US Navy Flies in to Colombo….
‘Before you study the economics, study the economists!’
e-Con e-News 08-14 January 2023
Welcome to the 250th issue of ee. Why announce this number? As a dubious index of a meagre weekly effort? Yet, scan the newspapers and you’ll find awards galore being handed out by the corporates to themselves and to each other, for all manner of even-more dubious efforts: So, why not give ourselves an award, a number, and look stupid too!: how much time wasted writing this out and you reading it! Award yourself! The English have turned us into a prize-giving nation!
• Charade or dissimulation, it’s theatre with an edge, a sharp edge that cuts, with most of those being sliced and quartered being kept off stage. The doctors misdiagnose the disease, offer a fake panacea and prognosis, with the cure being put off every day, cos it’s winter in the North Atlantic and more time is needed studying these tropical hothouses where the microbes of sin and corruption proliferate like NGOs.
So why did a US Navy spy and expert in their ‘Integrated Undersea Surveillance System’ meet our frangible fungible finance minister? What fortunes fie-fo-fum are being sniffed under the sea lanes? Is it coincidence that Sri Lanka this week announced it had finalized ‘oil exploration rules, earmarking 900 offshore blocks’ in the Mannar Basin in northwest Sri Lanka, which ‘may’ hold around $260billion worth of oil & gas resources? The US Navy Spy appears just as the US is escalating war games in the region (see Random Notes, Japan).
State Minister of Finance Shehan Semasinghe apparently met ‘Rear Admiral Eileen Laubacher, the US National Security Council (NSC)’s South Asia Senior Director’, for matters more mundane: the US ‘enjoys effective veto power’ at the IMF. And the beast must be soothed.
‘Any country seeking support from IMF will have to tackle the pressure exerted by the US with regard to the economic reforms,’ editorializes the Daily Mirror. So Semasinghe promised the US Navy spy Laubacher (‘Love’s Baker?’), that Sri Lanka is working ‘to implement IMF-agreed economic and financial reforms’. The US National Security Council Director then sang of the US government’s ‘shared values of democracy’. (Semasinghe was accompanied by Treasury Secretary Mahinda Siriwardhane, and Deputy Treasury Secretaries AK Senevirathne & RMP Rathnayake to assure bureaucratic fealty).
Thus ‘Sri Lanka began a fresh austerity drive Monday, freezing Government recruitment as new taxes and higher electricity prices kicked in with authorities trying to secure an IMF bailout… The IMF has also asked Colombo to trim its 1.5million-strong public service, sharply raise taxes and sell off loss-making State enterprises’.
The US Senate Committee on Foreign Relations has also demanded, the IMF loan must fulfil 3 preconditions: making the Central Bank independent, observing the rule of law, and setting an effective anti-corruption machinery.
With all such US threats, the English media can happily proclaim over and over again that it is somehow China, which is blocking the IMF pittance.
• England’s Standard Chartered Bank’s latest ‘global’ report on Sri Lanka sweeps away any fog about democracy: While declaring ‘Polls could delay IMF deal progress, but won’t cause large deviation from current policies’ they insist, ‘Polls or no polls, the risk of political unrest remains high in 2023.’ They also accused the government of ‘pussyfooting on State-owned Enterprise & other institutional sector reforms’ (Random Notes). Standard Chartered’s origins are in Indian opium, slavery and apartheid…
• US Undersea spy Laubacher also met President Ranil Wickremesinghe on January 12. Here again, Laubacher was eager to hear the President elocute correctly in Royal College accents, the US government’s IMF mantra, as well as discuss maritime matters and the narcotics trade (Ranil may not have mentioned the flooding of drugs is largely a major product of US wars in the region, raging from Afghanistan to their infamous Southeast Asian ‘golden triangle’).
Laubacher met Minister of Energy Kanchana Wijesekera as well, who sang those global icing tunes of ‘energy & climate goals’, and Foreign Minister Ali Sabry who sang ‘preserve human rights & promote reconciliation’.
Laubacher was provided cover by US envoy Julie Chung, NSC Director for South Asia Regional Affairs Brian Luti, State Department Director of the Office of Nepal, Sri Lanka, and Bangladesh Scott Urbom, Embassy Notetaker Daniel Moon, and USAID Acting Country Director Debra Mosel.
