ee archive: eesrilanka.wordpress.com
“Before you study the economics, study the economists!”
Who Finances the Financiers?
e-Con e-News 19-25 July 2020
• Death: Made in England • Igniting Hanuman’s Tales • US & EU Interfering in Elections
• Murder at the Central Bank • Et Tu Bajaj! • The War of the Road
• Even the stainless steel silver window – through which coffins are inserted at Kanatte’s crematorium, that comes down before the fires of heaven and hell are ignited – shiningly declares, “Made in England!”
• Walk along any road and examine where manhole covers are made, or the brand names of equipment used by cultivators or construction crews or by municipal and other workers. This issue examines the financing of such equipment imports and the prevention of their production here. (see ee Focus, Leasing).
• Lighting the Fuse on Hanuman’s Tales – ee wonders what monkey-tricks the US embassy and its allied white and white-black cohorts will enact in the final 10 days before the elections, to prevent a stable government with a clear majority, dedicated to transforming the economy, which is long long overdue, midst another capitalist meltdown.
The consequences of millions of Dollars and Euros and Yen passed down in the last few months to interfere in the election (under the guise of combatting Covid, enhancing white versions of peace, democracy, human rights, women’s rights, training officials, etc.) are all too evident in the headlines adorning the opposition media. Then again, all the capitalist media oppose a new economy, and the Left media (romantic, anarchist, etc) is imprecise about exactly what is needed.
The outburst of outgoing German Ambassador against imports, bloodsoaked England still pontificating at the UNHRC, Indian envoys issuing threats, calls for Indian intervention, claims of imminent military dictatorship, etc., aim to disable a fitting response to the ongoing capitalist crisis.
If a clear 2/3rds majority is won, prepare for cries of fraud to reverberate through the white world. If that clamor cannot deter the government from moving towards a national economy, then further attempts at destabilization and chaos will surely follow.
Multinational frontman Elon Musk said this week of the US-led ouster of Bolvia’s Quechua leader, “We will coup who we want!”
Such candor will of course not make our dollar liberals question the democratic credentials of their funding sources. Yet any government claiming it is nationalist and independent cannot simply wilt under the relentless pressure to sell off the country’s resources (see ee Focus, Revocation of Land Circular). Since imperialist interference will escalate, the much-needed cultural revolution girded by a modern industrial producer culture at its centre, will be sparked to ensure greater independence.
“Edirisinghe Trust Investment Finance Ltd had paid bribes amounting to Rs. 113.8 million to high ranking officials at regulatory agencies and several other high profile individuals to cover up the fact that they had Rs 8.6 billion in hidden accounts, a Central Bank (CBSL) official attached to the Financial Intelligence Unit of Sri Lanka revealed yesterday” (see ee Finance)
• Murder at the Central Bank – ee received a crying email from one of our readers. S/he had made the mistake of calling the Central Bank for information.
S/he was trying to get a copy of the report of the Central Bank Committee appointed to look in to “unauthorised finance and leasing companies”. The report was assigned after the murder of a leader of a Bajaj Union (that’s not what the Union is called, but that’s what it is!) trying to prevent the seizure of a 3-wheeler by an “unauthorized” finance company’s “seizers” (repossession men).
The murder featured the thudding of iron bars on mortal flesh and bone, captured on camera, with attendant theatrics starring Hawiian-and-white-shirt-top-buttons-off-showing-chest-hair-gangsters befitting a Tarantino-type tomato-sauce-spilling spaghetti-western.
Ten phone calls costing several floating rupees plus many edgy minutes later, stark dull reality dawned upon our reader, after s/he was passed from one CB official to another (all refusing to give their names – “It’s against the law” – they kept reminding). How dare s/he, mere mortal, call the bank of banks, with the highest concentration of PhDs in one building in the country!
Eventually after being given various possibilities – “write a letter to the NBFI director” – and excuses – “we’re having lunch” – our reader was told that the report, based on submissions made by the public, was private!
The final report, s/he was told, was meant for the governor and the President. So what could be in that report to make it so precious? And what are we to make of the state of finance in the country, which adamantly refuses to invest in modern industrialization, with many insisting we do not have the funds for.
• Et Tu Bajaj! – ee fantasizes, the CBSL report perhaps exposes the relationship between India’s Bajaj Co. and the murder? Sri Lanka is, after all, the second largest export market for Bajaj Auto, after the entire Africa continent! And Bajaj reported a Rs.5.5 billion profit in 2020’s second-quarter alone. Sri Lanka has the highest concentration of vehicles in all of South Asia! Over double that of India! SL also has the highest number of road fatalities. Again, higher than India!
• A news item this week winked at ee’s eye: “The non-banking financial industry of Sri Lanka (NBFI) has grown rapidly and the entire asset base of the Regulated Finance Companies (RFCs) stood at Rs.622 billion in 2013. Within a span of 6 years, it escalated to Rs. 1.39 trillion!” And that does not include the trillions blown to foreign multinationals and banks:
“Sri Lanka’s licensed finance companies are involved in providing financial services such as offering of small ticket personal loans, financing of two/three wheelers, truck financing, farm equipment financing, loans for purchase of used commercial vehicles/machinery, secured/unsecured working capital financing, etc….” (see ee Finance)
So there it is: Auto companies, not just Bajaj and Tata, have long been in the business of not just making vehicles and selling them but also financing the purchases of all types of machinery. So what is the relationship between machinery manufacturers, financiers and importers of machines, leasing companies, and the consumer? Where did this leasing business come from? (see ee Focus)
Every single screw and part of this urban and rural machinery is made abroad. These finance companies are fronts to grease the sales of the goods and services of foreign multinationals and banks. These MNCs export machinery to Sri Lanka, sold via banks, who lend to finance/leasing companies, who lend to users of those machines at exorbitant prices, putting the people and the country into hock! And when the farmer or worker or petty businessman cannot pay, they send in the ‘seizers! Close-up Tarantino! Spill the tomato sauce! Perhaps the report did discuss the relationship between Bajaj, the murder and the NBFIs….But neither a Tarantino – nor an Asoka Handagama (who works at the Central Bank) – or Bollywood would dare make a movie from that private report, either (see ee Focus, Central Bank)
• In the meantime, reports reach ee of several thousand vehicles leased to the government by finance companies, in the last few years, without a provision to transfer ownership at the end of the 5-year lease period. Since the government uses vehicles for a much longer period than five years, it loses immensely!
• “Road behavior, especially outside Colombo (by all road users, but mostly private bus drivers and three-wheelers), is largely undisciplined and speeding is a problem. The root of the problem lies in the contracting structure of the bus/taxi driver industry, which is a completely unregulated industry with no discipline because of the demanding work schedules and 24×7 operation” – World Bank
A1. Reader Comments –
• Kuvanna’s Song • Mini-B’s Links • Politicians & Inventions & the Working Class
A2. Quotes of the Week –
• Foreign Intervention in Cabinet • Sri Lanka’s Graphene • We will coup whoever we want! • Atrocious Clauses • Stalin & Plows & Nukes
A3. Random Notes –
July ‘83 was a Multicultural Event • Heil DIMO! • German Ambassador bitter • Sarvodaya’s Lap Dance • Microfinance & Rural Prostitution • Morals & the Church • Bank Lives Matter
B. ee Focus –
B1. Revocation of Land Circular 5/2001 Opens Up a Can of Worms – Lasanda Kurukulasuriya
B2. Sovereignty & Finance – Garvin Karunaratne
B3. The Technology Leasing Game
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.
• “Loved the verse on Kuvanna at the start of ee”
• “ee forgot to give readers Miniran Balakaya’s website link: “facebook.com/miniranbalakaya”
• On Miniran Balakaya video – “Good one. The politicians don’t give a shit about the inventions that people do here. When such things happen people try to seek foreign help. Recently I saw Gota inspecting a wireless stethoscope that has been developed by a kid in Kandy. These are revolutionary products! We really have the potential to make stuff on our own. The problem here is that people aren’t given recognition for what they do. Hence they remain silent.”
[ee responds, as Miniran Balakaya has noted: Politicians respond to pressure. It is an organized working class that has pushed politicians to demand local industrial production… One invention does not a revolution make. The state must launch a cultural revolution to ensure a producer culture.]
A2. Quotes of the Week_____________________________________
• “Sri Lanka is no stranger to foreign interference in its domestic affairs including elections. Following the abortive power grab in Parliament, in 2018, the then President Maithripala Sirisena publicly stated that some foreign powers had sought to interfere in the appointment of his Cabinet. He stopped short of naming names. Regional powers also meddle with the elections of their smaller neighbours. In 2015, the then President Mahinda Rajapaksa, who sought a third term, got a RAW deal from India. Three years later, Rajapaksa, in a press interview, said India, the US and some European countries had been behind his defeat. The US admitted that it had released millions of dollars from its Complex Crises Fund to some Sri Lankan NGOs, which teamed up to engineer Rajapaksa’s defeat.” (see ee Sovereignty, Cabinet)
• “Sri Lanka has the highest-grade graphene – the new lightest & strongest supermaterial for the future. But Australia, Canada, and the EU are now being allowed to take raw graphite out of Sri Lanka & do the processing & modern manufacture of hi-tech devices, all made outside, stealing potential huge profits and skills. The Sri Lankan government should negotiate joint ventures to develop new hi-tech industries right here. These include: quick-charging batteries & bendable touchscreens for phones/tablets, nano-tech, flexible robotics & prosthetics, supercars, wearable devices/patches, solar cells, water filter, conductive cement (another local industrial resource) – and many other innovative & practical uses that creative Lankans could learn to make! Miniran & the future – is in our hands! – Miniran Balakaya
• “We will coup whoever we want! Deal with it” – Elon Musk on Overthrowing Bolivia’s President Evo Morales and Stealing its Lithium
• “I noticed with shock and a certain bitter laughter, that the people who espoused cutbacks, belt tightening, austerity, privatization, the people who made up the atrocious clause, “running the country like a business,” have been spun around 180 degrees. Where they advocated, over the last 30 or 40 years, shrinking the state, they have now swiftly expanded it. Though they have not admitted to the failure of their ideas and austerity policies, they have virtually, though temporarily, overturned 40 years of shrinking the state’s responsibilities to people.” (see ee Media, Narrative)
• “After three decades, the face of the Soviet Union has been completely transformed. What’s essential to Stalinism’s historical actions is this: it found a Russia that worked the land with wooden plows and left it as the owner of the atomic bomb. It elevated Russia to the rank of the second industrial power in the world, and it’s not merely a question of material progress and organization. A similar result could not have been achieved without a great cultural revolution in which an entire country has been sent to school to receive an extensive education” – Isaac Deutscher, 1953.
A3. Random Notes (‘Seeing Number in Chaos’)_________________
July ‘83 was a Multicultural Event – Sinhala Buddhist nationalism has been prevalent among the working class from the beginning, due to colonial manipulation of the economy and within workplaces. Traditionally, clerical and middle-management personnel (early CMU members) were Burgher, Tamil or Malayali. Chargehands and Kanganis were Malayali. This was why anti-Malayali sentiment could be mobilized to divide the working class in the 1930s.
The looting which took place in 1983, as opposed to the wilful destruction of the official pogrom, included Tamil members of the urban lumpen and working classes, Indians and Muslims. It was a multicultural event
Many media analysts don’t have any real knowledge of the working class – An NGO not really being a microcosm of society, and the people bringing them tea or their drivers, not really representative of the proletariat. The industrial working class has been predominantly Sinhala Buddhist until recently, when Estate Tamils started joining in large numbers. However, the business/executive class is overwhelmingly non-Sinhala Buddhist, and Sinhala Buddhist members of the managerial stratum are driven by a more cosmopolitan but petty bourgeois or bourgeois ideology.
