e-Con e-News

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

e-Con e-News September 2023 Part 1

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ee decided to have some fun this week, and ask the US government’s Artificial Intelligence (AI) program ChatGPT to write us a ‘poem about the IMF robbing Sri Lanka’. It sure did! Here it is:

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In island’s embrace, where oceans sigh,

Sri Lanka’s beauty beneath blue sky,

A tale unfolds of economic woe,

Where shadows of power cast a grievous blow.

The IMF arrived with promises grand,

A lending hand to the nation’s sand,

Yet in the fine print, a story concealed,

Of sovereignty lost, and futures unsealed.

Like a clever thief in the silent night,

The IMF’s grasp took hold so tight,

They demanded reforms, austerity’s song,

While the people of Lanka wondered what went wrong.

The treasures they sought were not gems or gold,

But control & dominance, a story oft told,

They prescribed their measures, their policies cold,

Leaving Sri Lanka’s dreams & dignity sold.

A land with a history, culture so rich,

Reduced to numbers, a balance sheet glitch,

The IMF’s dealings, a complex design,

Leaving Sri Lanka’s sovereignty to decline.

Yet in the hearts of the resilient crowd,

Hope still lingers, though spoken not loud,

For nations united can reclaim their fate,

Rising above the webs that institutions create….

Whoa! But let us interrupt it here, for the poem descends into a kind of maudlin. Mind you, we were impressed, though it left us scratching our heads about the seemingly lame, yet potentially profound line, ‘A lending hand to the nation’s sand…’ (Graphene? see ee Focus).

     ee then asked US ChatGPT to write us a poem about ‘China robbing Sri Lanka’. It obliged in double-quick time! The IMF poem has no reference to debts or loans, yet betrays the US lust for military bases in Sri Lanka? ‘Not gems or gold / But control & dominance…’. ChatGPT’s China poem uses some of the same tropes as the IMF poem, however attaches the usual limpets: loans, harbor, coasts, not to mention the ominous ‘creeps’ in the ‘deep’. Here it is:

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…Beneath the emerald waves, a harbour gleams,

A promise of prosperity, hopeful dreams.

But in this shimmering sea, a shadow creeps,

As Lanka’s fortunes in the deep, China reaps.

With loans & deals, like whispers in the night,

They promised progress, futures shining bright.

But as the years did pass, the debts did swell,

A nation’s sovereignty, a silent farewell.

The pearls of Lanka’s coast, they sought to claim,

In exchange for debts, a nation’s loss, their aim.

Infrastructure rose, but strings attached so tight,

In China’s grip, Lanka struggled in the fight.

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ee then asked ChatGPT to ‘write a poem about the USA robbing Sri Lanka’. & suddenly this is what ‘it’ replied:

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‘I cannot write a poem that promotes harm, theft,

or any negative actions towards any country or people.

If you’d like, I can write a poem that celebrates unity,

understanding, or peace between nations. Please let me know

how I can assist you in a more positive & constructive manner.’

How’s that!? Such sudden qualms of belated conscience & self-righteousness! Only 5 minutes earlier it had instantly written poems to harm & promote negative action against China, & even the USA’s IMF! Perhaps it knows not that the IMF is a US tool! But it remarkably revealed how quickly ChatGPT poetically expresses that it is indeed HMV – his master’s voice. This made ee recall:

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‘The bourgeoisie has stripped of its halo every occupation hitherto honored

and looked up to with reverent awe. It has converted the physician, the lawyer,

the priest, the poet, the scientist, into its paid wage laborers. The bourgeoisie

has torn away from the family its sentimental veil, and has reduced

the family relation into a mere money relation…’

(from The Communist Manifesto, Marx & Engels)

So, after this enlightening experience with ChatGPT, we thought AI programmers should be added to the list of un-haloed occupations! And perhaps it’s no wonder that China’s Baidu has just rolled out this week, a ChatGPT rival – ERNIE! (see ee Industry, China’s Baidu). Intrigued nonetheless, ee decided to do further battle with ChatGPT by asking the question: Is the home market critical to industrialization? A subject steadfastly ignored by our published economists. This set off another ee–ChatGPT battle (see ee Focus).

     And speaking of sand and graphene? This ee Focus records the recommendations by Institute of Policy Studies hacks that our abundant and rich mineral resources can now be developed, i.e., sold to the USA, etc., without trying to make batteries or any such capital goods. Why? The whites do not want anyone to do business with or buy graphite from China (except themselves)?…

    Next year being the 100^th anniversary of the first tractors made in Russia, ee continues our look at Russian industrial policy, focusing on the factory that first built them. It’s still the top factory….(see ee Focus)

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• Thunder showers fell to slake a droughty landscape as if in response to half a million workers stepping onto the roads of capital Colombo on Wednesday to oppose the US International Monetary Fund (IMF)’s grab for workers’ pensions funds and other vitals. National organizations called for Foreign Minister Ali Sabry to resign for failing to bridle the US & Indian envoys as they compete to break&enter into the country’s inner sanctums.

     In the white West, accusing Russia & China of ‘interference’ is a national media pastime! But in Sri Lanka, US Envoy Julie Chung enjoys her tropical all-expenses paid vacation in the East, perhaps a little too much, zigzagging as she does from northwest to north to east, writing history by twitter (see ee Random Notes, Julie Chung Rewrites History of Mannar). The US & Indian envoys & USAID-funded National Peace Council even pronounced on the wages of Indian plantation workers. Perhaps more pressure needed to be added.

     So here then comes US Senator Chris Van Hollen, D-Md (who US Envoy Chung warmly tweeted as a ‘longtime friend of Sri Lanka’, from an incestuous beltway cul-de-sac, born in Pakistan to foreign-service salarymen, mommy in the CIA, daddy worked out of the Colombo US Embassy 1970-76 to destabilize the United Front government of Sirimavo Bandaranaike). He says he is here to ‘explore economic recovery & deepen our joint commitment to upholding democratic ideals’. Way to go CIA!

