ee archive: eesrilanka.wordpress.com
“Before you study the economics, study the economists!”
When Traders Masquerade as Industrialists: Recalling SBD de Silva
e-Con e-News 07-13 June 2020
“Everywhere there is a push to ‘open the economy’. What is meant, of course, is to bring back, as soon as possible, the profit-seeking activities of capitalist firms. It’s an unchallenged assumption that the return of normal capitalism, i.e., the ceaseless drive for the private accumulation of socially produced wealth, is crucial to overall welfare.” (see ee Economists, Open the Economy)
• “The National Peace Council gets funds from USAID, Asia Foundation, EU, English High Commission, Legal Action Worldwide, Misereor (German government), Catholic Agency For Overseas Development.” (see ee Random Notes, That Companies Act)
• Has the Central Bank always opposed independence? Who does it serve? Why did SBD de Silva seek exile from the Central Bank? This ee recalls SB’s brilliant scholarship, marking 2 years since he passed away. ee was launched 20 months ago to call up the spirit of SB’s dedication to transforming a colonial economy that’s never served us, Corona or no Corona!
This ee highlight excerpts from SB’s near-40-year-old suppressed classic, The Political Economy of Underdevelopment, where he openly recounts the ingenious cunning of import traders, who oppose any real transformation in Sri Lanka.
The present government says it’s curbing wasteful imports and promoting local production. Yet SB showed how, from 1970-77, this thieving trader class, evaded strict import controls, while masquerading as industrialists, soon destroying nascent national industry with a vandal’s delight.
As another capitalist crisis engineered by Anglo-America looms on the horizon, it’s salutary to recall’s SB conclusion: only a powerful state-backed socialist industrial policy can resurrect the country (see ee Focus)
A1. Reader Comments –
• Master Race & Liberal Democracy • ee loves the Rajapakses? • SWRD Murder • Keells & Cars
A2. Quotes of the Week –
• No Friends, Only Interests• Whites are better Judges, says Ivan the Terrier • Keell’s Radhika does HongKong • Memories of ’70-77 • UNP & Advertising Mafia
A3. Random Notes –
• Jockeying to Jilmart• Socialist Industrialization vs Capitalist Industrialization • Profiting off Black People in SL • ‘Ethnicity’, Race & Liberals • White Leftists • Black Diplomats & White Wars • ee News Compendium • Economists Love Exports • Stock-market Quickies • Central Bank & Finance Regulation • Harry wants Flex • US Trade War on China • Rajeewa, Victor & Dayan • Autos, Oils & Roadkill • National Peace Council & Companies’ Act
B. ee Focus
B1. SBD de Silva & the Heat of the ‘Cold War’
B2. 2 Yakku Haunting the Central Bank – John Exter, & SBD de Silva: Memories of a Great Guru III
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 to send them as email.
• “I disagree totally with ee‘s idea of the foundation of a liberal democracy. That’s a very warped view of history.”
• “ee is a fan of the Rajapakse clan….”
• “Were ‘they’ also behind SWRD’s murder? It was Sinhala Buddhist nationalists! It didn’t need the CIA.”
• “Horrible to see once again all those ugly huge ‘cars’ massed in front of Keells. They always upset me but now even more. Do they all need such huge ‘cars’? Isn’t it time to cut back? Has Covid-19 taught us anything?”
• ee Response to ee Reader Responses:
– On Liberalism & Master Race, ee recommends Domenico Losurdo’s classic Liberalism: A Counter-History. Read: platypus1917.org/2012/05/01/liberalism-and-marx-domenico-losurdo; watch: vimeo.com/38923840).
– As for the murder of SWRD, see ee 6 Oct 2019 – Exposing the Real Assassins
A2. Quotes of the Week_
• “Pathfinder is nothing but an intelligence gathering outfit” (see ee Economists, Weerawansa)
• “We are following & awaiting for evidence of structural reforms that would build resilience into Sri Lanka’s economy.” – Singapore-based money manager (see ee Economy, Distressed)
• “They have no permanent friends or enemies. Only permanent interests. They always support both sides. So no matter who wins they always have a friend.”
• “Following independence, both European and Burger judges left Sri Lanka and the vacancies created by their departure were filled by indigenous people who did not have the acumen and adequate practice in the judicial field. Though they were well versed with the Law, they didn’t have a proper understanding of the role of the Judiciary in a democratic political system.” – Victor Ivan, FT (see ee Politics)
• “First came the climate change movement, headed by Greta Thunberg, then the Me Too movement, the HK democracy movement, the movement in India against the Citizenship Act and now Black Lives Matter.” – Radhika Coomaraswamy, FT (see ee Sovereignty)
• ‘Video-addressing the Houston congregation, Biden disclosed he “grew up with the Catholic social doctrine”. Today, combating “systemic racism” & instituting “racial justice” is his foremost priority.” – Dayan Jayatilleka, FT (see ee Random Notes, Biden)
• “I remember going to JR’s well attended rally in Maharagama in 1977. During JR’s speech they played over the loudspeaker clips of speeches by Anura & Sirimavo – a rather high-tech move for the time. Mrs B’s clip – repeated incessantly in the UNP campaign – was of course about ‘bringing rice from the moon (if all else fails)’. That’s what many remember, the alleged absurdity of importing ‘rice from the moon’, not the ‘if all else failed’, and especially the global recession of 1973 – the punctual origin of so-called neoliberalism or the ‘open economy’ as JR called it, with the full blessing of Washington. It’s truly valuable to analyze the memories people have of those 1970-77 times. It proves the power of the (dominant) ideology and the power of media both then & now…”
• “Some people insist the Left failed to inform people about the 1973 international economic crisis. Yet, Mangala Moonesinghe read out in Parliament from an article in Time or Newsweek, which spoke about poor people in the USA assuaging their hunger by eating clay. The archives has many articles in the local press about the world food crisis. The effect of queues on the populace was immense, and outweighed any government explanations. People tended to believe the UNP, even when Premadasa claimed the Spanish onions imported by the government were actually tulip bulbs, which the government was forcing people to eat (tulip bulbs cost a great deal more than onions!). People also believed stories about starving people eating grass. There were isolated cases of grass-eating, but these were probably psychiatric cases. UNP propaganda has always been better. JR used 2 agents in a bus, one at the front & another at the back, both blackguarding the government. Then it appeared as if the entire bus was blackguarding the government. Like English spy D’Oyly, JR also used poets, who would chant anti-government verses. One of the first things the UNP did in 1977 was to abolish queues, even for buses, which became cattlecars!”
A3. Random Notes (‘Seeing Number in Chaos’)_
• It’s election season, and we can expect a sharp rise in disinformation & violence, midst raucous jockeying to jilmart the expected landslide of the present ruling coalition. Yet can our governments, having handed over economic power to financial capitalism, really rule? Or do they stand in for rulers, given the various political deadlocks? What exactly can be accomplished midst a massive crumbling of the old economic order, while traders sabotage and fascist repercussions loom more threatening.
• Traders are easily undermining recent government import & production policies. Their media is negatively comparing these limited policies to the 1970-77 government. Yet, these media criticisms of that Sirimavo Bandaranaike government are strictly from a capitalist point of view.
The 1970-77 government did not have a single economic policy. The Left expected industrialization to be done by the state or the cooperative sector, and had no wish to create an industrial bourgeoisie as such. They were willing to leave consumer goods production to the private sector as well as the co-op sector.
The shortages of raw materials, the licensing system etc, 1970-77, were caused by shortages of foreign exchange, due to decreased export prices for tea, rubber, etc, and rocketing import prices for food& oil imports. This left little foreign exchange for importing raw materials and intermediate goods needed for industrialization.
SB de Silva identified some policy-level shortcomings that led to – alongside changes in class relations – neither real socialism nor real capitalism, due to the failure to create a national-industrial bourgeoisie and due to the profiteering of a privileged commercial class. The key issue remains how to define the difference between socialist industrialization & capitalist industrialization? How did that distinction inform SB’s work, and how does it matter today for us? SB’s criticisms are not a lament on the coalition government’s inability to develop capitalism in the way US Advocata advocates!
SB saw how traders sabotaged government policies. He advocated implementing a real industrial policy, which needed agricultural reform to energize the rural home market, and a holistic political economic & military strategy. (see ee Focus)
• Those who we never hear criticizing global imperialism or US interference in Sri Lanka, and in fact profit from the US government’s “non-governmental” largesse, are now all concerned about Black people in the US, but only to say we are as bad.
This week saw more clumsy yet vociferous attempts by Sri Lankan liberals to profit off Black people in the US by trying to conflate white supremacism with Sinhala Buddhism. Every news item about the ongoing white US charade ends up giving a lecture to Sri Lankans. Listen to former Keell’s director & UN official Radhika Coomaraswamy sermonizing in the Wijeya Group’s Financial Times She links the ‘feminist’ Me Too, Hongkong “democracy” & Black Lives Matter. She reveals her class bias when she calls the young more “sophisticated” for talking of “bias” & “privilege” than about “institutional racism”. She then casts her vote: “Many still support strongmen systems & dominance models of ethnic relations. In Sri Lanka eg voting patterns in the last election seem to suggest that.” (see ee Sovereignty).