• Rear Admiral Laubacher surfaced her submarine in Colombo after dipping into Dhaka for a 4-day visit.
In Bangladesh, media asked her about the US ‘shifting to democracy & human rights from its war on terror policy’ Laubacher and other NSC representatives duly visited Rohingya refugee camps in Cox’s Bazar. The US has provided more than $1.9billion in ‘humanitarian assistance’ to support refugees, blaming ‘the Burmese military’ for ‘this humanitarian crisis’. Rohingya refugee camps have been famed recruiting grounds for US mercenaries (recall the war on Afghanistan).
The US hosted their 46th annual Indo-Pacific Army Management Seminar in Dhaka last fall. Laubacher reminded her hosts that the US is largest source of investment in Bangladesh. She therefore sang their faux mantra, about ‘labor & human rights, energy, trade, security cooperation, religious freedom…. She said she was worried for the Bay of Bengal, which contain ‘vital shipping lanes and undersea cables that power our economies by moving food, fuel, goods, and data’. She was in Dhaka to ensure these lanes remain ‘free and open’… blah blah blah. No Bangla asked her about how ‘open’ the North Atlantic would be to Asians dipping their warm brown submarines into such pale climes.
• Meanwhile, the man responsible for dancing the coup against now-former Pakistan PM Imran Khan, US Assistant Secretary of State for South &Central Asian Affairs Donald ‘Banana2’ Lu was in India from January 12. Lu followed the US Navy spy Laubacher to Bangladesh on Jan 14…
• This ee continues looking at Sri Lanka’s fascinating role in disseminating science & technology to the East. Last ee discussed Japan’s artisans and machine tool industry. This ee looks at the story of US, England and Europe financing early Japanese industrialization and war against Russia, Korea and China, and the role of ‘Japan’s banker’ Jacob H Schiff. Schiff, senior partner of US Banker Kuhn, Loeb & Co, is said to have met Japan’s special finance commissioner Takahashi Korekiyo in 1904, who was traveling in New York and London to raise funds for war.
US banker Schiff was in London, returning from Europe. Using the massacre of Jews in 1903 in Kishinev, capital of Moldova, Schiff had been pushing the US President Theodore Roosevelt’s regime to attack Russia. A few weeks before he met Takahashi, Schiff also wrote Lord Rothschild hoping for a Russo-Japanese War that ‘would lead to an upheaval in Russia and the triumph of constitutional government there’. Schiff asked Rothschild and other Jewish bankers in Europe to block Russia from obtaining war loans.
Japan however linked Schiff’s moves to the English bankers’ desire to lessen the risk of Russian retaliation for London’s financial support of Japan, by broadening ‘the circle of that support’ to the USA (Fukai Eigo, Personality & Thought; GD Best, Financing a Foreign War: Jacob H Schiff & Japan, 1904-5).
• Almost 200 (an economical upward approximation, last count 182) international economists & ‘development experts’ have issued a joint statement, appealing to the morality of Sri Lanka’s creditors, nations & private capitalists, to write off Sri Lanka’s so-called debt (ee Focus)
They could have pointed out that it is the whites who owe us after 500 and more years of war! Rather, being experts with western credentials, they highlighted: 1) the ‘unsatisfactory practices’ of international institutions like the IMF & World Bank, 2) the opacity of debt negotiations, 3) profiteering by private creditors holding International Sovereign Bonds (ISBs).
• Shadowy offshore tax-hideouter Hamilton Reserves Bank, based in St Kitts & Nevis, holds $250mn of Sri Lanka’s 5.875% ISB, which was due on 25 July 2022. They filed suit in the Federal Court of New York Southern District against Sri Lanka in June, after the country’s ‘default’ on its $1billion sovereign bond.
Delaying by private lenders to resolve sovereign crises ‘is increasingly a norm’. In September the Sri Lankan government asked a US judge to dismiss the HRB suit: the case is an ‘apparent attempt to gain leverage over a nation in crisis and jump ahead of other foreign creditors.’ HRB has already collected 25% of a $1bn bond. HRB claims Sri Lanka owes it a total of $257,539,331.25. This comprises $250,190,000 in principal & $7,349,331.25 in interest.
