The IMF Road to Rambukkana
“Before you study the economics, study the economists!”
e-Con e-News 17-23 April 2022
The IMF & Rambukkana – Queues were allowed to lengthen at that filling station in Rambukkana in the days leading up to fateful Tuesday (19th). On Monday the 18th, people had accused staff at the filling station of withholding stocks of fuel until a possible price hike. The owner of the filling station had then ordered a fuel bowser to refrain from arriving at the station until price increases were announced. The crucial question no one seems to be asking: Just how did petrol stations & bowsers come to be privately owned? Violence, a potential demolition of the entire town, and a subsequent ‘peace’ were soon engineered. The US Moody’s Rating Agency then even declared Sri Lanka’s ‘outlook’ as stable (see Random Notes).
In 1962, the assets of US and English oil companies, which were still holding the country to ransom post-independence, were taken over, and vested in the Ceylon Petroleum Corporation (CPC), after the nationalization of the petroleum industry. Importation, distribution and retailing of petroleum products were then carried on under a state monopoly – until 2002 when the International Monetary Fund (IMF) demanded the privatizing of the energy sector. The downstream distribution of petroleum was then privatised in 2002, with India’s IOC soon dominating privatization of energy (see ee Focus).
This week, the IMF ‘thanked’ India for assisting in the provision of rapid financial funding and guaranteeing loans to Sri Lanka. India will therefore move to further dominate Sri Lanka’s financial sphere, and more Sri Lankan assets will be handed over to private Indian interests (see ee Economists, India)
• Last week, the Bowser Tanker Owners Associations of the Ceylon Petroleum Corporation (CPC) and the Indian Oil Corporation (LIOC) had claimed that fuel transportation in the country would come to normal on Monday (18), because most of the bowser drivers had gone on vacation for the new year. After the Rambukkana incident, the Sri Lanka Petroleum Private Tanker Owners’ Association told the CPC Storage Terminals in Kolonnawa, that the bowser owners were reluctant or unable to report to work over personal safety issues. ‘A fleet of nearly 250 bowsers carry fuel to many parts of the country on daily basis, whereas only 6 were present today. Those bowser owners are from the Western Province’ (see Random Notes).
• Import-Export trade-related illicit financial outflows from Sri Lanka between 2009-18 alone add up to over US$45billion, just $6bn short of the total defaulted foreign debt by Sri Lanka this year – Global Financial Integrity Report 2021, December (p59; ee Economy)
These figures do not include the foreign exchange lost from transfer of remittances through illicit channels which would add up to at least US$2billion per year, and the transfer of investment funds out of the economy through other illicit means, like over- and under-invoicing, transfer pricing, etc.
This immense loss of surplus from underdeveloping countries like Sri Lanka orchestrated by its business elite hand in hand with the political establishment should become the main focus of economists in Sri Lanka. This transfer of surplus cannot be wiped out simply by raising interest rates as broadcast by so-called economists like Dr Harsha de Silva, WA Wijewardena, US-funded thinktanks like Advocata and Verite, IPS, including the recently appointed Central Bank Governor Nandalal Weerasinghe.
• Sri Lanka’s Embassy in the USA is asking people not to insult the 8-member Sri Lankan delegation led by the Minister of Finance, who are attending the Spring Meetings of the Bretton Woods Institutions (IMF, WB, WTO) in Washington DC. The delegation, we’re told, has stayed in not-luxury hotels, traveled in not-luxury limousines. They met India’s Finance Minister, the IMF’s Managing Director, and the WB’s Managing Director of Operations, and unnamed officials from the US Department of the Treasury, the US Department of State, USAID, the WB’s International Finance Corporation (IFC, which has been slowly moving in on local banks & finance companies).
• The IMF employs at least 3,000 people, predominantly white or white-washed, including lawyers, computer technicians, and other support personnel. The core of its staff are the over 1,000 economists, presumably chosen from over 120 nations, but a quarter are US citizens. Every year the IMF recruits about 100 economists, many new PhDs from the white world’s most expensive graduate schools – Harvard, Stanford, MIT, Chicago, Oxford, Cambridge, the London School of Economics. Entry-level PhDs at the IMF could earn salaries over $100,000 a year – tax free. As international civil servants, they fly business class (often, first class) and stay in deluxe hotels. These newly minted PhDs soon find themselves overseas sitting across the table from a finance minister or central bank governor, helping to control a country’s economic policies.
The salaries of US citizens on the IMF staff are subject to tax the same as those of other US citizens; however, the Fund provides them with substantial supplements to their salaries so that their after-tax earnings are comparable to those of staffers from other nations.
If the IMF was a Sri Lankan state-owned enterprise (SOEs, as capitalist media likes to call them), it would be in even greater danger of being sold to the highest bidder now! Luckily [but not us!], it is a US-owned SOE. And US SOEs are highly protected under national security laws. Hence the US will never let go of their domination of the IMF/World Bank/WTO! Look at the UN. The UN, presumably representing all the states of the world, has been hijacked by white-dominated committees. All these whites are experts and technocrats no doubt. And they wish to run our governments again (see ee Focus).
