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“Before you study the economics, study the economists!”
Pompeo Threatens to Divide Sri Lanka
e-Con e-News 18-24 October 2020
“You’ve made great planes to span the skies
You give sight to the blind with other men’s eyes
You even make submarines stay submerged for weeks
But it don’t make sense you can’t make peace
You take one man’s heart and make another man live
You even go to the moon and come back thrilled
Why you can crush any country in a matter of weeks
But it don’t make sense you can’t make peace”
– Willie Dixon, ingenious Blues artist, jailed by the US government
for refusing to go to war against Korea
• US Secretary for Foreign Wars Mike Pompeo is coming here to threaten to divide the country. The US wishes to arouse further instability in the region to enable further intervention. An India-First Foreign Policy amounts to a US-First sell-out, since India has decided to tail the USA, argues Tamara Kunanayakam. This will create greater turmoil in Asia and Africa.
The US is threatening Sri Lanka to choose: between them and China? Yet they only care about their own might and profits. Look at the exponential maths of the USA’s Covid numbers: an estimated 500,000 dead by February 2021!
Don’t we need an independent foreign policy to pursue economic development? A ‘neutral’ foreign policy will isolate Sri Lanka from its true friends across the world? This is why the media likes to talk about ‘both sides’, ‘conflict’, ‘rivalry’, etc. Such talk is false equivalency. It’s the white imperialists who keep invading our countries. (see ee Sovereignty, Geopolitics)
The UN is still controlled by a minority of white countries, which is why the majority in the world must unite. This week marked the 70th anniversary of the US invasion of Korea, under UN cover. Korea was divided and is still divided. Learn how the UN has been manipulated by the USA and its white allies: we strongly recommend the work of lawyer Chris Black, whose Wikipedia page was censored in 2019 (see Random Notes)
• Is all this vicious media Sinophobia because the whites fear we may learn how China really developed its economy? This ee shows how China after 5,000 years of feudalism and colonial humiliation, resurrected itself in 1949. They first assessed their human and natural wealth, setting up a powerful system of collecting statistics, and most importantly, ensured a plan for investment in modern industrialization. Where on earth are our private banks and companies investing their huge profits? (see ee Focus, Adler)
• The World Bank & IMF Annual Meeting, 12-18 October, reversed decade-long harangues of ‘austerity’. They promoted austerity to slash government spending on health and education, while privatizing such social services, showering profits on financial capitalists. Now they call on capitalists to buy consent at any cost, through ‘social spending’. It isn’t clear how soon their local ventriloquist dummies (economists, thinktanks, media) here will echo those sentiments, or if this end of austerity is even meant for us.
“The question now is why has the thinking changed so radically. Answers cover 3 distinct categories: bitter experience of the past decade, changed circumstances and raw politics,” concludes London’s Financial Times, under the headline “Austerity Buried!”
But, hallelujah, FT ends by speaking of possible resurrection of austerity later. This ‘resurrection’ could take place even earlier through war, for they always seek to shift their burdens on to us. We should refuse to accept the ‘honor’.
But has austerity been finally buried? People being sacked at increasing rates? Has Capitalism decided what the world needs after a pandemic culling is another world war, with hundreds of millions murdered? Raw politics indeed!
• The 20th Amendment passed this week can provide the first steps towards real independence, strengthening the state. Elections must stop being a contest between two sets of retail merchants. For ee, true independence involves shrugging off the rule of these merchants and moneylenders, stepping towards modern industrialization. Note how Sri Lanka’s stocks and bonds react in sync with US foreign policy announcements. We will be undermined at every turn.
A cultural revolution for self-defence will have to be inspired immediately to prevent capitalism’s resort to provoking anarchy here again: Real industrialization requires a political, economic and military strategy. To this end, ee narrates the fascinating tale of how China achieved their economic miracle (see ee Focus).
• It is no surprise then that the US War Machine has timed the visit of Pompeo for just after the 20th Amendment was passed. They demand we stay in line, and choose between them and China. Are they afraid we will learn how China developed? For the last 72 years we’ve been an unannounced de facto colony of the USA. The way the media reports Pompeo’s arrival, it as if he were an avenging angel, aiming to assert this colonial subjugation, de jure.
• Many forget the USA actually means United Settlers in the Americas: “The key to understanding Amerika is to see that it was a chain of European settler colonies that expanded into a settler empire.” Thus begins the powerful analysis of today’s US Empire: Settlers, the Mythology of the White Proletariat by J Sakai. The book xrays the embryo of today’s US empire in the lives and consciousness of the early English settlers. It examines the mythology of the ‘Mayflower’ and ‘Plymouth Rock’, showing these ‘refugees” were not England’s impoverished, but mostly middle-class people trying to escape hard work by robbing other lands and enslaving other peoples. They were not escaping persecution. They had tried to persecute others by forcing their religion on them. Settlers links the present class conflicts of settler Euro-Amerikans to the struggle for the world.
If Pompeo does arrive in Colombo, in his White House fever, demanding no testing, perhaps he can come clean about who was behind the April 2019 ’Easter’ terror? A recent blood-curdling audio series by the New York Times on ISIS was exposed as fake, yet ignored by our media, who otherwise love to cut and paste their Hollywood press releases.
A1. Reader Comments –
• Tricontinental vs. Postmodern • Polticians & Wrestling • ee Insights
A2. Quotes of the Week
• Factory Health Committees Missing • Pompeo Trained to Lie • Sex & Economists • CIA & Postmodernism • Muscle Man for Banks
A3. Random Notes
• Dividing Sri Lanka into Kiribath • Bellwether Promotes Fake US History in Sri Lanka • Booming Stock Market in Another World ? Where do Crashing Finance Companies Invest • Where do Profits go? • The Fraud of Real-Estate Speculation • Standard Chartered & Colonialism • Why West Promotes SMEs • IPS & Temporary Import Substitution • The Illegal War to Divide Korea
B. ee Focus
B1. Industrialization & Planning in China – Saul Adler
C. News Index
A1. Reader Comments
ee thanks Readers who send articles of interest. Please excerpt or summarize what is important about any article sent, or your comments, and place the e-link at the end. It’s better to email.
• “After reading ee, I’ve spent more time reading Mariategui, Stalin, Mao, Nkrumah and other tricontinental Marxists rather than those white idiots like Zizek, Lacan, Laclau, and to an extent even Harvey – all of whom are constantly promoted to impressionable university students by these idiots claiming to be Leftists.”
• ee is difficult to understand. Really I am confused with its content. But when I read it twice I felt it was getting easier for me to read. Maybe later I could get to understand it better. I did not understand the comment “Anger is everywhere”… if it’s about politics, I think it’s false. I think, among politicians there’s no anger, only drama. Just like wrestling matches. Players are actors impressing an audience who are ready to kill each other for the players they support.”
• “I get some new insights or understanding from ee every week.”
A2. Quotes of the Week_
• ‘Had the factories formed health committees as decided by the tripartite (workers, employers, government) taskforce, the health problems would have been identified earlier and this crisis could have been avoided.’ (see ee Workers, Employers Fail)
• “When I was a cadet, what’s the cadet motto at West Point? ‘You will not lie, cheat or steal or tolerate those who do.’ I was the CIA director, we lied, we cheated, we stole. That’s, it was like, we had entire training courses.” – Mike Pompeo
• “Why are we prepared to pay for the services of a whole procession of economic thinkers from abroad when the net result of their meditations always seem to be that we must lower our birth rate? that we must teach the underemployed rural population of Ceylon, birth control! I think the unemployed and the underemployed rural population of our country has the right to turn around and tell us: ‘We did not put you into power so that you might deliver lectures to us on our sex life, nor to tell us there are too many of us.’ People are not argued into a lower birth rate. They learn it from the demands of another manner of economic life.” – Philip Gunawardena, 1957, in Meegama, The 1956 Revolution
• “It’s not a mere coincidence that in 1980s the CIA took a keen interest in French postmodernism and deemed it the best defense against Marxism. After all, a narrative that questions the distinction between facts and opinions, truth and fiction and regards reason with skepticism perfectly suits the interests of a country that successfully peddles fiction to the farthest reaches of the world thanks to its education, media and entertainment industries. The absurd and yet convincing portrayal of the US as a bastion of freedom, democracy and human rights is testament to the power of these industries.” (ee Sovereignty, Hong Kong)
• “I spent 33 years and 4 months in active military service and during that period I spent most of my time as a high-class muscle man for Big Business, for Wall St and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for US oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall St. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-12. I brought light to the Dominican Republic for US sugar interests in 1916. I helped make Honduras right for the US fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil (Exxon) went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in 3 districts. I operated on 3 continents. – US Major General Smedley Darlington Butler
A3. Random Notes (‘Seeing Number in Chaos’)_
• US imperialism promises to ignite more wars in the world as well as ‘civil’ war within its borders in the coming days. This is its usual resort in crises: to extend its octopoid suckers to resurrect itself.
