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

e-Con e-News 02-08 February 2025

Maybe they don’t die uneasily like the rest of us. They simply pass away in their sleep. But pass, they do. The serendipitously synchronous slipping into samsara of 2 of Sri Lanka’s nameboard oligarchs – Kandiah Balendra of Keells, & Don Harold Stassen Jayawardena of Distilleries’ Co, this week, recalls their twin origins in the colonial English plantation agency houses; and more particularly, in the aftermath of the destabilization of the 1970-77 government of Sirimavo Bandaranaike, rampant post-’77 privatizations, and that boondoggle called the Mahaweli Development Scheme, the largest project in the country’s history.

     The World Bank Country Report of 1980 promised that by harnessing the great river’s vast resources, the Mahaweli Project would transform Sri Lanka’s economy within a decade. Even, export electricity to India! They ignored Central Bank advice not to accelerate the program. In the end, the Mahaweli project unearthed ‘a gold mine, a hunting ground for thesis writers and professional researchers’, and not just them: such carpetbaggers as Balendra and Jayawardena emerged. English, Canadian and Swedish ‘donors’ operating under ‘development’ agencies, minted millions, 100 times more than the locals, who ‘received a bagatelle’ instead. (The English even insisted, while constructing the ‘Victoria Dam’, on importing drinking water for their employees, saying local water was not good enough!). Side by side with them, domestic merchants gathered ‘sudden and tremendous affluence’, as subagents and contractors.

     It is no accident therefore that such irrigation schemes have failed to reproduce the creativity and solidarity of the purana gam sabha (ancient village councils), or of the vast temple lands – they had no such intentions. There was a change in the composition of agriculture (tractor and pesticide, replacing buffalo, and women), and the pattern of products, but there was no change in the structure of production, distribution and investment of profits. The irrigation policies of colonial and so-called postcolonial agents sought to reinforce the isolation and entrapping of peasants in smaller plots, instead of reinforcing larger organization through cooperatives and banks to enable rural industrialization. All the program did was to impose another layer of parasites over the peasants.

     It was in the midst of such a boondoggle (Mahaweli) that the Social Scientists’ Association (SSA) organized its first (& last!?) research program, between 1980-82, on Agrarian Change in Sri Lanka, publishing its results as Capital & Peasant Production: Studies in the Continuity & Discontinuity of Agrarian Structures in Sri Lanka (CAPP). ee‘s muse, SBD de Silva, whose work is included in the book, recalled CAPP as one of SSA’s finest publications, after GVS de Silva‘s The Alternatives: Socialism Or Barbarism. The SSA’s dedication to such scholarship did not last, diverted and corrupted as it was by the ensuing wars of terror (stick) and carrot (NGO slush funds). SSA had been formed in 1977 by social scientists who felt that research had failed to significantly study problems of ‘development & change’. SSA was meant to end the isolation of such scientists and serve as a forum for discussion and debate, to make contact with foreign scholars for research both ‘nationally and socially relevant’. Along the way, it became a coven for ‘thesis writers & professional researchers’, who gladly became agents of Canada’s CIDA, USAID, Holland’s Development Corporation (SNV) or England’s ODI, ignoring both national and social relevance. Ethnicity and other atomizing identities, not agriculture or industry, were made ‘the national question’.

     ee aims to reproduce some parts of CAPP, especially as its research focused on the role of multinational corporations (MNCs, or TNCs) and especially the part played by Ceylon Tobacco Co (CTC, owned by British American Tobacco, BAT), a monopoly buyer which also directs peasant cultivation…

     The power of MNCs, like CTC and Unilever, etc., (linked as they are to Jayawardena’s corporate fronts, and Balendra’s Keells – what FMCGs do Keells sell?) is also evident in their control of the media: how, for example, is Swiss Nestlé’s name kept out of the reams of headlines about coconut prices? Or in the long tales about rice shortages, how England’s ICI-CIC impoverishes cultivators let alone pollutes waterways (a culpability our ubiquitous ecomaniacs are funded to ignore)?

     …Poetry oozes somewhere out of Colombo’s toxic Beira, surrounded by so-called modern ‘millennial’, ‘hi-tech’ companies and boutique hotels with fanciful but ultimately useless architecture, who are constantly giving sermons on all virtues and presenting themselves awards for ‘green’ this and ‘gender’ that…  

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• The USA & Other Success Stories – The media noise amplified by the re-entry of Donald Trump as US President recalls the varying techniques of white settler practices to depopulate continents. The BBC fails to tell us on exactly who ‘Trump says he ordered air strikes on …in Somalia’. This blood rite is portrayed as so commonplace. A hit. No names. Just labels. Oh, OK, ‘Islamic State Group’. But is this IS like the US IS in Syria? It IS what it IS… An assassination or bombing is what a leader of the free world is supposed to announce as their real inauguration, after she, he or it is given access to the nuclear codes, which remind of their own and the world’s mortality (…with JD Vance but a heartbeat or earlobe away….)