HRB lawyers complained the default is being ‘orchestrated by officials at the highest levels of government,’ including the ruling Rajapaksa family, and accused Sri Lanka of excluding bonds held by domestic banks and other interested parties from an announced debt restructuring.
Citing former US government officials and investigative journalists, HRB said the Rajapaksas have ‘amassed a multibillion dollar fortune, parts hidden in bank accounts in offshore jurisdictions like Dubai, Seychelles, St Martin.’
HRB added: ‘These favored Sri Lankan parties stand to be paid principal and interest in full, while the Bonds –which are also broadly held by US retirement systems including Fidelity Investments, BlackRock, T Rowe Price, Lord Abbett, JPMorgan, PIMCO, Neuberger Berman, and other US investors – remain indefinitely in default and unpaid, causing US retirees tremendous suffering from potentially massive losses of up to 80% of their original investment value.’
They do not mention: Sri Lanka also defaulted on repaying China’s loan of $78mn due in July, but China’s Exim Bank has not taken Sri Lanka to court (President RW spoke to Exim Bank this week).
The Rajapaksa family are also targeted in US Senate resolution by US Senator Bob Menendez (D-NJ), Senate Foreign Relations Committee Chair, and 2 others. Menendez is from New Jersey, ie, the famed tax hideout for the oily Rockefellers.
The US will continue to harass Sri Lanka even after the IMF deal. The Hamilton suit is reminiscent of the hedge-fund boss Paul Singer’s suit against Argentina in New York. They threatened Argentina they would seize their planes and ships. New York State’s legislature recently passed a bill to ensure that private creditors can’t use courts to get better settlements than bilateral government creditors. So, who are HRB’s ostensible owners, operating from a tax hideout in St Kitts? (ee Random Notes)
• Recall how the UN Women’s Organization has jumped into bed with behemoth asset manager Blackrock. Blackrock is now part of the bondholder group negotiating a restructuring with the Sri Lankan government. The IMF’s strictures strangle workers & cultivators, among whom women & girls will be squeezed disproportionately: women’s groups, who objected to the UN alliance with Blackrock, have noted (lankaweb.com/news/items/2022/08/13/un-womens-mou-with-blackrock).
A1. Reader Comments –
• Thanks to SBD de Silva • Sinhala Fate in the Hills • UNP-SLPP Puppy Love • Canada’s Thai Pongal • SL Army on the Line • Sinhala & Southeast Asia
A2. Quotes of the Week
• 5 Ways to Hoard Dollars • Mannar’s Gas Bubbles • Canada’s Record • SL Food Security & US Wheat • Destroying Hope • Mrs B’s Last Days • Wage Data Lacks • Losing Finance in 2020 • CB Governor Blames US Sanctions • SL & Singapore • ‘Red Indians’ as Natural Communists • Why England Confessed about Kenya • Denying Socialism • Kosovo’s Mining Wealth • NATO’s Grab for Sweden’s Arctic • Economists as Plumbers • IMF’s Egyptian Snafu
A3. Random Notes –
• Wimalasurendra Annual Lecture • Cameron the Conqueror • Gambling with US Retirees • Hamilton Reserve Bank Plays Shylock • Who is HRB’s Gnomes • Standard Chartered’s PussyFoot • Association of Professional Sri Lankans in England • Fellowes-Gordon • US War Games in Indian Ocean
A4. Building Blocks
• Guaranteed Rice Price for Industrialization • Creation of a Home Market for our Industry • Japan’s Limits to Industrial Exports • Smallholding & Science • The Extraordinary Culture of Machine Tools
B. ee Focus
B1. Statement by Academics on Sri Lanka’s Debt – January 2023
B2. Transmission Belt for Steel Technology: Ideas Transfer from SL towards Japan, Part 3 – Susantha Goonatilake
B3. Jacob Schiff’s Early Interest in Japan – Gary Dean Best
C. News Index
continued on: eesrilanka.wordpress.com