach to managing the pandemic
‘“If you have a well-designed house, quarantine is possible at home. But we have areas where shanties with very poor socio-economic conditions. Dr. Jasinghe said…the authorities have taken measures to relocate beggars as a part of the country’s pandemic management efforts. “Beggars have also been taken to certain residential facilities where they are taken care of. Notwithstanding the socio-economic level, I think they have been treated well..’
• Large crowds force closure of markets in Puttalam town
‘Though traders were evicted from the market, officials said they are allowed to engage in trade elsewhere in a manner that follows health and social distancing guidelines.’
• Lanka will have to learn to live and let live with Covid
‘The people living in the Western Province of Lanka, which comprise Colombo, Gampaha and Kalutara, number 5,881,000 according to the 2012 official census but, 7 years later, in 2019, it has been estimated to be 9 million, nearly half of the country’s entire population…Daily more than a million people converge on the capital Colombo from the outskirts of the city to their place of employment. Their mode of travel, apart from the trains, is mainly the buses, both government and private…True, though the Sri Lankan citizen’s fundamental rights are enshrined in the Constitution, in Articles 12, 13 and 14, Article 15 possesses the power to render them null in the national interest.’
• President reviews current status of digital ID
‘It includes information not only for obtaining passports and driving licences but also for pension, Samurdhi allowance, income tax and casting vote. The idea of a digital identity card was first mooted by the President when he was the Secretary Defence, the PMD said. The initial preparation commenced in 2012. The new identity card will be prepared under the Information and Communication Technology Agency (ICTA) and the supervision of a Presidential Task Force. President instructed the officials to take measures to issue the new identity card to every citizen soon. The discussion was attended by the Secretary to the President P.B. Jayasundera, Principal Advisor to the President Lalith Weeratunga, Secretary to Ministry of Public Administration J. J. Rathnasiri, Secretary Defence Major General (Retired) Kamal Gunaratne, Additional Secretaries to Ministry of Defence Waruna Dhanapala and U. K. Bandara, Controller of Immigration and Emigration V.B. Sarath Rupasiri, Commissioner General of Department for Registration of Persons Viyani Gunathileke, Registrar General N. C. Vithanage, Chairman of ICTA Jayantha de Silva and Chief Executive Officer Mahinda Herath.
• Gota’s Inner Circle
‘The “International Truth and Justice Project” has published an “infographic” depicting Gota’s inner coterie of military brass and core family, today’s rulers’
• Fire at Deiyandara Magistrate’s Court record room
• Another danger
‘According to the National Council for Road Safety, in Sri Lanka, the number of fatal accidents increased from 2,924, in 2017, to 2,949 in 2018. The types of vehicles involved in fatal accidents, in 2018, were as follows: motorcycles (1,277), three-wheelers (365), trucks (344), dual purpose vehicles (318), private buses (237), cars (210), SLTB buses (62) and bicycles (42).’
• Stepmotherly treatment for Police Support Services?
• Perpetrators of “singithi paathalaya” on social media tracked down
• Public sector goes back to work embracing technology
‘The current backlog of court cases is reported to have exceeded 800,000. Typically each backlog case is called up around three times annually. Thus, on any working day, the litigant populace daily commuting to courts is over 70,000 & increasing – most just to be informed of the next calling date…’
• Security vacuum at many archaeological sites
• Tough action against vandalizing archaeological and historic sites: Def. Sec.
‘A naval sub-unit has been established to maintain the security in the environs of the Muhudu Maha Viharaya, an ancient Buddhist temple in Pottuvil.’
• CJ43 alleges calculated UNP attempt to sabotage her defence against arraignment
‘CJ 43, in her memoirs, repeatedly questioned the impartiality of the police. Her assertion that the police cannot be trusted, and always cooperated with the political authority, at the expense of public interest, should have galvanized those interested in the rule of law.’
• Cuban doctors to advise Lankan migrant workers in Haiti
• Foreign Minister thanks Cuba for attending to medical needs of Lankans employed in Haiti
‘The five-member medical team was dispatched by the Cuban authorities..to support the over-50 apparel sector Lankan employees in Haiti.’
• India Is Intensifying Its American-Backed Hybrid War On China
‘BRICS Is Broken –”India Is Now A US Ally” after it clinched the Logistics Exchange Memorandum Of Agreement (LEMOA) with the US’
• India rushes fighter jets as Chinese choppers are spotted along border in Ladakh
‘When asked about the aggressive attitude, the officer speaking candidly said: “It is unnecessarily being sensationalized. It is a routine Standard Operating Procedure (SOP)”…The Line of Actual Control (LAC), unlike international borders, is not clearly marked. The India-China border is 3,488-km long. Indian and Chinese soldiers were involved in scuffles during last one week along LAC in north Sikkim and Ladakh… 4 Indian soldiers and 6 Chinese counterparts were injured in the Naku La sector, ahead of Muguthang, a pass at a height of more than 5,000 metres in North Sikkim.. 150 soldiers were present…”
• PM Modi, Bill Gates discuss COVID-19 situation, vaccine to treat pandemic
• First Somali Congressperson Legitimizes AFRICOM and US Drone War
‘Rep. Omar recently commended the US war machine for increasing the “transparency” and “accountability” of its bombing of her native country.’
• Video: Nevada Nurse in NYC: Covid Is Not Killing People – They’re Being Murdered
‘100% of her patients have died, and she makes it clear that although she is not a doctor, she is sure that these patients are not getting the proper treatment they deserve.’