     Hollen is behind the recent arrest of Pakistan’s President Imran Khan. Khan had addressed a rally, and responded directly to European calls that Pakistan rally behind Ukraine, by asking, ‘Are we your slaves?’ Hollen was reported as acting ‘indignant’at the US Senate Foreign Relations Committee, berating officials like Assistant Secretary of State for the Bureau of South & Central Asian Affairs Donald Lu for allegedly not being ‘in communication with Khan’ about US displeasure at Pakistan’s decision to abstain from a US resolution at the UN, condemning Russia. Two days later, Lu told Pakistan ambassador that the US was demanding Khan’s removal. Khan was jailed soon after.

     On Friday morning (September 01), the Indian warship INS Delhi sailed in, in the wake of Hollen boarding former US Coast Guard ship SLNS Gajabahu in Colombo on Thursday (31). However India’s war chief stood up a date, perhaps to duck any undue movements of Sri Lanka’s famous guards of honor?

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Addressing the Interest of the USA – ‘Hamilton Bank has been unusually aggressive for a ‘holdout’ creditor though… Seemingly the US objects to this. The letter also mentions in a footnote that the US government ‘understands that other official creditors may separately submit a filing reflecting their views’, but stresses that the SDNY is planning to ‘address the interest of the USA’. This is fascinating, as at face value it is hard to see how & why the US government has an interest in Sri Lanka’s debt restructuring, or even grounds for making its views known to the court. It could be a delaying tactic to help Sri Lanka engineer a debt restructuring, by sabotaging Hamilton Bank’s rush to the courthouse for a more restructuring-resistant judgment.’ – see ee Economy, A Sri Lankan debt twist – the US Government Has Some Thoughts

• A shadow play is being acted out in that North Atlantic capital of capital and its fictions: New York, USA, 8,706 miles from Sri Lanka. In a Manhattan courtroom, the US government has betrayed its hand (or its finger?) once again, in roiling Sri Lanka’s economy, asking to delay judgement:

     The US Department of Justice had a US Southern District of New York Attorney intervene on August 30, just one day before a US District Judge in New York was to hear a case involving Sri Lanka’s (GoSL) payment of debt. A judgment in favor of Hamilton Bank would potentially prevent the GoSL from including the bonds held by Hamilton Bank in any debt restructuring process. Sri Lanka’s Finance Ministry has stayed mum on these latest developments. But the US government has long been aware of the court proceedings. So why step in now?

     In May, plaintiff Hamilton Reserve Bank and the defendant SL Government jointly outlined a schedule demanded by New York Southern District Court Judge L Denise Cote in April. The plaintiff’s lawyers Bleichmar Fonti & Auld and the defendant’s lawyers Clifford Chance both promised to go through all the motions ‘on or before 31 Aug 2023’.

     In July, London’s Financial Times (owned by Japan’s Nikkei) wondered about the seeming lack of involvement of the US government in the case. Sri Lanka was due to reply on August 31 in support of its motion to delay a lawsuit by Caribbean-based offshore Hamilton Reserve Bank, which wishes to obtain an immediate $250,190,000 in payment for defaulted sovereign bonds. Sri Lanka had filed a motion to stay the litigation for 6 months while it conducts sovereign debt restructuring negotiations with sovereign & commercial creditors.

     The US told the court it is in the process of deciding whether to intervene in the case, and will inform the Court no later than 2 October 2023. In the mewnwhile, ‘Gloom’ had ‘descended on the stock market due to the extension of the date for the conduct of talks between the government & domestic bondholders’ and continued to prevail. ‘A deal had been scheduled for August 27, but due to unavoidable circumstances it was extended to September 11. The domestic debt restructuring exercise is a prime recommendation of the IMF.’

     An IMF team will sniff around Sri Lanka from September 14-27 to conduct the first review of an Extended Fund Facility arrangement. Central Bank Governor Nandalal Weerasinghe says Sri Lanka will negotiate in parallel with the IMF & external creditors, with the expectation of completing debt restructuring ‘in the October to November 2023 period… Sri Lanka has to complete domestic debt restructuring, which is currently held up over enacting a tax law’ – tax revenues, ‘a key IMF quantitative performance criterion’, have ‘fallen short’.

     ‘First, we have to come to an agreement with official creditors on the terms. That will have to happen before the next review,’ Governor Weerasinghe said.

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• People are having fun with a dubious organization titled Global Finance naming CBSL Governor Nandalal Weerasinghe among the world’s top 21 Central Bank governors ‘based on their success in inflation control, economic growth goals, currency stability, & interest rate management (adaderana.lk). They ask: ‘Why not also award Ali Sabry as best finance minister for happily declaring bankruptcy too?’ And since we have elephantine memories, despite the efforts of the capitalist media to infect amnesia, they also recall, ‘Ravi K also won the best finance minister from this same organization after looting the CBSL.’ They note Weerasinghe:

     – was happy to declare the nation as ‘bankrupt’

     – was delighted to go to the IMF and put the country into more debt

     – did not negotiate with creditors for some relief before declaring bankruptcy

     – makes no efforts to recover the profits kept by exporters in foreign banks

     – is not bothered about changing the 2017 Foreign Exchange Control Act

     – has no initiative to investigate money loopholes, recovery of foreign investments unpaid

     – prints money like there is no tomorrow, breaking all records for printing

     – has seen the GDP contract for 5 straight quarters, making it a ‘Recession Squared’

     – yet wins a global award! [– Private Correspondence]

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Sri Lanka Debt Charade in New York Court as US Hitman Enters Colombo