Sri Lanka Guardian Essays

Lalith: A Beacon of Nation-building

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Following article is based on the keynote speech by the author as the President of Sri Lanka at the late Lalith Athulathmudali commemoration held recently in Colombo.

I was thinking about when I first met with Mr. Lalith Athulathmudali when he was a lawyer and a lecturer at the Law College and I was an apprentice under Mr. H. W. Jayawardena, before I took oath. The day I took oath I also invited Lalith to come to my oath party, another person I invited was another young lawyer older than me and a member of Parliament Gamini Dissanayake. I had two other members of Parliament I invited since I knew them. One was the Chief Opposition Whip, Mr. R. Premadasa and finally, the Leader of the Opposition Mr. J. R. Jayawardene.

I think the destiny of the country and the UNP was to a large extent tied to the interaction between all these members. Lalith, like me and Gamini, was eager to see a modernized UNP. Now, why did I join? My family has been UNP from the start.

But what attracted me as a modern UNPer was what was called the Kalutara Declaration of the 1963 UNP Convention which was a draft done by Dudley Senanayake and J. R. Jayawardena which laid the ground for social democracy.

We had envisaged as a party from the time of Mr. D. S Senanayake for a capitalist economy and the fact that we wanted to do away with hunger, illiteracy, and disease. That was in 1947.

The next most important part was trading. The trade was given over to Lalith. Later on, shipping was added that the other major project, which is to be the impetus for the development was one was going to be the greater Colombo Economic Zone with the President kept for himself and the other one was the Mahaweli program which had given to Gamini Dissanayake. that is how we started. Lalith’s job was trade.

It didn’t have the flash of the other jobs, but nevertheless, it was important. And he opened up the trade the Greater Colombo Economics. At that time we were a socialist economy, everything was controlled and President Jayawardena wants to go decided to proceed cautiously. And what did he do? He took seven electorates in the Gampaha District starting from Negombo and ending with Biyagama where the normal laws of an open market economy, were applied and special concessions were given in the two investment zones of Katunayake and Biyagama.

But Lalith realized that we can’t get export only from those areas. We need to have the rest of the country. Therefore, he started the Export Development Board to promote exports outside the economic zone.

So he undertook the development of Sri Lanka’s main port, the Colombo port. So you are getting into that two big areas of development around Colombo. On one side was Colombo, the trading hub, and Colombo, the port connected to Colombo was on the other side, the Greater Colombo Economic Zone then into the rural areas came this massive development program which really developed the north central province, parts of east and the whole of the Kandy district.

So these were the driving forces of growth that went along .then as it went on., I was then the Minister of Education Lalith came up with this idea of scholarships for those who want to go to the university. So you had the Mahapola scholarship. It is the first time that we funded individuals for free education and not the institutes.

Unfortunately, we didn’t carry it through with our institutes. And you have, the universities which are today taking money directly from the government and which have not developed, unfortunately, structured around the UGC. I think we have to rethink all mechanisms rather than the countries which funded the student who funded universities and therefore the courses had to be employment oriented.

But in addition, the universities run their external courses so they are external students and every year we had to take in about additional 10,000 people which contributes to the 500,000 excess in the government service.

So anyway, he started the Mahapola scheme to go ahead. So these are what we have to learn of the changes that we have to do now, keeping free education and making it more meaningful. Then came Lalith’s next stint as the Minister of Agriculture where he started modernizing the villages and looking at modernizing agriculture and looking at exports and then his stint as the Minister of Education.

Another one in the picture is Lalith as the Minister of National Security. Much had been said of this, so I will not cover that. I will look at the contribution he made both to the economy and to the development of Sri Lanka. It was then in 1991 that we all parted ways. Lalith decided he will leave the UNP and I thought that I will stay with the UNP.

That the party mattered and the party had to be strengthened. He felt there had to be changed and that he had to go out. And then the politics of Sri Lanka took a different, state altogether. By 1993, Lalith was assassinated. That was a great loss to the country. Within a week, President Premadasa was assassinated. And by the end of next year, Gamini was no more.