Is US & white-settler reality about ‘ethnic relations’? ‘Ethnicity’ erases the entire nightmare of the genocide of whole peoples & continents, of chattel slavery (which bestowed slavery on children & unborn), and colonial depredation. These liberals also use unscientific concepts as ‘race’ on people in Sri Lanka, who have lived together in close proximity for 100s if not 1000s of years.
This ee also notes how not just liberals but those posing as ‘Western Marxists’ constantly attack socialist governments outside the Europeon sphere as “cultural nationalist”. (see ee Economists, Western Marxism Loves Purity & Martyrdom)
Most US Black leaders today refuse to condemn imperialist invasions, unlike Malcolm X & Martin Luther King, Robeson, Dubois & Garvey, who paid with their lives. The week saw US military leaders distance themselves from President Trump while affirming their right, not to defend the US from invasion, but to continue invading our countries. A letter from “black” US diplomats even complains about ‘racism’. Really? Yet there they are & were promoting white wars as their day jobs!
• There’s been a shift in the offensive to divide the country, with the local elements playing good cop, offering to negotiate just short of the Tiger demand for a separate state, while the international elements, UN, ICJ, ICG, & their local mouthpieces, CPA, Times etc, wag fingers about ‘militarization’. Meanwhile there’s a new NGO, Lawyers for Democracy? (see ee 24 May note on recent US pre-election funds for ‘social cohesion’) Funny there’s no NGO called Lawyers for Justice!
There were renewed attempts to promote the US MCC land grab, portraying it as yankee largesse. Is it also funny that countries like US, Canada, England, Japan, who are blatantly sacrificing the health of their own citizens and health workers, are offering us aid to fight the pandemic? These same countries, guilty of the most horrendous genocides in world history, yet strenuously denying them, keep trying to pin that label on Sri Lanka.
• ee is considering separating its News Index and placing it only on the website. Some readers find it “long ass!”, constituting almost 2/3 of ee’s weekly output, comprising almost 400 links. ee’s defense is: This is a compendium of only the English media, largely cut&paste business news, but not only. This compilation enables us to see patterns in bourgeois propaganda.
Take, e.g., the rising whine by capitalist companies demanding giveaways from the state to bail them out. This despite their propaganda for decades against state ‘interference’ in the economy.
ee also noticed the name of Paul Polman, former top Unilever CEO, appearing in several stories this week, from the international chamber of commerce discussion on “South Asia” to next week’s UN global compact. Polman, speaking for Unilever, told the corporate NGO front Center for Global Development in 2014: “We’re the world’s biggest NGO! …We’re a non-government organization. The only difference is, we’re making money so we’re sustainable.” (see ee 30 Nov 2018, 10 Nov 2019, 22 Dec 2019)) Unilever made $11.21bn in official profits in 2018! Unilever, as ee never tires of pointing out, has captured our vital home market, as well as the media, which it controls through the advertising agencies it dominates.
• Business media is also all concerned about workers in West Asia and their return home during the pandemic. Yet media never consistently discuss the conditions that have made workers seek their fortunes abroad, since 1977, nor conditions over there. At the same time, while shedding crocodile tears for the daily worker, Aitken Spence’s Harry Jayawardene came out this week demanding even greater ‘flexibility’ by demanding the government amend loosely enforced labor laws.
• Notice how almost all the economic commentators ( see ee Economists) call for “exports”! Also see ee Finance, how local players of the Colombo Stock Market are only in for a quick buck!
The role of the Central Bank and the failure of financial institutions, it’s said to be regulating, also dominated the news. While US Advocata and others point to the lack of accountability of public corporations, many private financial houses & banks don’t publish annual reports. All the Central Bank can tell depositors is, the higher the interest offered by these fly-by-nights, the greater the risk! Well, what else is new!
• Various business media highlight that China has “overtaken” Japan & the World Bank as Sri Lanka’s main creditor. It appears to be another slow buildup to an anti-Chinese campaign as part of the election campaign. To maybe justify a renewed anti-Chinese debt-trap narrative. The fact that Japan was a bigger creditor than China stymied the NYT debt trap story locally. That was a big nose rub in dirt for the US Advocata mob. US NGO Verité’s Aneesha Guruge, who compered Advocata’s Economic Freedom debate in 2017, wrote that disinformational brief for the NYT.
Meanwhile the Anti-China & Anti-Russia propaganda machinery grinds on. As noted last week, it is not a US-China Trade War, but a US trade war on China, trying to prevent its rise.
• ee notes the passing of news columnist Rajeewa Jayaweera, whose last column on planet Earth noted how President Premadasa bought the allegiance of Thondaman Sr by providing the ostensible leader of a plantation workers’ union, the government franchise for air ticketing to South India.
FT columnist Victor Ivan, of 1971 JVP vintage, claimed this week, local lawyers are not as good as the white lawyers under colonialism! He credits JR Jayawardene with turning politicians into businessmen, ignoring that colonial government was a business enterprise. Another alleged communist-turned-columnist Dayan Jayatilleka is threatening to sic Delaware Presidential contender Biden on Sri Lanka. He says Biden will ‘enforce democracy’ on us. Delaware is best known as the onshore tax-free home of US corporations, and asylum for famous white refugees from revolutions in Haiti & France – the dynamite-making chemical Duponts! Biden, in fact, opposed desegregation of schools! DJ has taken a break from threatening to sic India on Lanka!
• The murder this week of a 3wheeler Association ‘union leader’, complete with graphic video & photos, reminds of the nature of this petrol & auto game of imports & leasing, that’s turned roads into crime scenes lined with ugly auto-parts dealerships, plus trees & utility poles cluttered with ads for bridal shops & land sales. Oil, our largest import bill, is still controlled by US corporations, and the power generation mafia also continues to dominate industrial news.
• There’s a monsoon of “independent” groups! This week saw the fiasco of a clumsy disruption of an FSP demonstration outside the US embassy, with US officials denying their role in demanding ‘protection’. It’s unclear why the FSP, not known for their demonstrations against US imperialism nor white supremacy, chose to do so at this moment. There were also attempts to blame the government for the fire at the FSP office/library in Peradeniya (turns out to be a property dispute between the owners).
ee is not trying to shield any ruling party, but our dynamic ‘democratic’ environment leaves the country open to all manner of ‘3rd party’ destabilization, who play one against the other.
• ‘There’s no uniformity in the conditions applicable for the registration of organizations under the Companies Act and those for NGOs. Under Companies Act Article 7(1) a company shall not be registered by a name except with the consent of the Minister given having regard to the national interest, which contains certain words. Among them are the words “National”, “State” or “Sri Lanka” or other words which in the opinion of the Registrar suggest or are calculated to suggest, any connection with the Government or any Government Department.
But in the conditions applicable to the registration of NGOs under the NGO Secretariat, there’s no such requirement. This allows an NGO registered under such a name to present a grossly misleading impression to the public that the agency is connected to the Government. In particular the use of ‘National’ conveys the NGO represents the nation. A good example is the NGO known as National Peace Council which certainly does not represent the objects or views of the nation. It cannot be stated this agency is acting in the “national interest”. The fake title gives them an advantage for soliciting foreign funds from countries which show gratuitous interest in Peace in Sri Lanka.
Another example is the National Development Board – no longer a national bank. With privatization they should have dropped the ‘National’.
It’s time to ensure some uniformity in the application of the use of names, that ‘NGOs, banks & others are made to follow the provisions in Article (7) of the Companies Act’.
B. Special Focus__
B1. SBD de Silva & the Flames of the ‘Cold War’
‘Cold Wars’ are always burning hot for us. The covert wars, fought between the white world and the socialist countries 1945-90, certainly scalded SBD de Silva.
SB was removed as Deputy Director of the Central Bank of SL’s Research Department and transferred to the Employees’ Provident Fund as Deputy Superintendent.
One possible reason behind removing SB from CB Research was his looking into the foreign exchange racket and related files of the English plantation companies & multinational corporations, Indian family merchant networks, smuggling of gems & other commodities, and the refusal of these companies to comply with Sri Lankan laws.
Yet his official estrangement from the CB related to a ‘Cold War’ incident that took place during SB’s sabbatical from the bank to obtain his MA in Australia, where he wrote his thesis on Long-term Contracts & Bulk Trading in 1954.
His thesis is still vital to recall: The English during their WWII, and for almost 10 years after, conducted the trade of our major export commodities on the basis of long-term bulk contracts with London, and retained centralized state trading on a government-to-government basis rather than through private trade channels. It enabled stable prices for both their producers & consumers; and was a means to control imports, guarantee supplies thru efficient storage & transport, and ensure food rations.
