Opinion - Page 6

Sanctions Fuel the Fire at Cuba’s Matanzas Oil Storage

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On August 5, a major oil storage facility in Matanzas, Cuba, 65 miles east of Havana, was hit by lightning. A tank that contained 25,000 cubic meters of crude oil caught fire after being struck. Since then, an enormous fire has been raging in Matanzas. Lieutenant Colonel Alexander Ávalos Jorge, deputy head of Cuba’s fire department, said that it was impossible to estimate when the fire would be completely extinguished. This tremendous explosion and hard-to-control fire has led to several people being reported missing (including firefighters), many others injured with severe burns, and hundreds more evacuated from their homes. Cuba’s president, Miguel Díaz-Canel, rushed to Matanzas on August 6, interacted with the local officials who were trying to get the fire under control, met residents of the town, and the next day, interacted with the press and spoke about the heroic work done by the firefighters and the solidarity of the Cuban people. “We are going to overcome this adversity,” he said.

Four of the eight tanks at the storage facility have been impacted by these fires. By August 8, Matanzas Governor Mario Sabines Lorenzo also confirmed that three tanks had been compromised. Clouds of dust now hover over the island. Elba Rosa Pérez Montoya, Cuba’s minister of Science, Technology, and Environment (CITMA), said that scientists from various backgrounds were monitoring the situation to see if the smoke resulting from the fire will lead to any negative health effects for the residents of the surrounding areas. As of that point, she said, “We have no evidence that there are effects on human health.” Nonetheless, strange substances have been detected in the water supplies in Yumurí Valley, Matanzas. Diosdado Vera, an 89-year-old farmer, showed journalist Arnaldo Mirabal Hernández the unusual color and odor of the water in an old bathtub that serves as the water source for her cows. “There are approximately 3,200 particles in the air right now,” said CITMA Minister Pérez Montoya. “The clouds have sulfur dioxide, nitrogen dioxide, carbon monoxide, among other substances that are falling on Matanzas, Mayabeque, and Havana.” Meanwhile, Pérez Montoya said that a team of scientists is investigating the strange substances found in the Yumurí Valley.

This tragedy has also had immediate repercussions for the entire population in the province of Matanzas and the whole island of Cuba since it affects their electricity supply and access to health care, which already are strained under the weight of the U.S. blockade, due to lack of availability of spare parts and scarcity of medicines in Cuba, respectively.

The fire has already led to the Antonio Guiteras thermoelectric plant in Matanzas being out of service due to a shortage of water and the contamination of the water cycle. This will likely lead to severe electricity outages amid record heat waves this summer. Ricardo Ronquillo Bello, president of the Union of Cuban Journalists (UPEC), tweeted that this tragedy will be “another test for Cuban journalism that will know how to honor with its humanism and social responsibility.” Ronquillo was referring to the onslaught of fake news that swept through social media, leading to a sense of alarm during an already difficult period.

In this dire crisis, the people of Cuba and their government have responded immediately, and this has resulted in on-site efforts to contain the fire, prevent a major environmental disaster, and keep the population safe. It has also led to a call for international aid and solidarity. The governments of Mexico, Venezuela, Russia, Nicaragua, Argentina, Chile and several others have promptly offered material aid, and some countries like Mexico and Venezuela have also sent experts and firefighters to confront this complex situation. Cuba’s Credit and Commerce Bank (Bandec) has set up an account so that people in the country can donate money to the people of Matanzas.

“Cuba is Matanzas,” said President Díaz-Canel, in the context of both the impact of the fire on the entire island and the solidarity that is visible across Cuba.