So the drivers of the development, the people who were to shape the country were no longer there. And then we had to look at a new phase. By that time, the world was also changing. The whole concept of social democracy had gone further forward. And it was known then as what we call today a social market economy.

When I became president, it was partly because we didn’t follow Lalith’s advice. He said you export or perish. We didn’t export, so the economy perished. Now, the whole issue was how do you restart it again? What is the type of economic model? Are we going in with a completely open new liberal model or something else? So I thought we should stay on with the social market economy and define it should be vibrant. It has to be vibrant.

It cannot be otherwise. And we developed what was relevant for today, a highly competitive economy with social protection. So the economy has to be highly competitive, highly competitive globally. Then it had to be an export-oriented economy. We’ve included in that for the first time what Lalith said, export or perish. And we brought in an issue which was not important that the time Lalith was living or the others. But today, climate change and environmentally friendly, green and blue economy, the green and blue economy, a word that was given to us by the late Mangala Samaraweera at that time, And finally, what Lalith again laid the ground for and what I also work for and what we did to the digital economy So it’s a highly competitive economy, which is export-oriented, which has social protection which is environmentally friendly, and the characteristics is a blue-green economy.

It doesn’t apply to the government of today, and a digital economy. This is what we have. Now we have to go ahead. We can’t be begging anymore. We can’t be going to countries and asking for loans anymore. We have to learn to stand on our own feet. When India fell in 1991, I was the Minister of Industries at that time, they decided to come up by themselves. Deng Xiaoping in China decided that he’ll bring the country up. Japan destroyed by war with the atomic bomb decided to come up by itself. Now, what the hell we are doing; Getting aid all the time?

I certainly don’t like to recreate a beggar nation. We must now in our own effort get back. There is no other way. We can’t aim low. We are looking at a 25-year programme. Many of us won’t be there when it ends. But we, as a nation, are going to complete 100 in 2048. I was born in 49, then we were second to Japan. Today we are just above Afghanistan. Now, where are we going? Let us make up our minds that we are going to build this economy and we can do it.

It’s an open market economy, highly competitive. It won’t come overnight. Gradually over a period of five years will build up our competition. We must aim for five years to sustain a growth of 7%. Easier said than done, but it can be done and international trade as a percentage of GDP must equal 100 or more. We are not doing it overnight, but certainly, over 5- 6 years, which we have to do.

And the annual growth rate from net exports should be $3 billion. Investment annually must be $3 billion and we have to create an internationally competitive workforce, highly educated and highly skilled. It has to be employable skills, not otherwise. So all this is what we have to aim at and we have to go for it. Then what is it? Before that, we have to stabilize the economy.

So we started that process in 2023 our fiscal stabilization program envisages, the government revenue increasing to around 15% of GDP by 2025 and from the present 8.3% at the end of 2023. If you look at an economy with social protection, I think our revenue will have to go beyond that to about 18% of the GDP.

But that can take another five years. We need that. We have to do it. Then we are looking at a primary surplus of more than 2% in 2025.

We are to improve thereafter we have to reduce the public sector debt from 110% of the GDP to 100% of the GDP in the medium term. We have to bring inflation under control and a single-digit and interest rates I presume have peaked and will gradually come down to a moderate and single-digit level.

And the exchange rate in this will become stable and strong with this has to come the growth-enhancing structural reforms. So we are not looking at the four years for the stabilization program and the modernization afterwards is running to get there. It’s supposed to start next year but we’ve already started getting the stabilization program and starting the structural reforms also at the same time.

So this is where we are and one wish on the structural reforms because my friend honourable Charitha Herath had raised it in the debate. Unfortunately, I was not in the chamber to reply. Yes as the policy, we accept that the government should not be running businesses at full stop. Except for one which is an exception, we will stay in the financial sector, we will build the banks we own and make them stronger, but it will be run like any good commercial bank and we don’t mind giving a part to the minorities shares to the deposit holders, amongst others.