His support for Sri Lanka enacting such rational policies and attempts to rein in the foreign-exchange frauds of private companies, would lead to SB’s banishment from a bank dedicated to the colonial status quo.
University Police – While studying at the University of Melbourne in 1953, SB saw a poster about a meeting against the US war on Korea raging then. He attended the meeting, and was then asked to speak. The whites would murder 3 million people in Korea to divide that country, and the resistance to that invasion would fuel the flames of Cold War.
The Australian secret police within the University of Melbourne alerted foreign office officials about SB’s speech. The FO then complained to Central Bank Governor NU Jayawardena, attending a Commonwealth Finance Minister’s Conference in Melbourne, that SB, a Sri Lankan government employee, had dared speak at a ‘communist’ meeting against their war. NU then informed Prime Minister John Kotelawala. Kotelawala is said to have made some witty comment, adding, Sri Lanka can’t keep removing officials at other country’s whims.
Yet an investigation was commenced, and Douglas Gunasekera (later CB Deputy Governor, father of English novelist Romesh), was assigned to interrogate SB. Gunasekera, who SB recalled as “gentleman, old school” and very courteous, was yet part of the anti-communist cohort in the CB during the ‘Cold War’, led by another deputy director of research, Sydney Edmund Poulier Jansz, who echoing the McCarthyite rhetoric of the hour, had declared “Communism as a type of fascism.”
Most of the Central Bank’s top officials were against any attempts to link with socialist countries, echoing US dictat that Sri Lanka should withdraw from the Rubber-Rice Pact with China. CB officials were once invited for lunch aboard a Polish ship docked at Colombo harbor, and after the meal, Gunasekera quipped, if Sri Lanka improved links with them, “These buggers will pour money into the Communist Party!” SB was eventually transferred out of Research.
Anti-communism also meant many other sources of foreign exchange remained untapped. The Ministry of Planning, under Gamani Corea, noted, up to the 1970s, existing credits, mostly for project aid, were still untapped in Poland, Yugoslavia, East Germany, Hungary, the USSR. Even as France, England, Italy & West Germany had major economic links with those socialist countries, Sri Lanka was yet not allowed to do so, even while claiming the country was “nonaligned”!
The accusation of SB being a ‘communist’ would follow him throughout his sojourn at the CB.
When SB applied for a job at the CB’s Department of Statistics, K Williams, head of Statistics, told fellow interviewers, SB was a communist. One of the interviewers was Wijewardena Lake House editor, UGP de Mel, who had joined the Department of Statistics to become its Deputy Director. He responded to Williams by saying he thought SB’s interest in communism was “calf love…”
Yet an editorial appeared in the Ceylon Daily News wondering if communists were to be tolerated in such hallowed institutions as the Central Bank.
SB soon withdrew to work at the UN Economic & Social Commission for Asia & the Pacific (ESCAP) in Thailand, then at the School of Comparative Social Sciences, Universiti Sains Malaysia. After his work at the Ministry of Industries under TB Subasinghe, SB became Deputy Director of the Agrarian Research & Training Institute, in Colombo.
SB then began to teach at the University of Peradeniya, but eventually left (without even taking his pension) as he felt students were no longer interested in researching the country’s pressing issues, but only wanted strips of paper saying they had passed, which they could get from anybody. The universities, he said, had been turned into intellectual wastelands.
As the very first sentence in his book states: “Research in the social sciences in underdeveloped countries has, of late, metamorphosed into a variety of big business.” And that was in 1982!
‘We should first interview the media! – Just before SB passed away in 2018, I joked with him by using the old McCarthyite greeting: “Are you now or have you ever been a member of the Communist Party?” He immediately replied: “Are you?”
Indeed if I had some institutional backing like an organized political party, or had the equipment of at least a spy, I’d have been able to electronically record him secretly. Since the US NSA & their local embassy do indeed monitor local conversations, perhaps they could, in the name of holy transparency, share them in the public domain!
Yet for SB it was more important to know than to be known. 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’d laugh, or more like give off a pitiful grimace: “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 industrial endeavors.
If these are fictionalized reincarnations of the truth, I’d be happier to have someone, set the record straight! These reminiscences are based on haphazard notes from many conversations with SB over about 20 years after first meeting him at his Kundasale redoubt, by that burned-out palace of Narendrasinghe, the last Sinhala king of Lanka.
B2. 2 Yakku Haunting the Central Bank
John Exter & SBD de Silva: Memories of a Great Guru III
Listen here, people, listen Mr President, listen dear Governor of the Central Bank. Here we tell a timely tale of the treachery we are facing today. Here’s how the ingenious traders of Sri Lanka evaded import controls, 1970-77. How these traders masquerading as a “pseudo-industrial class” manipulated a weak industrial policy to enrich themselves while undermining and eventually destroying industrialization after 1977. Moreover, it’s a historic tale of a Central Bank allowing a Mahaveli-size diversion of investment and scarce foreign exchange away from industry and agriculture into wasteful consumption.
This story is not only a question of ‘dependence’ on the white man’s economy. The ample surpluses generated in Sri Lanka have long been stolen abroad, but even those surpluses left behind have never been invested in revolutionizing production techniques or ‘widening’ capital – ultimately incorporating new branches of production, and truly transforming the economy. Instead, our ruling comprador merchants have wasted enormous sums on consumption.
The colonial import-export plantation game is our samsara, our broken record, on permanent repeat. The dominant foreign investors, and their political control over colonial territory, have always prevented production that competed with the imperial economy, and refused to nurture our “own impulses to development”. We are only allowed to respond to the empire’s needs, with the empire controlling access to markets & technology.
This is why not a day goes by without craven media reminders about GSP+ and our dependence on white markets. They continually cry for FDI & exports, while the Central Bank has been unable to prevent the massive robbery of foreign exchange by multinationals like Unilever etc, via transfer pricing and inflating accounting costs to minimize local tax liabilities.
This is why, in this year of living more dangerously than ever, 2 yakku haunt the Central Bank.
Now, listen: there are good yakku, and there are bad yakku. Both can teach us well. By positive & negative example. After all, science advances more through its failures than by its successes. Such is the yaka dance of the dialectic.
The first yaka, John Exter, assigned by the US Treasury from the US Federal Reserve in New York, established the Central Bank of Ceylon and became its first Governor in 1950.
Exter Yaka’s CB of Ceylon was born in controversy. Then Finance Minister JR Jayawardene aka Yankee Dicky had requested the US government to set up the bank. The Bank of England was against a Central Bank for Ceylon, but they were not fully in charge anymore. The US had forced England to open their colonial markets to US goods, after the English could not pay back the Lend-Lease loans the English had borrowed to wage World War 2.
Exter Yaka, as an agent of the US Treasury, and as the new Governor of Ceylon’s Central Bank, enforced the international division of labor on Ceylon: capital-intensive production of advanced technology would be reserved for the imperialist countries, and labor-intensive production for the rest of the world. He purposely pushed the country, with the most impoverished peasantry in Asia the English bestowed on us, into further dependence & debt, enabling the transition from a plantation raj under the English to the import raj led by the US.
The genocidal US War on Korea “forced a massive use of natural rubber in the transport of US troops. Rubber prices soared. In Asia, the British Malay States and independent Ceylon benefited”. Unlike in Malaya where they invested in industry, “Ceylon wished to spend the sudden riches on expenditure. Governor Exter supported this, calling it a windfall… and brought in a new profligacy to national policy & politics.” (Dr Darin Gunesekera)
Exter Yaka intensified the spendthrift import-heavy lifestyle of the ruling oligarchy, that keep our necks firmly under the kneecaps of New York’s banks, asphyxiating under a debt load, where we only pay interest on the interest owed on a debt never to be paid back unless renounced.
They love Exter so much, in 2007 the CBSL named its International Conference Hall after Exter, and renamed its Anniversary Public Lecture as the John Exter Memorial Oration!
But then there’s this other yaka haunting the Central Bank: SBD de Silva. Once Deputy Director of Economic Research, SB was hounded out of the Central Bank as a suspected ‘Communist’, after an editorial appeared in the Ceylon Daily News wondering if such people were to be tolerated in such an hallowed institution. But what was SB’s crime? He, unlike Exter Yaka, was an ardent advocate of the industrialization of the country.
SB Yaka later became secretary to the kindly (perhaps too kindly) Minister of Industries, TB Subasinghe in that fateful ’70-77 government of Sirimavo Bandaranaike. Watching how our import merchants evaded import controls & tariffs, led SB to conclude that industrialization required a holistic political, economic & military strategy – for real independence.
So here then is the fascinating story we learned from Yaka SBD de Silva himself, who passed away 2 years ago. A tale retold today in his honor, with information, from his book The Political Economy of Underdevelopment, and from the website eesrilanka.wordpress.com, dedicated to SB.
The Central Bank, despite having “the largest number of PhDs in a single building in the country”, said SBD de Silva, “has always opposed the independence of the country”.