Some believe the fountainhead of the anti-Muslim movement is the intelligentsia rather than the petty bourgeoisie. The anti-Muslim feeling among the working class and peasantry is of course driven by the role of Muslim money lenders and traders. (The intelligentsia, however, is not a bloc, and is varied – there are institutional and organic intelligentsia, depending on their base)
The lack of a living proletarian movement means there is no socialist magnet for workers.
The other issue is how does a society industrialize without getting rid of the market minorities installed as a mercantile wedge by colonialism. Vietnam simply expelled the Chinese who controlled the rice trade and constituted a state within a state. Former Chinese Prime Minister Zhou En Lai long ago informed the Chinese in the diaspora, that they could not claim to be Chinese and not expect to be discriminated against: “If they wish to return to the motherland they are welcome. Should they adopt the nationality of their country of domicile they must be treated fairly and equitably, but they can no longer claim to be Chinese….” So what do people wish themselves to be in a 100 years?
• Heil DIMO! – The outgoing German Ambassador bitterly complained this week about import controls, calling Sri Lanka, “the only country in the world with a wide-ranging ban on imports!” Really!? (see ee Sovereignty) Hilariously, luxury importers also complained about import restrictions, crying they couldn’t pay the rent on their expensive showrooms! Attempts to sabotage the already weak import controls are underway: Read about the efforts of the private Pharmaceuticals (controlling 80% of the market!) to undermine them. (see Industry)
Meanwhile Sarvodaya Development Finance (“the development finance arm of the Sarvodaya Movement, one of Sri Lanka’s largest and most respected not-for-profit organisations”) was fined this week by the Central Bank. SDF, whose chief heads Capital Media, responsible for rightist rags like Echelon / EconomyNext, etc., is offering to help rural children acquire laptops! How and where are these laptops made? And why hasn’t SDF thought of investing in getting our rural children to make (not just assembling) laptops throughout the 60 years of its existence? Is it because of it’s umbilical strangling by the Rockefeller worldview?
Here is Sarvodaya-linked EconomyNext making further incomprehensible statements: ‘Sri Lanka’s Bank of Ceylon was expropriated from domestic citizens, one of the first private large firms set up by indigenous entrepreneuers soon-after as part of a wave of private property rights violations that led to Sri Lanka lagging behind East Asia, critic say.’ Really? The Bank of Ceylon was a recommendation of the 1934 Banking Commission to deal with the fact that English banks would not lend to Sinhala people, but used Chettiars and Afghan moneylenders as middlemen instead, who charged exorbitant interest! (see ee Finance, State banks)
• Macrofinance & Microfinance: And what of this business of microfinance, brought to the public eye by that Bangladeshi banker being given a Nobel Prize for identifying an area the World Bank still had not got its claws into: loans between women.
The seettu (cheettu) system of collective, revolving around savings/loans had been an institution from time immemorial, enabling impoverished people to build up enough capital to make unusual purchases. Roadside shops sprung up, called “seettu boutiques” which specialized in inexpensive household items and furniture, to be purchased by seettu beneficiaries. The first blow by the colonialists against this system was its banning among state employees. The death-knell for the system was rung by the descent upon Sri Lanka of microfinance…
Here’s another news item this week: “By the end of 2018, over 2.2 million Sri Lankans had drawn microfinance loans amounting to Rs. 84.2 billion… women in poor and war affected areas are especially targeted by microfinance financial institutions, which charge up to 220% interest and apply compound interest”
The private media of course refuses to tell us who is behind these microfinance rackets, and what goods do these women buy? This microfinance racket pits villager against villager, by making neighbors responsible for others paying the loans back. ee tried to find out, who the macrofinanciers are who provide these funds to the microfinanciers? And what do people buy with these loans:
A few phone calls ee made to its readers came up with these expenditures: “Money is supposedly borrowed for small businesses. To buy inputs like cloth, needles, thread, and a sewing machine! To buy land, to build a house, or grow more food to sell. To rent a tractor or a tsunami for harvest. To buy appliances. To buy industrial goods for themselves and their children.” All such goods that could easily be made in rural areas.
Who are the people who benefit from such loans, who are the banks that lend to the microfinanciers? Banks make mountains of profits, off both pawning and microfinance loans. Other than the banks, Unilever, Proctor & Gamble, Abans, Singer, etc. are the main winners of the microfinance and pawning game. They are the main sellers of the good life, fast moving consumer goods, appliances, etc.
The filmmaker Prasanna Vithanage made a movie about a pawnbroker, but of course turned it into a love story, not between the banks and their profits, but some tearjerking multicultural romance!
• And in case any ee reader thinks that Sri Lanka’s Central Bank is particularly secretive: In Europe criticizing their central bank (ECB) is almost a criminal offense. Criticizing the Bank of England was long considered tantamount to blaspheming the Anglican church. And the Anglican Church would “more readily pardon an attack on 38 of its 39 articles than on 1/39th of its income. Nowadays atheism is culpa levis (a relatively slight mortal sin), as compared with criticism of existing property relations”.
One ee reader who works for a European central bank, claims his emails and writings are carefully screened by his employer. One EU MP, from Germany’s Christian Democrat party, senior partner in Chancellor Angela Merkel’s coalition, noted the arrogance of Europe’s Central Bank, ‘They (the ECB) cannot simply say: “We are in charge because we are in charge.”
• What is the Greater Crime: Robbing or Owning a Bank? – It is private banks who provide awards to policemen. Policemen after all risk their lives to keep private bank withdrawals legitimate. Yet security guards are necessary but not essential to the workings of a bank. The costs bankers incur paying for protection is not considered part of its productive expenditures. Bank Lives Matter!
B. Special Focus____________________________________________
B1. Revocation of Land Circular 5/2001 Opens Up a Can of Worms – Lasanda Kurukulasuriya
The government’s recent move to do away with an important land circular, announced by the Cabinet Spokesman, Minister Bandula Gunewardena on 02 July 2020, has opened up a can or worms that can tunnel into many areas of government policy. Circular 5/2001, issued in August 2001 by the Ministry of Forest Resources and Environment at the time, was intended to protect hundreds of thousands of acres of forest cover that were not regulated under existing Acts of Parliament by bringing them under the Forests Department. With the impending revocation of the circular, these forests will lose this protection and revert to the control of District and Divisional Secretaries, who will not be bound by the strict conditions spelt out for the release of these lands for ‘other purposes.’
The rationale given by the Cabinet Spokesman who claimed that activities of chena cultivators were being hampered by the circular, is extremely disingenuous. It presents the revocation of circular 5/2001 as a move to help poor farmers, whereas it is part of a much larger ongoing project that seeks to do just the opposite – by releasing land to private investors for large scale commercial agriculture (‘economically productive purposes’). This is a policy that has long been pushed by the World Bank and western governments, that many analysts say will harm the interests of Sri Lanka’s farmers, who are mainly smallholders. Environmentalists have with one voice deplored the move to do away with circular 5/2001.
It is now clear that the objective of opening the floodgates to make land readily available to serve foreign capital, is embedded in many other projects touted as ‘development.’ A case in point is the Millennium Challenge Compact (MCC) which, in the US ambassador’s own words, is intended “to help the government to identify which state lands are underutilised and available for investment …”
Driving Dispossession – A new report released mid July by a US think tank, the Oakland Institute, identified the United States as “a key player in in an unfettered offensive to privatize land around the world via US blockchain corporations, government agencies, and the World Bank.” Sri Lanka is one of the six case studies in the report titled Driving Dispossession: The Global Push to “Unlock the Economic Potential of Land.” It warns that the compact between Sri Lanka and the United States Millennium Challenge Corporation (MCC) “could potentially shift millions of hectares of land into private control.”
According to Frederic Mousseau, its lead author and Policy Director of the institute, “In Sri Lanka, the Millennium Challenge Corporation, a US government entity, is targeting state land – it intends to map and record up to 67%of the country to “promote land transactions that could stimulate investment and increase its use as an economic asset.”
Mousseau goes on to say: “Governments are being pushed to adopt the Western notion of private land ownership to give corporations access to natural resources – land, water, and minerals – just the opposite of the drastic shift we need to win the struggle against climate change.” The report’s other five case studies are Ukraine, Zambia, Myanmar, Papua New Guinea and Brazil.
Moves underway – There has been a public outcry against any move to sign the MCC – which got Cabinet approval under the previous government. But there is less awareness that the process of transformation sought by the agreement – through introduction of new laws, amendments to existing laws and policy shifts – is already underway. A case in point is the State Land (Special Provisions) Bill, which would have fulfilled a pre-condition of the MCC if not for a timely Supreme Court ruling which blocked its passage.
Revoking circular 5/2001 is but one point in the trajectory of a process that exploits our natural resources, says environmentalist Sajiwa Chamikara, among the first to sniff out the imminent move. This did not come out of the blue, but is part of a carefully planned strategy, he said. World Bank reports of 1996 and 2015 clearly state that laws must be changed to introduce commercial agriculture. A Land Ordinance of 2014 was amended in 2017 to enable foreigners to buy land. “It is a step-by-step process, and revoking circular 5/2001 is yet another step,” he explained. If protests were of no avail he said environmentalists could challenge the move in court.
The FTA with Singapore too provides for land acquisition according to Chamikara, who is Environment and Legal Officer of MONLAR (Movement for National Land and Agricultural Reform). He said 62,500 acres earmarked for sugar cane cultivation under this FTA, lie in areas protected by circular 5/2001. And China has sought 15,000 acres for industrial zones in Hambantota and Moneragala. He said these projects need to be challenged.
In the Northern Province too ‘the difficulty of obtaining suitable land to commence business operations’ was identified as the main constraint for investors, in a recent study by Ernst & Young. “Owing to the dense forestry in the Northern Province, a significant portion of the land comes under the purview and protection of the Department of Wildlife Conservation and the Department of Forestry of Sri Lanka” the study is reported to have said.
Policy ambiguity – Around the time of the Cabinet decision relating to circular 5/2001, president Gotabaya Rajapaksa had also instructed officials to speed up the process of digitizing land transaction records (‘e-land registration’). Those conversant with this subject warn that this programme dating back to the 1998 ‘Bimsaviya’ Act, is fraught with danger, as the records once digitised cannot be changed or challenged in court. “Once your name is on the title register to a property, you are the legal owner even if you acquired the property through fraud. It is a state-backed guarantee that the owner is genuine” wrote Priyanga Boschmans, a barrister of The Honourable Society of the Middle Temple and a solicitor of the Supreme Court of England and Wales, in ‘A critical appraisal of Bimsaviya’ (Daily Mirror, 07.12.19). Part of the MCC’s funds are for ‘cadastral mapping’ and surveying required for digitizing a mega-number of land title documents.
It is puzzling why President Rajapaksa, who has shown readiness to meet various professional groups to discuss issues relating to government policy, has not met environmentalists, who are deeply troubled by these developments. There is a strong thread running through the SLPP’s 2019 presidential election manifesto that emphasizes the need to protect national resources. It decried “foreigners being able to buy lands, a scarce resource, without any hindrance” (page iii). It pledged to “take proactive measures to increase national forest cover by 30% (page 64). It said the main aim of its economic policy was to uplift the farmers. But a clear statement on land policy is conspicuous by its absence.
The January announcement that the new government had decided to integrate elements of the the National Physical Plan 2017 – 2050 (NPP) in its policy declaration (Vistas of Prosperity and Splendour) created further ambiguity regarding government policy on land. This writer has, in previous columns, shown that there is a nexus between the NPP and the MCC (‘All is not Wells Part I: Nexus between MCC and National Physical Plan – dailymirror.lk/opinion/All-is-not-Wells/172-183495 (Daily Mirror 21 February 2020); ‘Mega Land grab imminent?’ – island.lk/index.php?page_cat=article-details&page=article-details&code_title=205229 (The Island 03 June 2019). This ambiguity would be exacerbated by revocation of circular 5/2001.
