Wall Street Wagers on Winning Sri Lanka’s Elections
Posted on October 6th, 2024
e-Con e-News
blog: eesrilanka.wordpress.com
‘Before you study the economics, study the economists!’
e-Con e-News 29 September – 05 October 2024
The droning headlines in the capitalist media about a ‘Marxist’, ‘Socialist’, ‘Leftist’ being elected as the President of Sri Lanka are meant to mislead, but serve a purpose. So suggests an anonymous ‘Senior Stockbroker’, quoted by the Sunday Times, long-time mouthpiece of ye olde colonial import-export plantation economy.
The accession to head of state by the leader of the JVP is a performance yet again of the hegemony of Sri Lanka’s ruling traders – merchants & moneylenders – we dare not call them a ‘capitalist’ class. The ‘resilience’ of this ‘business community’ is evident, says this Stockbroker, in the JVP-front NPP being forced to ‘maintain’ the ‘status quo at the Central Bank’ and ‘going ahead with IMF program’ (see ee Economists, Senior Stockbroker).
‘Status quo’ perhaps refers to the retention of an ex-IMF salaryman as the Central Bank governor, or to the new Central Bank Act, which removes public accountability over the country’s bank of banks.
Having labelled the President as Marxist, etc, this media will now proceed on 2 lines about the JVP: 1) They are too Marxist; 2) They are not Marxist enough.
Meanwhile, the anonymous ‘Senior Stockbroker’ perhaps wishes to declare that the USA (which controls the IMF) always wins, no matter who gets the votes in Sri Lanka’s elections. Sri Lanka apparently has to now send a friendly team to the IMF’s US headquarters later in October. The President will yet then have to first secure endorsement, after the November 14 elections, from the new parliament – for a debt restructuring deal with international bondholders, ‘negotiated by his predecessor at the 11th hour and announced last week’. Why, in the last week before a major election, from 12-18 September 2024, would an ‘Ad Hoc Group of Bondholders’, comprising Wall Street’s finest, hold ‘restricted discussions’ with Sri Lanka. To buttress democracy, no doubt!
*
‘Washington-based lender unlikely to budge on core components
of its $2.9billion bailout, including a ban on printing money &
revenue & spending targets agreed by the last administration’
– ee Economists, Leftist Sri Lanka leader Stuck with Painful IMF deal
*
The ‘plural forum’ Yukthi Collective is calling on President AK Dissanayake to reject the ‘pre-poll deal’ with International Sovereign Bond (ISB) holders. Yukthi believes the IMF’s DSA is setting up a debt trap for Sri Lanka. Is this new? ‘The IMF is complicit with the bondholders, enabling them to extract as much wealth as possible.’ Is this also new? Maybe this is: ISBs were ‘the cause of the debt crisis in the first place’, and the IMF agreement ensures we will be forced to borrow more ISBs at ‘extractive’ high interest rates (see ee Focus). The problem with Yukthi is they wish to get a better ‘deal’ on ‘debt’, the sole purpose of which has been to prevent our industrialization. Yukthi does not or cannot offer an alternative: a program for industrialization, which is what all this arithmetic of debt – ‘no printing’ – is supposed to prevent.
The ‘pre-poll’ deal, Yukthi is objecting to, was announced ‘on 19 September 2024, 2 days before’ the Presidential election, and ‘after the election blackout period was announced’. The opposition SJB saw the UNP’s announcement as an illegal attempt to influence voters, especially their fraction of the merchant/moneylender/capitalist-wannabe vote bank. The IMF’s connivance in undermining their own much touted ‘rule of law’ is also no surprise. Senior Professor of Economics at the University of Colombo Sirimal Abeyratne, marks this Debt Sustainability Analysis (DSA) agreement as ‘a significant milestone for Sri Lanka’s economy’.
Other budding economists also feel they have to act as the IMF’s lower mouth organs to get ahead in life. One ‘economics lecturer at the University of Colombo’ warns the government about taking on Wall Street sharks in their own courtrooms. ‘Failing to secure the deal’s passage could open Sri Lanka to legal action from its creditors. It would be in the best interest of the country to avoid litigation with bondholders,’ he told AFP. It turns out, bondholders are seeking to choose courts outside New York, preferably in England or in President Joe Biden’s corporate tax-haven of Delaware.’ Why? Someone please tell this ‘economics lecturer’: 52% of the world’s private debt from colonized nations is governed under New York law, making the State the most important jurisdiction for those bond issuers. Wall St is fighting New York State lawmakers who feel capitalists avoid sharing in debt relief for developing countries, even though the US government and other public counterparts share! (see ee Economists, The Sovereign Debt Stability Act). What relief any one of them offer is of course moot.
• Japanese Envoy as Used-Car Salesman – This week we learned that the ambassadors of the US, Europe, India & Japan also moonlight as secondhand car salesmen (though they sell all kinds of other used industrial goods, not just cars). They hover outside Cabinet meetings with their traders. But it is the IMF who quarterbacks such yearnings. Imports of motor vehicles ‘will support revenue mobilization in 2025’, says the IMF’s Senior Mission Chief Peter Breuer. The term, ‘Trade Liberalization’ as Sugath Kulatunga reminds, is a euphemism for ‘import liberalization which is a primary objective of the IMF, which has to be resisted.’