Take US State Department economist Theodore Morgan, who in 1951-53 became an economic adviser to the CB of Ceylon, and in 1952-53, its Deputy Governor. SB said Morgan strenuously opposed “Sri Lanka’s most successful international trade agreement”, the Ceylon-China Rubber-Rice. The pact saved SL’s economy from disaster as rubber prices were low and rice was short, after the wasteful consumption encouraged by Morgan’s compatriot Exter, first CB governor.
Morgan called the C-C R-R pact, a “Military-Political-Economic offensive against the Free World!” – and even claimed China did not have enough rice to trade with us. Whereupon, it’s legendarily retold, someone had penciled in, or ‘minuted’, next to his comments: “If each Chinese ate one grain less, there would enough rice for all of Ceylon!” Despite the US embargo and threats, Sri Lanka became China’s largest trade partner in the 1950s, outside of COMECON countries, with China promising it would one day when it was strong, return Sri Lanka’s favor!
“Leftwing political parties and academic economists,” notably HA de S Gunasekera, were also against setting up a Central Bank. For Gunasekera, a colonial economy “heavily biased towards international trade” would frustrate a Central Bank:
“An export economy cannot effectively pursue an independent monetary policy. Ceylon’s level of prosperity is determined by foreign demand for its staple exports. Its level of income is determined by the prices that these exports fetch in foreign markets. A policy of compensatory spending cannot stabilize incomes of prices in a country so utterly dependent on foreign trade as Ceylon is.”
Other critics saw the CB refusing to expose the causes of our discontent at its root, with it socioeconomic data and analyses kept at a shallow empirical level. CB officials dream of careers with the World Bank, IMF, etc, instead of defending the country’s interests against these supranational financial behemoths.
Dedicated Central Bank officials like SBD de Silva, however, dared ask deeper questions about the continuing domination of English capital. SB showed how a feeble Central Bank was unable to control the plantation agency houses & the banks,to prevent the bleeding of money and smuggling of goods abroad.
Even after independence, Sri Lanka’s surpluses were lost to the centres of financial control not only as dividends, profits, trade commissions, etc. The financial reserves of expatriate companies were held abroad. Foreign-exchange assets of colonial governments were invested mostly in their own government or municipal securities.
Despite 1948 ‘independence’, plantation companies refused to remit to Sri Lanka, the interest & other income from their current reserves held abroad. “By the transfer of these funds the government hoped to foster a short-term money market. However, the companies refused to comply. In 1961 many of the companies removed these funds from any possible control by the Central Bank by shifting them to Holding Companies in England.”
SB also noted in that momentous year 1964 of the 20th century, 16 years into ‘independence’: “The agency houses…when called upon by the Central Bank to make available for examination, for exchange control purposes, their service agreements with the plantation companies, declined on the grounds that they were not legally obliged to do so.”
SB also described the paradox of 1970-77 government: “The professedly leftwing policies of the coalition government, under which the economic controls reached their high point” nurtured and benefited a bourgeoisie who then politically swung rightward.
SB noted how the state sector, comprising industrial and trading corporations, the plantations and transport, “though juridically intact”, were increasingly controlled by private business.
A large segment of the import trade had been nationalized, but “market scarcities created abnormally high profit margins on the trade that still remained in the hands of private importers and retailers”, while “tax privileges in tourism and the gem trade provided new bases of wealth”.
A genuine industrial development was inhibited by the extreme profitability of outright trading activities. The profit margins on the import of industrial raw materials, components and equipment for almost final assembly exceeded those on finished goods imported earlier. The commercial-cum-industrial or pseudo-industrial class had had virtually a mandate to enrich themselves.
“In the plantation sector, land reform emasculated the traditional monied groups. An expansion of state activity in selected manufacturing industries and in trade (the so-called non-capitalist road to socialism) involved the grafting on of a state-owned & inefficiently managed investment enclave. On balance, the path of development was a capitalist one. What generally occurred in these years was an overhauling of the existing class structures.
All the same, the coalition government, having nourished private accumulation, also constrained it. Controls caused a decline in investment outlets, aggravated by a ceiling on house ownership and on landholdings. Shortages of imported equipment & materials led to unused capacity. The licensing system, whereby established importers and ‘approved’ industries alone were eligible for foreign exchange, concentrated surpluses in existing enterprises – thus retarding the mobility of capital. The structure of both trade & industry became involuted, with effects analogous to those of a guild system.
Ronnie de Mel, 1977-88 Finance Minister, was recently featured in a US Advocata video, complaining about the pre-1977 period. Here’s what de Mel accomplished, as recorded by SBD:
‘Post-1977, “liberalization” of the economy concentrated incomes, widening investment and entrepreneurial interests, enabling the bourgeoisie to easily expand their wealth. They were allowed “a tax amnesty on undeclared wealth & the repeal of punitive laws against foreign exchange & tax violations.”
But the “accumulation” after 1977 became “substantially one of money wealth, whose transformation into productive capital [was] hindered by the trading & rentier activities which the open economy spawned.”
“As in the parasitic cities of the underdeveloped world, the service trades, the urban land market, and the construction of commercial buildings and luxury dwellings… enjoyed a phenomenal boom… [with] enterprises catering essentially to the conspicuous indulgence of an affluent enclave.” The basis of such wealth generation prevented “its transformation into productive capital”.
The new policies generated income disparities, diverting much of the new employment and production to counterproductive activity. Domestic manufactures were affected by the removal of protection, by higher costs for imported inputs and for credit, and by price inflation – making imported goods more competitive.
The destruction of the ‘high employment-oriented handloom textile industry’ was noted by the Central Bank in its report for 1978. Export-oriented industrialization, symbolized by the Free Trade Zones, relegated indigenous enterprise to the role of subcontractors to the foreign firms. The FTZ was dominated by the readymade garments industry, with foreign firms enjoying tax holidays, taking over established local firms.
The rise in imports far exceeded the increased income from tourism and remittances by Sinhala workers in West Asia. Imports caused a rapid run-down of the accumulated foreign-exchange reserves. What the Central Bank called the satisfaction of “pent-up demand” turned out to be an import mania involving non-essential goods, many produced locally before “even soap, pencils and erasers” (despite SL being a rubber-producing country).
“A trade deficit in 1978 was followed by a deficit of massive proportions in 1979” reversing the tendency towards small surpluses in 1976-77. “A foreign debt explosion occurred” even before costly investment projects were started. “The full impact of the debt repayment and servicing charges” were only “postponed by the initial grace periods of the loans”. IMF “in its conventional wisdom” advised an open devaluation of the currency for the second time, but the government resorted to “a veiled but continual depreciation of the Sri Lanka rupee”.
The deepening crisis “led the government into strategies of repression designed to ensure its own political survival as the agent of the financial interests it has so spectacularly bred”. While similar to the political path Southeast Asian countries took, Sri Lanka’s position was worse, “since its natural resource base limits the foreign-exchange potential to a narrower range of exportable commodities”.’
Several hundreds of thousands of lives later, killed, maimed and disrupted, with millions more having to leave the country to find work, it is indeed an amnesia almost befitting white-settler states, that apologists for the colonial economy claim JR’s 1977 “freed” us…
It is scholars like SBD de Silva who have ensured we do not whitewash the real costs of underdevelopment, and that wealth and capital is not just money. Wealth also includes, investment in the people, the land, and the technical means by which such wealth is machinofactured…
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.
• Support Black Lives Matter & Hong Kong Democracy – Radhika Cooomaraswamy
“First came the climate change movement, headed by Greta Thunberg, then the Me Too movement, the Hong Kong democracy movement, the movement in India against the Citizenship Act and now Black Lives Matter”
• Plot within TNA targeting party spokesman Sumanthiran – Jeyaraj
‘A well-endowed pro-Tiger media organisation in the west jumped into the anti Sumanthiran fray and obtained many critical statements through their local agents…Sumanthiran and I are relatives… I realise Sumanthiran’s “middle path” is the most feasible’
• Govt. warned of TNA’s moves in the wake of surprising denouncement of the LTTE
‘…The UNP split may have influenced the strategy – “Those who challenged Gotabaya Rajapaksa’s nationality, in the run up to last presidential polls, are still around. The TNA is part of that project, though its master Velupillai Prabhakaran is dead,” Dr. Amarasekera reminded.
• TNA asks PM to make fresh bid to introduce new Constitution
• TNA’s dilemma in the wake of UNP split, Wignesewaran’s challenge
• ITAK Leader Senathiraja further distances TNA from LTTE
• Wigneswaran-led alliance call for release of Tamil political prisoners held under PTA
• Stones thrown at complex housing Buddha Statue of Jaffna Naga Viharaya
• Credibility of the “War Witnesses”: Which version of Dr. Varatharaja do we believe now?
‘Dr. Varatharajah and 4 other doctors served in the war zone. Somehow only he has been fortunate enough to ask US help and be given visa for entire family to live and work in USA. They left in 2011.’
• Was Prabhakaran bribed?