US diplomacy once claimed to, “Speak softly and carry a big stick”. But then here comes US Secretary for Foreign Wars, Italian-American Mike Pompeo, shooting his laryngeal pistole into the air: from Venezuela via Russia, the Caspian, Syria and Iran, to Ladakh, Pakistan and Thailand, all the way to Taiwan. In between he threatens to drop in on Colombo, to play cowboy after roping in some Indians. Then proceed to a restless Maldives, and to Indonesia, where the blood of 1.5 million Indonesians still stain US hands. Malaysia was created by splitting it from Indonesia. Singapore from splitting Malaysia. Is Pompeo here to cut the Sri Lankan kiribath into 3 religio-linguistic slices, if we don’t go quadrilateral?
• Capital Media’s EconomyNext, umbilically linked to Fitch Ratings Agency, has a favorite un-named columnist, Bellwether, who goes on and on and on. S/he stated this week, with typical yankee-philia, that the US Constitution “was designed to further the cause of liberty” and “protected individuals’ rights from the government, as well as from their fellow citizens” and it “laid down clear, unequivocal and enforceable rules to protect individuals’ rights”.
But their Constitution does not protect all individuals. Only capitalists. And certainly not the original people whose land they stole, nor the Africans and the other people they enslaved.
The US Constitution was “a carefully composed fugue of silences”. Without even naming slavery or defining slavery, it gave tacit permission to the long-established practice of enslavement. The Constitution implied that there was a class of people – “held to service” – for whom rights might not apply. Even the 13th Amendment, almost abolishing slavery, December 6, 1865, allowed it in prisons. And guess who predominates in their prisons today? The US Supreme Court also ruled that a Black person was 2/3rds of a white man. To this day, this is how much Black people earn compared to whites. When Pompeo and Teplitz start whistling their ‘human rights’ Dixie, can someone remind them? “Cause slavery to disappear and you will have wiped America off the map of nations.” (Marx)
• Look at how the media reports the ‘bubbling’ stock market. The stock market is in another world. Billions are being turned over, we’re told. But none is being invested in the long-term interests of the country. A vital indispensable element in any plan for industrialization is a plan for investment. This is why you should read this ee’s history of how China developed. (see ee Focus)
• Finance companies, we’re told, are about to crash. The reporting sounds almost gleeful. And why not? Aren’t they pyramid schemes? Every capitalist crisis is an opportunity to concentrate and monopoli-fy. Non-Banking Financial Institutions (NBFIs) will merge and bigger NBFIs will form? Some news say these NBFIs are flush with liquidity (lots of money on hand), and are parking them in banks. Why are they not investing in heavy industry?
Where and in what does our private sector invest their trillions in? The other awful news is, LOLC microfinance is entering Zambia. Poor Zambia. What did they ever do to us? Then again, we should tell Zambians that LOLC is just a front for white banks and their “development agencies” – nutting to do with us.
Private bus owners are also demanding fare increases and fuel subsidies. Where on earth do they invest their money? Speaking of trillions being invested, ee guesses they send it abroad invest in useless phenomena like real-estate. No wonder workers cannot afford proper housing and have to be cooped into hostels. Do cattle set for slaughter get more space?
• Real-estate speculation only expands inequality in the distribution of land, especially for productive purposes. The proverb, “Land breeds no land” points to the futility from a national point of view of private investment in land purchases in a static social structure. Investment by buyer is matched by disinvestment by seller, and there is no change in net national investment. This is what rentier-ism means!
• Check how every single English newspaper dutifully reported this week’s appointment of the new English trade envoy. Why? Is it because he’s a former chairman of Standard Chartered Bank? SCB’s story is a classic tale of colonial plunder in Sri Lanka (coffee & tea plantations), India (opium plantations), Burma (rice), China (selling opium), South Africa (gold, diamonds), etc. In Sri Lanka they operated through Chettiar bankers, eventually creating the need for a Bank of Ceylon. But the BoC has failed in its duty to invest in real industry, hence the continued domination of moneylenders. Standard Chartered meanwhile provides capital to the garment business (Brandix) etc, and kindly sponsors the Gratiaen Awards for literature that steers clear of the roles bankers play in our underdevelopment.
One way to reveal the economic reality of colonial subjugation is how the media shapes the conversation of what needs to be done:
Why does the US ambassador, and all the other capitalist envoys – EU, German, Australian, Japanese, Indian – harp on promoting ‘small’ businesses, tourism, in Sri Lanka? Our merchant media is always full of concern for small and medium-sized businesses (SMEs) etc, and exports. What exactly are SMEs anyway? Are they ‘light’ industries, involved in food processing etc, using foreign machinery? So is that why the US, EU etc don’t promote ‘heavy’ industry? To understand why they promote SMEs, ee Focus is highly recommended this week, on how China planned their economy and industrialized.
• Dushni Weerakoon, the head of Institute of Policy Studies, believes import substitution should be temporary. Or so Capital Media’s EconomyNext tells us, in another badly written news story, which takes the first opportunity to wrap around Weerakoon’s pronouncement the same paragraph they repeat ad nauseam almost daily: “Sri Lanka has placed the worst import controls since the collapse of the Bretton Woods system of soft-pegs in 1971, after the country’s currency plunged in March and April amid liquidity injections.” The currency was plunging even when EconomyNext’s favorite politicians were in charge. (see ee Industry)
• How an illegal UN war on Korea was launched in 1950:
Sri Lanka gained from boom in rubber exports to tyre the invading forces during that US war on Korea. That ‘easy’ ‘blood’ money, rather being invested long-term (like in Malaysia), was used to bribe people to vote for the colonial party of feudals and merchants on whom power was bestowed in 1948. One story goes, Colombo was built up with that: The workers, who built it, were housed in crowded huts; due to the ensuing fractiousness, those locales came to be known as little ‘Koreas’. War remains on the horizon. How workers are treated at work and housed, has again come to the fore.
“The UN vote in favour of a “police action” in 1950 was itself illegal since Russia was absent for the vote in the Security Council. The quorum required for the Security Council under its Rules of Procedure, is all member delegations so that all members must be present or a session cannot proceed. The Americans used a Russian boycott of the Security Council as their opportunity. The Russian boycott took place in defence of the position of the Peoples Republic of China that it should have the China seat at the Security Council table, not the defeated Kuomintang government. The Americans refused to do the right thing, so the Russians refused to sit at the table until the legitimate Chinese government could.
The Americans used this opportunity to carry out a type of coup in the UN, to take over its machinery for its own interests by arranging with the British, French and Kuomintang Chinese to back their actions in Korea by a vote in the absence of the Russians. The allies did as the Americans asked and voted for war with Korea, but the vote was invalid, and the “police action” was not a peace-keeping operation nor justified under Chapter VII of the UN Charter, since article 51 states that all nations have the right of self defence against an armed attack, which is what the North Koreans faced and had reacted to. But the Americans have never cared much about legalities and they did not then for the American plan in its entirety was to conquer and occupy North Korea as a step towards the invasions of Manchuria and Siberia and the law was not going to get in their way.” – Check out: wikispooks.com/wiki/Document:North_Korea_-_The_Grand_Deception_Revealed
B. Special Focus_
B1. Industrialization and Planning – Saul Adler, 1957
Anagarika Dharmapala gave trade union leader AE Gunasinghe a book on Sun Yatsen, first President of the Republic of China, and said: ‘This is the kind of work you should be engaged in.’
“In China, where I have recently visited, the expansion of industry and agriculture is staggering… It has mobilized idle or unemployed manpower for investment – in industry, in transport, in agriculture. Traditional peasant underemployment has been transformed into an instrument for creating capital. Manpower has been used for investment in works which most Western experts would have declared impossible to achieve without heavy mechanized equipment. There is no inflation in China. There are no exchange crises. Instead of relying exclusively on complex imported mechanical equipment, scores of people have been mobilized… – Philip Gunawardena, 1957
“The Chinese produced a very interesting report designed to restructure the economy of Zanzibar. They told us don’t nationalize indiscriminately, concentrate only on major items. The state must control the export of cloves and copra because they are the major exports, and control sugar and rice because they are the main items of import. Leave the rest to private dealers and small businesses. They warned us against unprincipled nationalization. (Later, we found it to be true, because in Tanzania experiments in nationalization led to economic disaster.) …The Chinese suggested an economy which was internally integrated and gradually restructured to become less and less dependent on cloves and agricultural products and producing more food… They also suggested we develop local industry. Zanzibar already had some viable industries – we produced soap, for example – now we began to think of producing textiles with cotton from the mainland.” – AM Babu, 1988, in Amrit Wilson, The Threat of Liberation, Imperialism and Revolution in Zanzibar
Here below, we adapt Chapter 4 of Saul Adler’s The Chinese Economy, 1957:
“For several generations and more, Chinese intellectuals, including Nationalist Party leader Sun Yatsen, advocated the need for large-scale industrialization. If China was going to become a progressive modern world power, able to withstand invasion from without and decay from within, it had to industrialize.