With farmers’ woes having figured prominently in President Rajapaksa’s meetings with the public across the country ahead of the general election set for 5th August, it may be predicted that controversies relating to land will take centre stage in the political arena, in the years ahead.
B2. Sovereignty & Finance I – Garvin Karunaratne
“Private authorized Money Changers collect easily ten times more foreign exchange than all our banks put together”
In any country there has to be an apex body that controls finance. The finance of a country comprises the foreign exchange that comes in – the hard currency, printed by the UK, USA, EU & a few other countries and the local rupee, printed by Sri Lanka for use within Sri Lanka. My opinion is that handling the foreign exchange that comes in is crucial to any economy and our Central Bank is entirely to blame for abdicating the right for a country to handle the foreign exchange that legitimately comes into the country.
Our Central Bank effectively controlled the foreign exchange that came in until the end of 1977. It so happened that in 1970 I and my wife came back from England – we were there for studies on a scholarship and we applied to the Central Bank for permission to import a car. My wife had worked in England during our stay and I too had some earnings from giving talks on the Sinhala Programme of the BBC. We submitted details including all receipts and the Controller of Exchange of the Central Bank tooth combed each receipt before approving the import of a car for £875. The money had been earned by us and was banked in Lloyds Bank London, our bankers. That was in 1970. In short then, the Central Bank effectively controlled foreign exchange.
In contrast now the Central Bank has come up with the ludicrous idea that the Central Bank only controls the local Rupee. The abdication of handling our foreign exchange by following the Structural Adjustment Programme of the IMF from the end of 1977 is hailed by the Central Bank as a great success. In their words, “1977 was a clear watershed in the economic history of Sri Lanka, when the country turned away from a predominantly inward looking , tightly controlled and welfare oriented strategy to one which primarily emphasized export growth, competition and higher capital investment for economic growth and employment generation. The rapid spurt of the economy in 1978 was the immediate response of a hitherto long stagnant economy to the relaxation of controls and the restoration of price incentives. The economy in its performance in 1978 has clearly shown that given an appropriate policy climate it has the potential of moving onto a path of sustained economic development.”(Central Bank Annual Report 1985) .
What actually happened was totally the opposite. This has led to total disaster in terms of foreign debt, currency devaluation, high inflation, increased imports, poverty and unemployment. Following this neoliberal policy of relaxing foreign exchange use and meeting the shortfall with proceeds of privatization and loans, has led to a situation of increased foreign debt – By 1996 the foreign debt was $ 4.6 billion and by 2008 it was at $ 17.7 billion. In 1977 our foreign debt was only $ 750 million. Devaluation was from Rs 15.5 in 1977 to Rs 31.6 in 1978 – a devaluation of over 100% in the first year and to Rs 235 to the pound today!
Matters on foreign exchange that comes in did come to a head on 25th January 2001, when our two State banks had to pay a massive oil bill and both banks did not have enough foreign exchange and they had to go hat in hand to the foreign banks that had collected foreign exchange. The foreign bank that held foreign currency increased their price to Rs. 100.00, when at that time the dollar was trading at Rs.85.00. In the process the Rupee shrank to even Rs 106 to the dollar. Our State banks had no other alternative than to buy at the higher price demanded by the foreign bank. It is the banks that fix the exchange rate. Mind you it is not the bank’s money. It was foreign money collected by the Banks and the foreign banks had been grabbing foreign money for long. Once in about 1998 I had ordered the Bank of Scotland, my bankers to send money to my NRFC at the Bank of Ceylon and strangely the money was credited to my NRFC in Rupees. I was going to Myanmar on a holiday and needed to take dollars with me but the Standard Chartered Bank to which the Bank of Scotland had first sent the dollars snatched the dollars and credited the equivalent of Rupees into my account. Mr Athauda the Manager of the Bank of Ceylon said that that was how most remittances come. I had to wage a battle for two full days to get the money in dollars. Unknown to our Central Bank the foreign banks hoard foreign currency and bid the price upwards. They want the profit. Even our hard earned foreign exchange is manipulated by the foreign banks to make profits!.
As an explanation, the Central Bank said: “in a free floating regime, the market forces determine the exchange rate. The CB does not intervene in the process; the CB has control over the domestic money supply” (The Island: 17/02/2001). The remedy proposed by the Central Bank was: “In order to avoid a repeat of the catastrophe of the Rupee sliding down, we have decided that some of the very large bills will be settled outside the market and there will be forward hedging by the Banks to even out the payment of the bills overtime” (The Island: 17/02/2001) Forward hedging is like obtaining an overdraft. This statement of the Central Bank in itself is indirect proof that the Central Bank should actually be controlling our foreign exchange. The Central Bank is the apex body that has to control the foreign exchange.
In 2001 I wrote: foreign money that comes into our country from whatever source is the property of the Sri Lankan Government, other than in case of NRFC Accounts. It is this practice of allowing the banks to handle the country’s legitimate earnings as their private property that enabled the banks to hold the Government to ransom and cause the devaluation in this instance”Though I wrote that this is a matter that has to be addressed to immediately, nothing has happened till today. The foreign banks accept foreign money and bid the price upwards whenever they get the chance. I have been pointing out in my papers that our Government has to control the foreign exchange that comes in. This is a fundamental requirement in any country. We have banks collecting foreign exchange and also private authorized money changers accepting foreign money. Private authorized Money Changers collect easily ten times more foreign exchange than all our banks put together. All that money has to be credited to the Central Bank and it is the Central Bank that has to disburse that money. If our present mandarins in the Central Bank disagree, then to my mind they are not acting as a Central Bank. If it is only to handle the domestic Rupee we do not need a Central Bank with specialists. A senior administrator from the SLAS can easily attend to this task with a dozen accountants and clerical officers.
I think it is immediately necessary that our Prime Minister and President should look into this problem and if the Central Bank yet persists that it is not their job then appoint another authority to ensure that every dollar that comes in from all sources get into our coffers and get disposed as per decisions of the Government. (To be continued…)
B3. The Technology Leasing Game
The whites long ago decided to deny our countries the freedom to establish our own capital equipment (large-scale heavy industry) and intermediate equipment industry, to prevent technology transfer. Not only preventing but destroying nascent efforts. And massive investments are made in financing the import of such technology (see ee Finance)
We were then invaded by foreign labor-intensive manufacturing capital (garments and low-level electronic assembly, etc), with technology leasing arising out of the fear of nationalization. Charging high royalties, they imposed severe restrictions on uses of technology, which are designed to prolong the importation of technology. They thus hindered the assimilation, adaptation and diffusion of technology, and inhibited local technological efforts, by using international patent rights (IPR) and heavy bribes to the local import-crazy comprador bourgeoisie.
No organic links are engendered between the imported technology, indigenous resource development and the basic needs of the society. The imported technology also undermines balance of payments, price levels, growth and the distribution of income, and employment
There is a severe loss of foreign exchange due to payment of royalties, commissions and fees for the technology used. The leasing process is highly import intensive, with inputs of replacement parts, etc., restricted to foreign sources insisting on quality controls. Balance of payments deficits are worsened by multinationals’ penchant for overinvoicing. Exports are also adversely affected by volume restrictions, price stipulations, and inflated costs caused by high royalties and fees and overinvoiced inputs. Suppliers also reserve the right to fix the sale or resale price of the goods manufactured.
Further, MNCs prevent stimulating local manufacture of substitutes and appropriate linkage activities. Manufacturing ‘production’ is merely the assembling of imported inputs, and for tariff-hopping multinationals, this is also a way of ‘marketing by other means’.
The commodities being manufactured with imported technology usually displace local artisan activity. Newly imported tastes stifle potential indigenous activity and misdirect local financial and other resources. Technology is not effectively transferred, and can be withdrawn at any time, and is also not diffused throughout the economy. Any growth is never sustainable nor conducive to real development, which requires the systematic application of science and technology to local resources.
The leasing process also fails to distribute high income between classes, between persons, and between regions. Luxury consumer goods also encourage elitism. Any capital intensive foreign technology allows few people to be employed, and no redistribution of income takes place.
The high level of unemployment means that a mass market is not allowed to develop and the few employed, at relatively high wages, demand the usual luxury consumer goods, creating high incomes for their employers.
Local private sector users of imported technology do not conduct serious R&D effort when suppliers provide high technology with proven marketability. Users cannot substitute plentiful labour for scarce capital (and local components for foreign inputs) because usually there is only one technique for producing the commodity. In more brand-specific products, the technology is more process specific. There is also frequently no alternative (in terms of conditions of acquisition) international capitalist source. There is considerable similarity in the terms and conditions offered by suppliers, and very little variation between the USA, Europe and Japan.
Technological self-reliance requires ‘disaggregating’ complex technology used in projects, and making machinery here. It is the state that has to make a massive intervention in the bargaining process or assume increasing ownership of the enterprises. The technology has to be made more socially relevant and the system of leasing must be prevented from unequally distributing income, distorting tastes, inflating prices, aggravating foreign exchange crises and worsening unemployment. An effective national system of selecting, registering and monitoring technology agreements has to be introduced. Countries have to pool resources and markets for more effective bargaining and technological utilization. There is also a need for a legally binding international code of conduct to control relations between technology suppliers and technology recipients, that using ‘content laws’ eventually enables the transfer of the technological know-how and production process to Sri Lanka.
–Technology Leasing as the Latest Imperialist Phase, Maurice A. Odle
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.
• President: ‘Foreign powers Sought to Interfere in Appointment of Cabinet’ & Elections
• People’s Action for Free and Fair Election receives R8.5mn from Japan, R6mn from Norway
• Concerns raised over Indian diplomats meeting with North and East Politicians
• Colombo East Terminal – why Sri Lanka can never trust India – Waduge
‘With over 30,000 vessels operating along the East-West shipping route the objective is to attract these ships to Colombo Port. Currently 23 major shipping lines and 7 feeder services operate out of Colombo. Colombo Port is one of the most economical ports in South Asia r’
• “The Indians don’t trust the Rajapaksas”
‘…said a diplomat from a Western embassy in Sri Lanka’s former capital. “They see them as doubled-tongued. A reversal on the port project would see India returning to the pre-2015 days of distrusting Colombo.”
• Port workers declare strike week from today in protest of ECT deal
‘Members of 23 trade unions of the Port Authority will participate in massive protest demonstration this afternoon (from1 2 noon today) near the port chaithya, President of Sri Lanka ports independent union Lal Bengamuwage said.’
• Port Trade Unions to meet President over ECT
• TUs reveal East Container Terminal (ECT) Cabinet paper
‘The government on Friday rejected claims by trade unions that a cabinet paper was submitted seeking approval to go ahead with the agreement entered into with India and Japan to privatise the East Container Terminal (ECT) of the Sri Lanka Ports Authority…The paper also highlights that Adani Ports and Logistics has entered into a strategic partnership with John Keells Holding PLC to develop and operate the ECT…’
• What will happen to ECT located along international shipping routes?
“In 2019, Ambassador Alice Wells the Acting Asst. Sec. for South & Central Asian Affairs at the US Department of State pointed out India and the US follow similar policies: “Both India and the United States believe in free and open Indo Pacific region. First, we are worried about China’s ambitions and aggressions as manifesting themselves in the Indo Pacific. We have in bilateral and quadrilateral sessions that we do with India, Japan and Australia we are working on practical steps that can take to coordinate on our finance development. Practical steps to make sure our assistance programs USAID or the MCC in helping to promote regional connectivity. President will be meeting PM Modi and Abe in Japan at the G20 and we have an opportunity to highlight this new partnership…”
• Sri Lanka negotiating with India to secure 20 Trinco oil tanks
‘CPC trade unions have remained staunchly against any joint operation with India…If the CPC distributes fuel to the North and East and the North Central Provinces from Trincomalee, it could save a sum of Rs900 million per year in transport, shipping and late fees, the unions claim. This is much more than the rent paid by LIOC to the Government.’