• The Confessions of Marcus Hutchins, the Hacker Who Saved the Internet
‘At 22, he single-handedly put a stop to the worst cyberattack the world had ever seen. Then he was arrested by the FBI. This is his untold story.’
(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.
• Covid-19 would undoubtedly be a turning point Interview with CB Governor WD Lakshman
• Sri Lanka pays 48% of its revenue in debt service, and Angola 43%
‘According to the World Bank itself, Covid has pushed about 40-60 million people into extreme poverty, with best estimate being 49 million.’
• Sri Lanka is a Goldmine
‘Associate Professor of Erasmus University, Dr. Howard Nicholas dissected the current state of the Sri Lankan economy and prescribed what’s needed to rectify the lapses, while speaking to Indeewari Amuwatte on current affairs programme @HydePark on Ada Derana 24’
• After Covid-19: Creating employment for the ‘periphery’ – Vagisha Gunasekara
‘Another possible measure is to introduce a retraining programme for workers in industries that are unlikely to improve within the next year… to up-skill young workers by paying a lump-sum allowance to cover accommodation and transportation costs during the training or retraining programmes..
An important point in reconfiguring Sri Lanka’s manufacturing sector is to focus on ‘connectibility’ between manufacturing enterprises of all sizes. It is now well understood that the issue of horizontal (clustering, networks) and vertical (subcontracting) connections within the local manufacturing sector is a crucial determinant of a local economy’s ultimate sustainability through industrial development. Currently, larger manufacturing firms are unable to purchase raw material or technology locally due to issues of quality, consistency and other reasons. As a result, they end up importing most inputs of production, which has a bearing on foreign exchange reserves…In thinking about correctives for the Covid-19 induced increase in the ‘surplus population’, the government must steer clear of age-old development interventions such as microfinance-driven self-employment and micro-entrepreneurship that have been proven failures..set up for failure by its very design, and it eventually de-industrialises and infantilises the local economy. This method is in many ways the ‘easy way out’ and many international donors would support it too. But this is not a time for short cuts. We must find a solution to the employment problem that is effective in the long run, whilst ensuring economic recovery, and safeguarding foreign exchange reserves.’
• CB outlines strategies to support Lanka’s economic take off
• Sri Lanka growth stalls, GDP drops US$200 in 2019 after monetary instability – Bellwether
Where the pseudonymous writer lays down further capitalist gospel, throwing out a lot of jargon, rife with major typos, that comes down to privatizing public goods, and against printing money, etc: ‘W A Wijewardene who had played a key role in keeping monetary stability during the war years had left the agency.’
• Former Moratuwa Vice Chancellor Willie Mendis Complains about Life in the 1970s
‘Sri Lanka closed its economy in 1972. The objective was to promote self-sufficiency and foster prosperity amongst all Sri Lankans. The reality was food shortages, acute malnutrition, and a failing economy’
• Central planning warranting a ‘re-visit’
‘If governments come to acknowledge that the high prices of essentials are not determined by ‘market forces’, such as demand and supply, but by businessmen and traders with an avaricious eye on extortionate profits, they would be compelled to intervene in the market and resort to central planning to ensure that all sections of society are treated with a high degree of equity and justice.’
• Facing the ‘tsunami’ – Reductio ad Abeyratnum
‘the world economy was anyway heading towards a recession even without the Covid-19 issue. The expansion of a gigantic money and credit bubble had already been driving the world economy towards a downfall….the most critical issue is the emerging possibility of bursting the debt bubble with widespread defaults.’
• Sanderatne wants more exports
‘Although the trade deficit was brought down by as much as US$ 2.3 billion, the balance of payments did not reflect this improvement due to a decrease in tourist income, inadequate foreign investment and capital outflows. This underscores the vital need for export growth to achieve a better balance of payments outturn.’
• Malaria and Covid-19 – II – Philips
‘The [WW2] trade surpluses were frittered away to cater to the “backlog of consumption demand.” A quarter of the wartime assets were spent in one year alone, 1947…AJ Wilson would later call this early prodigality, “an orgy of unplanned spending,” by the first UNP government…Sri Lanka has about eight million working-age people…. Two million (25%) of the workforce are in agriculture, including the plantations. They are the most vital sectoral group, critical for both domestic food production and 22% of export earnings…One and a half million (18%) are in manufacturing and they account for virtually the balance 78% of export earnings, 45% of which accrue from textiles and garments and 7.5% from rubber products…Another one and a half million (18%) of the workforce are in government and semi government jobs… agriculture, manufacturing, and government jobs account for 60%, or nearly five million of the total employment. If all of them can be enabled to resume working, that will activate 60% of the informal workforce, or two million (25%) of the total 3.4 million (42%) strong informal sector. So, if 85% of the total workforce can resume working that would virtually eliminate the government’s burden to support the working people during the lockdown.’
• Prabhat Patnaik Speaks in JNU on Kerala Model of Development
“That even a state that is ‘poor’, ‘low-income’ can have social development indicators…better than even advanced capitalist countries…by growth through egalitarian distribution…”
• Advent of ‘Economic Paradigm Shift’ and 5G during the Post-Covid19 Revival Phase
‘When we make a comparative analysis between the behavior of Western political leaders and citizens of Western countries and the response from the communist countries, a strong preparedness and a response to fight with Covid19 was not visible among the Western countries’
• The Deadly Consequences of Neoliberalism: The Covid-19 Pandemic in Germany
‘Bertelsmann Foundation, one of the most influential neoliberal think-tanks in Germany, told us that we would still have too many hospitals in Germany and proposed to close more than 800 of the remaining hospitals…. Germany has one of the largest sectors of low-wage employment in Europe…. We do not know the number of cases of unreported deaths.’
