e-Con e-News

‘Before you study the economics, study the economists!’

e-Con e-News July 2023 Part 1

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‘The days of government funding are gone.

It really needs to be a private enterprise,

just as exploration was at the turn of the last century

where people with means make the exploration possible.’

– Stockton Rush (see ee Workers, OceanGate & How the Wealthy Kill)

Stockton Rush, now ‘former’ CEO of OceanGate, ‘maker’ of crewed submersibles to meditate on Titanic ruins, in his last moments perhaps wished to regulate himself? Greed – wellspring of recklessness – usually sinks them to the bottom of the sea. The trouble is, they wish to take us with them…

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• Mikhail Khodorkovsky, former owner of Yukos oil group, is another symbol of ‘freed’ enterprise. He was arrested, charged with fraud, tax evasion, criminal conspiracy, etc, in 2003. Russia’s rising President VV Putin then had Yukos reorganized under state control. Last week from his hideout in London, ‘in a publication sponsored by The Economist’, Khodorkovsky pronounced putative mutineer Yevgeny Prigozhin to be a ‘thug and war criminal’, but notwithstanding, ‘truly a revolutionary’. ‘Only an armed populace can topple this dictatorship’, Khodorkovsky said, appealing for England & NATO to militarily intervene ‘across the Russian border, all the way to Moscow on Abrams, Challenger & Leopard tanks!’ (see ee Economy, Political Power out of the Gun Barrel)

     We recall Khodorkovsky’s dialectics – ‘criminal yet revolutionary’ – when reading the weekly column of the Sunday Times’ domesticated economist & shareholder, Nimal Sanderatne. He writes, the economy has stabilized, goods are available, however, there’s ‘discontent… owing to the high prices… decreased real income of people, higher unemployment, increased poverty, and malnutrition are serious concerns’. People can’t afford the essentials on display (see ee Economists, The economy in the first half of this year). The media declares the surgery successful, yet finds the patient gasping…

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‘On June 28, China’s ambassador Qi Zhenhong

visited Keppitipola, Uva, and paid tribute to the statue

of Keppitipola Disawe, a national hero of Sri Lanka,

who led the Great [1818] Rebellion against colonization & invasion

and sacrificed his life for its freedom & independence’

– Twitter, Chinese Embassy in Sri Lanka

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In Sri Lanka, traders still determine national policy, prevent industrialization, and oppose regulation (like the OceanGate CEO). These oligarchs would also go orgiastic if NATO rolls, Khodorkovsky-style, beyond Colombo – eager suburb of London, and now Wall Street.

     So why have our eager democrats not been able to mount an ‘aragalaya’ against these Kolombot Khodorkovskys who are openly sacrificing the state on the stock exchange, and would happily sink Sri Lanka to the ocean floor? (see ee Focus). Their anarchic and ultra-idealistic rhetoric recalls the salaried recipients of NATO’s printed Dollar largesse showered on other locales that have now descended into war. Yet those calling the Aragalaya an ‘imperialist plot’, have been labelled ‘wildly lunatic’!

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• ee recalls an ominous omen in 2019 when President Gotabhaya Rajapakse was elected by unprecedented landslide: ‘The business community accepts the choice of the people’ stated Chair & Managing Director of Imperial Teas Group & Chair of Colombo Tea Traders Association, Kantha Karunaratne. Hmmm. So they are not the people?

