e-Con e-News

So Where Have All the Dollars Gone?


In 2017, capitalists were invited to take their dollars out…

blog: eesrilanka.wordpress.com

Before you study the economics, study the economists!

e-Con e-News 29 May – 04 June 2022

‘India, being aware of the medicine shortage,

imposed restrictions to prevent Sri Lanka

from importing medicine from any other country

except for India, along with its Line of Credit.’

– see ee Industry, Cautions

Erudite Indian diplomat MK Bhadrakumar (ee records his Indian Punchline blog),

twittered this week about the spread of foreign interference in Sri Lanka:

‘Isn’t it about time to start discussing those (external) players

who are feeling the unrest for reasons of their own?

There is a whole history of colour revolutions since Yugoslavia,

with local characteristics & variations on a fundamental theme.

Enter Christian church.’

‘The Paris milling wheat market, the benchmark for Europe,

has also seen a significant increase in the share of speculators

– that is, investors whose primary aim is to turn a profit –

buying up its wheat futures contracts…

The Chicago Board of Trade, one of the world’s leading futures exchanges,

also reflects this trend.’ – see ee Agriculture, Investors Cash in

A fabricated economic meltdown grinds Sri Lanka further into the USA’s sphere of influence. The historical centres of imperialism (the US, Europe, Japan), grow desperate to maintain their exclusive control over the ocean and region. India acts as the regional cat’s paw to pull their jak nuts out.

     Sri Lanka’s Ministry of Foreign Affairs, long a nest for anglomaniacs, now led by a colonial-importer and agency-house-linked Minister, has to display its eagerness to please. The crude seizure of an aircraft belonging to Russia’s premier airline Aeroflot follows the attempt to grab fertilizer without payment, from a Chinese supplier.

     The white calculus, using India to do its dirty work, assumes Sri Lankans despise the Indians even more than the whites, and will soon drive them out as well. Having used India to attack Sri Lanka and China, the US is exerting further pressure on India’s own ‘human rights violations’ after India has tentatively refused to join in sanctions against Russia.

     English media continue to blame fuel and food games on ‘Russia’s war on Ukraine’. Russia’s MFA spokeswoman has however exposed how the US & EU have engineered the shortages and massive price hikes (see ee Focus).

• ‘Foreign investors wooed to ‘invest in Sri Lanka, gain and take profits away at whim’ – so announced an excited Ceylon Chamber of Commerce headline, 5 years ago. The new Foreign Exchange Act No12 had just beenimposed in July 2017, under US-funded Yahapalana’s regimen: ‘The concept of foreign exchange control has now disappeared from our dialogue’, Rajendra Theagarajah, chairman of the Ceylon Chamber then told a visiting New Zealand business delegation in Colombo.

     ‘That 5-decades-old Act has been repealed and replaced by a much more investor-friendly Foreign Exchange Management Act (FEMA)’ said the ‘Veteran Banker’. ‘FEMA allows you to invest your money in your chosen ventures, make gains and take your profit away as and when you wish, without having to obtain any formal, regulatory approval from the authorities’ (Random Notes)

• The head of US-funded thinktank Advocata, regional Borah merchant Murtaza Jafferjee, has been appointed by Prime Minister and Minister of Finance Ranil Wickremasinghe to form an ‘Economic Stabilisation Dialogue” between the Ministry of Finance and ‘independent’ economists (ee can guess who they are!). It is these independent economists who pushed the FEMA, and now demand an ‘independent’ Central Bank.

     The PM also said the National Youth Corporation will be restructured and reoriented towards climate change and environmental protection, to perhaps rebuild the base of the devastated UNP. The environmental protection flim-flam will be used to block infrastructure and industrial development too.

     Meanwhile, Sri Lanka has hired Rothschild-banker-linked Lazard and Clifford Chance as financial and legal advisers to talk with international creditors. Whilst the largest holders of Sri Lanka’s sovereign dollar bonds have hired Rothschild & Co as financial adviser (see ee Economists).

• 100 years ago: English banks were still refusing to lend to Sinhala people, except through south Indian Chettiar and north Indian Afghan moneylenders. These moneylenders borrowed from English banks, and lent to locals at exorbitant rates. In 1925, a Nattukottai Chettiar ‘bank’ collapsed. The English banks then stopped lending Chettiars money. Chettiar firms began demanding repayment from Sinhala debtors. In financial straits themselves, Sinhala people defaulted and lost their lands. This resulted in an intense anti-Chettiar campaign, with the Chettiar bankers taking control of the leadership of Indian plantation workers’ community.