• Bank of England…
‘The breakdown in supply chains, and the resulting chain reaction from the fall in employment (a negative multiplier) has cut down incomes drastically. The Bank of England announced that they faced this year, the deepest depression in the economy in 300 years.’
• The Virus, Capitalism, and the Long Depression
‘These crises have occurred approximately every 8-10 years since capitalism became the dominant mode of production and social relations globally. The last slump was one of the deepest and thus called the Great Recession, where nearly every capitalist economy contracted for up to 18 months….In the immediate pandemic crisis, socialists must be demanding that working people should not pay, as they are always forced to, for this crisis. Monetary and fiscal stimulus packages should be directed to saving jobs, keeping wages and sick pay at levels needed to live, reducing rent and interest burdens for households and providing health support for all. Instead of governments bailing out companies and banks, they should be alleviating the misery of working people….Longer term, socialists must use this crisis to explain that it is capitalism that creates these recurring slumps (and more frequent pandemics), and it is only by replacing the capitalist mode of production for profit with a planned and democratically run economy that these regular slumps (whatever the trigger for each) will be stopped.’
• Beyond the Plague State
‘States of alarm and emergency proliferate, veritable sanitary dictatorships are spawned (most egregiously in Hungary), a public health emergency is militarized, and what The Economist dubs a “coronopticon” is varyingly beta-tested on panicked populations.’
(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.
• PB’s admission highlights enormity of financial crisis facing country – DEW
‘Asked whether he believed one-time Finance Secretary Dr. Jayasundera, who kept the country’s economy humming in the middle of a devastating war, to defeat the LTTE terrorists, amidst the worldwide economic crisis of 2008, overstepped his limits, the former minister pointed out that the statement was obviously issued in his capacity as the head of the public service, in addition to being Secretary to the President, knowing the dire straits the country was in.’
• President calls on banking sector to think out of the box
• Sri Lanka President asks banks to give subsidized credit to identified sectors
‘We must move towards a production economy.’
• Sri Lanka halts dividends, profit repatriation, share buy backs by banks
‘Sri Lanka’s central bank has halted banks from declaring dividends and foreign banks from repatriating profits under new regulations which it said was to conserve liquidity amid a Coronavirus outbreak until December 2020’
• Sri Lanka Treasuries yields down, no money printing visible
• Fitch warns IMF Debt Suspension Would Ruin Ratings
‘Fitch Ratings last month warned that multilateral development banks could see their credit ratings suffer if they let the poorest nations suspend sovereign debt payments.’
• Sri Lanka’s vulnerable politics could affect external debt financing: Fitch Ratings
• CB implements extraordinary regulatory measures to pump in more liquidity to banks
• Dwindling foreign reserves, increased money printing to exert pressure on rupee
‘Morgan Stanley stated that they now prefer Pakistan ISBs over Sri Lanka’s in the Asian context and Ghana over Sri Lanka in the global context, mainly due to Sri Lanka’s worsening fiscal environment.’
• Sri Lanka, IMF continuing talks for emergency Covid support
• IMF considers Lanka’s request for rapid financing facility
‘The aid granted under the IMF’s rapid financing initiatives comes without the usual conditionality. But the Fund is working to ensure transparency and prevent corruption by asking all recipient governments to commit to enhanced reporting of crisis-related spending and undertake audits’
• Vestiges of the 1970s?
‘The foreign exchange saving due to the import ban is US$ 1.4 billion per month.’
• Import contraction to outpace fall in exports – Frontier Research
• Sri Lanka’s fiscal outlook bleaker than ever
‘Around Rs. 100 billion is needed monthly for the salaries and incentives of public servants, state corporations, boards, banks and insurance.’
• Sri Lanka’s Rupee appreciates to Rs.191.5 against the USD: reserves decline sharply
‘…amid foreigners exiting from government securities…’
• Forex reserves drop in April
• First Capital Research report, ‘Covid-19 impact on CSE sectors‘
‘Beyond the 3 month period, and with the relaxation of import regulations we expect a gradual recovery in the General Insurance business. Due to the adverse economic situation, higher number of withdrawals from finance companies would be witnessed….Covid-19 takes a surprising toll on economic activities of Banks which unvaryingly results in lesser demand for credit.’
• Mangala appeals to Prez:
‘On March 10, the Secretary to the Treasury issued National Budget Circular No. 1. This circular, available on the Treasury website, was sent to all ministries and heads of departments authorizing expenditure under Section 150(3) of the Constitution from March 6 onwards. This Circular is unconstitutional and has no validity in law.’
• Modi announces $270 b virus economic package
• India announces INR 20-trillion Economic Stimulus Package to battle Covid-19
• India’s Big Bang Economic Stimulus to battle COVID-19
‘INR 50-billion special credit facility for nearly five million street vendors with initial working capital of up to INR 10,000… About 80 million crore migrants are to be given five kg of grains and one kg of chickpeas per family for two months…INR 300 billion additional emergency working capital for 30 million farmers…’
• Covid-19 economic impact could reach $8.8 Trillion globally — ADB Report
‘Global employment decline will be between 158 million and 242 million jobs, with Asia and the Pacific comprising 70% of total employment losses. Labour income around the world will decline by $1.2 trillion to $1.8 trillion—30% of which will be felt by economies in the region, or between $359 billion and $550 billion.’