Meanwhile, Mizukoshi Hideaki, Japan’s departing ambassador to Sri Lanka (another dead-car salesman) has decided to give us yet another lecture on corruption, clothed in a parable about Japan’s modernization. Alongside his master’s voice, the US envoy Julie Chung, who is also said to be imminently departing Sri Lanka, he seems to have been here from November 2021: ‘at the time of Gotabaya government. I experienced with Sri Lankan people the worst ever economic crisis and Aragalya (sic!) movement in 2022’. Really!
Without batting an eye, we imagine, he added: he had just met Nandika Sanath Kumanayake, the new secretary to the President, who studied at the National Graduate Institute for Policy Studies (GRIPS) in Japan and ‘is an expert on the corruption issue’.
While seeing no link between himself and the import mafia, the ambassador admits: ‘once Sri Lanka lifts its import restriction, there is a danger of foreign currency shortage happening again. Therefore, after achieving the stabilization, it is essential to build up a competitive industry that can push sustainable development of the country and earn foreign currencies. In building up industries, Sri Lanka may learn lessons from Japan’s industrial policies…’ under the benevolent eye of their master, the USA. In ‘competitive speak’, competitive means don’t mess with our exports to Sri Lanka.
The Japanese envoy recites: ‘Immediately after the attack on Pearl Harbor, Japan also started to attack South East Asian & South Asian countries including Ceylon under colonial rule at the time. The consequences of the war were devastating. Japan’s economy was left in ruins, and the societal impact was immense.’ He skips over the ‘consequences’ of Japan’s war on the rest of Asia, and all of Europe’s wars on Sri Lanka.
He is however full of a jumble of grammatical tenses (well, perhaps he doesn’t really speak English, but it’s unclear if Japan’s invasion of Asia was just a strategic ‘miscalculation‘) and makes no mention of the imposition of over 50,000 US troops on Japan (making it appear to be a thing of the past), or of sustained involvement in anti-China mischief. He therefore makes no mention of the role of US military procurement in Japan’s industrialization, or of Japan’s central bank’s role in guiding credit, of huge cartels and foreign exchange controls. Let alone about that US Plaza Accord crippling Japanese industry…
The USA’s Colombo mouthpiece, EconomyNext which also reported on the Japanese envoy’s speech, mischievously added assertions that were not made in his speech, like: ‘A mass-privatization program was also done.’ Hideaki also mentioned Japan’s latest Prime Minister, Ishiba Shigeru, though he did not add that Ishiba wants an ‘Asian NATO’ to consider introduction of nuclear weapons, and wishes to station Japanese troops in the US too. (see Japanese Envoy, SL can learn from Japan’s Meiji restoration, Dodge line stabilization, ee Sovereignty)
• Interesting Times: Almost one year (Oct 7) after renewed Palestinian resistance to the latest European settler state in Asia, we see the USA threatening nuclear war through their proxies in both West Asia & Eastern Europe. Of course, the English media turns this news upside-down. The forthcoming BRICS summit will take place in Kazan, Russia, on October 20-22. As a prelude perhaps, there are reports that the ‘the Russian naval fleet in the East Mediterranean downed 13 Israeli missiles last week near Lebanon’ (see ee Sovereignty, West Asian Crisis prompts Biden to break ice with Putin – Bhadrakumar).
England claims it has struck a 99-year deal with Mauritius to operate a military base at Diego Garcia for at least the next 99 years. They say India agrees. And so does the USA, too. How’s that!? England’s Foreign Office claims, now ‘the status of the base will be undisputed and legally secure.’ Diego Garcia is in the Chagos Archipelago, and England chased the Chagosians off their lands, and then rented the port out to the US in exchange for a nuclear submarine. Bombers from the USA refuel in Diego Garcia before they bomb East Africa & West Asia. ee 31 August 2024 reported, the USA’s 110th Expeditionary Bomb Squadron (EBS) was part of a Bomber Task Force (BTF) Mission over Diego Garcia (see ee Random Notes).
*
• The US is scouring the planet for outposts to indirectly wage war on enemies, perceived and projected. They seek to shape a sacrificial ‘Israel’ out of Sri Lanka. Some call Taiwan, Israel East, and Ukraine as Israel West. If Palestine is Israel Centre, then is Sri Lanka, Israel South? A Brookings Institute report on Iran calls for the US use of proxies: Of course, it is an issue of how we read such reports that are made public. As menus? That hide their real menus? Where do these ‘menus’ fit in with, the US tool kit: sanctions (tariffs), subversion, terrorism, provocation, waging war, invasion and occupation (see, Washington Sets Trap for Iran, Will Iran Take the Bait? – Bertelic, ee Sovereignty)
*
_________
Contents: