e-Con e-News

Posted byee ink.November 30, 2024Posted inUncategorizedTags:asia, China, politics, sri-lanka, travel

blog: eesrilanka.wordpress.com

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

e-Con e-News 24-30 November 2024

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‘I also ask him to examine the Central Bank,

another institution that has been exercising influence over

the economy of the country. The body of John Exter has been

removed from the territory of Ceylon, but his soul is still

marching on in the Central Bank of Ceylon, & the sooner that

soul is also buried, the better for the economic independence of Ceylon.’

– Pieter Keuneman, Parliament, 1956.

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‘Southern poverty is not only continuing but exponentially growing

despite almost the entirety of the world opting for

‘market reforms’ or capitalist-led growth.’

– see ee Economists, Continuing relevance of Gamani Corea’s thinking

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‘No way for Govt to break

guardrails of IMF program’

– IMF’s Peter Breuer

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guardrail | ˈɡärd ˌrāl | noun

a rail that prevents people from falling off

or being hit by something

– Oxford English Dictionary

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‘When we assumed office, the discussions on debt restructuring,

which had been ongoing for more than 2 years, were in their

final stages. At this juncture, debating whether the proposed

restructuring plan is good or bad, advantageous or disadvantages,

serves no purpose. This is the reality we are faced with. Based on this,

we have reached a common understanding regarding bilateral debt.

We are now prepared to quickly formalise agreements with individual

countries accordingly. On the other hand, about international sovereign

bonds & commercial market debt, we have reached a preliminary agreement.

We anticipate that this process will be completed by the end of December.

Consequently, we believe that the debt restructuring program with the IMF

can be successfully concluded before the end of this year. Additionally,

we expect to secure staff-level agreement for the 3^rd review of the program this

week, which will provide a credible foundation for rebuilding our economy.’

– AKD, Sunday Times (see ee Sovereignty)

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‘IMF to closely discuss upcoming budget with Sri Lanka’

– EconomyNext (see ee Economists)

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‘Sri Lanka has regained political stability’

– CBSL Governor & (Non-medical Doctor) Nandalal Weerasinghe

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Central Bankers come and go, but the zombie ghost of the Central Bank of Ceylon’s first US governor John Exter still haunts and rules the land, still laying down the dictat of the US Treasury. IMF Chief Missionary Peter Breuer cannot divulge what the US has threatened the JVP with, that will ‘hit’ them if they do not stay with the ‘guards’. Breuer has been illegally scampering in & out of Sri Lanka, before, during & after elections. They will now be allowed to police the budget (tho this is not new). ‘The IMF is keen that [the budget] is in line with the program objectives. He cited the primary surplus, the revenue & the quality of fiscal measures as the important guardrails… Responding to a query about the announcement by the previous government to lift the ban on vehicle imports, he said it was discussed and would be a very important source of revenue for the government in the year ahead. So, after all that talk of ‘Chinese debt trap’, it turns out the US & so-called ‘local banks’ who are actually importers of crap machinery, and in fact are controlled by the World Bank etc, ‘own’ over 50% of Sri Lanka’s debt. Is it any surprise that the US Treasury Secretary is part of the US National Security Council? (see ee Random Notes).

     Who Holds the Wheel? – A ‘Steering Committee’ of a so-called ‘Ad-Hoc Group of Bondholders’ own about 40% of $12.55billion of defaulted bonds, while a ‘Local Consortium of Sri Lanka (LCSL)’, with 11 members including banks, have around 12%. The Steering Committee is made of funds managed or advised by Amundi Asset Management, Barings, BlackRock & its subsidiaries…(to see the rest of the suspects, see Random Notes)…

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‘The current funding arrangement for digitisation of television in Sri Lanka

is a ‘soft loan‘ from the Japanese government, & it is tied up in ‘one bundle’

with loans for other projects… based on the premise that

the deployment of the Japanese digital television standard,

Integrated Services Digital Broadcasting-Terrestrial is mandatory.’

– ee Industry, Japanese Digital Television Project announced after meeting AKD…

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‘Conduct a detailed debt audit on foreign loans obtained

by the governments to ensure transparency & accountability

in public financial management and to take legal action

against those who have misappropriated such loans.’

– NPP policy document: A Thriving Nation, A Beautiful Life.

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Indeed, we do not wish to add to the NPP’s heavy load, but their audit of debt could list which corporations & banks import which industrial goods, naming the makers & financiers of such imports. They could also demand, like Indonesia has just done, that certain goods sold domestically need to contain at least 40% of parts manufactured locally in Indonesia (see ee Industry).