• Argentina misses deadline on international debt agreement
‘Deadlocked over Argentina’s $65 billion debt, the three main bondholder groups rejecting a government restructuring proposal, say they are unwilling to swallow “disproportionate” losses on their investment…Failure to pay would mean a default, a near doomsday scenario for the cash-strapped country that would prevent the government from seeking credit from the financial markets’
• The US Fed Hasn’t Spent a Dime Yet for Main Street Versus $735 Billion for Wall Street
‘Here is a list of Wall Street bailouts so far….’
(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
• Time to wake up and lend a hand
‘I saw a long line of people standing on the pavement….There was a pawnshop, they were waiting to pawn things they had. Whatever they had.’
• DFCC Bank’s Ranwarama pawning facility lends helping hand to those with urgent cash requirements
‘DFCC Bank is rated AA- (lka) by Fitch Ratings Lanka Limited.’
• Sri Lanka cabinet clears Rs25bn Coronavirus income supplements
‘Health Minister Pavithra Wanniarachchi had proposed that a 5000 rupee payment be made to 514,046 persons in May.. to low income persons who lost their livelihood, elders payments and those on kidney treatment.
• Covid-19 exit strategy demands exit strategy for Economic Crisis too
‘This FDI-based export manufacturing industry has no validity anymore. The Employers’ Federation of Ceylon (EFC) admits, the pandemic has severely impacted on all businesses globally, without exception. It is thus used as an excuse for Employers to lay-off employees, not for survival but more as means of saving “profits”.’
• Employers give pledge to govt.: Won’t lay off a single employee
‘The employees serving in the private sector are three times of the public sector employees. The government is of the view that no one must suffer because of the Covid-19 unnecessarily’
• BASL focuses on uncertainties in the post-Covid-19 labour market
‘If you stick to Shop and Office Employees Act, it validates 60% authorized deductions, then wages boards only 50%. These are things that are still in the law. I don’t think these can be strictly adhered to. You see the national minimum wage rule is there on tripartite agreement which is Rs. 13,500. There are 43 Wages Boards or different types of employment boards. No Wages Board has stuck to the national minimum wage because everybody knows that it’s not enough.’
• Historic tripartite deal reached on Wages Board pay for employees during Covid-19
‘The Employers’ Federation of Ceylon (EFC), the trade unions and the Ministry of Skills Development, Employment and Labour Relations have reached what has been described as a historic tripartite agreement to pro-rate wages based on varied levels of deployment of staff.’
• Reorganize tertiary education to enable graduates to find jobs, President tells Uni. chiefs
• Teachers get tough with govt. on requirements for schools reopening
‘”The government must ensure that 4.3 million students and 260 000 teachers and principals receive adequate face masks before schools start,” he said.
• Request to donate salary could be seen as a threat: Ceylon Teachers’ Union
“Last month they said they wouldn’t charge interest from government workers since they are in a desperate situation….But in the end, interest was charged. Now they’re asking us to donate a day’s salary to reduce the budget deficit. It is wrong to ask that.”
• Postal Officials express displeasure at April pay cut
• Postal Department ready to refund day’s salary
‘Postmaster General Ranjith Ariyaratne said the majority of the 22,000 workforce agreed to contribute to the Covid-19 Fund, however, only a group of some 1,000 were opposed to it…the Sri Lanka Postal Services Union said the money was cut from their salary, on a decision taken by the Post Master General, without their consent.’
• JVP asks govt. to pass benefit of falling prices on to public
“As per the latest Central Bank report, the per capita tax burden is at Rs 80,000. Every citizen is made to pay Rs 80,000 in taxes to the government. The per capita debt is at Rs 650,000, thanks to the loans taken by the governments in the past’
• WFP and Australia provide funds to help 80,000 school children receive take-home food rations amidst school closures
‘In Sri Lanka, over 1.1 million primary school children have been receiving mid-day meals through the Government-funded National School Meals Programme. The take-home ration method has also been widely used by WFP, even before Covid-19, when restrictions arise such as limited access to schools.’
• Planters’ Association outlines response to Covid-19 challenge
‘”Contrary to what some small trade unions have been falsely claiming in local and international media, the response against Covid-19 in the plantation sector has been unprecedented and exhaustive…. RPC employees have been working tirelessly to safeguard the RPC workforce of approximately 135,000 as well as the wider estate community of more than one million individuals….The PA noted that there had been some instances workers and estate community members have been compelled to resort to improvised masks owing to shortages of such equipment in the region,’
• Migrant Workers in a Mess
‘The return of 20% of migrant workers will aggravate the prevailing labour conditions with surplus of labour where poor demanding capacity or bargaining power will be left with labour rights, labour conditions and wages too, he said. “Sri Lanka’s migrant worker population is around 2 million”’
• Foreign Employment Agencies seek govt assistance
Association of Licenses Foreign Employment Agency of Sri Lanka (ALFEA) is requesting the government to help their employees…There are currently 1 .7 million workers overseas and over 90% of them are recruited through our Recruitment Agents. The migrants provide around $ 8 billion remittance every year to Sri Lanka. In addition, $3 billion has been paid to our Foreign Employment Agencies as service charges.”
• Vocational training for Sri Lanka’s prisoners with private sector participation
‘Nearly 100,000 get remanded annually’
• Covid-19 Pandemic to Turn a ‘Hunger Pandemic’ – UNWFP
‘An estimated 265 million people could be pushed to the brink of starvation by the end of 2020 said UNWFP. He said already 135 million people had been facing acute food shortages in the world, but now with the pandemic, 130 million more people could go hungry by end 2020.’