There were many superficial plans but no action. Industrialization was a favorite hallucination for intellectuals in ivory towers to escape from harsh reality.
The extreme rightwing of the ruling Nationalist Party, (later KMT) led by Chiang Kaishek, aspired to borrow European technology, while maintaining a decadent social order. Industrialization was simply a matter of importing a vast flow of physical machinery and foreign tech experts, and turning on a switch at the right moment, leaving intact a decaying institutional framework. They wanted China to become a Confucianist replica of Imperial Japan.
But industrialization is not a matter of technical gadgets. It is economically all pervasive. It is a root and branch transformation of how production is organized and a way of life for those involved. Another mistake was a misunderstanding of the prerequisites: Creating modern industry requires a huge increase in the rate of investment, especially in basic industries.
A nation of people living at subsistence levels cannot divert substantial resources to investment. They must either borrow from abroad and/or tighten belts if they wish to industrialize. It was widely believed that China was too impoverished to have a potential surplus for investment and would have to depend on long-term foreign loans. This was not true.
Every country has a surplus, but it is usually smaller either because of waste and inefficiency, and because it is dissipated without adding to the nation’s productive resources. “Instead of fructifying in the pockets of the taxpayer-investor as in the classic Gladstonian model, it was diverted to the small governing class of a ‘bureaucratic bourgeoisie’ and their hangers-on, and wasted on purchases of land, private hoards, antisocial speculation and usury, and the maintenance of a corrupt and incompetent government apparatus and army.” If a country has a disposable internal surplus it does not need foreign loans.
Foreign loans could speed up then rate of investment if given under reasonable terms, but European loans to a “Communist” China after 1949 were out of the question. China, like the USSR, had to plan its industrialization, assuming European long-term capital was not available.
If a country has a small or negligible industrial base – although it may not have to import capital, as long as it has an agricultural or other raw material export surplus – it still has to import considerable capital goods, and especially certain crucial machinery, which it still cannot yet produce for itself.
Some people confuse capital and capital goods. They also undervalue internal and external possibilities. Some underestimated China’s ability to produce certain types of investment goods, and doubted they could speedily master techniques to make other such goods. They also overlooked the availability of non-Western sources of supply, from the USSR and the Eastern Bloc. Both those regions were willing to supply China with machine tools, generators, heavy machinery and other modern tech goods. China acquired major supplies of such goods from the Eastern bloc in exchange for agricultural goods and products and materials. In addition, the USSR provided millions in loans to spend on investment goods. The USSR also provided foreign technologists and engineers to assist in planning and production, and training Chinese to take their place. Many Chinese were also trained in the USSR.
Economists discussing underdevelopment also exaggerate financial problems, which are of secondary importance. Economic development is not about dollars and pounds, but about centralizing and mobilizing disposable social surplus for application into constructive investment channels. Just because the concentration and allocation of investment occurs through an elaborate financial machinery in the West, it does not mean others must follow this model, or that large-scale investment would then not be possible. In China, the State owned and controlled heavy industry, the main artery of economic development, and directly allocated a proportion of its product to investment. Taxation was used to centralize part of the surplus and stimulate incentives to invest, and savings encouraged with the growth of banks. The monetary and real side of investment has to be planned to interlock and synchronize.
In the first phase of industrialization, finance plays no distinctive role. Agricultural productivity is raised by simple means without involving mechanization, to increase the supply of food and agricultural raw materials by a comparative reduction in the agricultural labor force, and the transfer of labor from agriculture to industry. One way to increase agricultural productivity is to mobilize previously idle or largely unemployed labor to carry out basic irrigation, water conservancy, and rural construction and transportation projects.
In a country where labor is plentiful and capital goods scarce, and where a dynamic tradition of organizing large and medium-scale public works survived, many labor-intensive projects could be undertaken, without dependence on foreigners, or internal financial strain. Such measures often yield quick and highly remunerative results and expand the social surplus available for investment. With greater advanced machinery available, of course, hydroelectric, navigation, mining, industrial development and agricultural expansion projects can take place.
To analyze Chinese economic development, 3 other consideration became relevant:
1. At a certain stage, the process of industrialization becomes autonomous, the process of expansion becomes self-feeding and self-financing. The industrial sector ceases to be dependent on foreign sources for replacing parts, or for additions, becoming able to produce most of the needed amounts and types of capital goods. Investment begets both replacement and further investment. This is the critical point in the process of accumulation and industrialization. Once it has been reached the primary foundations have been laid and the system grows of its own momentum, as both the very different Japan and the USSR attest to, which is easier to see in hindsight than prophecy. Forecasting is hazardous. China is nearer to completing primary foundation than is realized in the West. Coal, iron and steel and electric power were expanding, output of machinery growing fast. China had reached the critical point at the end of the first 5-year plan, and the process would become self-generating during the second.
2. Labor. The most difficult problem of all was the creation of a large, disciplined and skilled labor force, which given an adequate supply of food, is the crux of the industrialization process. Western discussion instead focused on problems of capital and capital goods, which are easily controlled, and dwell on managerial ability. With a skilled labor force, the problem of capital formation and capital maintenance can be resolved; without it, the best machinery in the world will rust, unused. Industrial countries devastated by war, recovered quickly. The creation and rapid expansion of a skilled labor force amenable to factory discipline is very different than the mobilization of an already existing trained labor force. The discipline needed for a smooth and continuous operation of a factory system is is as hard to acquire as a modern industrial skill. The huge rates of labor turnover in industrial plants and mines in Africa, Latin America and West Asia show maintenance of labor force is as much a problem as recruitment.
While several challenges remained, China was not starting from scratch. Chinese peasants have developed a knack of voluntary cooperation and self-discipline, without which large-scale public works could not have been carried out. The habit of working together in teams of a few individuals as well as in groups of 1000s and 10,000s is not something to be acquired afresh. Also the diligence and aptitude of the worker has been frequently commented upon.
3. In terms of competent managerial staff where large-scale industrial construction was a new phenomenon, and some economists claimed that private enterprise was superior to socialism with regard to entrepreneurship, it was the Communist Party that fulfilled that the traditional role of the entrepreneur, providing the “ruthless energy, organizing ability, and leadership, without which large-scale industrialization would have been impossible”. The Chinese Communists also learned from the role of plant managers in the USSR.
Another argument was that industrializing countries should focus on light industry, and neglect large industry, which they should import. They claimed, light industry required smaller inputs (investment, maintenance, replacement, less skills) than in iron and steel and general engineering. Countries should first gain skills in these to then later acquire advanced skills. Light industry required a shorter period of investment with quicker returns, and a fast rise in the standard of living.
However, “the issue is strategic at least as much as tactical.” The greater the concentration on heavy industry, the sooner the critical point can be achieved, at which the process becomes self-generating, with the strain diminishing and the rewards proportionately increasing. Light industry fails to raise the standard of living over the long-term. It was a question of seeking petty benefits now or shaking off poverty and backwardness, as Zhou Enlai noted. Also inelastic supplies of raw materials from domestic industry (food processing, etc) impose a bottleneck on light industry, since the rate of expansion is slower in agriculture than in industry.
Heavy industry enables maximum advantage from “leap-frogging” and economies of large-scale production. Industrial arts requires a long process of trial-and-error. Certain production, like oil, can avoid intermediate stages and in one leap attain the best large-scale processes. The cost of innovation and improvements become smaller, after the ‘penalty of being first’ has been suffered by someone else – this applies to social as well as technical levels.
Light industry prolongs dependence on foreigners such as for power and transport equipment, and also for textile and food-processing machinery. Some economists claim this dependence is an asset rather than a drawback, since it increases the advantages from the international division of labor. Of course larger countries have more abundant natural resources, such as India and China. In the long run, savings in otherwise recurring foreign-exchange expenditures and economies of scale should far exceed the original foreign-exchange cost of basic installations and any temporary losses from comparative inefficiency in the initial building up of heavy industry. Once a country has heavy industry it is easier to benefit from the industrial division of labor.
Heavy industry is the foundation of all modern industry. Nehru told the Indian National Development Council on Jan 21, 1956: “If you want India to industrialize and to go ahead, you must industrialize and not bother about odd little factories producing hair oil and the like. You must go to the root and base on which you will build the structure of an industrial India. Therefore it is heavy industry that counts.”
Economic development does not occur in a political vacuum. China has a history of humiliation from invasion. National defence is a regrettable and costly necessity especially for countries in a process of industrialization. Need for a defence establishment and danger of being cut off from supplies by war involves painful decisions to allocate resources to industries which compete with civilian heavy industry and light industry. The more specialized the capital goods for defence, the more painful the decision. For the Chinese, the alternative was not guns vs soya beans, but blast furnaces vs the foreign yoke.