     The English set up a Banking Commission, headed by Indian Parsi banker ‘Sir’ Sorabji Nusserwanji Pochkhanawala, a founder of the Central Bank of India in 1911. This Commission Report of 1934 recommended setting up the Bank of Ceylon (BoC). the BoC was ‘strangled at birth’ in 1939, and forced to operate ‘independently’. Attempts to set up a local development bank resulted in the expulsion of socialist ministers and the eventual assassination of a Prime Minister in 1959. The BoC was nationalized in 1961, but it still refused to lend to rural people (ee 17 July 2021).

     Meanwhile a witch-hunt is on against former Central Bank governor WD Lakshman, who once promised a development bank, blaming him and others for the supposed delay in begging the IMF for a 17th panacea (ee Random Notes).

‘Research in the social sciences in underdeveloped countries

has, of late, metamorphosed into a variety of big business.

Institutes and research agencies flourish in rich profusion,

with virtually a business interest  in staging seminars, symposia

and workshops and in sponsoring publications.

In contrast, concerned activity committed to exposing the real roots

of social disarray is, remarkably, absent.’

So begins SBD de Silva’s classic, The Political Economy of Underdevelopment (PEU).

     This year 2022 marks the 40th anniversary of the PEU’s publication in 1982. And this month of June marks 4 years since SBD de Silva made the transition. ee was started a few months after he passed, in dedication to SBD’s work.

     Four years later, SBD would not be surprised to find some fellow social scientists (who he knew well) now donning coats and ties, talking of ‘social justice’ minus any discussion of ‘economic justice’.

     Social science has indeed become a very big business. Foreign-funded NGOs, without any control by the MFA, have spokesmen and spokeswomen dolled up as civil society, providing an endless stream of quotes, lamenting misery minus ‘exposing the real roots…’

     We often wonder what SBD would have thought of the events of the last weeks, let alone the last few years. While disgusted about the petty frauds of politicians and officials, he always considered such talk of ‘corruption’, etc., as diversion from the ‘real roots’.

     The capitalist media incessantly blames ‘money printing’ and financial jugglery like ‘soft-pegs’, debt, lack of foreign exchange and investment, balance of payments, fiscal deficits. SB focused on the prevention of investment in modern industrialization.

     Not a day goes by without a news headline or an economist talking about ‘the crisis’. SBD would always make wicked fun of those economists and leftists who constantly spoke of ‘crisis’, and ask, what crisis?

     To SBD, the so-called crisis was not an unusual feature but part of Sri Lanka’s ongoing underdevelopment, rooted in colonialism’s impoverishment of the cultivator, and the prevention of investment in modern industrialization based on the rural home market, now monopolized by multinationals like Unilever, etc.

     Media, meanwhile, when they can’t deny the need for industrialization, promote fake manufacture – note this week’s headlines, ‘Abans to promote ‘Made-in-Sri Lanka’ and ‘Hayleys Fabric looks to move to higher-end textile manufacturing’ Meagre promises that never see reality (see ee Industry).

• Just as evidence mounted on the US assassination last July of Haiti’s President Jovenel Moïse, the USA’s premier printed parrot, New York Times began a new series (The Ransom): on how France devastated Haiti’s economy by forcing Haiti to pay massive reparations for the loss of slave labor after enslaved Haitians rebelled, founding the world’s first Black republic in 1804. This tremendous defeat of European colonialism, resulted in England shifting its plantation slavery games to Asia, to Sri Lanka, India, etc.

     Sri Lanka shares a proud history of centuries-long resistance alongside Haiti, as noted by historian and Philip Gunawardena biographer Ananda Meegama (ee 08 August 2020). The assassination of Haiti’s President follows the earlier kidnapping of their President Aristide by US, Canada and France.

     Meanwhile, Mexican President Obrador may skip the US Summit of the Americas June 6-10 in Los Angeles, if US President Biden fails to invite Cuba, Venezuela & Nicaragua. He says the US blockade of Cuba is ‘genocidal.’

continued on: eesrilanka.wordpress.com

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