• The Coming Precarity: Employment in Canada after the Crisis
‘Lacking a collective sense of class, and without the guidance of pro-labour institutions like unions or a prominent worker’s party, the precariat has made for an unreliable political coalition. Their uniquely insecure position makes them amenable to populist signaling, but this is not paired with a particular allegiance to the Left.’
• Saving the old from Coronavirus has become a moral dilemma
‘Texas Lieutenant Governor Dan Patrick stated in public that older people would rather prefer to die than hurt the US economy. Right Wing Broadcaster Glenn Beck demanded that people over 50 should go back to work even if they got sick… Economistic arguments can go too far as in Jonathon Swift’s Modest Proposal, wherein he wrote satirically about the Irish famine, and that the poor should sell their babies to be eaten to avert hunger and overpopulation…’
(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.
• President hangs tough over ban on Ethanol imports
• Can’t allow irrational laws to impede our economy: President
‘The President also emphasized the importance of removing the plantations that are not suitable to the country or harmful to the environmental conservation of Sri Lanka and planting the crops most suitable to the country…. The President noted that a decision was taken to cease the importation of Ethanol which had been traumatizing the economy for a long time and he added that he would not withdraw his decision due to any influence from businessmen.’
• Canada’s High Commissioner clarifies: Canada is SL’s Top Wheat Supplier
“Not sure how it looks to troll your own organization but…#Canada is not just “one of #SriLanka’s top wheat suppliers”, we are SL’s top wheat supplier by quite a margin. And we have been for many years.” (SL’s annual wheat & maize imports = $374mn)
• Paradigm shift needed for economic revival and poverty eradication
‘By using wet milling, cassava can be converted into flour which can be used as a food ingredient in cooking. Ethanol can be produced from cassava. Snack items such as chips could be produced from cassava. In China, noodles produced from sweet potatoes are a favorite dish. It is also of medicinal value for diabetic patients. Jam, sauce and pickles made from sweet potatoes have a substantial demand, which we have not explored into. Soup and porridge made using sweet potatoes are served in foreign countries. Sweets, desserts, fresh salads and curried dishes out of the leaf stem of certain tuberous crops are ideal for consumption. When we hear these innovative developments, we ought to be ashamed that we are still living in a primitive society.’
• Financial Times wants to keep importing potatos!
‘Local production costs of potatoes are significantly higher than that of imported potatoes. Domestic producers are kept afloat by slapping special commodity levies on imported potatoes. What this means is that domestic consumers are paying more for inefficiently produced local potatoes and paying indirect taxes to the government for the imported potatoes they consume. Protectionist duties add up, making food more expensive for all. As a result, the cost of labour is higher in SL. Therefore, many industries that must compete globally are hobbled by high labour costs….Instead of prohibiting imports and imposing taxes on consumers to protect inefficient producers, the state should ensure that supply chains are resilient because they are diversified both domestically and internationally. The best way to do this is by preventing the monopolisation of links in supply chains. Simplistic retreat to slogans such as self-sufficiency will not suffice. SL has experience with those policies from the 1970s. Then they gave rise to black markets for the affluent and malnutrition for the poor. What was implemented in a much simpler time cannot be made to work in today’s more complex economy where consumer preferences cannot be satisfied by ration shops.
• Sri Lanka coconut auctions go online
‘Coconuts at auctions are mostly bought by desiccated coconut and oil millers.’
• SL’s ban on pepper imports leads to sharp fall in imports to India
‘Sri Lankan government has increased vigilance since February, to prevent the routing of Vietnamese pepper into India with a fake certificate of origin of Sri Lanka.’
• Viral Lessons
‘The corner shops have become relevant. Posh supermarkets failed their customers spectacularly. The humble three wheelers, vegetable sellers and fish mongers came to the rescue of the middle-class bourgeois, better known as toiyas.’
• Sri Lanka’s CAA ends ‘black markets’ it started in dhall and tinned fish
‘In this article the merchant class gloats about its vicotry over the government’s halfhearted enforcement of import and price controls, and states its gospel of hatred towards rationing claiming it automatically leads to blackmarketeering and hoarding…’
• Plantation sector has a key role to play to build local economy – President
‘“The reasons for Janatha Estate Board to be a loss making entity must be investigated.”’
• Who Speaks for Small Farmers, Earthworms and Cow Dung?
‘The late Ray Wijewardene in conversation: “I whole-heartedly agree with the senior officer of the Department of Agriculture who said, in a rare moment of candour: “Fifty years of the DoA has been a total failure….Still, 90% of our farmers are recipients of poverty alleviation subsidies…. The US PL 480 (Public Law 480), which annually provides large quantities of wheat to the developing countries at comparatively low prices, is one of the biggest enemies of our farmers, who are squeezed between diminishing real prices for their produce and the increasing costs of production.”’’
• Short supplies trigger high prices for tea following demand hike
‘John Keels Holdings Tea Report indicated Russia, Turkey, Iran, CIS countries were observed to be main supporters of Ceylon Tea in Colombo last week. Libya and Iraq were selective in their buying.’
(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.
• Help for biz hit by import restrictions
‘More than half of Sri Lanka’s imports are intermediate goods needed for exports’
• Transforming how tea is bought and sold in Sri Lanka
‘With a potentially devastating economic shock looming, the Sri Lanka Tea Board and its Tea Traders Association turned to a local Microsoft partner, CICRA Solutions….Buying and selling are now conducted safely and securely via Microsoft Azure, with traders bidding virtually from their homes or offices. The first e-auction went off well with high demand.’
• Sri Lanka State SOEs to get Coronvirus bailouts for salaries
“It was decided to provide financial facilities to public enterprises such as Sathosa, Janatha Estate Development Board and State Engineering Corporation.”