The socialist arguments for concentrating on heavy industry are simple: Under private enterprise, industrialization only begins in light industry, and particularly in textiles, because the market is immediately in sight, and because the risks arising from growth are correspondingly low. It is only later, after the development of light industry has itself created a demand for machinery, that a market for products of heavy industry emerges which is wide enough to justify relatively large-scale private investment in basic industries.
Under socialism, planning presupposes a fair degree of ability to foresee the future in a holistic whole, so that the expansion of the aggregate market as distinct from particular and individual markets can be rationally allowed for, and it is a comparatively easy matter to use the products of heavy industry with efficiency and advantage.
Second, the state can take into account the whole “social product” of investment; whereas under capitalism, the private investor, whose horizon is necessarily limited by the anticipated ‘private’ returns, may decide that the returns are not big enough to justify the initial expenditures involved. Railways, eg, create economies external to the railway industry, which may accrue to landowners and industrialists in other sectors. To increase ‘private’ returns and reduce investors’ risks, the State made large land grants, as in the US eg, where railway construction became a form of land speculation, or extended guarantees, as in India, to railway companies. The risk element in this type of investment is smaller for the state than for private enterprise. The state can also more accurately gauge the external economies and the longer-term ‘social’ returns. The piecemeal expansion of transport, which may involve duplication in some areas and deficiencies in others, is less costly with planned State expansion.
Chinese industrial development before 1949 was very chaotic. The losses were great from its casual and unregulated manner. Losses occurred from an inability to take a long view and the gaps between the ‘social’ and the ‘private’ product was great. The possibilities for increasing social advantage under effective state direction and coordination was broader.
Reasons for the adoption of the First 5-Year Plan – Rehabilitation and future advance were the major tasks from 1949-52. Continue the previous line of development sticking to the goal of setting goals one year ahead? Or, accelerate and transform development by adopting longer-term targets as a whole with interdependent advances in specific sectors? There had to be experimental formulation of overall targets and some coordinated planning between different sectors. There was no absolute demarcation but there was a crucial difference.
The socialist sector especially in modern industry and transport was the “leading force of the entire social economy”. It is a basic ideological tenet of socialist theory that a planned economy was more efficient and practical than unplanned, because the larger the state sector, the more feasible planning becomes.
The USSR, within a space of 3 5-Year Plans, industrialized, transforming itself from a technically backward country into the second and then the first industrial country in Europe. Its rate of growth then was the fastest on record. China learned from the USSR, from its successes and drawbacks, especially because of many similarities. A high rate of economic progress depended on first expanding per-capita agricultural output. In China, they had to first release the peasant productive energies through land reform, secondly rapidly acquire advanced industrial techniques, thirdly, turn largely unexploited natural endowment to good account. This was all impossible without concerted industrialization. The USSR had shown China that industrialization could be achieved by a “forced march.” For the USSR, it had been a gamble against heavy odds. So for China, it was much easier and less speculative because of the USSR.
And yet for China it was a formidable massive undertaking. The country, only recently unified, was still assessing its basic natural resources, and collecting statistical data. Planning in agriculture, which still accounted for 60% of gross output in the mid-1950s, was especially difficult. Not impossible, but the margins of error were wider, and results less predictable. Handicraft production also did not easily lend itself to planning. But the growth of agricultural cooperatives helped both handicraft and agriculture.
Despite substantial investments in capital construction projects, China’s industrial base was still slender in 1952. Despite a massive increase since 1949, there were only 31,000 engineers in 1952, and an acute shortage of technicians. The mixed nature of the industrial sector caused complications in central supervision and control. Private enterprises had to not only be subjected to constant check up but also linked to state and jointly owned enterprises, to avoid bottlenecks and disproportionalities. There had to be sufficient foundation in terms of Chinese experience of planning, for specific enterprises, then for specific sectors, and for the whole country.
The years before the First 5-Year Plan provided rich experience. Various ministries of industry, generally fulfilled targets. But plan-fulfilment was not a sufficient criterion of the efficiency of production under planning. Over-fulfilment in a sector may conceal under-fulfilment in a large number of plants. If the planned target is too low, fulfilment or over-fulfilment may mean very little. If set too high, under-fulfilment may mean inability to set the optimum target rather than the technical capacities of labor and management. Successful planning depends on, among other things, setting targets for certain sectors sufficiently high to provide a spur to production, but not so high as to preclude realization, and on achieving correct interrelations between sectors so as to avoid unwanted surpluses or bottlenecks. In the long run, the proof of the pudding is in the eating. In the short run, errors in specific industries are unavoidable. In a rapidly developing economy, the problem is to keep them to a minimum, and quickly make corrections. The USSR experience would be an invaluable asset in achieving the right balance between sectors within the annual plan, and between the annual plan and longer-term plans.
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.
• Geo Politics: The importance of securing Sri Lanka’s interests above all? – Kunanayakam
• 16 US military officers in SL ahead of Pompeo’s visit
‘An official at the Immigration and Emigration Department at the Katunayake Airport, said 16 US military personnel arrived at the Airport on the Qatar Airways flight QR-668 from Doha, Qatar.’
• No military officers but State Dept. officials ahead of Pompeo’ s visit: US
• Mike Pompeo’s staff in Sri Lanka ahead of US State Secretary’s visit
• US officials arrive in Sri Lanka to prepare for Pompeo visit
• Pompeo & the Sopranos (A Fantasia)
‘Pompeo, little Roman bambino, is desperately seeking to efface his dark Sicilian peasant origins and join up with the white robber patricians of the US. We wish him well.’
• Sri Lanka’s bonds slump heavily after U.S. calls for “difficult” choices over China ties
• Govt.’s 20A victory fails to boost stock market
• US to offer options for SL on economic development partnership
• Beijing slams Washington for forcing Sri Lanka to pick a side as US-China relations worsen
• China says US bullying countries to pick sides
• Your Majesty – Declare Eelam in UK
• Tribunal orders London Govt. to lift ban on LTTE
The appeal was filed on behalf of the TGTE members by Prof. Conor Gearty of Matrix Chambers and the London School of Economics.
• Sri Lanka Foreign Ministry- Wakey Wakey, ghost of Prabakaran arisen in UK
• Where was the UK Mission looking?
• 1987 Indo-Lanka Accord says nothing about Devolution or 13th amendment
• Washington sends a liar, cheat and thief to Sri Lanka
• US urges Sri Lanka to make “difficult but necessary” decisions to secure economic independence
‘Principal Deputy Assistant Secretary Dean R. Thompson, Bureau of South and Central Asian Affairs of the State Department said the United States offers Sri Lanka transparent and sustainable economic development’
• Pompeo in India to sign Basic Exchange and Cooperation, intelligence sharing agreement
• India, US likely to sign pact on geospatial cooperation
‘Despite constant prodding from the US, the previous United Progressive Alliance (UPA) regime of Prime Minister Dr Manmohan Singh had not agreed to ink LEMOA, COMCASA and BECA during its 10-year tenure on the ground that it would compromise India’s “strategic autonomy”…. there are “enough India-specific safeguards” built into these pacts.’
• US Pompeo to visit Sri Lanka and Maldives as China threat looms – Financial Times
• Pompeo: It’s Not the Time….
‘However this is not the time for any MCC agreement where we have to tie up land for sale issues, or preparation of land registries by foreign entities like Trimble Inc. controlled by Indians.’
• Pompeo’s Asian trip will reaffirm a “free and open Indo-Pacific” – State Dept.
‘The highlight of Pompeo’s Asia tour will be the third annual U.S.-India 2+2 Ministerial Dialogue to advance the U.S.-India Comprehensive Global Strategic Partnership…’
• US Secretary of State travel to India, Sri Lanka, Maldives, and Indonesia Oct 25-30
• Ranil’s Questionable MOU with India
‘While the MOU with India was supposed to have covered subjects like technology, education and agriculture, what was signed contained a substantial section on Trincomalee oil tanks. The intentions, therefore, were questionable.’
• Pathfinder, Takshashila Institutions discuss way forward for SL- India relations
‘Indrajit Coomaraswamy & Prof. Rohan Gunaratna, Professor at Nanyang Technology University, Singapore were the two main panelists. The discussion was hosted by Anirudh Kanisetti, Associate Fellow at TI. Dr. Samatha Mallempati, Research Fellow, Indian Council of World Affairs and Dr. M. Mayilvaganan, Geopolitical and Strategic Analyst and Associate Professor, ISSSP, NIAS joined’
• Sri Lanka’s newfound optimism in its India First Policy
‘SL is the prime importance of India under the SAGAR Doctrine and Neighbourhood First Policy.’
• India’s Consul General calls on Uva Governor
‘Consul General of India (Hambantota) Dipin P.R called on the Governor of the Uva Province’
• TNA MP raises privilege issue against EP Governor
‘Yahampath thereafter issued statements to the press stating that I led the delegation which behaved in a manner unbecoming of parliamentarians by demanding land on the basis of ethnic proportion.’