     At that time, ee wondered, ‘So what happens when they choose not to accept the people’s verdict?’ (ee 23 November 2019 – The Merchant Oligarchy’s ‘Boundless Ingenuity’ at Derailing Independence). Now we know. ee also noted then: ‘The CBSL this week feebly took on Fitch for its cavalier ratings game, acting as guard dog of the financializers, salivating sour over the recent election. Their immediate defence was to point to the buoyant stock market immediately after GR’s election. But others point out the dangers of quoting a casino (the Colombo Stock Exchange), clearly fixed by a cabal of banks & conglomerates, measuring what is good or not good for the economy. Such indices are no indication of the health of the people…’ Indeed, more than any, these ‘Tea Traders’, with their Dollars parked in cooler climes (no, not Nuwara Eliya) certainly knew and know what lies in store…

If you are still curious about the lineages of present goings-on, join novelist of Jathika Chinthanaya – National Consciousness – Gunadasa Amarasekera, who with author of 9: the Hidden Tale, MP Wimal Weerawansa, will launch Galle Face Protest: Systems Change or Anarchy – Politics, Religion & Culture in a Time of Terror in Sri Lanka by Sena Thoradeniya on July 4, 3:30 pm. at the National Library Services Board – yes, on the edge of Independence Square.

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‘The Finance Minister & the Central Bank Governor

have misled the people for several months

until the fact is revealed in the Cabinet Paper at the last moment.

[They] told a complete lie several months ago

that they would guarantee that there will be no haircut on domestic debt…

The government has struck a deal with primary dealers.

Working people have no chance…’

– NPP MP Vijitha Herath (see ee Quotes)

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‘When it comes to implementing trade reforms,

it is not merely a matter of economic theory,

but of a communication strategy that needs to be in place.’

– England’s Ceylon Tobacco Co (CTC) Chair Suresh Shah,

Head of Govt State-owned Enterprises Restructuring Unit (SRU)

• Wonder how this week’s fake ‘threats’ against private banks trumpeted by media, syncs with CTC Shah’s communication strategy?: The private international sovereign bond (ISB) holders’ demand for ‘Domestic Debt Restructuring‘ (DDR) dominated much of the economic news. DDR is another trope of this ‘open communication’ that few understand. Economists, academics & their discontents however jumped in, much of their financial ballet dancing over our heads. The media of course did not highlight this DDR (or DDO) as a demand from ‘Wall Street’.

     This DDR was supposedly threatening the private banks (many having ‘foreign links’, including with the World Bank & other imperialist ‘development’ banks!). The private banks whined that 18%(?) of their loans are not being repaid. The IMF & their local subsidiary, the Central Bank of Sri Lanka, then announced they will let these banks off the hook and made a grab at the pension funds – Employees Provident Fund (EPF) and Employees Trust Fund (ETF). So this is what ‘domestic restructure’ means in plain rupees. If the EPF does not submit, the Central Bank Governor warned he would hit them with a higher 30% income tax increase. The EPF, the biggest fund in the whole of South Asia, was set up after a struggle launched by the Communist Party of Sri Lanka in 1957.

     In this ee Focus, Howard Nicholas (& Son) argue such moves portend worse repercussions. The Nicholases argue that the IMF, and their local traders in money & imports, wish to screw the country more in our ‘desperation’. Nicholas Sr (co-founder of the now-hijacked Institute of Policy Studies (IPS) & Social Scientists Association, SSA) suggests it would be better to quit this IMF rollercoaster, and wonders why the Central Bank and the government are not pushing back harder:

     ‘We now have ‘Domestic Debt Restructuring’ being imposed on us. We are told, ‘Unless you do that, foreign bond holders will not accede to restructuring’… The foreigner now says, ‘You must treat us equally’, even though the 2 ‘asset classes’ are totally different. That’s why the foreigner gets far more than the person buying Sri Lankan debt…The question I ask is, ‘Why aren’t we fighting back, pushing back?’ [We should declare]: ‘This is ludicrous. You should not be doing this. You should not be imposing this on us.’