• Sri Lanka streamlines sand, mineral transport licenses
‘Sri Lanka’s Geological Survey and Mines Bureau (GSMB) issues about 100,000 licenses a month or about 1.2 to 1.5 million licenses a year.’
• CEB urged to speed up dredging of reservoirs to maximise water storage, power generation capacity
• Delays in power projects costing billions to be probed
• A design and manufacturing approach for post-Covid revival in Sri Lanka
‘The interest on engineering and technology education needs to be sustained and more funding must be diverted to see a constant supply of the human resource of the required quality…. there are no incentives to develop the plants and equipment within Sri Lanka.’
• 90% of BOI firms resume operations
‘Around 90% of Board of Investment (BOI) approved factories within the 12 Export Processing Zones (EPZs) have begun operations by yesterday with an estimated 50% employee turnout… There are total of 244 factories employing 46,230 in 12 EPZs.’
• Lessons for Sri Lanka from regional manufacturing hubs
‘Apparel is the single largest industry generating a revenue of $ 5.5 billion which contributes to 44% of SL’s merchandise exports with over a 500,000 workforce (15% to the total workforce), whilst the second largest contribution comes from the tea industry contributing to 12% of total merchandise exports. Moreover, 85% of the workforce comprises of women and any negative impact to their jobs will have spillover effects on the country’s sociocultural factors. SL reports a negative trade balance of $ 8 billion (2019) and as a result the rupee is being depreciating throughout. SL is having subnational loan amount of $73 billion (87% of GDP) to payoff….70% of the total cost comes from raw materials (variable cost) and only a ‘contribution margin’ of 30% is available to cover all other expenses and secure profit. The average salary and wages costs around 18% to the sale value, which is around $ 900 m per month for the industry (based on $ 5 b export value), however the SL Government’s bailout package for the ‘entire country’ is only $ 270m [Rs. 50 b], which is not sufficient to rescue any industry….While SL generates revenue of $ 5.5 b, the net contribution is around 55% [$3b] SL relies extensively on its raw materials from other regions, where 40% of fabric and accessories are imported from China, even though they are known as an expensive hub with wage costs being twice as much as SL. ’
• ADB provides USD 25 mn Trade Loan to SPC
‘The Asian Development Bank (ADB) has provided a guarantee for a $25 million trade loan to the State Pharmaceutical Corporation of Sri Lanka (SPC) to purchase medical supplies as part of the country’s response to the novel coronavirus disease (Covid-19) pandemic…ADB’s Trade Finance Program guaranteed 85% of the trade loan extended by Standard Chartered Bank to the state-owned People’s Bank and onwards to SPC to support its import of these critical medical goods.’
• President instructs to focus on rapid development in main cities
• Don’t blame China, take this opportunity to develop industries in Sri Lanka for export
‘Sri Lanka must attract leading Chinese companies to establish in a Chinese export zone in Sri Lanka, where quality tools, machinery, motor spares, electric vehicles, solar energy and materials to the garment industries will be manufactured. This will give technology transfer and job creation. Now as never before Sri Lanka needs an export-led economy and not an import-dependent economy.’
• 100% made in Sri Lanka cars by next year: Dilantha Malagamuwa
Is it comedy or tragedy that a news story contradicts its headline and lead paragraph a few lines further: “However, the engines and gearboxes will be imported as the manufacture costs would be much higher than the manufacturing of other vehicle parts,” he said”
• International supply chain industry could hardly predict the near term future: SAGT COO
• SLT Group 1Q 2020 operating profits grow by 28% to Rs.3.2bn
• Fitch revises DSI Samson Group Outlook to Stable; Affirms ‘BBB(lka)’
‘Fitch estimates that DSG had around LKR800 million of cash at FYE20 and undrawn but uncommitted lines of LKR6 billion, against debt maturities of LKR10 billion falling due in next 12 months.’
• Covid-19 Unmasks Dangers of Commodified Healthcare
‘Fidel Castro saw the promise of interferons for curbing infectious diseases typical in countries like Cuba. By September 1981, having learned from Finnish doctors how to isolate human interferon and produce it en masse, Cubans created Interferon Alfa 2B to treat Dengue fever, which affected 344,203 people in 1981. Due to the success of the antiviral, only 158 deaths resulted from the outbreak. Multinational as it is, Interferon Alfa 2B could not have been a project for the multinational pharmaceutical industry. This is because such a drug cannot realise the level of profit required by pharmaceutical corporations.’
• Why Capitalism Can’t Cure Global Pandemics
‘Venkatraman Ramakrishnan (Nobel Prize winner for chemistry in 2009) pointed out that the current model of developing medicine will not work for infectious diseases for two reasons. One is that drug companies do not see an incentive for developing a drug that cures patients in a few days. The other is that infectious diseases are far more prevalent in poorer countries, and the poor cannot pay the prices that multinational drug companies want.’
• An abysmal failure of leadership
‘He devised a plan for joint European coal and steel production, an arrangement that would eventually evolve into the European Union.’
• Out in Space: Difference and Abstraction in Planetary Urbanization
‘As Goonewardena has argued, the conceit of a planetary approach is to bring a ‘totality’ into view—not in order to homogenize or ‘fetishize the oppressive ways of the world, but to negate them’
(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.
• The Privatization of Development Banks – Nicholas
‘Presenting his views on technological advancement in developing countries Prof. Howard Nicholas stresses that privatization of DFCC and NDB banks is one of the worst things ever done to the Sri Lankan economy.’