File photo of young Lalith with beloved mother and father at Oxford [ Special Arrangement ]

It will bring some discipline in. So the financial sector. Yes, well, you control it with the financial sector. Not with the water’s edge or the Hilton Hotel. That is secondary. So we will keep building on our financial sectors we don’t mind helping out in the technology sectors. The digital economy will have to have some investments there. But the rest, yes, we have tried everything.

We tried state ownership. We have tried mixed economies. We tried to run it with corporations, that trillion of rupees that we have lost and we made us poorer than we were in 2019. So that is what we are going to do. And when you look at the future, one of the biggest new areas of development in Sri Lanka is as a logistics centre. Sri Lanka can be a feeder to most Asian countries, a transhipment hub first is the Colombo port.

Now we have got the south port very soon. We will have investment for the east terminal. And when that is full, the next project we are working on will be the north port, which will take all the way up to Ja-Ela making it the largest port. And from Ja-Ela only five miles away from the airport, you get an Air-sea hub naturally.

Then Hambantota another port, which can we reach out to Africa and Trincomalee on the eastern side of the Indian Ocean. So here we are. This is what we have and we have we are starting at that. Now that is what Lalith started. Secondly, large-scale modernization of agriculture small or big we have to modernize agriculture.

Which will aid the largely rural areas to increase our paddy production. We have a big market for export. The Middle East requires food. Singapore requires food and many other growing markets. There would be at least 500 million more people from Saudi Arabia to Indonesia by 2050 not counting the hundreds of millions in East Africa and South Africa. That’s the area we are looking at highly automated manufacturing because Lower-Wage economies will be in Bangladesh, Myanmar and even in India. We have to jump ahead. Our tourist industry has to now reorient itself to high-level tourism. We can’t have 10 million tourists coming in paying $100 to $150 a night. It’s better to have 2 million tourists at $ 500 to 1,000 a night.

So let’s see how we can build this society. Last time when Lalith, Gamini, Premadasa, Jayawardene, and all of us started, it was derailed by a war. I don’t think there is going to be a war in the country but the consequent, after-effects has to be actually rectified. And we decided after the budget debate is over in the following week that the party leader and the Speaker will meet and the Government to discuss how we can resolve the outstanding issues.

So that one thing we can all work together if you remember a large number of people who have graduated, thanks to what Lalith has done, so let’s work together both for the University and for a better Lanka, where those who graduate, those who post-graduate degrees from that university can exist.

Global Peace and Humanity: We, the People are Victims of Failed Global Leadership

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Cop 27 has just ended in Sharm el-Shaikh (Egypt) without any candid measures to deal with a readily available “Time Bomb”, of climate change affecting all and everything that is living on Earth. Nations and leaders made promises at COP 26 GlasgowConference but never took practical steps to lower the fossil fuel emissions, greenhouse effects and depleting lifelines of sacred Earth. The media would call this perversion from reality – ‘politics of broken promises, business as usual. Do they not understand the vitality of a healthy Earth and functional systems of Nature within a splendid Universe?  Do they know how the Earth, the seas, water, air and life and all other beings were created?  Have they talked about how the Earth functions, how the water flows and how the seas exist and how oxygen generates and sustains human life?

To avoid any conflict between Man and the Nature of things, the leaders and climate experts must comprehend how the planet Earth exists and moves at its axis and rotates at 1675 km per hour or 465 meters per second which are 1,040 miles per hour. The Earth’s circumference at the equator is 40,075 km. And the length of time the Earth takes to complete one full turn on its axis is 23.93 hours. And how do all living beings get lifelong nourishment within the splendid Universe? Were they all talking and listening and doing nothing to avert the catastrophic consequences of their own failure?  Is that not what happened at COP 26 too? Not to mention the COVID-19 Pandemic and its ongoing critical impacts on all aspects of human affairs. The G20 showcase galvanized the media coverage of the few who could speak and impress others with persuasive voices of ingenuity but without any rationality to console mankind with substantial remedies, be it climate change, the war between Russia and Ukraine, supplies of gas and oil from Russia, food scarcity and global peace, conflict resolutions or future-making. It is repulsive to suppose universal harmony can be enhanced by profligacy, malevolence and the horrors and miseries of unthinkable multitudes.

