Colombo-based Advocata Institute has repeatedly provided a platform for Ricardo Hausmann, an advisor to a right-wing, U.S. backed coup government in Venezuela.
The Advocata Institute – “an independent policy think tank” that promotes “free-markets” and “free society” – recently hosted Director of Harvard University’s Center for International Development (CID) Ricardo Hausmann for a virtual discussion on debt sustainability.
This is not the first time Advocata has promoted Hausmann, who is presented as an eminent economist, with no mention of his role in a U.S. backed coup in Venezuela, and in the Yahapalana government’s unpopular economic programme and the controversial MCC agreement.
So, who is Ricardo Hausmann?
Hausmann belongs to a group of economists from the Instituto de Estudios Superiores de Administración (IESA), a private university in Caracas whose economists greatly influenced the policies of former Venezuelan President Carlos Andres Perez.
Perez came to power in 1989 and imposed a structural adjustment programme backed by the IMF and “IESA Boys” like Hausmann. Within months, these policies fuelled the Caracazo uprising where government forces killed up to 2,000 protestors according to some estimates.
After this bloodbath, Hausmann served as Perez’s Minister of Planning from 1992 to 1993. When Perez was being impeached for misusing 17 million U.S. dollars, Hausmann moved on to become Chief Economist of the Inter-American Development Bank (IADB) in Washington.
The Bolivarian Revolution of 1999, saw popular leader Hugo Chavez come to power and rollback Perez’ policies, alleviating extreme poverty through a series of nationalisations and comprehensive welfare schemes.
In the years since, Hausmann has continued to advise the right-wing opposition from abroad despite conflicts of interest with his job at Harvard, private consultations, and paid speeches for the likes of JP Morgan Chase, Bank of America Merrill Lynch, and Citigroup – some of whom are Venezuelan and Sri Lankan bond holders.
In 2014, Hausmann penned an article titled “Should Venezuela Default?”, calling for the government to default despite being solvent. The article sent Venezuelan bond prices crashing, leading Chavez-successor Nicolas Maduro to label Hausmann a “financial hitman”.
Hausmann has continuously backed the financial isolation of Venezuela, calling Goldman Sachs “morally indefensible” for purchasing the country’s debt in May 2017. In January 2018, Hausmann infamously called for “military intervention by a coalition of regional forces,” to depose Venezuela’s popularly elected President Maduro.
Weeks later, when relatively unknown politician Juan Guaido unilaterally declared himself “interim President” of Venezuela in a U.S. backed coup, Hausmann was appointed as the coup government’s representative to the IADB.
Learning nothing from his disastrous stint behind Venezuela’s economic policy levers in the 1980s and 1990s, Hausmann wrote that Guaido’s, “interim government will need a program with the International Monetary Fund,” in order to revive the country’s economy.
During the Yahapalana administration’s IMF-backed economic liberalization program, Hausmann appears to have maintained links with Finance Minister Managala Samraweera, Deputy Finance Minister Harsha De Silva and State Finance Minister Eran Wickramaratne.
In 2016, the Sri Lanka Economic Forum featured Hausmann and billionaire George Soros as speakers. The latter’s Open Society Foundations funded the Hausmann-led Center for International Development to the tune of some 3.1 million U.S. dollars to “collaborate” with the Yahapalana government on an “applied research project.”
In a visit to Sri Lanka in 2018, Hausmann advocated for liberalisation of immigration laws, an issue which had sparked protests against the proposed Economic and Technology Corporation Agreement with India just two years prior.
In 2019, MP Harsha De Silva said the controversial Millennium Challenge Compact, a 480 million dollar grant proposed by the U.S. to accelerate privatisation of land and private sector investment in public transport, was formulated with input from Hausmann.
More recently, Hausmann said that Sri Lanka should pursue debt sustainability through a path of Expansionary Fiscal Contraction – a theory which assumes that major cuts in government spending will fuel economic growth, despite evidence to the contrary.
Given Ricardo Hausmann’s controversial history, Advocata – which is linked to many Sri Lankan corporates – must clarify whether their continued promotion of Hausmann is a tacit endorsement of his anti-democratic politics.