• JR and Gota: A tale of Two Executive Presidents – Part II – Jeyaraj
• Eelam and Tamil Eelam
‘Eelam, in fact, is one of the two indigenous Tamil names for Sri Lanka, the other being Ilankai.’
• The UN Needlessly Bulls Eyes Sri Lanka: Unsubstantiated Accusations
• Wimal defends high profile military role in govt
• Sri Lanka refutes UN assertion that it has “clamped down” on freedom of expression over Covid 19
• Newly constituted Presidential Task Force threatens rule of law: ICJ
• ICJ wants military dominated Presidential Task Force abolished
• CPA concerned over appointment of two Presidential Task Forces
• Security landscape fast changing: Growing Concern in sections over militarisation – Times
• Prez accused of forming outfits in violation of Constitution – Lawyers for Democracy
• An Open Letter to the President of Sri Lanka on the Ill-bred Conduct of a US Diplomat
• Why you should worry about MCC Sri Lanka
• Will we donate extremely lucrative rich information about land under the MCC program?
• Mangala calls for fast-tracking of MCC agreement
• Cabinet “disapproves” of the way Police handled Black Lives Matter demos in Colombo on Tuesday – Bandula
• Didn’t request to block protest; police prevented it due to Covid-19 restrictions: US Embassy
• Court order foils scheduled protest opposite US embassy
• US donates equipment for Sri Lanka’s frontline responders to Covid-19
• Canada genocide claims: Govt. takes up Bill 104 with Federal, Provincial authorities
…move held up pending consultations
• Canada grants CDN$ 400,000 to UNFPA to strengthen Govt. response for Covid-19 pandemic
‘The present grant builds on existing Canadian support to UNFPA in Sri Lanka to end gender-based violence, in line with Canada’s Feminist International Assistance Policy’
• Germany funds construction of water wells in Vavuniya District
• ADB approves USD3Mn Japanese grant to assist SL response to Covid-19
‘… from its Asia Pacific Disaster Response Fund (APDRF)…financed by the Government of Japan..’
• The Ultimate Power????
‘Pakistan has recently shot down a spy drone of India and India has arrested a spy-pigeon of Pakistan.’
• Modern-day “Eight-Nation Alliance” reflects West’s anxiety about China’s rise
• US grant to produce report on “Russian health disinformation” – Russian embassy in Colombo
• Libya: The Incredible Irrelevance of America – Dyer
‘After long-ruling dictator Muammar Gaddafi was overthrown in 2011….overthrown in 2011, the country actually disintegrated into a series of city-states ruled by rival Islamist militias’
• South Africans apparently part of aborted Tripoli assault
‘The private military contractors, numbering 20, were recruited to fight with forces loyal to Khalifa Haftar, the military strongman running a large part of Libya from Benghazi. Over a year ago he mounted an assault on Tripoli, hoping to take the national capital from Government of National Accord (GNA) under the leadership of Prime Minister Fayez Serraj….The planned assault ended acrimoniously with the contractors opting to board rigid-hulled inflatable boats (RHIBs) and transit the Mediterranean to Malta where they were arrested and released. This after a fine was paid by the company which chartered the RHIBs.’
• Does the races power still have a place in the Australian constitution?
‘Two retired judges say a section of the constitution which allows federal laws to be made for a particular race of people should be changed, because it is a relic of Australia’s past and is potentially dangerous.’
• It’s not just Cambridge University – all of Britain benefited from slavery
• US Military Chairman of the Joint Chiefs of Staff apologized for taking part in President Walk
“My presence in that moment and in that environment created a perception of the military involved in domestic politics,” said General Mark Milley.”
• Why successive US governments haven’t been able to ensure racial equality
• Covid has exposed USA as a failed state
‘The internet will surely emerge as a central battleground, and one which poses a far greater risk to America’s open, divided, and already-penetrated system than to China’s hermetically-sealed national internet: indeed, it is doubtful the worldwide web as we currently understand it will long survive a great power confrontation.’
• Black former US ambassadors call for reforms to address police brutality and systemic racism
(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 truly independent nation.
• Vehicle lease payers to meet President on six-month moratorium
‘A promised six-month debt moratorium for lease agreements has yet to materialise…President of the All-Island Vehicle Leasing and Loan Installment Payers Association…Self Employed Professionals’ Three-Wheeler Association Chairman Sunil Jayawardena, who spoke against the so called leasing mafia that he claimed was responsible for the setback, was beaten to death on Wednesday in Mirihana.’ – economynext.com/vehicle-lease-payers-to-meet-president-on-six-month-moratorium-71020/
• Sri Lanka President orders police to halt seizing defaulted lease assets
‘Sri Lanka’s Finance Houses Association which represent legal finance and leasing companies meanwhile said… did not relate to any regulated firm but an unauthorised money lending company.’
• Stop unlawful activities of leasing companies: Prez directs Police
‘President informed the Police not to allow vehicles to be seized on the ground of non-payment of installments.’
• One killed, another injured in explosion in Kinniya
• 40kg of TNT explosives uncovered in Vishwamadu
• Azath Salley allegedly influenced police on Mawanella Buddha statues vandalism
‘It was also revealed that the suspects who were said to be handed over by Mr. Asath Salley were the brothers of Mawanella Ibrahim who were preparing for the second attack after the Easter Sunday attack. The two brothers are currently in the custody of the CID.’
• 30 years on, remembering the life sacrifice of 634 policemen
• Kadugannawa Postal Bomb Case 1947
‘Homosexuality was hardly known in the villages…’
• President Promotes 19 more SLAVF Majors to next rank
• DIG Waruna Jayasundara appointed new Commandant of Police Special Task Force (STF)
• BASL accuses Minister of Justice of acting beyond his authority
‘The Bar Association of Sri Lanka has urged the Minister of Justice to reconsider his directive to grant several exemptions on the examination to be followed by students of Kotelawala Defence University (KDU) upon being admitted to Sri Lanka Law College’
• New Made-in-India fighter jet cleared for development
• India, Australia sign pact to use military bases for logistics support
• Malaysia – Even $3 billion not enough to settle 1MDB case with Goldman
(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.
• Dr. N.M. Perera’s Policies Are Valuable Today – Vitarne
‘He ended the dependence on the International Monetary Fund (IMF) which had started with the borrowing of Rs.100.9 million in 1965 by the UNP Government, which went up yearly to reach a sum of Rs.723.4 million by 1970. To quote NM this massive borrowing was at the cost of our financial independence.’
• Central Bank enters new era, reconstitutes Monetary Board
‘There also appeared to be differences of opinion between CB Governor Prof. W. D. Lakshman and these two members on recent monetary policy decisions and the recent regulatory actions of the CB including current money printing.’
• Central Bank defends money printing
• Wimal favours US style Prez election, appreciates Dr. PBJ’s present role…finds faults with CBSL
‘Minister Weerawansa said that even if he landed in trouble and suffered a setback the Pathfinder was nothing but an intelligence gathering outfit….he claimed that some top CBSL officials pursued what he called IMF type policies in respect of Sri Lanka.’
• Yuthukama appreciates Wimal pushing for US style-prez poll, other reforms
• Only The Fast And The Nimble Will Survive, Says Pathfinder
‘Many countries have responded by pursuing bilateral, regional and plurilateral trade agreements to boost their growth and employment prospects. Sri Lanka has fallen behind and is confronted with the possibility of falling even further behind.’
• Sri Lanka should sell more to Asia in a post-Covid 19 scenario – Pathfinder Foundation
‘At present, over 50% of Sri Lanka’s exports are to the EU and US. More needs to be sold to Asia.’
• Local SOEs should come under singular management – LKI Director
• Complexities of gold trade – Reducto Ad Abeyratnum
‘If gold is smuggled by importing via Sri Lanka, then it is a problem of the lack of an efficient surveillance mechanism, prevalence of corruption, and a weak regulatory framework. We would have addressed these issues rather using the easy way out with higher import duties. However, by imposing the duties again we have closed the door to another potential export industry and to open an international gold market in Sri Lanka’
• Initial signs of economic recovery and revival – Sanderatne
‘The initial signs of Sri Lanka’s revival of export manufacturing, reorientation of exports to new international demands and enhancement of sea food exports and other exports that were not adversely affected are economic opportunities that must be seized and exploited to the full.’
• Long waves in global business cycles versus Sri Lanka’s disastrous short waves – Wijewardene
‘But the disastrous Covid-19 pandemic has pushed the country to negative region thereby prolonging the economic recovery process. But it gives an opportunity, driven by necessity, to move for the needed structural reforms to push the country to a series of new waves marked by advanced production techniques’
• No easy road to economic survival – Fantasy and Reality: “New abnormal”, debt relief, food security, exports – David
• Planners must think out of the box –David
‘Self-reliance has become a pop term in the context of disruption of supply chains exposing how dependent we are. However, to attempt substantial self-reliance, that is import substitution across the board would be disastrous. Lanka is self-sufficient or nearly so in rice, fruits, vegetables, meat and fish. Strengthening domestic agriculture and animal husbandry in more such sectors is wise. But leaving aside the plantations, agriculture and animal husbandry account for less than a tenth of GDP, hence though psychologically stimulating this is not the location where the big match will be played. Manufacture and services are the playing fields that matter’
• Mangala presents framework to avoid impending economic crisis
‘For SL lived beyond its means and did not undertake the reforms needed to build the export-oriented economies that have catapulted countries in East Asia and Southeast Asia from third-world to first.’