• India pushing for deepening economic collaboration with Lanka
‘Indian High Commissioner Baglay said so at a virtual event titled “Deepening Economic Collaboration between India and Sri Lanka” on 21 July 2020. This event was organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKIIRSS). Secretary, Ministry of Foreign Affairs, Ravinatha Aryasinha and the President of FICCI, Dr. Sangita Reddy participated in the event apart from other senior office-bearers from FICCI, LKIIRSS, and representatives from the Sri Lankan Board of Investment, Tourism Promotion Board, and the Institute of Nanotechnology.’
• SL to facilitate, protect and promote liberal ecosystem for Indian investors: Foreign Secretary Aryasinha
‘“India accounts for 20%of total SL imports and is the third largest export destination for SL.. Chair, South Asia Regional Council, FICCI and President, Group Public Affairs & Member of the Group Executive Board, Mahindra & Mahindra Ltd., Manoj Chugh said that there are new sectors which are yet to be tapped…Chief Operating Officer, Ashok Leyland Nitin Seth; Co-Chair, South Asia Regional Council, FICCI and Director – International Business CNH Industrial (India) Pvt. Ltd. Ashok Anantharaman; Executive Director, Investment Promotion, Board of Investment of Sri Lanka Prasanjith Wijayatilake; Director, Tourism Planning, Development and Investor Relations, Sri Lanka Tourism Development Authority Dr Prasad Jayasuriya and Head of Business Development, Sri Lanka Institute of Nanotechnology Dr Lakshitha Pahalagedara also shared…’
• India discusses rescheduling bilateral debt repayment by Sri Lanka
• Sri Lanka debt moratorium discussed by India Exim Bank, Finance Ministries
• Eyeing China, India plans solar power park in Sri Lanka
• Germany says import controls policy “detrimental”
‘German Ambassador Jorn Rohde pointed out, “The Presidential election results of last year show a clear division between communities and religions where there was a clear majority support from the majority community and a clear minority support for the opponent.”… The ambassador also expressed concern over the loans given by China adding that this had been discussed in Germany as well whether they are undercutting in terms of prices and whether their loans are given based on accurate assessments carried out. Germany has also been miffed by the government’s stance regarding tenders and raised the issue of transparency and fairness. The ambassador made specific reference to the Kerawalapitiya LNG power plant tender which had faced a number of issues particularly a conflict of interest in the case of Lakdhanavi Ltd which is also the lowest bidder but not awarded since it was said to have quoted too low a price and due to conflict of interest. Lakdhanavi is a subsidiary of LTL Holdings also a subsidiary of the Ceylon Electricity Board that uses German technology.’
• Govt. denies MCC agreement already signed
• No formation of Government committee to study experts’ report on MCC
• Covid & MCC Sri Lanka: Health Risk with Work Visa to Foreigners – What will the Doctors say? – Sri Lanka Study Circle
• ACSA, SOFA, MCC Once concluded there is no walking away from treaties – Kohona
• JVP flays govt. for dillydallying on MCC
• Port City Colombo responds to MCC comparison
• Placing ‘Gunaruwan Report’ on MCC in context with work of international scholars
‘though the MCC claims that its purpose is to help poor countries reduce their poverty it is in reality a means for the Americans to extend economic hegemony over such nations…’
• England’s HR Ambassador’s hypocrisy at the UNHRC.
• Sri Lanka to do away with race, religion and marital status of parents in birth certificates
• New Birth Certificate: A Betrayal of the Sinhala Buddhists – Waduge
‘The Sinhale Nation was built by no one else but the Sinhala Buddhists. It is an achievement archaeologically, culturally & historically embedded across every contour of SL & cannot be denied.’
• Sri Lanka will continue to include “race” in birth certificates, reversing previous decision not to
• National hero Henry Pedris
‘His parents built the Isipathanaramaya at Havelock Town, in his memory. Edward Henry Pedris – the national hero, displayed such rare courage at his death that any Sri Lankan would be proud.’
• Where – O where! – is the Left, the Right, and the North + East?
‘The latest to raise the racist ghost of the past is Dayan Jayatilleka, who is raving and ranting against the armed Dharmapalas” (i.e., the Rajapakases) accusing them of dismantling the existing order to establish a militarised authoritarian regime. He is not saying anything new. He is parroting what the Saravanamuttus, Savitris and Ismails have been voicing in the post-Nandikadal period and even before’
• Sri Lanka’s foreign policy formulation: The first 10 years
‘A dependent colony produces a dependent elite. How dependent the elite were can best be seen in the way in which they secured independence: through constitutional cosmetics and formal requests, rather than the Indian strategy of non-violent action. The ideology of this elite naturally influenced the formulation of foreign policy by the so-called “triumvirate”: D. S. Senanayake, Sir Oliver Goonetilleke, and Sir Ivor Jennings.’
• Sirimavo Bandaranaike’s trailblazing foreign policy
• Pre-Historic Lanka To United Sri Lanka – Sociological Revelation
• DBS Jeyaraj calls for indian Intervention
• ‘India committed to SL’s peace, prosperity and security’
• TNA seeks NE merger, self-determination
• TNA backs federal solution through non-violent and peaceful negotiations
• Providing workable solutions to northern problems is foremost national duty – US-funded NPC
‘As witnessed in the USA, where the campaign that “Black Lives Matter” has taken the centre stage, there needs to be a recognition by the members of the permanent ethnic majority towards those who are permanent ethnic minorities.’
• US-funded NPC pushes for national path to reconciliation 37 years after Black July
• Two attacks and the anti-Tamil pogrom in July 1983
• Former refugees return secretly to escape Covid
• Former Saudi Ambassador Worried About Democracy in Sri Lanka
• Dispelling fears – Hakeem
‘Dispelling Myth of Unethical Conversion for Historically Swelling Numbers of Ceylon Moors/
Sri Lankan Moors’
• End of Sinhala political history?
‘Going by pronouncements of staunch supporters of Gotabaya R, there is the ‘mirage of immortality’ of the Sinhala race coming down from Ravana (There is a popular TV serial now running on Ravana with some learned academics participating).’
• Trust deficit plagues India-China ties, Tempers cool, uneasy peace in the Himalayas – Venkat Narayan
• Four arrested over destruction of 1,700 year-old Buddha statue in Pakistan
• Sri Lankan companies have invested in Vietnam, in apparels.
‘By 2020 SL companies with a capital of $76 million were in Vietnam and Vietnamese companies have invested in hotels and construction here. SL exports to Vietnam grew steadily from $72 million in 2015 to $100 million in 2018, but then reduced to 78 million in 2019. Vietnam’s exports to SL had grown from $244 million in 2015 to $302 million in 2019.’
• US-Vietnam ties: Past, present, and future
‘With an increasingly assertive China making gains in the security domain, or the domestic dynamics of two different political systems with differences in areas such as human rights, which will be at play as the United States holds presidential elections in November 2020 and Vietnam holds its quinquennial Party Congress in early 2021 – Dr. Prashanth Parameswaran is a Senior Columnist at The Diplomat and a fellow at the Wilson Center’s Asia Programme.
• How Beijing’s ‘red lines’ over Taiwan could lead to war with US
“I have read a number of [classified] documents which indicate that the Chinese communists would not want to destroy or fully annex Taiwan….So it would select certain targets for the first strike to paralyse Taiwan, or a decapitation strike that could erode military morale and unnerve the jittery public…Many of their military moves are aimed at psychological intimidation against Taiwan with the message that independence is a dead end and highly risky.”
• A New Cold War? No Sale!
‘”Don’t defend Trump – attack China!” said the instructions sent to the Republican Party’s senatorial candidates, but it doesn’t work outside the United States. It probably won’t work inside either.
• How the South African govt checkmated itself
‘Only a few years into the first Mandela administration a major “transformation” of the public service was launched. Experienced white employees were pensioned off and replaced by a host of affirmative action appointments, many of them political but many more of them bringing in civil servants from the former bantustans – who had already learnt many very bad habits. By 1999 in most departments almost all institutional memory had been lost and many of the new folk had little idea as to how to do their jobs. Typically, by then, there would just be Mrs Van der Merwe, who used to be in charge of the typing pool, but at least she knew where the files were kept and what happened if you ignored the obvious red lights. Soon Mrs van der Merwe was gone too and chaos reigned. Each new minister wanted to pick his own Director-General (and several deputies), usually from the same ethnic group as himself. The result was a constant whirligig of change with many acting appointments. Procurement rackets developed, sometimes including the minister. Presidents kept moving ministers around and they in turn kept changing their top civil servants…. The only real exceptions were those parts of the government machine involved in raising money – the Reserve Bank, the Treasury and SARS. Since they had to continue to lay the golden eggs they alone were allowed to retain some measure of expertise, skills and organizational discipline….’
• Voter fraud allegations dog east Toronto riding in Canada
• Ontario’s Bill on Alleged Genocide of Sri Lankan Tamils
• Your Excellency David McKinnon: Your Canada Day (July 1) Message to Sri Lanka
• Canada’s relationship with China rooted in a century-old tradition of imperial violence
‘Canada, as a loyal part of the empire, aided the British conquest of China. Some Canadians fought in China and the British commander of the Canadian Militia from 1880-1884, Lieutenant-General Richard George Amherst Luard, served there. In 1900 Canada was contracted to supply the British forces quelling the Boxer Rebellion. Canadian missionaries were also a significant force in China and they generally aided the foreign powers as detailed in When Missionaries Were Hated, an edited collection published in 2007. By 1919 there were nearly 600 Canadian missionaries in China’
• Canada & Kidnapping of Haiti’s President
‘As well as France and the USA, Canada had pernicious reasons for supporting the 2004 coup that led to the ousting of the Lavalas government, according to the film. (France had felt threatened by Aristide in 2003 – after he gave a speech demanding that France pay Haiti reparations of 21 billion US dollars – the modern day equivalent of the 150 million francs that Haiti was forced to pay France after the end of slavery.) Canada has since used the coup as a way to further exploit Haiti. An example of this exploitation is the Canadian company Gildan, whose workers in Haiti made less than a dollar a day whilst the company gained millions. The Aristide government attempted to double the minimum wage but this was not seen as popular to some of the rich elites…’
• How Canada, the US, and OAS allied to overthrow Morales
• Freedom Rider: Media Silent as Trump Declares Wars
‘Trump’s attacks on Venezuela, Syria and Iran are criminal, but Joe Biden vows to be even worse.’
• US attorney general explains real reason Washington is hostile to China
• A New Cold War on China Is Against the Interests of Humanity
• Five Slaves and Four Slaveholding Presidents in the Early USA – Wasala
• Cold Wars and Profit
‘The truth is that the world is under the increasing control of a global elite of billionaires, to whom nationality is irrelevant and national governments are tools to be manipulated.’
C2. Security (the state beyond ‘a pair of handcuffs’, monopolies of legitimate 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.
• Mole inside Zahran’s inner circle gave Indians precise intelligence on impending attacks
• Suicide bomber’s widow provided information to Indian intelligence agency: Witness
‘It was initially believed that Sarah was killed during the Sainthamaruthu blast which occurred at the NTJ safe-house on April 26, 2019 but later the police found sufficient evidence to show that she had fled to India by sea in September 2019…”Sarah was born in Thethativu as a Hindu…The witness was also asked would the Indian intelligence agency would have safely extracted its agent after the operation….The SIS officer said that if they had inserted an operative into a terrorist cell, they would also have a plan to safely extract that person after the operation’.