Sanctions

The U.S. blockade of Cuba fuels the fire that rages on in the country, despite denials by authorities in the United States. The U.S. government has both been stiffening up the blockade of Cuba and denying that sanctions have any impact on the functioning of the country (in fact, in 2021, then-White House press secretary Jen Psaki had said that the problems in Cuba are not due to the U.S. sanctions but rather are due to “the Cuban government’s economic mismanagement”). The U.S. Embassy in Havana has made assurances that the blockade authorizes U.S. entities and organizations to provide disaster relief and response. But organizations tell us that this is not the case, with the 243 sanctions imposed on Cuba working as a stranglehold against pursuing any activity in the country. Many of these organizations say that the process to send aid to Cuba is lengthy, with a licensing regime in place that requires expensive lawyers. Cuba’s inclusion in the state sponsors of terrorism list means that banks in both the United States and abroad are reluctant to process humanitarian donations.

While Washington says one thing and does another, the firefighters in Matanzas—aided by the reinforcements from Mexico and Venezuela—have been spraying foam on the fire to prevent it from spreading further, and helicopters have been pouring water on the other oil tanks to stop them from combusting. Even after the fire settles and the ashes remain, Cuba will struggle to rebuild these tanks and to solve its energy crisis. These are not merely domestic problems but rather are problems created and exaggerated by the harmful U.S.-imposed blockade that has been in existence for the past six decades.

Not long after the lightning strike, users on social media shared the hashtag #FuerzaMatanzas (be strong, Matanzas) on various platforms. Within 24 hours, the hashtag was shared by nearly a billion users, according to Dayron Avello, social media manager at Clínica Internacional Camilo Cienfuegos. A billion people have signaled their support for Cuba, a solidarity the U.S. blockade is unable to prevent.

This article was produced by Globetrotter.

Sri Lanka: Lest we forget, not Gota, but the political system failed the country

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5 mins read

Gotabaya Rajapaksa made mistakes as the President of the country, and grave ones at that too. Some of his decisions were ill timed and ill informed. Some decisions he should have taken, were not taken. The country is witnessing the aftermath of these decisions and non-decisions.

However, he cannot be held solely responsible for the disastrous economic situation in the country. He did inherit a nation in debt and low GDP growth. His predecessors too are at fault for the economic policies they followed. One of them has now become a pontificator of good governance although he did not even offer an apology to the country and to the families of hundreds who died a preventable death, let alone taking responsibility for a major security lapse that he, as President and Defense minister, should have taken responsibility for. That President, along with the current President who was then the Prime Minister, presided over a decline in economic growth from around 7% to 2.7% during their tenure, and a rise in foreign debt from 70% of GDP, which itself was a very high figure, to 96% of GDP at the end of their tenure.

Many in Sri Lanka have now become experts in politics, economics, budget management, and you name it, virtually everything and anything. Mostly with the benefit of hindsight. Some of these expert voices were not heard when the country progressively hurtled down the path of unsustainable debt. There was no sign of an Aragalaya then, although the issues that were brought to the forefront by the various shades of Aragalaya, were there then, as they are there now.

Not many questioned the unaffordable availability of luxury consumables, all imported with borrowed money. Not many complained about the avalanche of vehicles imports. Not many seemed to mind the loss-making State enterprises like Sri Lankan Airlines and the Petroleum Corporation, as long as the planes flew, and subsidized fuel was provided in abundance. There weren’t many who voiced concern about the huge amounts spent to provide subsidized inorganic fertilizer. All these were funded with debt, foreign and local.

It is not one leader, whether in politics or business or academia, or in civic society, who failed the country. It was a collective failing on the part of many. It is the political system, the governance system, and the leaders it produced that failed the country.

In this context, it is unworthy of Sri Lanka to label Gotabaya Rajapaksa as the sole villain who allowed the country to fall into the abyss it has fallen. While other contributors roam free, some, somewhat disgraced, others have risen as saviors.