• Sri Lanka insurers escape Covid mortality but hit by central bank controls
‘Import controls will hit insurance growth due to controls on vehicle imports, while currency depreciation will also push up claims costs, said Rishikesh Sivakumar, Senior Analyst Fitch Ratings…
Fitch had already downgraded state-run Sri Lanka Insurance after the sovereign rating was cut…Analysts and classical economists have called for the reform of the central bank, to stop currency depreciation and monetary instability which had held the country back from 1951…’
• February trade gap widens as exports languish; imports up
‘Personal vehicle imports in February rose 11. 3 percent YoY to Rs.53.6 million. Sri Lanka’s fuel bill in February rose 48.6 percent YoY to US$ 418.7 million.’
• Eshana De Silva appointed NDB Chairman
‘De Silva currently serves in the capacity of Chairman of several companies including the Esna Group, Hanjin Shipping, Shermans Logistic and Star Leisure, Esna Holidays. He was also the director of Interocrean Group, Sherman Sons Group and Fortress Resorts. He is also the Honorary Consul for the Republic of Kazakhstan since 2011, and chairman Pan Asia Bank.
• Central Bank of Sri Lanka implements Extraordinary Regulatory Measures to provide liquidity to banks amidst Covid-19 outbreak
• SL Central Bank strengthens liquidity position of banks
• CB to checkmate Covid-19 crisis with more cash
‘Announces further extraordinary measures to boost liquidity for banks to urgently support Covid-hit businesses, individuals’
• Appointment of joint committee of SEC and CSE to broadbase capital market through education and awareness
‘The Chairman of the SEC has nominated Commission Members Mr. Suhada Gamalath PC, Mr. Sunil Lankathilake, Mr. Manil Jayesinghe, Mr. Naresh Abeysekera, the Director General Mr. Chinthaka Mendis and directors Mr. Tushara Jayaratne and Mr. Prabash Wanigatunge to serve as the SEC nominated members of the Committee.’
• Singer Finance Debenture issue oversubscribed
‘Singer Finance is a resilient and trusted financial institution with a diversified asset portfolio spanning across the country, and is a 75% owned subsidiary of Singer ( Sri Lanka) whose holding Company is one of Sri Lanka’s largest business conglomerates Hayley’s .’
• Sampath Bank records moderate growth in PAT due to withdrawal of DRL & NBT
‘SB reported Profit after tax (PAT) of Rs 2.5 Bn for the three months ended 31st March 2020’
• A stitch in time saves nine: Consolidation to save ailing Licensed Finance Companies
‘Contributing to only 7.4% of the total assets of the financial system as per the CBSL annual report in 2019, LFCs play a major role in the banking and finance industry by prioritising the subprime borrowers who have not been prioritised by the banking industry… The LFCs with an asset base of over Rs. 100 b (large LFCs) maintain a cost to income ratio of an average of 40%, whereas the LFCs with an asset base less than Rs. 20 b (small LFCs) function at a cost to income ratio of over 75% on average as per the latest 3Q 2019 financial statements.’
• Sri Lanka banks readying for external pressure as ‘stimulus’ trigger downgrades
‘Sri Lanka’s banks which have borrowed abroad could face greater pressure from foreign lenders amid credit downgrades, a senior banker said as the first sovereign rating cut following a fiscal and monetary ‘stimulus’. Rating agencies warned the country above its weakening debt repayment ability as taxes were slashed in January in a ‘fiscal stimulus’ in a growth short-cut to try and boost growth after an output shock from a currency in 2018 which came from rate cuts and liquidity injections.
Downgrade – After policy rates were cut in January 2020 and large volumes of money was printed in a ‘monetary stimulus’ in March hitting a dollar soft-peg a amid a Coronavirus crisis and Fitch Ratings downgraded the country’ ‘B’ speculative grade credit to ‘B-‘, or a notch above ‘CCC’.
Hatton National Bank, Sri Lanka’s second largest private bank by assets said it was ready to meet any heightened concerns from lenders on rollover of its foreign loans. “We are actually making sure that we have enough funds to make all our repayments on the due date, just in case we are unable to negotiate anything different,” Hatton National Bank chief executive, Jonathan Alles told in an online forum organized by the Advocata institute, a Colombo based think tank.
“In this regard the rating .. matters because these are including in our loan structures. “It has an impact on our borrowing and our ability to borrow in the future and for the borrowing cost as well.” He said sovereign ratings and performance indicators were built into some loan covenants.
Many Sri Lanka banks have borrowed abroad, sometimes from oil rich Middle Eastern countries, which are also facing pressures due to low oil prices with state revenues also collapsing.
Difficult Questions – Foreign lenders were also questioning the lack of state support for Sri Lanka’s banks.
“We try our best to explain but, they all come from countries where there has been tremendous government support like 30% or 15% GDP is being allocated as stimulus in to the economy to support SME s and various others” Alles said.
“When you get a UK investor or someone coming from Singapore this is a bit challenging.
“And they are also very concern about the moratoriums we are granting, their impact on profitability more importantly sustainability of the business and the industry and the ability for the banks to continue.”
Singapore, which does not print money as part of its economic strategy based on classical economics, is using foreign reserves buffer to fund a deficit in 2020, without hurting the exchange rate or monetary stability.
• Accountants call on bankers to follow loss models
‘Managing Director HNB Jonathan said that if all banks reduced branches by 10% it would greatly push digitization.’
• Coronavirus adds huge flywheel to Lankan banks’ digitisation drive
‘The banks have now begun to reassess the need for all of their branches and are contemplating if they could operate with three-quarter of the branches while on-boarding customers into digital platforms as they attempt to stay nimble.’