• War Trauma in the Military, their Families and Communities
‘The 30 year armed conflict in Sri Lanka has produced a new generation of veterans at risk for the chronic mental health problems that resulted following prolonged exposure to the war. Over 200,000 members of the Sri Lanka armed forces and police had been directly or indirectly exposed to combat situations during these years.’
• Defense Secretary gives red light to underworld (Video)
‘Retired Defense Secretary Major General Kamal Gunaratne said that despite the threats to his life, he would not give up the fight against the underworld.’
• Outgoing German Envoy concerned over German national under PTA detention over 5 months
• Court of Appeal overturns life sentence of ex LTTE cadre turned lecturer accused of child conscription
• Militarising prisons: Quick fixes over long-term change? – Ambika Soros
‘The buildings in which they are housed are in many instances dilapidated, with poor light and ventilation and unfit for habitation. Many are also infested with pests, such as rodents, bed bugs and mosquitos. Prison overcrowding results in persons not even having the space to lie down, due to which they take turns sleeping or sleep in the washrooms. Their access to water and sanitation facilities is limited, the condition of sanitation facilities is poor, and overflowing and blocked toilets are not uncommon. Further, since most prisoners do not have access to sanitation facilities at night as their cells or wards are locked at night, they relieve themselves in plastic bags or buckets… although prison work is expected to be rehabilitative, convicted prisoners who work within the prison receive only a few cents a day as payment since the rates of remuneration have remained the same for the last 35 years. The lowest daily wage for Grade 1 prisoners is currently Rs. 1.00, while the highest daily wage for Grade 4 prisoners is Rs. 2.50. There is also a severe shortage of staff resulting in officers being overworked and experiencing stress and mental distress. The cadre of officers has not been increased commensurate to the increase in the number of prisoners, resulting in a high ratio of officers to inmates.’ (The writer is a George Soros’ Open Society Fellow)
• STF had provided security to rogue narcotic racketeers
• Excise Dept. backs artificial toddy industry too – Thera
• Archaeology DG says Ex-Minister wanted him to release protected land
• PCoI criticised for entertaining complaints from private businessmen
‘The Commission is charged with not attending to problems faced by public officers but entertaining complaints from private businessmen and those indicted by AG’
• New Navy Media Coordinator
‘Commander of the Navy Vice Admiral Nishantha Ulugetenne has appointed Captain Indika de Silva as the new Media Coordinator of the Sri Lanka Navy from 15th July 2020… Captain Indika de Silva has successfully completed the Naval Command and Staff Course at the US Naval War College, Rhode Island. Being a specialist navigator, Captain Silva received his specialization in Navigation from India and Advanced Navigation from China as well.
• Law enforcement cooperation: EU-Lanka talks successful
‘Ambassador Grace Asirwatham having talks with Executive Director of Europol Catherine de Bolle in The Hague on 16 July 2020: ” The Europol is the European Union’s Agency for Law Enforcement Cooperation…Sebastien Moras, Head of Corporate Affairs Bureau (CAB), Cristina Manu from the External and EU Institutional Affairs of the Governance Directorate and Counsellor of the Embassy Madhuka Silva were present at the meeting.”
• The Malays of Ceylon Advent and decline of a martial race
• Indian, US warships to conduct exercise near Andaman and Nicobar archipelago
• China launches first-ever mission to Mars in space race with US
• Nuclear Weapons and Extreme Threats
‘to look at a case of nuclearism, at what went wrong, what could have been different…’
C3. Economists (Study the Economists before you study the Economics)
ee Economists shows how paid capitalist/academic ‘professionals’ confuse (misdefinitions, etc) and divert (with false indices, etc) from the steps needed to achieve an industrial country.
• Why can’t Govt. go for a fiscal stimulation?
‘In Sri Lanka, parliament is the whole authority for public expenditure, public finance. Because there is no parliament for the whole year, their hands are tight. So, the Central Bank is firing all guns and the Central Bank is going beyond our mandate and not only monetary stimulus, part of the fiscal stimulus is now being done by the Central Bank.’
• ‘Money sitting and money on wings’: Sir Dennis Robertson in Banking policy and the Price Level (1926) – Usvatte-aratchi
• US Federal Reserve Asks SL government for Collateral
‘A foreign lending agency, for the first time, has requested for collateral from the Sri Lankan government… “The New York Federal Reserve Bank has requested the Sri Lankan government to use the US treasury bills belonging to Sri Lanka as collateral, in return for a lending facility”…
• Indian Swaps, US Fed Repo & Domestic Borrowing – Wijewardena
‘The government has resorted to other tactics like getting a SWAP facility from India or entering into a repo with the Federal Reserve Bank. Both these measures would help the Central Bank to boost its foreign reserves but not the government to finance the budget. As a result, the increased expenditures have been funded by borrowing from domestic sources. There-again, these borrowings have been made principally from the Central Bank and commercial banks – two inflationary sources of financing.’
• SL’s economy is sliding – Reductio Ad Abeyratnum
‘A country’s development depends not on endless borrowings on concessionary terms, but on private investment growth.’
• External reserves decline as strengths in balance of payments weaken – Sanderatne
‘The only way out of this external vulnerability is through foreign assistance by way of aid, concessional loans and moratoria on debt repayment… The Government must not “look at the mouth of a gift horse” given by donors and offend friendly countries that assist us.’
• JVP unveils its plan to develop economy
‘We propose the revival of three main areas to improve the economy. They act like pillars holding up an economy. The first factor is changing the existing political culture. Today, politics has become a business. It should be transformed into a public service. Second, democracy and rule of law should be restored and strengthened. Third, there should be national reconciliation’
• SL economic consequences of the peace; monetary instability and trade lockdown: Bellwether
‘Sri Lanka’s central bank is printing unprecedented volumes of money, despite upcoming foreign debt and downgrades the country has suffered… SL needs to radical shift away from the policies involving monetary instability, nationalism (economic and otherwise) and the regime uncertainty of pulling the rug from under the private sector with fluid policies and expropriation which has kept the country back from independence. Otherwise, the devil will come to collect. This time the interest will be high.’
• IMF paper busts ‘flexible exchange rate’ myth on exports, but too late for Sri Lanka
• Consumer staples to see a shift away from premium categories until incomes recover
‘FMCG firms likely to increase focus on value categories to cater to lower income levels’
• Heads of State Join CEOs & UN chiefs at largest-ever UN convening of Global Business Leaders
‘United Nations Global Compact Leaders’ Summit to address the private sector’s response to 3 unprecedented and interconnected global crises – health, inequality and climate change..including more than 100 global, regional and local sessions – the Summit was the UN’s largest, most inclusive and most sustainable convening of purpose-driven business leaders…advancing the Sustainable Development Goals (SDGs). More than 20,000 business and sustainability leaders from over 180 countries…The panelists for the Sri Lanka Network session were 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.
• Deficits and Implied Taxation
‘Japan’s debt is denominated in its local currency and they with their long-lasting export-strength have built up reserves and stakes in important global institutions like the Asian Development Bank. Sri Lanka is not the United States. The United States has hegemonic power over energy, military, and international institutions and is the global reserve currency.’
• Way forward to Stimulate Recovery – with the Seven Cs: Ananda Business Network
‘Credible in the eyes and Compliant with, the expectations of the international monetary and financial agencies, rating agencies, investors…all within a truly non-aligned foreign policy…’
• Sri Lanka import controls hurt economy, business, export competitiveness: Advocata
• IMF: US dollar’s prevalence unfavorable for developing economies’ recovery
• China vs America, who is in charge?
‘Global leadership has been missing during the covid-19 pandemic. While President Trump has been pulling America out of global organisations like the WHO, China is seeking to increase its international influence, creating a shift in the world order.’
C4. Economy (Usually reported in monetary terms)
ee Economy section shows how the economy is usually measured by false indices like GDP, etc, and in monetary terms, confusing money and capital, while calling for privatization and deregulation, etc.
• CB denies pledging USD4.5 Bn US Treasury Securities to obtain USD1Bn credit facility
• CB imposes penalties to 2 Banks and 3 Finance companies due to violations of financial transaction reporting rules
• June national inflation up on higher food prices
‘Within the food category, increases were observed mainly in the prices of vegetables, sugar, fresh fish, eggs, rice, turmeric powder, chicken, potatoes, coconut oil, limes, Mysore dhal, fresh fruits, biscuits, coconuts, green gram, papadam, cowpea and canned fish. However, decreases in index values were reported for garlic, dried fish, dried chilies, bread fruit, chili powder, and curry powder. The non-food category in June 2020 also saw increases in groups of items ‘Clothing and Footwear’, ‘Health’, ‘Transport’ (Purchase of vehicles) and ‘Restaurants and Hotels’. However, price decreases in groups of items were reported for ‘Alcoholic Beverages, Tobacco & Narcotics’ (betel leaves) and ‘Housing, Water, Electricity, Gas and Other fuels’ (material for maintenance). Further, very slight price increases were reported in group of ‘Furnishing, Household equipment and Routine household maintenance’ and very slight price decreases were reported in groups of ‘Recreation and Culture’ and ‘Miscellaneous Goods and Services’ compared to the preceding month. The price indices of ‘Communication’ and ‘Education’ groups remained unchanged during the month.’
• Sri Lanka rupee ends weaker, gilt yields marginally up (July 21)
• Sri Lanka rupee, gilt yields flat at open (July 23)
• Sri Lanka rupee firmer, bond yields flat at open (July 24)
• Sri Lanka rupee ends weaker, gilt yields marginally up (July 24)
• Exchange controls extended till Jan 2021
‘Companies operating foreign branches or offices have been allowed to remit 20,000 US dollars without prior approval. However the amount that can be remitted out of a business or personal forex accounts had been limited to 20,000 dollars.’
• Sri Lanka call for dollar loan draw bids from India, China state banks
‘State-run Industrial & Commerce Bank of China and State Bank of India are in consortia that responded to a call for dollar term loans to SL, the Finance Ministry said. State Bank of India, Singapore Branch, bid with Hongkong & Shanghai Banking Corporation & Credit Suisse AG, Singapore Branch. Industrial & Commerce Bank of China (London) bid with Sri Lanka’s Acuity Partners.
• India holds talks with SL on debt moratorium
• Swap Agreement with India this week….Talks underway between SL and China…
‘…Meanwhile, the Central Bank of Sri Lanka will sign a US $ 1.1 billion currency swap deal with the Reserve Bank of India this week.’
• India agrees for $400 million currency swap with Sri Lanka
‘President Rajapaksa had…requested Indian government to provide USD 1.1 billion special swap facility to top up USD 400 million under SAARC facility amidst the COVID pandemic.
• CB approves Rs.11.8 bn worth new loans in 10 days
• Continuing measures to preserve foreign currency reserve position of SL
• SL’s revenue from income tax declines by nearly 22% in Jan-April 2020
• Sri Lanka’s exports drop despite import restrictions
‘Sri Lanka generated 906 million US dollars through exports in June, down from 1.08 billion recorded a year ago, according to the Export Development Board. Exports of diamonds, gems, and jewellry and apparel exports dropped…“Total export earnings for January to June 2020 was USD 4.3 billion compared to USD 5.9 billion recorded in a similar period of the previous year,” The government, in May, slapped temporary import bans on more than 200 products and imposed other restrictions to support local industries hit by the coronavirus pandemic. The restrictions were relaxed later to allow the import of raw materials eyeing re-exports and not the local market, a notice published by the import and export control department showed.
• Ranil wants IMF rescue…
“It is estimated that Sri Lanka will lose US$ 7 billion in foreign revenue this year having to pay US$ 3 billion for debt servicing. The UNP in calculation has revealed the need for US$ 6 billion for the next two years of which US$ 3 billion is required immediately. Many countries have already received international assistance to fund their immediate financial requirements. Countries like Pakistan, Nepal, Bangladesh, Myanmar, Afghanistan, Maldives, Egypt, and Kenya have begun the process of securing financial support from the International Monetary Fund.”
• Secondary bond market yields remain broadly unchanged
• Private buses to reduce operations by 50%
“Because of our faith in the President, we won’t go on strike. But the government should realise they have a duty towards private bus industry,” Private Bus Owners’ Association President Wijeratne said’
• CB caps interest rates on leases provided for public transport buses during moratorium period
• Sri Lanka economy market outlook; Echelon online forum
‘Lakshani Fernando – VP at Asia Securities, Dimantha Mathew – Head of Research at First Capital, Nikita Tissera – Head of Research at Bartleet Religare Securities, Udeeshan Jonas – Chief Strategist at Capital Alliance and Sanjeewa Fernando – Executive Director Research at CT CLSA…The session is moderated by Shamindra Kulamannage – Editor-in-Chief of Echelon Magazine…’
• World facing bankruptcy time bomb : Study
‘A premature withdrawal of supportive economic and policy measures could push the rise in insolvencies to 40-45%.“And if the global economic recovery takes longer than expected, the surge” in insolvencies could rise to as high as 85 to 95%, it added.’
C5. Workers (Inadequate Stats, Wasteful Transport, Unmodern Plantations, Services)
ee Workers attempts to correct the massive gaps and disinformation about workers, urban and rural and their representatives (trade unions, etc), and to highlight the need for organized worker power
• 1Q unemployment hits 10-year high
‘…Census Dept. data shows unemployment reaching 5.7%, up from 4.5% in 4Q 2019…Workers slip more into agriculture, youth and women more likely to be jobless…Both men and women in formal workforce decline from 1Q 2019…
• Sri Lanka unemployment hits 10-year high in 2020 March quarter
• Inordinate delay in Employees’ Provident Fund balance updates
‘The National Labour Advisory Council (NLAC) has raised the inordinate delay in updating EPF with relevant authorities. EPF statements have not been made available in 2019.’
• EPF continues to suffer massive losses : CBSL Data
• EPF’s listed equity portfolio loss by Rs.39 Bn end of 1Q 2020
• Agreement on private sector employees’ salary extended till September
• PHIs claim backing of 19 other unions for a strike
• Health workers Criticize ‘resurgence, response and rifts’
‘Strong criticism has been levelled at the Health Ministry from three significant fronts viz., the Association of Medical Specialists (AMS), the Government Medical Officers’ Association (GMOA) and the Public Health Inspectors (PHIs). They have accused the Health Ministry of doing things without consultation with others, and they have thrown barbs at the high-level Task Force for not properly coordinating the battle against Covid-19…’
• Seafarers ahoy!
‘Marine recruitment agencies and a union representing seafarers (ship’s crew) are appealing to the Government to come up with a cheaper accommodation rate in hotels for returning Sri Lankan seafarers who have to undergo a compulsory 14 days in quarantine… There are still around 3,000 Sri Lankan seafarers stranded in various parts of the world who have completed their contracts and want to return’
• Bogus job agents play out more naive Lankans seeking jobs abroad
• Foreign Ministry taken steps to assist Sri Lankan workers in Italy
• Sri Lanka plans to expand foreign employment market for Sri Lankan migrant workers
‘Immediate job opportunities have been offered for about 400 nurses in Germany, the official has told Silumina. In addition, currently offers have been received for 1,000 bus drivers in Saudi Arabia and 1,000 taxi drivers in Dubai…’
• HSBC holds first overseas education webinar
‘The session was moderated by Tharanga Gunasekera, Head of Marketing & Communications, HSBC Sri Lanka. Panelists included Jack Johnston, Regional Manager, Monash University Australia, Shihui Pang, UK Consulting Program Manager at Crimson Education, UK, Andrianto Saputra, Customer Relations Management and International Recruitment, Sunway Education Group Malaysia. Covering another important aspect on navigating through the COVID -19 volatility and saving for future education was well explained by Simin Zhuo, Insights and Research Analyst, Wealth Products and Services, HSBC UK…Country Head of Wealth & Personal Banking for HSBC Sri Lanka, Nadeesha Senaratne commented “Over 20,000 Sri Lankan students study overseas at any given time in key education corridors such as Australia, UK, Malaysia, India and the US…’
• Senior Citizens & Low Interest Rates
‘Millions of senior citizens retired after 30-40 years’ service depend on the monthly interest rates they get from their fixed deposits’
• Cabinet approves gratuity for all pensioners
‘The proposal made by Prime Minister Mahinda Rajapaksa to provide gratuity for 600,000 pensioners was approved today….Meanwhile, the Cabinet highlighted that many retired employees receive a salary less than Rs.20,000 and that this anomaly should be rectified by the National Salaries Commission.’
• EFC-StrEdge partnership offers customized business solutions
‘The ‘Solutions’ arm of the Employers’ Federation of Ceylon (EFC) recently entered into a partnership with StrEdge Advisory..”Particularly, the financial and strategic management expertise StrEdge brings in, blends in with the labour law and HR expertise of the Solutions Arm…’
• HRM programme to meet modern commercial needs head-on
‘The Chartered Institute of Personnel Management (CIPM) launched a new study programme in Human Resource Management titled the Chartered Qualification in Human Resource Management (CQHRM) last Friday.
• ‘CIPM and SLIIT sign historic MOU, expanding horizons of students’
‘CIPM Sri Lanka – the nation’s leader in human resource management and Sri Lanka Institute of Information Technology(SLIIT) entered into a historic MOU…’
• Open University of SL in grave financial crisis as Treasury cuts funding
‘Rs. 350 million was required per month to run the university, which was able to raise Rs. 100 million per month through students’ fees for capital expenditure such as infrastructure, buildings, library etc. As it was possible to meet 100% of the monthly salary bill with Rs. 190 million Treasury funding, there was no issue, but the reduction of the allocation by Rs. 40 million led to a financial crisis’
• SL Music Composers and Music Artistes’ Association maiden AGM
‘The Association was formed with the objective of safeguarding creative property rights of artistes and song composers in the country, convenor and organizer, Keerthi Pasquel said.’
• Another long walk to the polls – Estate workers with a franchise lament over hardships
‘According to the 2012 Census, 4.5% of the Sri Lankan population live in estates. The percentage of the hill country Tamils making up the plantation population in the years 1911 and 2001 was 77% and 88% respectively.’
• Australian minister slams SL asylum seeker family for ’wasting $10m of taxpayer money’
• Original people in Canada protest Walmart
“First Nations contribute significant amounts of money to this corporation’s profits,”
• 1.4 million workers filed for unemployment last week
• 28 million in US living under Threat of Eviction from Homes
• Racialized Capitalism
‘The exclusion of Black women from trade unions and the organized labor movement reified their superexploitation by excluding them from labor protections afforded to other classes of workers. Likewise, the argument that Black domestics were “unorganizable,” was based on chauvinist assumptions that continued the social stigma and vulnerability of this class of workers. Moreover, the organization, unionization, and protection of Black women was essential to the eradication of modern US racial capitalist exploitation.’
C6. Agriculture (Robbery of rural home market; Machines, if used, mainly imported)
ee Agriculture emphasizes the failure to industrialize on an agriculture that keeps the cultivator impoverished under moneylender and merchant, and the need to protect the rural home market. Also, importation of agricultural machinery, lack of rural monetization and commercialization, etc.
• Sri Lanka rough rice forecast for 2020 Yala minor season up 11-pct
• Agriculture policies and the lack of it
‘The governments of 1965 (Dudley Senanayake) and in 1970 (Sirimavo Bandaranaike) moved towards primacy for food production albeit without a specific long term plan. The government of 1977 (J.R. Jayewardene) reversed all gains made by previous governments by introducing an open economic policy without safeguards for agriculture.’
• Gazette issued to ban use of paddy and rice to produce animal feed
• Brutalised and forgotten Sri Lankan cinnamon peelers recognised in new research
Pepper Vs Rubber
‘Rubber smallholders numbering over 300,000 have been clamouring for an enhanced price for rubber…The selling price of rubber is Rs. 250/ per Kg as against the COP of Rs. 360/.’
• Freak storm destroys Puttalam salt harvest
‘A lot of these farmers are fishermen, who take to salt farming during the monsoon season that lasts for about six months.’
• President promises to revive kitul industry in the South
‘…which had deteriorated due to raids by the Excise Department….’
• ICRA Lanka reaffirms the ratings of Bogawantalawa Tea Estates PLC
‘Bogawantalawa tea estates are situated in the Golden Valley located in the central hills of Sri Lanka…. The labour cost represents around 60-70% of the Company’s production cost…’
• Flood protection of Colombo Metropolitan Region – A case of mixed priorities
‘It is surprising why the GOSL wanted JICA to do this study when Sri Lanka has a large number of professionals including many PhD holders, specializing in hydrology, both in the public sector and universities. Afterall, it is not a project involving high technology… The Japanese after having reduced the span when the new bridge was built in 1993, now recommends the span to be enlarged! The writer recalls that flooding of the Weras Ganga had been absent before the new bridge was built’
• Government to launch a systematic program to meet drinking water needs of Jaffna Peninsula
• Turmeric sold at exorbitant prices due to massive shortage
‘Sri Lanka is currently facing a massive shortage in turmeric in the country leading traders to sell the processed spice via informal channels at prices that are over five fold higher than the government imposed maximum retail price (MRP)…Spices and Allied Products Producers and Traders Association (SAPPTA) President Chairman Vernon Abeyratne said local production is by no means enough to meet the country’s current consumption. Sri Lanka currently has a requirement of approximately 400,000 kilograms of turmeric for local consumption.. The Essential Food Commodities Importers and Traders Association warned back then that the restriction would result in a shortage in the market. Prior to the import ban, the price per kilo of turmeric stood at Rs. 325 with an import tax of Rs.102. Turmeric is grown in wet and intermediate zones of Sri Lanka as a mono-crop and an intercrop under coconut. Major growing districts are Kurunegala, Gampaha, Kalutara, Kandy Matale and Ampara districts.
• Turmeric & Ulundu Imports
‘Minister Wimal Weerawansa raising issue over the government confiscation of 65 containers with ten tons of turmeric. The public demand for this commodity grew manifold after the outbreak of Covid-19 in Sri Lanka. An essential component in almost all Sri Lankan dishes, turmeric powder mixed with water is used as a disinfectant. This has led to a shortage. Weerawansa urged that the Sathosa be called upon to do the distribution. He also proposed that 5,000 tons of Ulundu (Black Gram) be imported to meet a prevailing shortage. President Rajapaksa was, however, not in favour of imports since it would affect local production. Hence, no decision was taken on the request.’
• Sri Lanka coconut auction prices up 3.1-pct
‘Palm oil, close substitute for coconut oil has been taxed at 350 rupees a kilogram while coconut oil imports have been restricted after money printing by the central bank to finance the deficit. Sri Lanka’s coconut production was estimated to have dropped 12.6%to 679 million nuts in the quarter of 2020 from a year earlier’
• Sri Lanka slightly lowers import duty on virgin coconut, babassu oil
• Plans afoot to promote pepper cultivation as an export crop – President
‘The people also requested the President to establish an Organic Fertilizer Plant and a seed production facility… Sand mining in Weli Oya was handed over to a private company during the previous government. The President was informed by the people about the illegal sand mining in violation of the license conditions…Issues related to Mahaweli lands were also brought to the attention of the President…The Ellewela Irrigation Project launched during President Mahinda Rajapaksa’s regime has been abandoned halfway. The people of the area informed the President if the project was completed it will meet the drinking and cultivating water needs of about 70% of the people in the area.’
• Indian producers smarting over rise in pepper imports from Sri Lanka
• President to meet spice industry today (July 20)
• Sri Lanka tea pick up at auction mid-July
• First half tea production hits 20-year low
‘Severe drought prevailed during 1Q cited as main reason…’
• Patriots and crimes against culture
‘At a ceremony to mark the reopening of the Gotatuwa Agrarian Service Centre, burnt down by the JVP 20 years back, that the JVP had destroyed 247 out of 545 agrarian service centres and the state-owned warehouses with huge stocks of paddy in them during its reign of terror in the late 1980s.’
• Transforming Sri Lanka’s agriculture
‘The Sri Lanka Agripreneurs’ Forum…recommended the creation of a ‘National Agri Enterprise Resource Planning (ERP) System’…in which the private sector would have a significant stake…“The biggest deterrent to improving agriculture is the absence of new technology. You need more greenhouses and new irrigation systems which include drip irrigation and sprinklers.”
• Defensive nature of most biz lines propels CIC first quarter
‘CIC Holdings PLC reported 18% higher revenue or Rs.7.88 billion during its fiscal first quarter…supported by business segments connected to crop solutions, livestock and health and personal care…Employees’ Provident Fund had 12.7%stake in the company’s non-voting shares being the largest shareholder.’
• Mangrove honeys and other benefits
‘In the past, mangroves were very much more common around the coasts and provided, among other benefits, breeding grounds for fish and other aquatic life, and protection against coastal erosion (including the 2004 tsunami). Much of our over 20 species of mangroves (of which pollen studies have formed a component) have been destroyed by felling for firewood, aquaculture, etc. Furthermore, this writer has not seen specialist honeys produced in this country; such as the black, white and red mangrove honeys, with distinctive flavours and reputed medicinal properties, produced in Thailand, Kenya, Florida and elsewhere’
C7. Industry (False definitions, anti-industrial sermons, rentier/entrepreneur, etc)
ee Industry section notes the ignorance about industrialization, the buying of foreign machinery, the need to make machines that make machines, build a producer culture. False definitions of industry, entrepreneur, etc, abound.
• Chamber of Pharmaceutical Industry meets NMRA to reiterate its stand
‘Sri Lanka Chamber of the Pharmaceutical Industry, whose members represent 25% of the importers and supply close to 80% of the medicine needs in the country, yesterday met with the National Medicines Regulatory Authority to resolve the dispute over NMRA action on the import and sale of 10 drugs whilst another discussion is scheduled for next week’
• Drug prices: National Medicines Regulatory Authority and pharma firms trade charges
‘The importers who have been issued notices of licence cancellations for 10 medications and supplements by the National Medicines Regulatory Authority are: Hemas Pharmaceuticals; A Baur & Co; Euro Asian Pharma; Pettah Pharmacy; and Robert Hall & Co ’
• Private Hospitals Association to discuss post-COVID recovery of healthcare sector
‘The Association of Private Hospitals and Nursing Homes (APHNH), the Charted Institute of Management Accountants (CIMA) and the Ceylon Chamber of Commerce (CCC) will be hosting a seminar on ‘Post-COVID Economic Recovery of the Private Health Sector’ on July 25….withexperts including Portia Jayamaha (Director Finance, Hemas Group of Hospitals), Abhishek Kalupathirana (Manager, Mergers & Acquisition, PwC Sri Lanka), Dilshan Fernando (Manager – SME, Commercial Bank) and Imran Furkan (CEO and Board Director, IT BPM)… This seminar is open to all Private Health Regulatory Council (PHSRC) registered private hospitals, both members and non – members of APHNH…’
• Mystery contract to exploit ilmenite in Mannar
‘A committee of officials will be appointed to probe reports that an Australian company together with Sri Lankan counterparts has been granted a contract to extract ilmenite in the Mannar area, the Cabinet decided this week.’
• Sand, Bus & Police Mafia
‘It is an open secret that the Police have been in the pay of the sand mafia. Ask any professional driver who plies these provincial roads and he will tell you how the drivers of these tippers show off their speeding prowess with questionable brakes to boot. Private bus operators are only closely second to the sand mining mafia when it comes to bribing…’
• Ulhitiya Reservoir Land Given to US Dole Co.
• Govt. extends Rs. 11 b bond to purchase coal by one year
‘Cabinet agreed to allow Rs. 11 billion Treasury bond issued by People’s Bank to Lanka Coal Ltd…’
• Vallibel Power Erathna’s first plant in Kuruwita signs fresh PPA deal with CEB
‘It is one of the largest public quoted renewable energy companies in Sri Lanka and it manages and operates three mini hydro power projects at Kuruwita, Ratnapura, and Norton Bridge, namely Erathna Mini Hydro Power Project, Denawaka Ganga Mini Hydro Power Project and Kiriwaneliya Mini Hydro Power Project with a cumulative capacity of 21.75 MW.’
• CEB finally begins to tap solar power in a big way
• S. Korea’s 3rd largest conglomerate keen on $600 mn. LNG project in SL
‘the proposed mega project would create semi-skilled and skilled employment to nearly a 1,000 Sri Lankan nationals….recently the largest Commercial Bank in the Republic of Korea, KB Financial Group of Kookmin Bank, committed a mega investment in highly reputed and diversified “Blue Chip” Corporate of LOLC Group of Sri Lanka.’
• Defence Ministry Centre for Research & Development produces ‘Blue Guns’ for weapon training
• Metropolitan Group continues driving licence operation till army takeover
‘Design, computerisation, supply, implementation, operations and maintenance of smart card driver’s licence solution, printing and issuance of cards using special card printing facility are being carried out by the private company since 2009 up to now…will be handled by the Sri Lanka Army with effect from January 1 next year…’
• Construction sector dissatisfied how govt. handling payment issue
‘Payment of over Rs.50bn delayed by nine months… “Govt. should have borrowed and settled us directly”- Chamber of Construction Industries of Sri Lanka…Banks reluctant to lend to sector despite Treasury letters… The construction sector accounts for about 8%of the country’s GDP and provides direct employment to approximately 650,000 persons and indirect employment to over 300,000 persons’
• Manufacturers oppose lifting of temporary ban on footwear imports
• Substandard imports seen as crippling SL’s software industry
‘every year more than 15,000 IT and software related graduates pass out of state and non state universities. But unfortunately most of them migrate to other countries for better prospects…’
• Import curbs hurt furniture importers for houses and luxury apartments
‘Besides, the closure of such businesses would result in a loss of employment for nearly 30,000 to 40,000 people, if the government fails to lift the restrictions in some form, bringing in relief to the businesses involved in importing luxury items…Showroom owners lament that millions of rupees invested to set up showrooms displaying these items for prospective buyers have now gone to waste.’
• Tile and Sanitaryware Temporary Import Suspension and its adverse impact on Consumers and Country’s Revenue
‘The Tile & Sanitaryware Importers Association…consists of over 300 importers…giving tax revenue totalling Rs. 12 billion annually…provides direct and indirect employment to around 50,000 individuals islandwide. The 300-odd members have appointed over 2,000 dealers across the island…’
• Sri Lanka’s China-run Port, Colombo Dockyard team up for floating vessel repair
• Colombo Dockyard PLC Launches the Buoy Tender Vessel Being Built For General Company for Ports of Iraq through Toyota Tsusho Corporation of Japan
‘Colombo Dockyard PLC is a flag ship investment of Japan and operates in joint collaboration with Onomichi Dockyard Company Limited of Japan. Also the Sri Lankan Government institutions hold more than 35% stake at CDPLC. As the leader of the Shipbuilding & Repairing Industry in Sri Lanka, CDPLC..is Sri Lanka’s front runner of its industrialization drive”.
• EDB webinar on marketsin Germany & Europe for electronic & electrical exporters
• Merchandise exports rebounds by 50.4 per cent last month in comparison to May
• Trade war in strategic minerals
‘The rare earths are 17 minerals with similar chemical properties. Though some are used only in tiny quantities, they are vital to the manufacture of electronic devices and of technologies for the energy transition, including wind turbines and electric vehicles.’
• Bill Gates: Indian pharma industry can produce Covid-19 vaccines for entire world
• Seven Indian pharma players race to develop Covid-19 vaccine
• US Fixated With Huawei, Should Focus On China’s Expansive Ops: Report
‘The Trump administration in recent weeks appears only to be fixated on precisely two Chinese firms – TikTok and Huawei, said a Washington-based think tank while suggesting that the United States should be focused more on the expansive operations of Chinese state-owned enterprises that are quietly dominating the sectors of infrastructure, telecommunications, transportation, energy, and financial services globally.’
• Trans-Pacific View – Rare Earths in the US-China Trade War
C8. Finance (Making money from money, banks, lack of investment in modernity)
ee Finance tracks the effects of financialization, pointing to the curious role of ratings agencies, again false indices, etc.
• ETI Paid Bribes Amounting to Rs 113.8M
‘…a Central Bank (CBSL) official attached to the Financial Intelligence Unit of Sri Lanka revealed yesterday
• Finance Companies Pay Bribes to Central Bank?
‘About the integrity of the Central Bank, perhaps, the cat is out of the bag when a Central Bank mandarin has admitted: ETI has paid bribes…’
• NBFIs call for positive reforms strengthening legal enforcement in the sector
‘Sri Lanka’s licensed finance companies are involved in providing financial services such as offering of small ticket personal loans, financing of two/three wheelers, truck financing, farm equipment financing, loans for purchase of used commercial vehicles/machinery, secured/unsecured working capital financing, etc…. The non-banking financial industry of Sri Lanka has grown rapidly and the entire asset base of the Regulated Finance Companies (RFC’s) stood at Rs.622 billion in 2013. Within a span of 6 years, it escalated to Rs. 1.39 trillion. During the same period, loans and advances of the RFC’s have grown to Rs. 1.066 trillion from Rs. 471 billion. This 60-year-old industry accounts for around seven million customers at present in the form of 57-60% borrowers and 40-43% depositors while it has about 32,000 employees.’
• More than 2.2 million people have drawn microfinance loans
‘By the end of 2018, over 2.2 million Sri Lankans had drawn microfinance loans amounting to Rs. 84.2 billion… women in poor and war affected areas are especially targeted by micro-finance financial institutions, which charge up to 220 per cent interest and apply compound interest.
• Committee to probe co-operative society’s Rs.500mn purchase of treasury bills through fake dealer
• Sri Lanka looks to pay losses of depositors who lost Rs507mn from Entrust bondscam
• Cabinet approves Committee to formalize and drive efficiency in state banks
“The sector’s non-performing loan (NPL) ratio continued to rise rapidly and reached 4.7% by end-2019 and 5.1% by end-March.’
• Sri Lanka committee appointed to change direction of state banks
‘Sri Lanka’s Bank of Ceylon was expropriated from domestic citizens, one of the first private large firms set up by indigenous entreprenuers soon-after as part of a wave of private property rights violations that led to Sri Lanka lagging behind East Asia, critic say.’
• SL Banks’ Association attributes delay in relief disbursements to cumbersome processes
• Govt. sets up property development and investment entity
‘to revive stalled State-owned or underperforming ventures initially in the hospitality sector… The move confirms the new Government’s stand that State-owned enterprises will not be sold or privatised but revitalised via Public Private Partnerships (PPPs) and better management.’