     And a note to a supine merchant media: When news items declare, ‘ADB approves $200mn Sri Lanka loan for battery storage, grid upgrade’, instead of being pom-pom wielding cheerleaders, they could also list which US & Japanese corporations, for whom the Asian Development Bank is a front for, would supply such industrial goods for ‘battery storage’ & ‘grid upgrades’.

     We should also note that the merchant media’s economists & foreign thinktanks are firmly opposed to state-owned enterprises (SoEs), whether they make money or not, and staunchly against any ‘local content’ laws &  ‘import-substitution’. Their main interest is high interest rates for their financial finagling, & imports of their industrial products, & export of our natural resources, including workers  – the sum total of their slave economics.

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• Not so Peaceable Coercion – Dhananath Fernando, a smart ‘poor’ Koralawella boy (these are his backers’ own patronizing words), has been groomed by Catholic Action and the US government, to front as the grand-sounding ‘CEO’ of the US thinktank Advocata Institute (tho behind him reigns the real power – Borah importer & Advocata Chair Murtaza Jafferjee – CEO, Chair… such bureaucratic corporate hierarchies, but never mind). Fernando had this to say in a recent Financial Times column:

‘As James Madison, one of the great thinkers behind modern democracy, once said:

‘If men were angels, no government would be necessary.

If angels governed men, no checks would be needed.

But because governments are made up of people,

we must create systems that control the government itself’.’

(see, ee Economists, New era of hope & responsibility)

So, so, so, who is ‘we’ who will create these systems to control people? Robots? The ‘business as usual’ merchants & moneylenders & their foreign overlords?

     Good Liberals, Mass Rape & the Ideal Commodity – Now let us see who the real James Madison is – what the US embassy will never teach Fernando. According to The American Slave Coast: a History of the Slave-Breeding Industry by Ned & Constance Sublette, Madison was fully part of ‘the brutal story of how the Anglo-US slavery industry made the reproductive labor of the people it referred to as ‘breeding women’ essential to the young settler-state’s expansion. The ‘Captive African Americans in the slave nation were not only laborers, but merchandise & collateral all at once. In a land without silver, gold, or trustworthy paper money, their children & their children’s children into perpetuity were used as human savings accounts that functioned as the basis of money & credit in a market premised on the continual expansion of slavery. Slaveowners collected interest in the form of newborns, who had a cash value at birth and whose mothers had no legal right to say no to forced mating.’

     The Sublettes’ story describes power struggle between the rulers of Virginia, the slave-raising ‘mother of slavery’, and South Carolina, the massive importer of Africans – a conflict that was central to US politics from the making of the Constitution through the debacle of the Confederacy. Virginia slaveowners won a major victory when Thomas Jefferson’s 1808 prohibition of the African slave trade protected the domestic slave markets for slave-breeding. (continued in ee Random Notes)

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• In the aftermath of the 19^th century US war between their industrial north & the agricultural south, Karl Marx & Friedrich Engels & eminent US jurists declared that slave masters should never be allowed political rights again! Well, the failure to comprehend the true nature of a triumphant white-settler state, despite its social-media-driven virtue signalling, has led to widespread indignation among US-embassy-liberals in Sri Lanka that such a leader as Don ‘Let’s Make a Deal’ Trump could emerge in their promised land. Yet brain-dead Joe Biden was just as bad, 2 sides of a printed US dollar, which baldly declares, ‘In God we Trust’. So what will Trump bring to our table?:

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‘Trump will have a 2-year window before the midterm congressional elections,

during which he will have a certain freedom to push his policies through

the Senate & the House of Representatives. After that, his decisions could

face resistance both domestically & from US allies.’

– Andrey Sushentsov, Russia Foreign Ministry’s MGIMO International Relations Dept dean

(see ee Sovereignty, A defining moment in the Ukraine war)

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‘Industrial policy for me, free trade for thee…’

– see, ee Focus

• Thisee focuses on ‘the challenges of a Trump presidency’, with a yet more expensive US dollar placing inflationary pressures on import-dependent countries like Sri Lanka, which will further impact the foreign debt burden. Shiran Illanperuma notes how the theories & policies propounded by neoliberal thinktanks like the Atlas Foundation-affiliated Advocata Institute & the Friedrich Naumann Foundation, have little to no influence in their own countries of origin. He concludes that Trump offers a ‘Window of Opportunity’ and insists that ‘for an underdeveloped country like Sri Lanka, no industrial policy tool should be off the table. Well, tell that to the traders!

     ee Focusalso reproduces Dhanusha Pathirana’s insistence that it is ‘evident’ that the Sri Lankan government’s deal with the USA ‘has been influenced by corrupt interests’. He concludes ‘Sri Lanka’s debt crisis is a stark example of the destructive power of predatory lending’, and calls for holding ‘these lenders accountable for their role in exacerbating the debt crisis in the third world’