• Capitalist media and their economists blame money printing (ee Random Notes). What about the failure to invest those funds in modern industrial production? What about the orgy of luxury and inessential imports? Isn’t this the real corruption? Also, most goods are bought on credit and not with money. The issue is also not Central Bank printing, but commercial banks extending too much credit for rentier activity! As for the Central Bank, they have the largest number of PhDs per square foot in the country. They may wish to retire in Washington. How independent can they be of such desires?
• Wholesale vs Retail, Political vs Economic Corruption? Multinationals control most world trade and prevent industrialization in our countries. MNCs like Exxon and Unilever, facilitated by banks such as Citibank and Standard Chartered, etc., remove billions from this country. They also control both media and so-called ‘civil society’ and NGOs. Their media prevent any national conversation on the need for modern industrialization. For example, when they cannot prevent people discussing industrialization, they spread falsehoods.
There were many accolades for the ‘Handicraft Queen’, Barbara Sansoni, who passed away this week. But the promotion of such quaint ‘arts & crafts’ was erected on the grave of the destruction of the textile industry, as in Thulhiriya, which has been hijacked by MAS, etc. MAS & Brandix, nor Sansoni, have ever made a pin here! Handicraft is the production of an entire good by one person. Manufacture is based on those goods being made by different people and assembled. Modern industry is based on the production and division of machines. Such details, the ‘free’ media refuses to divulge.
• Many NGOs have infiltrated the legitimate protests of the people, and are attempting to weaken the state and society further. The oil industry, particularly the Rockefeller and Ford Foundations, are behind the infusion of huge amounts of funds to these NGOs, especially so-called ‘civil society’ and ‘social media’. The still-colonized government of Sri Lanka has been unable or has refused to control the entry of such funds. Under the guise of ‘democracy’, they have furthered the interests of MNCs, among the most corrupt institutions in the world, and directly linked to assassinations, attempted coups and terrorism in the country
A revealing development this week was the appointment of Kushan d’Alwis to the board of directors of the Ceylon Tobacco Company, owned by the multinational, England’s British American Tobacco. ‘D’Alwis is Chairman of the Office of National Unity & Reconciliation, which has been financed by the Rockfeller Foundation. D’Alwis is a member of the Board of Investment and of the Financial System Stability Consultative Committee of the Central Bank. On the Boards of Lanka Hospitals Corporation and National Development Bank PLC, he was a member of the Law Commission 2011-15, on the Panel of Legal advisers to the Tax Appeals Commission and of the Public Representations Committee on Constitutional Reform, and also the Vice Chairman of the Civil Aviation Authority of Sri Lanka (ee Business).
• The capitalist media is interviewing people identified as ‘social media activists’. Unelected and unrepresentative, how these ‘activists’ are chosen by the (Unilever-run) media, and how these media-acclaimed ‘activists’ choose their priorities, plans and programs remains a mystery. The same is true for the demand for ‘independent’, ‘unelected’ professionals and technocrats to run the country (ee Focus).
‘Social media’ is almost all owned by the USA. So are they CIA activists? Can they be neutral algorithms? Are they bots? Or are they Colombots?
If big tech companies are going to turn their back on the US Department of Defense (War), this country is going to be in trouble. – Amazon.com founder Jeff Bezos.
And why not. Bezos’ Amazon depends on the internet, which was created by the US military. Nor should it surprise that after the US sparked the NATO-Ukraine war, Google took a series of restrictive actions against Russia. Google even offered the option to translate ‘Dear Russians’ into ‘Dead Russians’! While Twitter has now begun to tag alternative media thus: ‘This tweet links to a China state-affiliated media website…’
So why have we come to believe that white media is not ‘state-affiliated’ but ‘independent’? In fact, the louder the words ‘independent’ and ‘free’, we hear the echoes of chains dragging and coins clinking…
Billionaires, portrayed as celebrity entrepreneurs, are said to have invented Facebook, Twitter etc. ee (21 August 2021) has noted before how it was the US government that funded their high-technology companies, like Apple, which were given access to major government research programs, military initiatives, government procurement contracts, and research institutions.
So-called social media should be more correctly called anti-social US state media. No different from the media owned by large multinational conglomerates, dependent on their bases in imperialist countries, in London, New York. It’s this media that is now spreading the gospel of retail corruption and the need to weaken an already weak Sri Lankan state serving the import mafia mainly. They wish to prevent Sri Lanka’s control of ‘strategic’ companies in competitive sectors such as steel, petrochemicals, modern manufacturing, electricity.
Their internet and so-called social media are now spreading second-by-second memes and videos about who is to blame for the current crises in the country and the world. Sri Lankans need to quickly find better truly independent ways to communicate with each other.