• Sri Lanka Treasury Bill yields fall across maturities
• National Insurance Trust Fund (NITF) Rs. 1 b retrocession gets Cabinet nod
‘2 companies selected to provide reinsurance support to NITF for 18 months…Cabinet has green-lighted a Rs.1 billion reinsurance cover for the National Insurance Trust Fund (NITF) for 18 months from two Indian and Nepalese companies…J.B. Boda and Co. headquartered in Mumbai and Everest Reinsurance Company based in Nepal…with the Chief Insurer being Chaucer Syndicate 1084, which is listed on the London Stock Exchange…’
• Sarvodaya to “uplift education” in suburban and rural Sri Lanka by selling laptops
• People’s Bank, IDB to support 5,000 small businesses
‘While the development of micro, small and medium-sized enterprises (MSMEs) is highly dependent on ‘development banking’ the two development banks that existed in Sri Lanka were unfortunately converted to commercial banks…. There are four types of development banking. They are industrial development, agricultural development, another is called ‘ExIm’ (export and import development) and the other is housing development. Development banking is very much alive in countries like China, India and the the US’
• People’s Bank further slashes loan interest rates
• Dramatic fall in credit card spending
• Moody’s extends review for downgrade on 3 Lankan banks
‘Moody’s Investors Service yesterday extended its review for downgrade on Bank of Ceylon’s (BOC), Hatton National Bank PLC’s (HNB) and Sampath Bank PLC’s (Sampath) long-term local currency deposit and foreign currency issuer ratings of B2.’
• Sri Lankan banks’ ratings under pressure as operating conditions weaken: Fitch
• Lankan banks’ operating environment deteriorates – Fitch
• Fitch-rated firms here estimated to lose Rs.30bn in revenue to pandemic
‘Among the hardest hit sectors, hotels will see the largest drop in revenues, due to travel restrictions and border closures continuing, while the consumer durables sector will also see weak revenues with muted demand through the end of the financial year.’
• Sri Lanka stocks end three-day rally (July 21)
• Zero risk on banks’ capital on loans given under CB credit guarantee schemes and Treasury undertaking
• HNB ramps up COVID relief with extension of over Rs. 350 bn in loan moratoriums
‘As the first private sector commercial bank to enter the SME space, HNB has a long history of supporting SME development in Sri Lanka….’
• DFCC announces Thimal Perera as new CEO from 2022
‘Perera has held several senior positions in the banking sector and has over two decades of experience in the financial services and banking sector, both locally and internationally having been with the HSBC Group, both in Sri Lanka and Overseas, the Commercial Bank of Qatar, Barclays Bank PLC, UAE and at Hatton National Bank’
• DFCC migrates to Google Enterprise with Finetech consultancy
• National Development Bank to raise Rs. 8 b via debentures
• Bourse bullish on SL Covid as turnover hits Rs. 1.19 billion
• JKH and banking sector counters under foreign selling pressure
• Nanayakkara appointed head London Stock Exchange Group Shared Services Centre in SL
‘Nanayakkara joins LSEG from Global Market Technologies (GMT), formerly known as Mubasher/Direct FN’
• Froth Returns to China’s Stock Market, Echoing the 2015 Crisis
‘Yet even with the ups and downs of recent weeks, China’s stock market is worth a quarter more than it was a year ago, bringing tremendous wealth to investors. The collective value is hovering around a $10 trillion marker. That was how much it was worth in June 2015, right before a crash prompted hasty reactions from China’s regulators and set in motion a global sell-off.’
• US Citibank Offers Covid Aid
‘For every US$1 donated by a Citi employee in support of COVID-19 relief, Citi donated US$1 to one of four organizations selected by each of Citi’s regions to address unique challenges: United Nations Development Programme (Asia Pacific), International Rescue Committee (Europe, Middle East and Africa), the International Organization for Migration (Latin America) and Direct Relief (North America). All donations between January 1 and May 31, 2020 were made eligible, and Citi to donate up to USD 500,000 to each organization.’
• The Old and the New of Fintech
‘Technological change in the financial industry is accelerating…This column distinguishes between the information and communication channels of financial innovation and analyses their implications for financial intermediation… New policy priorities should focus on accurately assessing the operational risks and ensuring the robustness of these technologies.’
C9. Business (Rentierism: money via imports, real-estate, tourism, insurance, fear, privatization)
ee Business aka ee Rentier focuses on diversions of the oligarchy, making money from unproductive land selling, tourism, insurance, advertising, etc. – the charade of press releases disguised as ‘news’
• Gold prices hit all-time high, decline in reserves
‘Sri Lankans buy gold jewellery with disposable income, which has fallen to very low level as a result of pay cuts of employees and reduction of income of self-employed and businessmen, a spokesman for the Jewellers Association told the Business Times.’
• Cargills and CT Holdings go for share buyback
• Sri Lanka’s Ceylon Cold Stores loses Rs349mn on Coronavirus, revenues down 26-pct in June
• Commercial High Court grants Enjoining Order preventing use of DSport mark by Discovery India and Singapore
‘LSV has been the exclusive broadcaster of the DSport channel in Sri Lanka through Dialog TV for approximately 2 years, and pursuant to the launch of the said illegal DSport channel of the Defendants, the Plaintiffs face an imminent threat of infiltration of the said illegal DSport channel into Sri Lanka.’
• Chartered Management Sri Lanka
‘Newly elected President Kaushal Rajapaksa, at the 19th annual general meeting of the Chartered Management Institute of UK- Sri Lanka Branch, Fellow of the Plastics and Rubber Institute of Sri Lanka…holds an MBA from India. He is also the President of the Plastics and Rubber Institute of Sri Lanka….with his own business of recycling and exporting industrial and post-consumer waste. He is also in the leisure boat chartering and building industry serving as a director of the Sail Lanka Yachting Group. Kaushal is also the chairman of the Industrial Association of Minuwangoda, a management committee member of the National Exporters’ Association and an exco member of the Singapore, Pakistan and China Business Councils… The AGM conducted online via ZOOM was chaired by outgoing president Murali Prakash from Australia while chief guest David Jones, Managing Director, APAC, CMI UK, joined in from Malaysia…’
• Federation of Chamber of Commerce and Industry and PwC Sri Lanka launch ‘Business Resurgence Study’
‘The web-based trilingual study during the months of July-August …will comprise 4 main sections…. (b) company background including operating locations, scale, workforce size and composition…’
• Pakistan-Sri Lanka trade potential estimated at USD2bn, discussions on to increase SL exports
• Axienta expands footprint to African region
‘An innovator in the field of Sales Force Automation (SFA) for a large number of leading blue chip companies in Sri Lanka…recently signed a partnership agreement with TecnoZone IT Solutions, a software technology company operating in Malawi…’
• Pan American International Movers Association welcomes its new member in Sri Lanka
‘Trans-Global Relocations Ltd. recently became a member of PAIMA (Pan American International Movers Association), making it the only relocation company in Sri Lanka to be a part of the network…The company specialises in mainly handling door-to-door relocations for corporate, diplomatic and UN Missions worldwide.’
C10. Politics (Anti-parliament discourse, unelected constitution)
ee Politics points to the constant media diversions and the mercantile and financial forces behind the political actors, of policy taken over by private interests minus public oversight.
• Ranil is worse for SL than COVID-19 – Tissa Vitarana
• Why SL should adopt US system of elections – Chandraprema
‘What the USA has once in four years is a genuine general election. In November this year, the USA will be electing its President and members of the House of Representatives and the Senate. Apart from these, most states hold elections to state legislatures and state governorships as well on that day. What is of importance to us here, is the concept of holding elections to several tiers of the government on a single day and preferably with a single ballot.’
• Gam Sabhas as stepping stone for reconcilliation
• Seducing the Parliament
‘President Jayewardene turned this system that worked well, upside down. An infamous system was created enabling the MPs of the ruling party to plunder public property… Following this example, the MPs and the Ministers of the ruling party became commercial planters by purchasing government estates at a nominal price….More than 1,500 liquor licenses were distributed through government MPs during the rule of President Chandrika.’
• Women nominees: Poor showing from major parties in run-up to Sri Lanka’s polls
• NFF, PHU ink agreement ahead of parliamentary poll
• We’re creating a working class consciousness – Socialist Equality Party (SEP)
• TNA moots more FDI for N&E in manifesto
‘Presents biz opportunities with India via Palaly airport and KKS Port… “A cooperative movement was a very successful model with the North and East several decades ago. We will actively encourage the rejuvenation of regional and rural economies by strengthening cooperative societies and cooperative rural banks”…’
• Perspectives for a Bonapartist Gota regime: GR overshadows MR, Cabinet, SLPP and Viyathmaga-Yuthukama catchers – David
‘Readers have been exposed to loads of comments on the economy; hence few words will do. (i) Debt servicing will reach “I can’t breathe” proportions in Q3/4 2020; survival is contingent on Chinese and Indian largesse, a moratorium on repayment and MCC dollar deposits. (ii) Balance of Payments will remain in the red for very well-known reasons. (iii) The budget will run a substantial deficit since revenue has declined and budgetary expenses risen, both sharply. And (iv) employment is in bad shape but statistics are not available. A dictatorship will aggravate most of this due to domestic resentment and international antipathy.’
• Kumar David states the case for his NPP candidature
• Sanmugathasan And Wijeweera – Amunugama
‘Wijeweera, now well on his way to promoting ‘’Sinhala Socialism’,’rejected Shan’s emphasis on the plantation proletariat as the vanguard of the local revolution and his attempts to mobilize them under the ‘’Red Flag ‘’banner in the hill country.’
• The relevance of N. Sanmugathasan to our times and all times – On being a Tamil, Sri Lankan, and Marxist Internationalist – Philips
‘Sometime in 1967 or 1968, Shan said in a public speech, “I am a Tamil by an accident of birth.” I was a student at Peradeniya then, and the statement generated some discussion among Tamil students.’
• JVP says history being distorted to cover up RSM demolition
• The 2020 election: Battle of the Breakaways – Jayatilleka
‘The answer is obvious and it is yes, there is. Sajith Premadasa, educated at a British public school and the LSE (specialising in economics)…’
• “Narendra Modi is like Indira Gandhi on steroids!” – Indian Historian Ramachandra Guha says – Venkat Narayan
‘If legislators can be bought and sold at any time, he asks: What is the purpose of holding elections in the first place?’
C11. Media (Mis/Coverage of economics, technology, science and art)
ee Media shows how corporate media monopoly determines what is news, art, culture, etc. The media is part of the public relations (corporate propaganda) industry. The failure to highlight our priorities, the need to read between the lines. To set new perspectives and priorities.
• Magistrate tells CID it could investigate journalist Bastians if there is evidence
‘Appearing in court for the CID, ASP Merrill Ranjan Lamahewa objected and said the journalist had been obstructing the CID investigation from the outset, and inconvenienced the Department….“The Committee to Protect Journalists, Reporters Without Borders, Amnesty International, Human Rights Watch, and Front Line Defenders condemn this assault on human rights and press freedom in SL and call on the Sri Lanka Police to immediately stop the harassment and ensure Bastians’ safety,”
• Cumaratunga’s Exalted Mission
‘Cumaratunga Munidasa’s 133rd Birth Anniversary falls today – July 24…History shows that during times long past our country had been called ‘Sinhala’. Its Sanskritised version ‘Sinhalan’ had later been phonetically transformed to Ceilan and later to Ceylon.’
• Reputed entrepreneur and legend – S.T.Sinnadurai
‘Sinnadurai was born in Kankesanthurai…He supported Buddhist activities and erected places of Buddhist religious worship..The Panchanga Pictorial calendar, that Sinnadurai introduced in 1950 marks an important landmark in our culture.’
• Robert Knox, also Daniel Defoe; 17th century men of many parts
‘Novelist Kathryn Frank submits the theory in her 2011 publication Crusoe, Daniel Defoe, Robert Knox and the Creation of Myth that Robinson Crusoe is Robert Knox, camouflaged and centre-staged by Daniel Defoe in his novel Robinson Crusoe’
• On narrative, reckoning and the calculus of living and dying
‘So, why did they drag us through thirty years of dispossessing, dismantling, and disenfranchising? Well. Capital. I guess. Each day when the government trots out what it will do next is an opportunity to witness its intrinsic crisis and failure, its quotidian failures and its hypocrisies. I don’t think that capital is in crisis, the neo-liberal state it created is in crisis.’
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