     Finally, ee reproduces Part 2 of Bram & Howard Nicholas’ ‘Poverty of CBSL’s Monetary Policies’. They too point out, ‘High domestic interest rates on Government debt, combined with the absence of Central Bank intervention to purchase newly issued debt, will escalate the domestic debt servicing burden.’ Such interest rates will have detrimental effects on investment & economic growth. They call for ‘the establishment of development banks (where have we heard this before?) to provide concessional finance for specific sectors. Though they conclude, ‘However, these too are unlikely to sufficiently offset the negative effects of elevated & volatile medium- & long-term real interest rates’. (see ee Focus)

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• A purported ‘mafia’ (aka cartel) of rice millers & rice importers have been dominating the mafia cartel of newsmakers, while winds & rains heralding the northeast monsoons, buffet & inundate the homes & fields of the land. We should recall the Great Uva Rebellion, the first war of independence against English colonialism, took place in such intramonsoonal conditions from October to November in 1818. Also, the failure to complete that independence with the weakening of the ‘independent’ state, especially over its control of agriculture, hijacked by such English multinationals as Unilever (Liptons), ICC-CIC, Ceylon Tobacco Co, has led to various fissiparous tendencies. This is most symbolic in LTTE leader Prabhakaran who was born through such elements in November 1954, and who was propelled to power especially after JR Jayawardena’s fake ‘Open Economy’, which told Jaffna cultivators to sell their onions wherever they pleased – Colombo likewise was going to import them onions too. A portentous month is November, indeed! Then again, all months are… in a Sri Lanka still under siege after 500 & more years of invasions.

     The media portrays a battle between rice millers & rice importers, with all manner of ranting & raving, gnashing & grinding of editorial false teeth. But the central issue remains the uneven application of rural labor, and the failure to organize the whole society & rural industry in particular on the basis of the rhythms of rice cultivation – the primary agricultural pursuit. The English destroyed canals & irrigation systems and village industries, particularly iron & steel making. This was done to destroy the solidarity of the ancient village councils, whose unity was based on the management of the irrigation systems. As noted by a reader in the last ee, failure to keep up one’s share of the canal system, could result in being whipped, with the guilty having to also pay for the cost of being whipped. SBD de Silva in his last years focused his research on the urgent need for rural & agricultural industrialization: He noted the control of the village economy by Colombo merchants of imported goods, & related moneylenders, and their control over the media (led by Unilever) prevent such issues from even being broached: eg, he noted the failure to monetize & commercialize the rural economy, with fundamental economic relationships dominated by the pre-capitalist barter of harvests for industrial goods, which could just as easily be made in villages (ask the Japanese ambassador!). De Silva always recalled how the oncoming Japanese kamikazes post-1939 forced the English to give peasants a fixed price, and workers a fixed wage. Indeed, Silva also noted that such price controls required rationing.

     Rice rationing was introduced during England’s WW2, and people had to be taught how to use the rice ration book. This period of shortages of essential goods resulted from the non-arrival of merchant vessels due to war. The rationed commodities were then distributed through co-operative societies established throughout the country.

     After the end of the white war on Korea led to the end of ‘the export boom’, the terms of trade grew even more unfavourable – due to the refusal of imperialist powers, particularly the USA, to pay a fair price for tea & rubber. The World Bank (IBRD) agreed to ‘rescue’ the economy, according to certain criteria. The US Governor of Ceylon’s Central Bank advised the Prime Minister Dudley Senanayake, who had just won an election, to seek an election before imposing the World Bank’s stringent conditions. Sound familiar?

     ‘Shortages’ then led to pressure on the government for an increase in the price of rice. At the behest of the World Bank‘s first mission to Sri Lanka, Finance Minister JR Jayewardene increased rice prices from 25 cents a measure to 72 cents. ‘Workers’ parties’ campaigned against the increases, by collecting and submitting hundreds of signatures to parliament, joining national protest against the cutting also of the rice-ration by a 1/4 measure, and the increase in flour price by 15 cents.

     Calls for the conclusion of a Rubber-Rice Pact with the People’s Republic of China to solve the rice shortages were strenuously opposed by a US lobby within Sri Lanka, led by (another ‘former Marxist’!) JR Jayewardene, resulting in his nickname, Yankee Dicky, with the proponent of the pact within the government, RG Senanayake, being dubbed China Dicky.

     Rice rationing was again introduced in 1974, on the ground that rice was not purchasable for any love of money on the world market… The UNP gained from this total failure of the United Front Government, and especially of the discrediting of the LSSP & CP…. Sound familiar…?

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Contents:

JVP in the Open Prison: Peaceable Coercions & Forever Wars in the Age of Trump