• Those of us who seek an independent country, based on a modern industrialized economy, should take heed. The imperialists insist: We must not be allowed to choose our own leaders. This is the lesson of the last 74 years, if not the last 516 years at least. This was the lesson of the assassination of SWRD Bandaranaike in 1959. Of the attempted coup in 1962. Of the toppling of a government by bribery in 1964. Of the terrorism and wars that blighted the country from the 1970s onwards.
• Last week, an ee correspondent bumped into a ‘musician’ on her way to sing at the Galle Face gathering – GotaGoGama or Aathalgama, depending on your persuasion. What was she going to sing about? ‘Corruption’. ‘We have to go to the IMF’. ‘The Central Bank should be independent from political control.’ Whoa! We thought, economics has finally struck a chord – but clearly economics of the Yankee kind.
So how is it that young people, who claim to be ‘radical’, and ‘rebel; and ‘alternative’ would express such backwardness? This is quite something…
This musician also told of her recent work: Making an app for finance companies to alert seizers to claw back vehicles from ‘owners’ who have not kept up with payments. Last week, ee recorded that leasing companies were planning to seize 5 million vehicles of people who cannot pay monthly debts!
Young people, and working people, have been heard echoing the media insistence of submitting to IMF. Perhaps the IMF is seen as Santa Claus, as the epitome of generous free-spending white man in a non-settler colony. Perhaps people have been driven like cattle to such dire circumstances precisely to accept such a solution.
• The Debt Trap: the IMF & the Third World, by Cheryl Payer (1974): So, what the ‘West’ then got their media to do, was to use their ‘projection’ technique to blame China for this. Hence the Kalu-suds in Sri Lanka now prattle about ‘Chinese debt traps’. ‘Projection’ is to blame others for what you do…
What the IMF will do now is insist on Sri Lanka taking out more ISBs (International Sovereign Bonds), which is already almost 50% of ‘our’ debt. ISBs are loans from ‘Western’ banks. Interest is higher, repayment shorter term.
The fundamental role of the IMF/World Bank/WTO (‘Bretton Woods’ triplets) are to prevent modernization (ie, real industrialization) in Sri Lanka at all costs… And instead keep promoting fake modernization (luxury consumption, fake garment’ factories that do not make a pin, thread, or textile, etc, parroting ‘Woke’), which will only further increase debt….
The greatest crime of the century (so far) is the WTO’s prevention of modern vaccine production in our countries, via TRIPs (so-called Intellectual Property rights, etc.).
The current ruling family are only the latest symptom of a deeper cancer. Some wish to change it back to that other ruling family, the Wijewardenes. The issue is not families, but a class. The capital that the business and political class took illegally out of the country only through trade accounts between 2009-18 is $45Billion! It’s in the latest global financial integrity report, 2021 December, p59, Trade-Related Illicit Financial Flows in 134 Developing Countries 2009-18.
Because Unilever controls the media through advertising, etc., we will never learn about matters like ‘transfer pricing’, etc., which robs huge amounts out of the country, and hence, Unilever also controls the so-called ‘arts’, and ‘artists’. These arts and artists are so embedded in the ‘West’ they cannot see the world, hence why the ‘West’ is doing all it can to prevent our links with the rest of Asia…
‘There is no alternative” (TINA) is/was the gospel of Maggot Thatcher and her contemporaries like JRJ and Re-gun, 40 years ago… So no exit but only if u live in English, so to speak. There are many many alternatives, also recall, White July 1983 and 30 years of war… and Beeshanaya ‘87-89 were heavily backed up by IMF loans.
• ee watched a very interesting discussion on Sri Lanka’s economy this week, and highly recommend readers watch it. According to economist Howard Nicholas: 1) IMF policies mistake the symptoms for the cause. The theoretical underpinnings of IMF policies are fundamentally flawed. IMF economics rests on a flawed theory of money. Academic economics has no proper theory of money. Acclaimed neoclassical monetary economist Robert W Clower, before he died, wrote they do not have a theory of money. The sooner we admit this failing, the sooner we can overcome the limitations and problems. This is the missing element at the heart of IMF thinking.
2) The IMF focuses on the wrong thing. SL’s biggest current and past problem is the trade imbalance, the massive excess of imports over exports. The recent IMF staff report, in 120-odd pages, incredibly they only mention the trade balance only once, and only obliquely. This is quite staggering. They have an ideological agenda. They are not looking at the stats, and they not interested in the data. They wish to pursue certain policies.
3) In the short term, IMF policies will solve the balance of payments, in the sense that they will restore reserves of the economy to a moderate level, allowing the economy to start functioning again, allowing imports, allowing the stabilization of the currency in the short term. The IMF policy recommendations will aggravate SL’s problems in the long term. They will cause Sri Lanka to have even greater exposure to international sovereign bond debt – ISBs – which will hamstring SL going forward, trying to rectify its trade imbalance.
We are coming to a point where we have no reserves to service debt, or even pay interest. SL has been heading for a currency crisis for a long long time…’ – https://fb.watch/cxmXThIAB2/
continued on: eesrilanka.wordpress.com