• Caveat Emptor
‘It would be a good idea to require the listed finance companies to make their printed annual reports made available to shareholders to their depositors too. Their financials are, of course, on their websites and diligent investors can inform themselves of their affairs before placing their money in them.’
• Inconsistencies Between Central & The Finance Ministry On Total Debt Liabilities
• FCCISL upset on disbursement of working capital loans from government
‘The Federation of Chambers of Commerce and Industry (FCCISL), the country’s most representative private sector lobby group: We have received many complaints from our membership, which is scattered under 8 national chambers, 19 business associations and 30 regional chambers’
• South Asia is at the crossroads; it should seize the moment
‘… hosted by the International Chamber of Commerce (ICC) Sri Lanka in association with the Daily FT, LNW and MTI Consulting…International Chamber of Commerce Chairman Paul Polman began by outlining his take on what the private sector should do…(The writer is a former Standard Chartered Bank Economist and lives in Canada.)
• APAC Sovereigns Set to Recover Amid Lingering Rating Pressures
• UN Webinar on using data to better position SMEs in post Covid-19 context
‘The UN in Sri Lanka, the UN Development Program (UNDP) and the UN Global Compact Network Sri Lanka are jointly organising a webinar series on ‘Supporting SMEs to Protect Livelihoods’…. Stax is a global management consultancy firm that works with a diverse number of companies in the world.’
• Sri Lanka diplomats claim their efforts helping country regain lost export markets and win new buyers
• The Consolidated Fund, And Everything You Need To Know About It
‘the Consolidated Fund is the place all of the government’s income goes to and out of which all its expenses are paid. In essence, it is the government’s purse’
• ‘Open the Economy’? The Pandemic, Costs, Benefits, Capitalism
‘It is mid-June 2020. Everywhere there is a push to ‘open the economy’. What is meant, of course, is to bring back, as soon as possible, the profit-seeking activities of capitalist firms.’
• The paradox of value
‘Imagine you’re on a game show and you can choose between two prizes: a diamond … or a bottle of water. It’s an easy choice…if given the same choice when you were dehydrated in the desert, after wandering for days, would you choose differently? Why? Aren’t diamonds still more valuable?’
• Western Marxism Loves Purity and Martyrdom, But Not Real Revolution
‘It is impossible to speak seriously about Marxism in the West without incorporating the role of Christianity in each social formation.’
• United Nations Global Compact’s Leaders Summit next week
‘…to address the private sector’s response to three global crises – health, inequality and climate…speakers include UN Global Compact Board Vice-Chairs Paul Polman and Bola Adesola, the heads of the Commonwealth, International Chamber of Commerce, NEPAD, International Trade Union Confederation, International Chamber of Shipping, and from academia Ilian Mihov the Dean of INSEAD and Professor Firmanzah, Rector of Paramadina University… the CEOs of AB InBev, Accenture, Acciona, Ambev, ARPA, CP Group, Dilma, DNV GL, Ecolab, Ekos Group, Enel, En+, Green Delta Insurance, H&M, Investec, KENGEN, Kokusai Kogyo, Melvin Marsh, Ménara Holding, Natura, Olam International, PT Supra Boga Lestari Tbk, PVH, Russell Reynolds Associates, Savco, Schneider Electric, Solvay, Sterling Bank, TAHA, The Lux Collective, Volans, and the Board Chair of Maersk and Siemens….The UN Global Compact Sri Lanka Network breakout session on June 16, 2020… Mr. Dilhan C. Fernando – CEO of Dilmah Ceylon Tea Company PLC. and Chairman of the UN Global Compact Sri Lanka Network, Ms. Sonali Peiris – Group Lead, Sustainability and Risk Management of John Keells Holdings PLC., Ms. Thanuja Jayawardene – Deputy General Manager, Women’s Empowerment, Advocacy and Code of Conduct of MAS Holdings (Pvt) Ltd. and Ms. Nadeesha Wijesingha – Senior Leadership Development Manager & HR Business Partner Marketing of Unilever Sri Lanka.’
• India’s foreign exchange reserves to hit historic $500-billion mark soon!
‘India also held 653.01 tonnes of gold as of March 2020, with 360.71 tonnes being held overseas in safe custody with the Bank of England and the Bank for International Settlements, while the remaining gold is held domestically.’
• Twentieth Century People Who’s Who of Sri Lanka – Volume 11
(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.
• President warns Bankers he will remove those who do not follow government guidelines and “fall in line”
• If fail to implement guidelines, won’t hesitate to sack CB or State Bank officials: President
• Sri Lanka plans 8.5-pct of GDP deficit, Rs440bn revenue loss after stimulus
• The Sri Lankan Financial System Remains Resilient and All Possible Measures are Taken to Ensure the Safety of Deposits of the General Public – CBSL Governor
‘Although various financial institutions are licensed, regulated and supervised by the Central Bank, it does not mean that all their operations are managed by the Central Bank on a day to day basis…The general public must therefore take note of the fact that higher interest rates offered on deposits generally mean that the relevant institutions are engaged in more risky ventures.’
• The Central Bank Should Take Responsibility For Finance Companies Under Its Administration
‘It is clear that the Central Bank has a massive regulatory role and it should not play an operational role in the market like superannuation management, rural credit, and others. It is a conflict of interest and legally wrong.’
• Asia’s Most Distressed Sovereign Debt May Force Economy ‘Reset’
“We are currently defensively positioned on SL dollar bonds despite the high yield,” said Thu Ha Chow, a Singapore-based money manager for Asian credit strategies at Loomis Sayles Investments Asia. “But we are following and awaiting for evidence of structural reforms that would build resilience into SL’s economy.”
• Sri Lanka’s Government debt to GDP ratio increase to 86.8%
• Sri Lanka 2020 first quarter budget deficit Rs440bn, revenues lower
• Sri Lanka CB not yet hiked Zimbabwe style quasi-fiscal Covid-19 facility to Rs150bn
• WB forecasts SL economy to contract by 3.2% this year
• China backed AIIB emerges as a key lender to Sri Lanka in 2019
• China overtakes Japan, World Bank as key Sri Lanka creditor
• Lanka gig economy lacks level playing field as foreign players not subject to local regulations and tax laws
• China suspends debt repayment for 77 developing countries
• Equities stutter on economy, second wave fears
‘Equities and oil sank yesterday while the dollar rallied as investors ran for the hills following the worst Wall Street rout since March,’
• UK economy shrinks record 20.4% in April due to lockdown
(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
• Minimum employment age to be upped from 14 to 16
‘The following laws will be changed. Shop and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954 (Cap 129), Employment of Women, Young Persons and Children Act No. 47 of 1956, (Cap 135) Minimum Wages (Indian Labour) ordinance amendment Act, Factories Ordinance No. 45 of 1942 and orders published in Extraordinary Gazette dated 31 October 1958, in accordance with the provisions of Employees Provident Fund Act No. 15 of 1958.’
• Labour regulations must be amended to allow greater flexibility – Harry Jayawardena
‘”This is a time for renewed focus on facilitating unhindered international trade so that our exports remain competitive in key markets. Labour regulations must also be amended to allow greater flexibility as current regulations deter employers from recruiting during periods of uncertainty, delaying economic recovery,”Chairman of Aitken Spence PLC Harry Jayawardena told shareholders in the annual report 2019/20.’
• Six Indians without valid visas arrested in Jaffna
‘a group of construction workers preparing to depart for Delft Island from the jetty by boat’
• Sri Lankan migrant workers stranded in Kuwait anxious to return home
• Three-wheeler Association Chairman murdered over ‘leasing mafia’
• No school, no meals: Sri Lanka’s battle against malnutrition amidst Covid
‘According to the Demographic and Health Survey (DHS) 2016, in Sri Lanka, more than 20% of children under five years are underweight.’
• Samurdhi banks face liquidity crunch over unlocking funds for poor
‘The Government has been dipping into the savings of Samurdhi beneficiaries to the tune of more than Rs.50 billion to pay the Rs. 5000 dole for two months to four million beneficiaries. As a result of this withdrawal, Samurdhi banks are facing liquidity and capital adequacy challenges including subdued loan growth, liquidity issues and erosion of deposits amid lower interest rates, economic analysts said.’
• Housing for middle and low income families a priority: President
‘Secretary to the President P. B. Jayasundera, Chairman of State Development and Construction Corporation D. P. M. Chandana and the members of the Board of Directors were also present’
• Some principal paths to economic revival
‘For the purpose of protecting jobs, the government should consider subsidizing wages for a period of 12 months in the tourism, travel and apparel sectors in particular.’