• TNA will reject any constitution that doesn’t have wide national consensus: Sampanthan
• Murali: Owned by two nations – Editorial
‘Murali knows what it is to be nurtured and guarded when overwhelming forces are out there gunning for you. And this helping hand was extended to him in cricket by none other than former skipper Arjuna Ranatunga who hails from a family which promotes Sinhalese nationalistic views.’
• En-mass expulsion of North Lankan Muslims showed Prabhakaran’s true face
• LTTE’s mass expulsion of Muslims from the north 30 years ago – Jeyaraj
• “The Lankan people have never fought for their independence” – Sunday Times
• Sunday Munch: so we never fought for freedom, oookkkkayyy?
• Sri Lanka and the return of geopolitics in the Indo-Pacific
‘German government has released a 70-page strategic policy guideline for the Indo-Pacific’
• MCC LIES: Sri Lanka is not getting $480m signing MCC
• MCC Agreement and Mark Pompeo’s visit: A mouth that must be looked at in this gift horse
‘Is the United States about to lose control of its secretive Diego Garcia military base?’
• If President Sirisena protected Our Land from MCC – President Gotabaya Rajapakse, will also
• Anti-China promoted by NGOS
• The coming ‘Corona Constitution’ and the US election – Jayatilleka
• Diplomacy and economy
‘The US can create situations to make the countries in the region feel unsecured in a climate of increasing terrorism risks.’
• Does the Son of Mervyn Live on Planet Earth?
“Today, the citizenry and the economy are more defenceless than they need have been,” he cries! Good one! The Financial Times and their merchants know better than Dayan who’s left public health defenceless.’
• Former Foreign Secretary Criticizes President?
‘It has now become the norm at international meetings to have limited time slots, even at the Head of State level. Meandering and lengthy harangues are no more welcome’
• South Korean PM telephones MR
• Redefining Australia’s South Asian foreign policy particularly with Sri Lanka
‘In 2017, two way trade totalled more than AUD $1.4 billion.’
• Development assistance from Norwegian Investment Fund to Sri Lanka
‘Norwegian Government already signed agreements Hatton National Bank and Softlogic…Norfund, Finnfund and MunichRe have invested in total USD 30 million in Softlogic Life Insurance PLC. Finnfund and Norfund signed a USD 15Mn Tier II Subordinated Debt transaction with the Softlogic Co. Softlogic Life is Sri Lanka’s third-largest life insurance entity.’
• India’s loss of Farzad-B in iran is only the beginning
‘ONGC Videsh is also involved in exploration work in Israel as part of an Indian Consortium of government companies with participating interest of 25%. Now, Farzad-B is located on the Iran-Saudi maritime boundary in the Persian Gulf which is a hugely sensitive area.’
• UN Human Rights Chief slams India for stifling NGOs’ voices
• Ladakh standoff: Breakthrough in sight?
• India and China exchange comprehensive disengagement proposals after 50 years
• The “Non-Aligned” Nations Realign
‘The formerly colonized peoples of the planet say No to US bullying, sanctions and regime change’
• The Fallacy of Denouncing ‘Both Sides’ Of The U.S.-China Conflict
• The Logic of Sino-Western Détente
• The End of Engagement
‘The United States has declared the end of “business as usual” in U.S.-China relations’
• U.S. Fails To Find Allies For Waging War On China
‘China has overtaken the U.S. as the EU’s biggest trading partner’
• Pompeo: Lying not to make America ‘great again’
‘He recently made a three-nation trip to Senegal, Angola and Ethiopia, and without offering any major new American government policies, he insulted China’s aid to Africa as “empty promises.”
• Agents of Chaos: How the U.S. Seeded a Color Revolution in Hong Kong
‘Letting a foreign power occupy the field of cultural production, dominate public discourse, and frame the narrative is tantamount to giving a burglar in your home a guest pass. And that is exactly what the Hong Kong government did for over twenty years.’
• Trudeau Vows to Stand Up to China’s ‘Coercive Diplomacy’
‘”Prime Minister Justin Trudeau says Canada intends to work with allies to challenge the Chinese government’s ‘coercive diplomacy’.”’
• Toronto Launches Campaign to Combat Rise in Anti-East Asian Racism
“…More than 600 incidents of anti-Asian racism have been reported across Canada since the onset of COVID-19”
• Election in Tanzania: The Battle of Neoliberal Agendas
‘Canadian corporate mining firm Barrick Gold surrendered 16% of its shares and promised 50% of its benefit to the government.’
• Nagorno-Karabakh needs a regional solution
‘But Putin seems to prefer the company of Trump and Macron, knowing fully well the US and French antipathy toward Erdogan.’
• The Nagorno-Karabakh conflict and why Turkey backs Azerbaijan – Ambassador, Turkey
• Nagorno-Karabakh Talks Again Fail – No End Of War In Sight
‘During the last 36 hours, Armenia has shot down 8 drones… finally finding a way to detect and hit them. Canada has stopped the export of gimbal targeting turrets to Turkey. Without these the drones are blind. One recently destroyed Turkish Bayraktar drone had a very recent manufacturing date of September 2020. It is thus not a stock item. This means that Erdogan’s son in law, who produces these drones, will soon have problems to supply more of them… David Ignatius, the CIA affiliated Washington Post columnist, argued to create a no-fly zone against Azerbaijahni drones over Nagorno Karabakh… The USA wishes to have airbases in Azerbaijan…very close to northern Iran and Tehran.’
• Another color revolution fails in Kyrgyzstan
• Moscow derails Kyrgyz color revolution
• Guns For Food: The U.S. War On Hezbollah And Lebanon’s Shia
‘As Lebanon goes through the worst economic crisis in its history, U.S. sanctions seeking to disarm Hezbollah are leaving its supporters in the historically marginalized Shi‘a community especially distraught.’
• U.S. Again Moves Goalposts For Nuclear Treaty Extension
‘The Trump administration wants to abandon all nuclear arms treaties with Russia. It has already left the Intermediate-Range Nuclear Forces Treaty that restricted some classes of shorter range nuclear weapons.’
• More Pressure On Russia Will Have No Effect
• Arc of instability on Russia’s periphery
‘An arc of instability has appeared on Russia’s peripheral regions to the west and southwest — Belarus, Nagorno-Karabakh and Kyrgyzstan. These regions are vital to Russia’s national security and weakens its capacity to be a resurgent power on the world stage.’
• The Best Answer to Chaos in Bolivia Is Socialism
• England now preparing for a no-deal divorce from the European Union:
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.
• State Elements Blamed for Easter Attack
‘Dixit asserted that the decision to give active support to SL Tamil militants could be considered one of the two major foreign policy blunders made by the then Indian Prime Minister Indira Gandhi.’
• India’s elite black cat commandos train PM’s security personnel
• Indian and SL navies to carry out 3-day military exercise to show growing strategic interests
• Army Commander says origin of latest COVID-19 cluster could be of foreign origin
• JHU wants origin of current wave of COVID-19 revealed
• Sri Lanka army dismisses “fabricated attempts” to tarnish quarantine efforts
• The COVID Bomb Explodes: Who is Responsible – Sri Lanka Study Circle
• Easter Sunday probe in tatters: Director CID transferred following internal inquiry
• Communications gone topsy-turvy in Sri Lanka Police
• Ex-SIS chief blasts top people who feign ignorance of Easter carnage warning
• The two main candidates seem to secure a major portion of election cost from drug dealers.
• Madush killed to stop names of drug-trafficking politicos being revealed: NPP
‘The killing of a leading drug dealer Makandure Madush was to prevent him confessing the names of 80 or so politicians who had links to the drug trade in court, an Opposition MP alleged in Parliament yesterday’
• Civil group demands HRCSL intervention in Madush killing
• What an arrest!
‘In May, the Fort Magistrate’s Court issued an order for the immediate arrest of Karunanayake, Aloysius and others, but the CID did not make any serious effort to arrest them until they had their arrest warrants stayed by the Court of Appeal.’
• Boossa Prison named as High Security Prison (Video)
• Dinesh says Yahapalana betrayal in Geneva resulted in US blacklisting SL Army Chief
• Over 3,000 women arrested for Excise offences completing 2020 third quarter
‘30,354 suspects were taken into custody for various instances of violations of the Excise Ordinance, during the first nine months of 2020.’
• Is the Auditor General the panacea for all our ills?
‘we must not come into the false conclusion that the presence of the Auditor General is the way to root out corruption’
• My father & the Hansa Regiment: Factual inaccuracies in Amunugama’s memoirs
• Entries called for NSSF National Rifle and Pistol Championship 2020
• Goldman Sachs Malaysia Arm Pleads Guilty in 1MDB Fraud
‘Goldman has long been a darling of authorities, and has offered something of a revolving door into public service. Hence its other nickname: “Government Sachs.”’
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.
• 90% of Sri Lanka’s debt is owed to western and multilateral financial institutions.