     ‘What they are trying to do is push us further and further because we are desperate. And the fear factor is always there: ‘If you don’t do this, we’re not going to continue supporting you, you won’t get the second tranche, etc etc.’ So we do everything they say – it’s the monkey jumping for the peanuts basically – we will do anything. We are not only undermining the democratic essence of our system, but we are also abrogating our responsibility to the people of the country, by doing this. Because one of the consequences of this Domestic Debt Restructuring is we are going to make domestic debt, a risky asset – and the minute you do that…

     ‘And we are doing all of this because we are so frightened that the IMF will pull the plug and say, ‘Well, sorry, if you don’t agree to domestic debt restructuring, we are not going to give you the second tranche.’ Meanwhile, we are actually destroying ourselves, and it’s going to be far more damaging than actually not continuing with the IMF agreement.’ – ee Economists, Howard Nicholas on Domestic Debt Restructuring (also, see ee Focus)

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• Sri Lanka’s ‘Human Resource’ luminaries (ranging from managers of plantations to moneylenders to Coca-Cola) shepherded themselves this week to plot their ‘hire & fire’ strategies for the year. They broadcast a selection of their public thoughts through the media (see ee Random Notes). The Chief Human Resources Officer of Singapore Prime Minister’s Public Service Division presumably highlighted ‘open communication between management and employees’. Yet the IMF (& their local running poodles, the Employers Federation etc,) demand ‘flexibility’ – a euphemism that does not exactly lubricate ‘open communication’. The World Bank appears more ‘transparent’: The WB wails Sri Lanka’s ‘rigid’ labor laws lead to ‘very high firing costs!’ Workers are already informal & insecure, yet these whites demand more precarity! (see ee Focus)

     Singapore is not a real country anyway. It is a trading centre for multinational corporations and the foreign militaries that gird them. It is indeed an industrial powerhouse. However, it has no water. It has no peasantry. It is at best a city-state, a stationary imperialist aircraft carrier. There is no compare to Sri Lanka, where the favored ‘human resource’ expression is to call a worker a ‘buffalo’. ee truly loves buffalos (Bubalus Bubalis!). ee sees their culling as symbolic of the increasing privatization of water resources and asphyxiation of the national ethos.

     The HR meeting included Borah merchant Murtaza Jafferjee, stated as representing US thinktank Advocata. No mention that in May 2022, Jafferjee was appointed by then-PM-&-Minister of Finance, now President, the unelected Ranil Wickremasinghe, to form an ‘Economic Stabilization Dialogue’ between the Ministry of Finance & ‘independent’ economists. Brother Jafferjee is working overtime, we hope he gets adequate recompense. Some ee readers argue, he too is a worker! (see ee Comments).

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‘We know so little of ourselves, so little of our history…’

This was a constant tocsin of SBD de Silva. He also struck notes on the curious absenting of an economic history. A foundational record that could inform all other accounts, base our knowledge in material lives, including of course the strivings of people themselves. After all, all manner of ‘other’ histories are promoted. Many funded by that bountiful Ford Foundation (whose founder Henry is famously quoted as saying, ‘History is Bunk’) have been published and celebrated. Political histories! Cultural histories! Anthropology. Archaeology. Fiction. All without strategic reference to people’s lived experience, or rather their experience of making a living and a life. Bunk? Fictions, indeed!

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‘This was the first time that a participatory, non-bureaucratic method

was used for the creation of land records in the developing world.’

(see ee Focus, Participatory Origins: the Paddy Lands Register)

SBD de Silva, for example, identified many types and relations of rice and agricultural production: in the dry zones and wet, in Jaffna, and in the East, in the highlands, along the Mahaveli, Hambantota’s gambara system, etc. Meantime, much is passionately written about Sri Lanka’s this & that magula, our utter backwardness, our primitivity, despotism, chauvinism, etc, and reams of books published about it, many PhDs & professors awarded, rewarded & tenured for such forays into our hearts of darkness. And here we are. This ee Focus looks again at the creative attempts to implement the revolutionary Paddy Lands Act against all odds, and the attempt to identify tenant cultivators. The Act was enacted for humanitarian reasons, and secured tenure, but, said SB, had no impact on the supply of labor. Labor required to power rural industrialization…

Aragala means Business? IMF Scams EPF!