In this context, it is a sad reflection on the part of Sri Lankans in particular the media, to provide headline grabbing news items portraying the former President as having nowhere to go. Gotabaya Rajapaksa must come back to Sri Lanka and be afforded the security and facilities that an ex-President of the country is entitled to. If as alleged, he has committed other misdemeanors, whoever who is accusing him of such misdemeanors should take legal action and Gotabaya Rajapaksa should face the court decisions. However, he is innocent until he is proven guilty, and it is an insult to Sri Lanka and all Sri Lankans if he cannot return to the country and be protected as a former President.

He should be afforded the opportunity to provide his own defense against accusations of misuse of power, mismanagement, and any other misdemeanors.

Many seem to have short memories. They have forgotten that the country is free of terrorism and a separatist war thanks to the contribution made by Gotabaya Rajapaksa to end terrorism and war. His task was a Military one, which he achieved. Others had the task of introducing peace and reconciliation, and they were not able to achieve that lasting peace amongst the communities.

There is no question that family politics and all the negatives that come with power drunkenness reached its zenith with the Rajapaksa political family. The people and the system allowed this to happen. It is time that all Sri Lankans questioned the political system that has prevailed since independence, and perhaps find answers to some questions and find the way forward.

  1. Have the constitutions that the country has had so far, including the current one with its amendments, been beneficial to the country and its progress, economically and socially.
  2. Economically, the country is nearly bankrupt with debt levels suffocating it, with income streams severely impacted due to COVID. Do the readers think this situation is only account of COVID? If not what else?
  3. Socially, minority issues, especially aspirational issues, equality and equity, women’s rights, language issues, accountability issues, corruption, unethical conduct, etc., etc., still beset the country. Is it the constitution that is at fault or the politicians which the constitution produces?
  4. In reality, while one can boast that people, through their representatives, decide on policies that successive governments have introduced, is this so or is it a fallacy? Except at the time of casting their votes, at what point till the next election do people participate in policy determination? Even during elections, do people really discuss, debate, and decide on policies contained in manifesto’s or are they purely looking for some immediate benefit from one side or another?
  5. Do people have a choice in who is standing for elections from a political party?
  6. Are political parties democratic and is there a people-oriented process to elect their leaders?
  7. Does the system in place facilitate the effective participation of experts in economics, business, agriculture, health, education, fisheries, and other key areas of the economy in policy formulation, or is this process limited to a few “yes” men and women who say what politicians wish to hear?
  8. The cost of conducting elections is very high, with the last Presidential Election costing around Rs. 5 billion and the General Election around Rs. 10 billion. To this cost one has to add what candidates and their supporters spend on elections. The issue is not necessarily the overall cost, but whether there has been a justifiable return to the country on the investment made because of the elections, and whether the return has been more for the candidates and their sponsors.
  9. Buddhism, as defined more and more by the Buddhist institution from cultural practices rather than by the doctrinal practices introduced by Buddha, has been given pride pf place in the constitutions while other religions have been more or less “accommodated” in them. One should ask whether societal values, ethical behaviour on the part of the people as well as the elected leaders, and indeed on the part of some members of the Buddhist institution have progressed to towards the Buddha’s doctrinal teachings. The question to be asked is whether the State should be secular, and all religions treated equally, and their role limited essentially for spiritual practices as per their respective religions.
  10. Finally, while there would be many more questions that are bound to posted, challenges to what has been stated here, the objective behind posing these questions is for one to contemplate whether, despite whatever achievements of the past, the coming generations will be served well in years to come with a constitution more or less in the same vein and only cosmetically changed, or whether it is time to think outside the box as it were, and consider a constitution that will produce better outcomes rather than what 70 years of independence has delivered to Sri Lankans, then and now.

The author posed these questions in an article titled “Contours for a new constitution with a difference, for the future, not the past”

Sri Lanka: Tragedy of a Donor Darling

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3 mins read

A tragedy is unfolding in Sri Lanka. Citizens must queue for food and pharmaceuticals, vehicle owners cannot fill their tanks, and there have been rolling power outages. The economy is paralyzed, and because the country’s debts are already unsustainable, it cannot borrow. The country is suffering the world’s worst economic crisis since World War II.