• Dr Howard Nicholas of Sri Lanka Demolishes Neo classical “Neanderthal” Economics
‘After hearing what I have to say, students tell me that they do not want the ‘garbage found in the text books’. Investment bankers from Hong Kong, who would not be seen dead with Marx in the same room, are also so impressed, they want to know where I am getting this to stuff from about structured markets and differential exchange rates.’
• Funeral of Austerity
‘The global economy and its worst contraction in eight decades overshadowed the World Bank and International Monetary Fund (IMF) annual meetings last week. The rhetoric at these meetings was a significant shift from the last few decades of neoliberal policies.’
• Global economy: the week that austerity was officially buried
‘The IMF and World Bank are urging richer countries to spend their way out of the pandemic, although some developing nations face cuts’
• World facing new Bretton Woods moment: IMF
• Sri Lanka Economic Association at the fore once again to promote private sector
• East Asian countries achieved great progress due to technocratic orientation – Hettige
• Moving towards a more sustainable foreign debt – Sanderatne
‘The trade deficit must be improved by increasing the country’s exports.’
• What is our status of “economic freedom” as a nation? – Reductio Ad Abeyratnum
‘According to the Economic Freedom Index 2020 published by the Heritage Foundation in the US…six countries which have the highest economic freedom and are classified as “free” – Singapore, Hong Kong, New Zealand, Australia, Switzerland, and Ireland.’
• Conditions for a recession maturing in global finance capital for several years – David
‘Finance capital is typified by the big banks, hedge and other funds and investment houses and billion-dollar investors.’
• Parliament votes to allow members of Committee on Public Finance to pick its Chairman
• Reform of SL State Enterprises – Revival through Singapore model to stop the haemorrhaging?
• Sri Lanka Economy Caught between a Rock and a Hard Place: Pathfinder
‘Export growth through diversification of products & markets & FDI would need to be two key pillars’
• Sri Lanka’s Changing Relationship to Chinese Loans
• Sri Lanka performs better in reducing hunger in 2020
• Greatest paradox of economy!
‘Today, the share of global output of the United States is just around 15.2% but central banks around the world hold more than 60% of their reserve currencies in US dollars, which facilitates global trade as never before.’
• Setting the record straight: Nehru and his policies shaped modern India and its economy
‘In 1950, India met nearly 90 per cent of its needs of machines and even machine tools through imports. This meant that despite political Independence, she was completely dependent on the advanced countries for achieving any economic growth through investment.’
• Three ways Sri Lanka can deal with COVID-19 induced poverty – World Bank
• ‘Bread or Guns?’: the dilemma that refuses to go away
• Global poverty soars — as Incomes of world’s billionaires hit new highs
‘The world’s total population is around 7.8 billion, and according to the UN, more than 736 million people live below the international poverty line…. By 2021, as many as 150 million more people could be living in extreme poverty.’
• ‘Asia for Asia’ philanthropy must fill the gap of declining int’l aid’
‘Asia has amassed one-third of the world’s wealth, but still has two-thirds of the world’s poor”
• IMF Admits China Overtakes US As World’s Largest Economy; But Why Is The Media Silent?
• Western Lockdown to Shut Down China?
‘The present lockdown of the Western world and much of the Third World is an attack on China. Here is how it works’
• Creating a Creative Economy
‘The Peoples Republic of China (PRC) celebrated the 40th anniversary of the establishment of the Shenzhen Special Economic Zone (SEZ) in grand scale in Guangdong.’
• The “America First” Pandemic Response: Parasitic Finance as Lenin’s End-Stage of Imperialism
• Ending Corporate Impunity is at the Heart of a Sustainable Post-Pandemic Global Recovery
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.
• World Bank Country Director meets Central Bank Governor
‘The World Bank Country Director for Maldives, Nepal and Sri Lanka, Mr. Faris Hadad-Zervos, accompanied by the World Bank Country Manager for Sri Lanka, Ms. Chiyo Kanda, paid a courtesy call on Governor of the Central Bank’
• COVID, constitutional issues send stock market down by 4%; turnover up
‘Plantation stocks lose flavour; retailers switch to healthcare companies’
• Sri Lanka national inflation rises to 6.4 percent in September 2020
• Cabraal Rules out IMF-recommended wealth tax
“You cannot make poor people rich, by making the rich people poor”
• It’s China that happens to have the cash now, says Cabraal
• Sri Lanka borrowing from cash-king China a post-pandemic reality India must accept
• Sri Lanka to delay second quarter GDP data to December amid Coronavirus
‘The statistics department had come under pressure to show a higher growth number after the release of the first quarter data. However GDP data are estimates which are consistent if the same methodology is used across time and countries’
• Central Bank keeps policy rates unchanged
• SL wants to renew US$1.5bn equivalent RMB swap as standby facility: Minister Cabraal
• March 2020 quarter earnings decline by 52.0% YoY for 266 companies: First Capital
• 50% probability for policy rates to remain unchanged due to improvement in high frequency indicators: First Capital Research
• SL constitution making: how the popular vote destroys freedom and prosperity: Bellwether
• Sri Lanka sovereign bonds plunge ahead of debate on constitutional amendment
• Sri Lanka GDP growth to shrink 4.6-pct in 2020, Bangladesh among fastest to grow: IMF
• China’s economic recovery firms up in Q3 with 4.9% growth
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
• Sri Lankan fishing boat with six crew held in Indian waters: Coast Guard
• Wage growth slips in August while continuing to underperform inflation
• Govt. urged to admit pandemic now at community transmission stage GMOA alleges Epidemiology yet to share data, cause remains a mystery
• Employers fail to control COVID, but Sri Lankan army rounds up workers instead
‘Had the factories formed health committees as decided by the tripartite [workers, employers, government] taskforce, the health problems would have been identified earlier and this crisis could have been avoided.’
• Pavithra reveals Brandix brought 48 Lankans from India
• 80,000 to 100,000 garment workers to lose jobs? – Times
• Live wires of Sri Lanka’s economy are now treated like criminals – Chamila Thushari
‘They are also entitled to an attendance allowance which is between Rs.3,000-5,000. So despite having sick, casual and annual leave, they report to work.’
• Army rejects reports of treating garment factory workers “inhumanely”
• ‘Trade unions’ protest against 20A near Parliament
• Worker remittances inflow remains resilient
• Circular migration of Lankan Female Domestic Migrant Workers
‘A quarter of Sri LankanFemale Migrant Domestic Workers are circular migrants. They start their journey in their mid-20s and return home periodically and, often, permanently, when they reach their 40s and 50s, effectively spending almost two decades of their adult life in the migration cycle.’
• Inter-Provincial Private Bus Association owners demand fare increase, diesel subsidy
• Severe shortage of teachers will be a huge blow to education system: CTU
‘A mass recruitment of about 70,000 teachers which took place between1989-1990 would lead to a large number of teachers retiring in the coming years causing this shortage’
• Wasting Funds for the Scholarship Examination and the Requirement of Spending Funds for the Improvement of Teacher Quality
• Handing over appointment letters under 100,000 jobs programme begins
• Regional Plantation Companies complete 39,150 new houses for estate workers
• Palm oil labor abuses linked to world’s top brands and banks
‘…makes its way into the supply chains of many iconic food and cosmetics companies like Unilever, L’Oreal, Nestle and Procter & Gamble… Giant Western financial institutions like JPMorgan Chase, Deutsche Bank and the Vanguard Group continue to help fuel a crop that has exploded globally…’
• Bangladesh garment workers pray for orders as pandemic shreds exports
• Global glove makers compensate Nepali workers
Faced with US sanctions, Malaysian glove-makers reimburse Nepali migrants as they struggle to meet pandemic demand…Malaysia makes 65% of the world’s rubber gloves, and demand has surged 45% since the novel coronavirus outbreak. Every month, hospitals, airlines and the service industry worldwide use up 80 million pairs of gloves’
• Cathay Pacific to slash 8,500 staff, end Cathay Dragon brand due to pandemic
‘The airline’s share register is dominated by Swire Pacific Ltd., Air China Ltd., Qatar Airways and the Hong Kong government, with only a 12% free float.’
• Canada approaches Covid 10,000 fatalities, blamed on privatization of elderly care
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.
• Development of Himbiliyakada begins following President’s visit
‘President Rajapaksa participating the second “Conversation with the Village” program, met with a large number of villagers from Gemburu Oya, Lediyangala, Aliyawala, Weheragala, Himbiliyakada and several other close by villages and listened to their grievances. Issues related to land rights, drinking and irrigation water supply, dairy farmers, problems related to the kidney disease were explained to the President by the villagers. Measures have already been taken to resolve a long standing unresolved issue of the land deed issue in Hettipola town. Plans afoot to handover 110 deeds for lands utilized by villagers in Himbiliyakada.’