• Civil society coalition calls for ‘Urgent Justice Mechanism’ for repatriated migrant workers
‘The coalition comprises the Migrant Forum in Asia (MFA), the Cross Regional Centre for Refugees and Migrants (CCRM), the Solidarity Centre, the South Asian Regional Trade Union Council (SARTUC) and Lawyers Beyond Borders (LBB).’
• GMOA appoints committee to study latest proposals to establish private medical college
“We have only bitter experiences about attempts to create private medical faculties. For example Colombo North Medical faculty and SAITM, only created chaos in the country. Given this, we are surprised that this topic has come up at a time when an election has been declared,” he said.
• Navin to head Jathika Estate Workers Union
‘Incidentally it was former president J.R. Jayawardene who appointed my father the late Gamini Dissanayake as the president of the UNP-led estate union,” Mr. Dissanayake said.’
• UNP TU-Seniors meeting ends abruptly
• Duminda Nagamuwa & 9 others from Frontline Socialist Party arrested
• President, private bus unions discuss challenges faced by sector
• Emirates lays off more staff
• Sri Lanka’s sex workers struggle to get by as Covid-19 brings industry to a halt
‘A UN Population Fund (UNFPA) and United Nations Development Programme (UNDP) report in 2014 indicated between 35,000 and 47,000 female sex workers in the country. A mapping of sex workers conducted by SL National STI/AIDS Control Programme in 2010 showed that 8,332 were based in Colombo. About 7,000 have been reported in Jaffna, in the Tamil-majority northern province.’
(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.
• Loans for 57,000 farmer families under IFAD program
‘Loans also available for machinery purchases and market promotions
• ‘Taxes on some food commodities increased to tide over economic crisis’ – PM
‘The increase in the Special Commodity Levy on a range of imported commodities came into effect from May 1, 2020. Among the items which have gone up in price as a result of the tax revision are Bombay onions, red onions, potatoes, garlic, dhal and canned fish apart from imported fruits.’
• MONLAR decries overkill prescribed to tackle endemic locust
• President wants quick solutions to fertilizer related issues
• Registration of coconut lands in the island made compulsory
• Sri Lanka coconut by-product exporters upbeat on quick rebound
‘Sri Lanka’s desiccated coconut export volumes fell by 45% year-on-year to 8,630 tonnes and by 28% in value to Rs. 3.7 billion (US$20.0 million) from January-April 2020….In 2019 value added products export (including coir sector) has earned $600 million by processing only 1 billion of fresh nuts….Furthermore if oil millers are allowed to import copra for oil milling and refineries, they can produce good quality coconut oil by refining crude coconut oil produced by oil millers…If the CDA allocates more fresh nuts to the export sector they can generate $1 billion foreign income without any trouble, they added.The country earns Rs. 110 billion (US$594 million) annually through the export of coconut-related products, the CDA data showed….Since Sri Lankans consume around 1,750-2,000 million fresh nuts…300-400 million nuts can be saved this way and made available to the industry while an enormous amount of husk, shell and coconut water will be available for other industries.’
• Imported Sri Lankan pepper boosts demand
• Dhal, canned fish consumption up in crisis-hit March
• Politicising Wildlife
‘Wildlife Minister offers directorships to off-road racer & Kataragama Acting Basnayake Nilame’
• Independent research group flays Mount Lavinia beach nourishing project
‘beach erosion happens during the south-west monsoonal season from May to September, and is a natural phenomenon. Rocks and boulders, a shallow reef parallel to the coast and a headland – a piece of land sticking out into the sea, protect the sand across the entire beach, the report noted. “It is clear that no erosion occurs across the Mt. Lavinia stretch of the coastline”’
(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.
• Chevron Lanka PAT grows 5% to nearly Rs. 2.1 bn in 2019 despite weak economy
• CPC embarks on lubricant production to save forex and earn Rs 2000 million annually
‘The Ceylon Petroleum Corporation would be able to save foreign exchange on the import of lubricants and contribute Rs. 2000 million annually to the national coffers with its planned move to produce lubricants locally at its new plant at Kerawalapitiya.’
• Sri Lanka plans price controls on sand after load ceilings drive up prices
‘The GSMB said the price had risen by about 6,000 rupees a load. The GSMB however blamed sand suppliers for the price hike, not controls, saying it was ‘fraudulent.’’
• Environmentalists raise concerns over sand mining project at Somawathiya reserve
‘At least 400 trucks loaded with sand travel about 4 to 5 kilometers daily across the Somawathi reserve, which has a sensitive environment, to transport sand.’
• Rebooting Sri Lanka post-Covid-19
‘Traditionally, our industries have stronger backward linkages than forward linkages—they tend to rely more on foreign intermediates than they supply to foreign producers of final products.’
• Once-abandoned Valachchenai paper mill resumes operations
• Who is the Chairman of the Kantale Sugar Factory?
‘The Good Governance Government [gave it to] an Indian company to resume operations…K.P. Nagaraja was appointed as Chairman of the factory… he came to know that there were two impostors who visited the site yesterday claiming that they were the Chairmen of the project. He added that it is wrong information given to the people of the area.’
• SL to get $ 200 million investment from Chinese firm
‘Shandong Haohua Tire Co. Ltd in Shandong Province, China has plans valued at US$ 200 million to set up a radial car and truck/bus tire plant in Sri Lanka, an overseas insurance publication said….The company is one of the largest private tire manufacturers in China.’
• Premier opens first ever Technology Faculty
• Export earnings increased to 606 million US dollars in May
• Sri Lanka import controls, cargo bottleneck hit apparel exporters
‘To make a garment, there are a lot of components needed such as clips and pins, which have small values.’
• Apparel stretched by lack of fall season orders
• 4,000 containers piled up in Colombo port in 3 weeks due to ban on imports
• SL lost GSP Plus due to illegal fishing by Senaratne’s vessels
‘60% of that company was owned by former Minister Rajitha Senaratne’s private secretary…politicians including former President Maithripala Sirisena, Rajitha Senaratne, Kabir Hashim, Lakshman Kiriella and John Amaratunga had asked him to employ their acquaintances.
• Sri Lanka bus operators look for loan bailout as Coronavirus curbs hit revenues
‘About 30,000 motorcycles are sold each month.’
• Sri Lanka President orders CEB to build 300MW coal plant fast
• Cabinet approves utilising $ 100 m from India for solar power
‘The Government of India has agreed to provide $ 100 million loan through the Indian Exim Bank to … to provide solar power systems to selected low income households in the Trincomalee, Moneragala, Anuradhapura and Hambantota Districts.’
• Mannar wind farm to be connected to national grid ahead of August schedule – CEB
‘Vestas will provide the Mannar Wind Power Project Phase 1 with delivery, installation and commissioning of 30 V126-3.45 MW wind turbines, as well as civil and electrical work’
• Sri Lanka to commission 20MW wind power plants in Jaffna
‘Ceylex Engineering, a affiliate of LTL Holdings won a competitive bid to build the two wind power plants and sell power to the Ceylon Electricity Board in 2017, but there were delays in land procurement…Earlier regulatory agencies were giving standard power purchase contracts for various renewable power plants at over 20 rupees a unit amid opposition from the Ceylon Electricity Board’s engineers, who were insisting on competitive bidding for private Independent Power Producers’
• External cost of coal power huge, says PUCSL
• Cost of operating cheapest energy source jacked up to astronomical heights
• ComBank raises another Rs 10bn to support Covid-19 affected SME exporters
‘Women-connected businesses, export-related businesses, and agriculture-related businesses have been earmarked as priority segments under the scheme. The sectors identified under this scheme are Food & Beverage, Herbal & Medicinal Products, IT & Software Development, Spices & Processed Spices, Textile & Garments including health-based protective products, Rubber-based Products and innovative Light Engineering products.’
• EU funds ADRA, Oxfam projects meet hygienic needs to face covid-19
• SL gets euro 11mn technical assistance grant from German govt.
‘Finance, Economy and Policy Development Ministry Secretary S.R. Attygalle signed the agreement on behalf of Government of Sri Lanka while Ambassador for Germany in Sri Lanka Jorn Rohde signed on behalf of Government of Germany in the presence of External Resources Department Director General Ajith Abeysekare and GIZ Sri Lanka and the Maldives Country Director Christiane Einfeldt’
• Sri Lanka waste-to-energy power plant delayed by Covid-19 travel curbs
‘Sri Lanka’s Hatton National Bank syndicated a 9.0 billion rupee credit facility for the plant’
• Sri Lanka power regulator fires salvo against fossil plants by adding up eco-costs
• Sri Lanka utility regulator to establish the externality cost of thermal power generation
• It will take a month to fix Assam gas well leak
(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.