     Whereas the US Democratic Party’s liberal (though somewhat-Republican) godfather Thomas Jefferson (1801-09) sought to first ensnare the ‘Indians’ in debt and steal their land, Trump’s last US presidential godfather Andrew Jackson (1829-37) forcibly evicted them from the US South, to extend the slave cotton plantations. By the time Trump’s latest godfather William McKinley (1897-1901), the ‘tariff king’, who invaded Spain’s colonies, was assassinated – by his successor, the roughriding Theodore Roosevelt (1901-09, whose ancestors were involved in pushing opium on China), who engineered a coup to steal Panama from Columbia – ‘a newspaper as ‘respectable’ as the New York Times could editorially threaten that those peoples who opposed the new world capitalist order would ‘be extinguished like the North American Indian’.

     This ee also recalls how that ‘celebrity’ ‘success story’ called the US economy has been so dependent on genocide and slavery (see ee Random Notes) … The USA keeps teaching us history every day and teaching us English too, as the first language of genocide, of slavery, all for free!, but our thought leaders are paid not to hear, not to see, not to think. The lessons may appear to be another ‘gift’, but as with most of their gifts, they require maintenance, need further experts’ services, need rusty parts to replace, which will have to be imported from them and paid for…

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This ee concludes ee Focus’ cursory glimpse at Sri Lanka’s relations with China prior to the European invasions. It ends, for now, by examining the formations of Portugal’s Casa da India, Holland’s Dutch East India Co, and its English avatars the English East India Co. They are the antecedents of multinationals, with budgets much larger than countries, like Unilever, and now US Exxon, who still dominate Sri Lanka’s economy. As our historical record notes, the departure of China from the ocean brought about an era awash in constant warfare in Sri Lanka, resulting in the massive destruction of cities, villages and structures, and the dissolution of the earlier social order…

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USA Watching the JVP Squirm: Colombo’s commercial and financial oligarchy have survived every single change of government, so now watch how they plan to ‘manage’ the early toppling of yet another ‘popular’ government.

The burdens of high interest costs on Treasury bonds are severely constraining the fiscal space available for critical social protection programs. The Government’s domestic interest payments consume the largest proportion of Government revenue, according to the IMF’s twin, the World Bank. Dhanusha Pathirana of the Institute of Political Economy (IPE) sees ‘a valuable opportunity to alleviate this pressure by reducing the interest paid on bonds held outside the public’s EPF and ETF’. This could result in substantial savings of approximately Rs600billion, which could be redirected to support essential public services and social welfare initiatives, to arrest the escalating cost of living, the deteriorating state of healthcare and education, and ‘create fiscal space for long-term industrialization goals, facilitating a shift of resources from unproductive to productive sectors’. (see ee Focus)

     The IMF’s padrone, the USA (with the EU wagging along) wants to see how the JVP will manage to keep its promises to the people within the prison house of their economic prescriptions and restrictions. This is why the International Monetary Fund (IMF) pops up soon after the car importers are flung their pounds of flesh (roadkill). Our economists refuse to divulge how the USA’s IMF profits by forcing Sri Lanka to import foreign machinery, particularly private vehicles, especially private cars. But this techno ‘dependence’ is key to understanding how non-settler colonies are maintained as shitholes to lubricate Trump’s profundity…

     The IMF’s appearance this week – to ‘discuss’ the 4^th tranche – is covered in billowing clouds of smokey foggery. Here goes: the IMF’s Executive Board of Directors will, by the end of this month, be presented with details of ‘the government’s staff-level agreement with the IMF’… ‘on the third review’…about the deals made, regarding the ‘extended arrangement under the Extended Fund Facility (EFF) of US$3billion’. ‘Once the approval is granted by the IMF Executive Board, Sri Lanka is expected to release the fourth tranche of the extended loan, amounting to $333million.’

     All this is based on ‘the submission of the 2025 budget consistent with the IMF program’s parameters’. Yet what kind of budget can be devised within such constraints?

     Midst the media foggery it is hard to determine exactly what kind of deals – especially privatisation (see ee Industry, Litro) have been agreed upon. Like former President R Premadasa, who simply renamed privatization as peoplization, they may simply change what such sell-offs are labelled….

     Meanwhile, ‘US President Donald Trump’s ‘pause’ on foreign assistance has tied USAID’s purse strings and left its Lankan partners in a state of disarray’ – all recipients of US philanthropy have less than 90 days to align any future goodwill with US foreign policy.  Despite, the momentary demonization of USAID and the UNHRC, apt though it be, the omission of the IMF, World Bank and WTO suggests a wilful innumeracy, let alone studied illiteracy…

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Contents:

USAID Crime Scenes in Sri Lanka. How About the IMF’s…?