The situation is so dire that millions of people have taken to the streets. The president has fled the country, and now parliament has elected a new, but unpopular, replacement. If all goes smoothly (a big if given the events of recent weeks), the International Monetary Fund can come to Sri Lanka’s aid with a rescue loan package (allowing for the purchase of essential imports) and a programme to achieve sustainable fiscal, monetary, and exchange-rate policies.

Sri Lanka’s plight serves as a lesson to other governments. When a country’s economic problems are obviously becoming insurmountable, postponing a reckoning through various piecemeal measures will only make matters worse in the end.

For years, Sri Lanka was a “donor darling,” owing to its relatively high standard of living, good social services, and robust economic growth. In the first half of the last decade, it boasted a 6.5 per cent average annual growth rate – one of the world’s highest – and very low population growth. Though economic growth slowed after 2015, it still averaged well over 3 per cent through 2019.

But at the end of that year, a new government came to power and immediately announced a large tax cut. In both 2020 and 2021, the government ran a fiscal deficit of more than 10 per cent of GDP. The annual inflation rate rose from an average of under 5 per cent in previous years to 39.1 per cent in May, and then to 54.6 per cent in June.

Worse, even with inflation already accelerating, the government announced in the spring of 2021 that it was banning all chemical-fertiliser imports. Predictably, rice production fell by 20 per cent, tea exports fell to their lowest level in more than two decades, and more than one-third of the country’s farmland was left fallow.

The COVID-19 pandemic came on top of these self-inflicted wounds, causing a sharp decline in tourist revenues, which then deepened Sri Lanka’s foreign-exchange shortage and further curtailed its ability to purchase imports. By late 2021, the situation was spinning out of control; and in May, the government defaulted on its foreign debt.

Now, Sri Lanka cannot obtain essential inputs to restart the economy until it has restructured its debt and installed a working government. Restructuring the country’s debt will be unusually complicated because a significant portion is owed to China, which does not participate in the multilateral Western-led restructuring exercises for overly indebted sovereign borrowers.

Again, the lesson for other debt-distressed countries is clear. While a country’s economic authorities can delay some of the consequences of ill-advised policies for a while through import rationing and prohibitions, price controls, fiscal deficits, foreign borrowing, and printing money, the music eventually will stop. When a government’s only remaining choice is to implement serious reforms or pursue desperate and economically irrational measures, doing the latter will merely deepen the misery and human suffering caused by the earlier policy mistakes.

Had Sri Lanka approached the IMF late in 2021 (or even earlier) and implemented the painful reforms needed to rein in inflation and reduce its current-account and fiscal deficits, at least six months of suffering could have been avoided. The country’s external debt would not have risen quite so high, and the road to recovery would not have been quite so long. More to the point, the country’s descent into complete political chaos might have been avoided altogether.

Since the start of the pandemic, the international community has appropriately been directing more attention to the plight of heavily indebted developing countries, with the G20 rolling out a Debt Service Suspension Initiative that extended some $13 billion of relief to 48 countries in 2020-21, but that was a drop in the bucket relative to needs.

Worse, there has been very little differentiation between countries whose underlying economic policies were sustainable and those whose policies would have become unsustainable without reform, even in the absence of COVID-19. Lending to a country in the latter category without ensuring that it has or will implement sustainable economic policies is not doing it any favours. On the contrary, such “support” merely postpones the day of reckoning and leaves it with an even higher debt-service burden when the time comes.

Policymakers in other economically struggling countries should take heed of Sri Lanka’s tale. The lessons can be paired with those from Brazil, which, following its 2002 debt crisis, quickly adopted the necessary policy reforms and went on to enjoy years of sustained growth. Brazil, too, had a choice between swift painful action to create the conditions for recovery, and denial and delay to put off the inevitable. Its leaders proved wiser than those who have since high-tailed it out of Sri Lanka.

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