• Sri Lanka adds more workers to agriculture sector in second quarter
‘The phenomenon where the employed persons in the agriculture sector is increasing while the total employed population in the economy is shrinking puts the onus on the government to generate more incomes out of the agriculture sector, which has so far contributed less than 10% to the entire economic output, to avoid widespread economic disparities and poverty. If left unaddressed, this segment could become the government’s biggest liability in economic and social terms, economists say.’
• Sustainability begins with conserving our ancient village water resources
‘In 1818 they took the first opportunity to put the farmer into peril. It was in 1818 that the English ordered to destroy all tanks, all fruit-bearing trees, all harvests and all cattle and kill all males over 18 years of age.”’
• China and Sri Lanka inks fresh deal to strengthen cooperation on water technology
• Sri Lanka produces record paddy harvest in 2020
• Army-run farms produce ample stocks of rice for sale to troops at subsidized prices
• MILCO now a profit making venture, says Chairman
• CIC reports stellar performance; 1H after tax profit up by 150% to Rs. 1.4 b
‘The conglomerate saw its revenue increase by 16% to Rs. 17 billion in 1H. CIC Holdings has five categories – Crop Solutions, Agri Produce, Livestock Solutions, Industrial Solutions and Health/Personal Care. The Crop Solutions sector comprising Plant Nutrients, Seeds and Agro Chemicals was the standout performer. The Health and Personal care segment comprises Pharmaceutical, Surgical and Medical Devices…’
• “Lankan agri-business sector needs to look at value adding opportunities”
‘An ooutdated land tenure system, low level of irrigation development, limited adoption of research finding and technologies, high cost of farm inputs, poor access to credit and markets, inefficient fertilizer procurement and distribution and inadequate storage facilities are some of the main issues that hamper the growth of the industry to a great extent in Sri Lanka.’
• Larger Markets of India & EU for Agri Products & Processed food – SL Agripreneurs
• Vietnam to assist Sri Lanka to develop fisheries and aquaculture industry
• Sri Lanka state retailer Lanka Sathosa appoints ex-army major as CEO
‘Lanka Sathosa Limited has 420 outlets and over 4500 employees.’
• Future of the Tea industry in Sri Lanka; Who will pluck tea leaves in 10-15 years?
• Sri Lanka’s Ceylon tea prices supported by China buying, India production fall
• Agriculture Minister to boost local production of animal vaccines
• Sujeewa Mudalige appointed to CIC Holdings board
‘He is the Managing Partner of PricewaterhouseCoopers, Sri Lanka and currently serves as an Independent Non-Executive Director at CIC Feeds Group and Link Natural Products Ltd. He is the Non-Executive Chair of Mercantile Services Provident Society (MSPS). He is also an Independent Non-Executive Director at National Development Bank PLC and at NSBM Green University… a past President of ICASL, a Member of the Council of ICASL and on governing board of CIMA UK – Sri Lanka Division, a Commission Member of the Securities and Exchange Commission… He was an Independent Non-Executive Director of Hatton National Bank PLC from 2012 to 2019. With the latest appointment, the Board of Directors of CIC Holdings comprises Harsha Amarasekera (Chairman), S. Fernando, R.S. Captain, S.M. Enderby, M.P. Jayawardena, D.T.S.H. Mudalige and P.R. Saldin
• Basil visits Watawala Dairy Farm
• Instructions to immediately gazette the Muthurajawela wetland as a sanctuary
• Covid 19; an unexpected windfall for Sri Lanka’s wilderness and wildlife
• Unchecked fire in Vavuniya forest plains
• Fighting Deforestation in Sri Lanka
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.
• Unusual amounts of radiation in soil: Amaraweera orders probe
‘Radiation is found in the sand left at the Pulmudai Mineral Sands Corporation and also in the leftover sand even after a Dambulla-based company has extracted its ore. The sand emits more than 500 units of radiation per minute, more than the current level of radiation after the Fukushima radiation leak in Japan. The Pulmudai Mineral Sands Company extracts ilmenite, rutile, zircon and monocyte, and typically removes only 40% of it, leaving about 60% of the minerals in the sand.’
• State Engineering Corporation, INSEE Cement sign agreement on dolomite deposits
• Sri Lanka import substitution should be temporary: Dushni Weerakoon
• Creating conducive environment for industrialists is IDB’s contribution to Restart Sri Lanka
‘The Industrial Development Board, under the Ministry of Industries and Supply Chain Management… to enable SMEs across the island. IDB Chairman Upasena Dissanayake is the Founder Chairman of Aqua Masters Ltd., which is in the field of water purification technology.’
• LAUGFS Gas initiating big plans for Indian Ocean Rim
• Colombo port gets congested
‘On average about 12-14 vessels call at the Colombo port daily and now with larger ships calling over, the port is constrained due to having only three berths in one terminal for deep draft vessels’
• Ceyline Group’s Mevan Peiris appointed to CSC Board
• Champika writes to Japanese PM
• Leasing concessions given for private bus owners extended
• Sri Lanka’s vehicle registrations expected to down to a 17-year low in 2020
‘Government to ban vehicle imports for at least a year to survive a possible forex crisis as average vehicle imports constitute nearly USD 800Mn or 4% of total imports for the previous 13 years.
Registered vehicle prices have shot up while unregistered vehicles are scarce due to import restrictions, resulting in lesser transactions and lower affordability as a result, competition is intensifying in the Leasing segment in NBFI sector due to attractive rates by Banks.’
• Welioya School receives IT Lab via ComBank and Sri Lanka Army initiative
• German envoy calls on BOI Chairman
• Sri Lanka’s DIMO, NTB link up finance pre-owned Mercedes, Jeep cars amid import controls
• Light Rail Shattered? History of rail-transit and tramcars
Minister says CINTEC to manufacture a graphite battery for export?
• SPMC launches locally-manufactured Clopidogrel
• Joint venture firms struggle without minor machinery components
• Step-motherly treatment given to coconut arrack industry: Harry Jayawardena
‘Today, 100% coconut products are out of reach of the consumer due to prevailing taxes.’
• Fitch affirms Melstacorp & subsidiary Distilleries at ‘AAA(lka)’; outlook stable
• CEA warns polluters of 13 teams coming to inspect effluents released to Kelani River
• Polyethylene Terephthalate – treasure not trash, or so they say
• ACL Cables launches new Mercury range for circuit protection devices, enhancing portfolio
• Unfriendly skies down private Mirchandani airline Simplifly
• 8 out of 10 SMEs struggling to stay afloat: World Bank ‘s International Finance Corporation
‘Companies in the agriculture, manufacturing and construction sectors hit the hardest, followed by the services sector.’
• India SME Accelerator Network hosts a webinar on ‘Business Opportunities in Sri Lanka’
‘… together with the Board of Investment of Sri Lanka (BOI) and the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL)…was supported by the India-ASEAN Sri Lanka Chamber of Commerce and Industry (IASCCI).’
• Ruwan appointed Vice Chairman of Hayleys’ Unisyst Engineering
‘former Chairman of the Ceylon Association of Shipping Agents. He is also the former Chairman of the Sri Lanka Logistics and Freight Forwarders’ Association and currently serves om its Advisory Council. He is also a Chartered Member of the Chartered Institute of Logistics & Transport…’
• Sarath Ganegoda appointed Alumex Deputy Chairman
‘He currently serves on the Boards of Unisyst Engineering PLC, Dipped Products PLC, Haycarb PLC, Hayleys Fabric PLC, Hayleys Fibre PLC, Kelani Valley Plantations PLC, Singer (Sri Lanka) PLC, Regnis (Lanka) PLC, Singer Industries (Ceylon) PLC, The Kingsbury PLC, and Horana Plantations PLC. Ganegoda currently holds 145,000 ordinary shares in the company’
• Rajitha Kariyawasan appointed Dipped Products Deputy Chairman
‘He currently serves as Managing Director of Haycarb PLC and Hayleys Fibre PLC. He was also appointed to the Board of Dipped Products PLC in May 2016. He held the positions of Director/General Manager of Ansell Lanka Ltd. and Chairman of the Manufacturing Association Export Processing Zone’
• Ex-JKH Sanjeewa Jayaweera joins Lanka Tiles, Walltiles boards
• Maharajahs: A story of Sri Lanka’s key investor
‘From importing automobiles they moved to hydro power to boost power supply to the country engaging in the establishment of the Victoria and Samanalawewa reservoirs’
• Boeing: A New Report, An Old Story
C8. Finance (Making money from money, banks, lack of investment in modernity)
ee Finance tracks the effects of financialization, the curious role of ratings agencies, false indices, etc.