• Banks bombarded with loan applications
• CSE lost a staggering Rs. 84 billion in value…
‘within seconds the previous day as it opened after one-and-a-half months of shutdown with investors apparently in panic selling mode influenced by severe impact on the economy from the Covid-19 pandemic and other shocks. It just took 38 seconds after opening for the active S&P SL20 Index to crash by 10 percent; a level circuit breaker which now requires the closure of the market immediately as per a new directive by the regulator the SEC.’
• Unnecessarily long CSE closure the cause for crash?
‘…during April, most markets including Asian markets have benefited by way of record runs in many years with the announcement of quantitative easing and fiscal stimulus measures taken by the Federal Reserve and other central banks throughout the world, analysts pointed out. “These moves have once again increased the risk appetite of the investors towards equity as an asset class,… when the CSE last traded on 20 March the stocks were attractively valued compared to other markets and was one of the cheapest in the region….Foreign Institutional Investors (FIIs) have made a material contribution towards equity capital raising in the CSE over the last three years. During 2017 to 2019 the Banking Sector alone has raised over Rs. 70 billion in terms of Rights Issues with FII’s subscribing to over Rs. 17 billion (25% ) of the capital raised.’
• European Commission delists SL from High Risk Third countries with Anti-Money Laundering
• Sarvodaya Development Finance staff helps daily wage earners
‘The contribution had been handed over to the Governor of the Western Province, Air Marshal Roshan Goonetileke.’
(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’
• Informal sector leads direct-to-consumer market over established channels during lockdowns
‘In both urban and semi-urban areas, the known small vendors in the locality have been chosen over delivery channels from supermarkets’
• Vehicle importers in disarray: no promised concessions yet from Govt.
• Lifebuoy effective against Covid-19 coronavirus in laboratory tests’
• Ceylon Tobacco’s cigarette sales down by 13% in a quarter
‘Company’s profit after tax – Rs.3.93 billion for the quarter ended 31st March 2020’
• BAT says potential COVID-19 vaccine using tobacco leaves ready for human trials
• Chaos as a catalyst for succession in family-owned businesses
‘70 to 90% of GDP is created by family businesses globally. Majority of Sri Lankan businesses in key industries be it small or large are owned by families with the exception of regulated and government-owned entities.’
(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.
• Brain-dead PCs on life support
‘We are burdened with more than 400 provincial councillors, and 45 of them are ministers. (There are 628 hospitals with 83,275 beds, according to the Annual Health Bulletin. We have 10 health ministers including nine in the provinces!)’
• Covid-19 no barrier to EPDP, pushes for early polls
• Dayasiri claims behaviour of EC member raises impartiality issues
• Right of Reply Dayasiri Jayasekara and SLFP/SLPP intimidate Election Commission
• Why didn’t they read Article 170?
‘When the Constitution explicitly vests only in the President the power to fix a date for the General Election, and requires him to do so in the Proclamation dissolving Parliament, by what authority has the Election Commission purported to usurp, or arrogate to itself, that power?’
• Holding the executive accountable is a democratic necessity
‘The long established Swarnahansa Foundation, and other intellectuals, that calls for presidential rule rather than having a costly parliamentary election at the present time…. a minimum of about 35,000 election meetings a day throughout the country for the five weeks of the election campaign for a total that exceeds a million meetings. Each of these meetings could attract between 10 to100 people quite apart from the thousands who will attend the larger political rallies organised by the political parties themselves’
• Jayampathy Wickramaratne, red-herrings and straw-men
‘Wickramaratne is a politician. He represented the United UNP as a National List Member of Parliament. Keep that in mind. All claims, arguments and dismissals are framed by party interest’
• ‘Ranil fielding weak team at 2020 general election!’
• Ex-MP Handunnetti complains against cabinet decision on misusing state vehicles
‘granted amidst calls made by the President’s Secretary requesting state employees to donate their salaries for May as a cost-cutting measure for the government.’
• Ex-state ministers using official vehicles: JVP cries foul, govt remains vague
“One minister uses about three vehicles. How much is the rent for a BMW or V8 per month? The allowance alone is Rs 240,000, which can easily cover that 100,000 fee,”
• Did we strengthen the PM’s office too much under 19A, causing instability? – Austin Fernando
(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.
• Task force, led by president SL combats Pandemic While Opposition flounders – Devapriya
‘The arguments and the criticisms that matter – including the plight of the daily wage-earner, the shocking contrasts of prices between regions, and the inability of the poorest in certain Grama Niladhari divisions to get the Rs. 5,000 promised to them by officials – don’t appear to be getting much emphasis in the popular press. I can only conclude that these don’t matter much to a party flirting with a suburban middle class, at least not so much as the constitutional arguments, mask-less task force briefings, and tuition master photo-ops. ‘
• Ven. Ellawala Medhananda Part 1
• Some reflections on the origins of Buddhism – Devapriya
• British Council launches Creative Economies report online
‘A research report ‘The creative and cultural industries in Sri Lanka’ with John Newbigin, the Ambassador for Creative Industries at Mayor of London, the former Chair of Creative England and current chair of the British Council’s Arts and Creative Advisory Panel as the keynote speaker, along with Annemari de Silva (researcher and writer), Dilani Hirimuthugodage (research economist at IPS), Gill Caldicott (Country Director, Sri Lanka British Council) Selyna Peiris (Selyn Handlooms), Linda Speldewinde (Design Corp Group) and Anushka Wijesinha (economist)’
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