• ETI Investments; Central Bank has failed in its duty – Prez
‘The Committee informed the President that the ETI Investments had not followed the proper procedures in their conduct from its inception. It had invested its assets in other institutes and at the same time, it had not been supervised by the Central Bank, the Committee pointed out.’
• Banking sector non-performing loan ratio edges up in first quarter to 5.1%
• Failed Finance Companies and belated Govt. announcement on Central Banks liability
‘Asked during the weekly Cabinet Press Briefing at the Information Department on Thursday, as to why the government had not made such a a clear announcement earlier, Media and Higher Education Minister Bandula Gunawardena simply replied that there was not much awareness among the public about the existence of the rule, but did not explain why the public had not been educated earlier despite there having been several failed finance companies.’
• Verite Research launches the first phase of a new public finance platform
‘Verité runs several other online platforms, including Manthri.lk, BudgetPromises.Org and FactCheck.lk.’
• Rush to invest in Colombo bourse
‘Locals who entered the stock market did so for short-term gains, some brokers pointed out.”
• CSE up in the wake of China-SL talks on debt relief
• Sri Lanka Insurance continuously secures Fitch Rating AAA (lka) for strong financial stability
• LB Finance’s 2019/20 FY records pre-tax profit of Rs. 9.9 bn in challenging environment
‘Meanwhile, the company’s first overseas venture, LB Micro Finance Myanmar Ltd, is now making profits, less than three years since its inception…’
• Finance Asia names HSBC Sri Lanka Best International Bank for the fifth year in a row
• Union Assurance renews partnership with Bar Association of Sri Lanka
‘Union Assurance (UA), one of the largest Life Insurance providers in the Sri Lankan insurance sector backed by one of the largest conglomerates in Sri Lanka – John Keells Holdings, ventured into a partnership with the Bar Association of Sri Lanka (BASL) back in year 2016.’
(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’
• MarCom collective commissions Ernst & Young to study industry’s economic significance
‘The Collective is a group of associations, businesses and professionals from the marketing and advertising industry that came together following the crippling impact of Covid-19.’
• Salons in survival battle amid Coronavirus and import controls
‘Nayana Karunaratne, President of Sri Lanka Association of Hairdressers and Beauticians (SLAHAB) says there are an estimated 60,000 salons in the country of which about 35,000 are barber saloons catering to men.nOver 250,000 person are estimated to be are employed in the sector, she said.’
• Lanka Realty right issue under-subscribed
‘Lanka Realty Investment PLC’s right issue has gone under-subscribed, thus enabling all business strategies to fail…’
• Colombo Fort Lands to privately place 19.7 million new shares
‘to settle debts due to two related companies, Corporate Holdings (Pvt) Ltd. And Financial Trust Ltd.’
• Prime Grand resumes construction aligned with health protocols
‘Key stakeholders of the project including the Chairman and Co-Chairperson of Prime Group Brahmanage Premalal and Sandamini Perera, Chairman of MAGA Engineering Capt. M.G. Kularatne, Chairman of DG5 Suranjith De Silva, Managing Director of CSEC Shiromal Fernando, Managing Director of VForm Consultants Lalith Rathnayake and other key individuals.’
• Colombo City Centre Residences, ready to be called home
‘Colombo City Centre project commenced in 2015 with the partnership between Abans Group of Companies and the Singaporean-based Next Story Group.’
• Project company to pump in additional US $ 1bn to Port City
• Baurs celebrates 123 years with ‘ABC for Life’ philosophy
Some partners include Roche, Novartis, Nestle Health Science, and Merck (Pharma), Omron, Medtronic, Nouvag, and Becton Dickinson (Surgical & Diagnostics), Johnson & Johnson, Turkey, Marico (Consumer), Swiss Air Lines, Edelweiss, SWISStours (Airline & Travel), Kluber Lubrication, Bracker, Datacolor (Textile & Machinery), Adama, Nufarm, UPL (Plant Protection Chemical), Elanco, Bioproton Pty Ltd (Animal Health), and Lonza, Kisco (Industrial Raw Materials)…Baurs is a member of the Ceylon Chamber of Commerce since 1899 and has an intact relationship with HSBC since ABC’s inception in 1897.
• Industrial Asphalts to raise Rs. 150 m via Rights
‘IAC’s operations are a combination of its primary asset, the land at Peliyagoda and its traditional business lines.’
• Despite zero sales & consumer outlook grim Prestige Automobile has stood by its employees
• Piramal Glass PAT Rs.389 million in FY 20, proposes 20% final dividend
• S.K. Wickremesinghe no more
‘…eldest son of Martin Wickremesinghe… High Commissioner to the UK from 1995-99… he chaired the boards of a number of Sri Lankan blue-chip companies including Commercial Bank of Ceylon, Ceylon Tobacco Company, Chemical Industries (Colombo), CTC Eagle, NDB, SriLankan Airlines, and Chemanex’
• Exclusive database on conformity assessment services launched on World Accreditation Day
• Hong Kong Govt. to lead $ 5 b rescue package for Cathay Pacific
‘The pact includes a HK$ 11.7 billion rights issue to existing shareholders, led by Swire Pacific Ltd. & Air China Ltd., which halted trading on Tuesday morning alongside Cathay, pending announcement.’
(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.
• Political implications of elections system mechanics
‘The JVP has been in a joint political enterprise with the UNP…since 2009….This situation has been exacerbated by the JVP abandoning its red clolour and bell symbol in favour of a different colour and compass symbol and contesting elections as a coalition of political parties.’
• The Executive, the Legislature and the Judiciary
‘Following independence, both European and Burger judges left Sri Lanka and the vacancies created by their departure were filled by indigenous people who did not have acumen and adequate practice in the judicial field…President Jayewardene ignored the law and allowed MPs of the ruling party to buy State plantation land at a nominal price, making them landowners and planters… they were permitted to do various businesses with the government. All the presidents who had succeeded JR followed suit, adding new elements to the corrupt, predatory and illegal tradition introduced by him. As a result thereof, the majority of the members of Parliament have obtained State lands, revenue earning licenses for businesses of liquor, passenger transport, duty free shops, timber, stone, sand, and re-exports, illegally and thereby becoming entrepreneurs transacting business with the government, contrary to the law. This corrupt system can be said to have made not only the MPs but the Presidents as well, extremely rich and wealthy.
• The Fundamental Rights Petitions Relating to The General Elections
• Please Allow Innocent Sri Lankans To Breathe!
‘Ratnajeevan Hoole seems to be nursing a pathological hatred of the Sinhalese, particularly, of Sinhalese Buddhists.’
• JVP defends Hoole
• Prof. Hoole is not a fool. HE is a tool. How did the Constitutional Council Appoint a Nigerian Citizen as a member of the Sri Lanka Election Commission?
• A knee on the neck of the next Parliament – Jayatilleka
‘Candidate Biden “warns about the rising tide of populism and nationalism around the world”. In a major foreign policy address (2019), he promised “a global Summit for Democracy” during his very first year in office, focused on “defending against rising authoritarianism and advancing human rights…in the cause of preserving open democracies and free speech”.’
• Return of Dayan Jayatilleka: Reincarnation of Varadraja Perumal’s defunct Cabinet Minister
• Power of block votes then and now – Rajeewa Jayaweera
‘President Premadasa, realizing early in his Presidency of the value of the Indian Tamil estate vote, wooed Thondaman Snr. by granting his many concessions, perks, and privileges. One such concession was the UL General Sales Agency (GSA) in the vital Indian states of Tamil Nadu, Kerala, and Maharashtra.’
• China-Sri Lanka Belt and Road political parties joint consultation mechanism established
‘… between the Communist Party of China (CPC) and main political parties of Sri Lanka…’
• The Supreme Court Ruling: Gift Horse or Trojan Horse? – Philips
• Mangala steps down from Parliamentary politics: “Gotabaya is inefficient and shortsighted”
• People will want Ranil back when Rajapaksa ‘economic virus’ hits them – Vajira
• Dressed the part, ‘Panther’ group came straight from central casting
‘Within a few days, an activist on Twitter sussed out that the group was comprised of models and actors from Atlanta’s film and entertainment industries…. Hashim Nzinga, the leader of the New Black Panther Party, suggested on his Facebook page that the group could be an FBI front organization.’
(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.
• ‘President corrected anomaly caused by his predecessor’ – Rupavahini under Defence Ministry
• Marxist with Gandhian Simplicity
‘He is sure to receive a rousing welcome from Karl Marx, and Mao tse Tung, with Liu Shao Shi intoning that he was the embodiment of what it was to be a good communist. These great men remind us that Marshall Perera, made his life sublime and departing, laid Red Flags on the sands of Time.
• Archaeological sites in East and Presidential Task ForceArchaeological sites in East and Presidential Task Force
• Ven. Ellawala Medhananda Part 7b
• The ‘Virtual Eelam’ is now on Tik Tok
• Twitter and Facebook Censorship and Mainstream Media Denial 304
‘I had never heard of ghost banning until I was ghost banned by twitter.’
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