• Women-owned businesses more likely to borrow from family, friends
‘The report, Gendered Impacts of COVID-19 on Small and Medium-Sized Enterprises, by Women in Work, a partnership between IFC, a member of the World Bank Group, and the Australian government’
• ‘All doom and gloom for NBFIs,’ reveals First Capital Research report
• Second wave intensifies pressure on Sri Lanka Finance and Leasing companies: Fitch
• Flushed with liquidity, finance firms settle debt at record pace
• NBFI sector to record weakest performance in current decade with substantial loss: FCR
• Second corona wave further stresses Sri Lankan finance and leasing companies – Fitch Report
• CB’s NBFIs undergo restructuring process
‘20 out of the 42 licensed finance companies in Sri Lanka are presently facing liquidity issues, with some of it at a high level of distress…NBFIs in Sri Lanka processed Rs. 1.3 trillion in assets as of 2019, and served an estimated 7 million customers, more than 60% were borrowers, while the remainder was depositors numbering around 3 million with Rs. 758 billion in deposits.
• Central Bank to model a ‘bad loan’ company
• Eight finance companies face added liquidity pressure
• Richard Pieris Group invests Rs. 1 Billion in Richard Pieris Finance Limited
‘The Group also has the pride of being the largest tea and rubber producer in the country. As one of the largest exporters, bringing millions of dollars to the country from more than 35 countries, its subsidiary Richard Pieris Natural Foams Ltd has an exceptional track record of being crowned as the most outstanding exporter of the year. Richard Pieris Group also runs the only hyper market chain…’
• Arpico Finance reaffirms its merger with Associated Motor Finance Company
• Softlogic Finance upbeat on future prospects despite CB notice on finance companies
‘Softlogic Group is regarded as one of Sri Lanka’s most dynamic and progressive conglomerates, with industry leadership in key business verticals; with its presence visible across the Healthcare, Retail, Financial Services, ICT, Automobiles and Leisure sectors.’
• Sri Lanka’s Softlogic Finance to raise Rs1.9bn from cash call
• India’s ICICI Bank exits Sri Lanka
‘State Bank of India, and Indian Overseas Bank has had operations in Sri Lanka for decades.’
• National Development Bank to raise up to Rs.8bn via rights
‘NDB Bank has 9,922 public shareholders. Among the biggest shareholders of NDB Bank are EPF (10% ), BOC (8% ), Sri Lanka Insurance (11percent ), Dr. Sena Yaddehige (4% ), Softlogic Life Insurance (4% ), and ETF (4% ).’
• First Capital Wealth Fund announces dividend of Rs. 100 per unit for FY 2019/20
‘First Capital Asset Management, a subsidiary of First Capital Holdings PLC, is licensed and approved by the Securities and Exchange Commission of Sri Lanka (SEC) while Bank of Ceylon (BOC) acts as the trustee and custodian for the fund.’
• Sri Lanka’s UB Finance to raise Rs1.6bn equity to boost capital
‘Colombo-based Union Bank owns 81% of UB Finance’s voting stock and Equator Capital Partners, an emerging markets fund manager, 13.2 per cent’
• Fitch publishes Lakdhanavi first time AA+ rating, Outlook Stable
• LOLC expands international footprint with entry into Zambia
• Heavy retail play on penny stocks
• More CSE dealings by directors and related parties
• Investor focus shifts to plantations as CSE manages to close positive
‘Plantation-heavy food, beverage and tobacco sector most traded value and volume wise, with 8 out of 10 biggest gainers percentage wise being plantation companies’
• Plantation stock trade loses steam
• CSE’s positive run loses steam but succeeds with Rs. 1 b plus turnover for 30 consecutive days
• Trading at CSE: Expolanka Holdings generates 19% of total turnover
• Indian companies likely to get nod to list in seven countries
• Global stocks bide time as U.S. election caution sets in
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 sales, tourism, insurance, advertising, etc. – the charade of press releases disguised as ‘news’
• Sri Lankan insurance industry records 8.64% growth in 2019
• Buyers ditched as developer abandons proposed ‘CM Towers’ condominium project
• USAID: SL urged to leverage $ 150 b worth of trade shifts over next 5 years
‘USAID Mission Director Sri Lanka and The Maldives Reed Aeschliman, Export Development Board Chairman Prabhash Subasinghe, Deloitte LLC Stewart Pierce-Gardner, AmCham Sri Lanka Hony. Secretary Shirendra Lawrence, AmCham Sri Lanka President Presantha Jayamaha’
• Trade Minister says export economy key to country’s economic wellbeing
• Travel agencies face further shutdowns
‘In 2018 there were over 2000 smaller registered travel agencies operating in the country but this year this has reduced to less than 1000’
• Senior Prof. Udith K. Jayasinghe appointed Vice Chancellor of Wayamba University
‘SANASA Life Insurance and SANASA General Insurance Board Member…’
• The Club HNB members to invest in vibrant local artwork through Artra
‘Through their work with leading local and international art festivals, embassies, and cultural partners, ARTRA will curate refined thematic content for Club members…’
• Sri Lankan Entrepreneurs Association established in Qatar
• H’tota Chamber to teach Chinese to local community
• SL Consulate in Sydney & Export Development Board webinar on ‘Market Enhancement
• Webinar on Deakin Pathway at @ APIIT
‘Asia Pacific Institute of Information Technology (APIIT), Sri Lanka in partnership/collaboration with Deakin University Australia…’
• MoU between University of Moratuwa and Aalto University, Finland
• SL Italy Business Council webinar with embassy of Italy and Ceylon Chamber of Commerce
• UK Prime Minister appoints new Trade Envoy for Sri Lanka
‘Lord Davies is Chairman of Corsair, of LetterOne and Intermediate Capital Group. He was Minister for Trade, Investment and Small Business, a joint role between the Department for Business, Innovation and Skills and the Foreign and Commonwealth Office, with responsibility for Infrastructure. He was Chairman of Standard Chartered PLC, awarded a CBE for his services to the financial sector and community in Hong Kong, and also Honorary Distinguished Professor at Cardiff Business School.’
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.
• The Way Forward After 20a
• 20th Amendment to the Constitution passed with amendments
• Sri Lanka’s President Wins Bid to Regain Sweeping Powers: Bloomberg & CPA Upset
• Leftist faction in govt. oppose amending Dual Citizenship law via 20A
• Wimal alleges bid to ‘bribe’ his group over 20A
• Gammanpila, Wimal, Wijedasa, Vasu back clause allowing Dual Citizens to hold office
• We agreed to support 20A upon President’s request: Gammanpila
• From JR’s 2nd Amendment to Gota’s 20th Amendment
‘Whatever the “carrots and sticks” that influenced their decision, six Muslim MP’s and one Tamil MP have shown that minorities are “two-thirds majority makers” even if they were not king makers at the presidential hustings’
• SJB owner justifies decision to vote in favour of 20A
‘The country needs a powerful President. Why should we elect a president spending a huge amount of funds, tie him and throw him into a river,” she said.
• Now, Diana blames Mark Antony for stabbing Caesar!
• SJB expels dissidents for voting in favour of 20A
• Restoration of Executive Authority Of The State Of Sri Lanka Is Most Welcome
• Three events of the thirties that made the post-independent era — Part 1
‘The second event was the birth of the Sinhala Maha Sabha in 1935 which will be explored in the next article. It was a counter to the rising wave of Tamil show-vinism. The Tamils who broke away from the Ceylon National Congress, which consisted of the elite drawn from all communities, established the first communal party, Tamil Mahajana Sabhai, in 1921…’
• Drafting of new constitution begins
‘headed by President’s Counsel Romesh de Silva, in the BMICH, and 3 senior officers of the Ministry of Justice appointed to the Secretariat of the Committee, with meetings held every Friday, other members of the committee are President’s Counsel Manohara De Silva, President’s Counsel Sanjeewa Jayawardena, President’s Counsel Naveen Marapana, Prof. Nazeema Kamardeen, Dr. A. Sarveswaran, President’s Counsel Samantha Ratwatte, Prof.Wasantha Senevirathne and Prof.G.H.Peiris.’
• Two days insufficient to debate 20th Amendment – Opposition
• Make 20A an instrument of a modernising Govt. – USAID’s NPC Perera
‘With the exception of China, the big powers have shown strong interest in human rights issues especially in relation to the long standing ethnic conflict.’
• Signs of ‘spring’ in nationalist Sri Lanka
‘Many Asian countries are in turmoil including Sri Lanka. At present Sri Lanka watches anxiously as parliament debates the proposed 20th Amendment to the Constitution while a few airports away Thailand and Pakistan agitate against their respective countries’ prime ministers’
• Don’t blame Constitution for grave lapses of Ranil and Maithripala -JVP
• The Pohottuwa Government Of Sri Lanka Part 2 A 1
• Gamini Dissanayake’s 26th death anniversary
‘What a lot he achieved from 1977 to 1988, the completion of the Mahaweli Development Project, the building of five dams and reservoirs so that the country becomes self-sufficient in rice and doubles its electricity capacity,’
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.
• Taste of wife’s tears in food – Former Chief of Defence Staff
• Hagiographic Review of Amunugama’s The Kandy Man
• Willie Dixon made sense
• How star reporter’s Syria podcast sent New York Times into crisis
• Media Again Falsely Claim That Joe Biden’s Intervention In Ukraine Was Innocent