The sanctity of human life is grounded in the realization of peace, dialogue and co-existence. The ongoing conflict between Russia, Ukraine and the West is one of the single factors in perpetuated global disharmony and socio-economic and political disorder.

To stop the war in Ukraine, the US, the EU, and NATO should have direct face-to-face communication with President Putin. …….It is logical when people of diversity and opposing ideals come to talk directly, tensions and evil mongering are reduced to reason and mutual interest. This has not happened except for military options for weapon supplies and the enlargement of the scope of regional conflict.  Time and history will not forgive nor forget any of the leaders if they failed to agree to an immediate ceasefire and peace deal

Are we living in an era of false truth, feigned piety and alternate transient facts of human affairs? Those occupying positions of influence generate ideas and narratives which are often drawn from people who are ideologues of self-interest, contradictions and misrepresentations across the global landscape.  Dr. Rudolph Hansel (“Returning Man to Nature. Paul Thiry d’Holbach. “The essence of man is to feel, to think and to act” Part II” Global Research: 11/08/22),  shares an in-depth look at Paul-Henry Thiry d’Holbach (1723-1789), one of the leading figures of the French encyclopaedists, in his book “System of Nature”, published in 1770:

Let man, therefore, cease to seek beings outside the world he inhabits, which are to provide him with a happiness that nature denies him: let him study nature, learn its laws, and contemplate its energy and the unchanging way in which it acts; let him use his discoveries for his own happiness, and tacitly submit to laws from which nothing can escape him; let him refrain from inquiring into the causes which are surrounded for him with an impenetrable veil, let him bear without grumbling the decisions of a universal power which can neither turn back nor ever deviate from the rules which its nature prescribes for it.

Global Leaders Must Listen to Voices of Reason and Intellect for Peace and Conflict Resolution

Effective leaders are people who know their strengths and weaknesses and are always open to listening and learning from the masses. Those who pretend to be wise and super beings are on the wrong side of time and history. Leaders must recognize the limits to time and place for change. Our conscientious culture, hopes and ambitions are evolutionary and continue to be changing and evolving for a sustainable future. Truth is ONE, it cannot be divided into numbers of votaries, that is, We, are One People, We are One humanity under the dreadful impacts and consequences of an invisible enemy set to dehumanize all the mankind on this planet. We should be looking for an informed conscience not a default of an enlightened conscience to restore trust and societal confidence that the COVID-19 pandemic is medically and spiritually treatable, War between Russia and the West (NATO and the EU), Ukraine being the object can be stopped, supplies of natural resources can be restored to normalcy, climate change can be understood and remedies can be implemented, Kashmir and Palestine -Israel future can be resolved peacefully, and we can be reconnected as One People and One Humanity without egoistic politics of the few.

Most contemporary leaders of the world appear to rejoice in self-centred evil-mongering, not wisdom and truth of people-oriented political systems of governance. Ideas and ideals that defy reasoning and truth are gushingly operative in the aerial bombing of the innocents in Syria and inhuman displacement of civilians, forced confinement and torture of masses in Kashmir by Indian-occupied forces, Palestinians under Israeli occupation, Saudi Arabian-UAE led war against the poor people of Yemen, and almost a million forcibly evicted Rohinga Muslims from Mynamar (Burma). The UNO is just a symbolic title, not a force to transform conflicts into peacemaking optimism. We, the People of the globe ask all nations on Earth to recognize our strengths and weaknesses for unity of minds for change and adaptability to the making of a people-oriented future in peace and living together as people of reasoned conscience

We can do it, we are One Humanity– we cannot be divided into segments of geography and history as numbers. We the People, We the Humanity are connected to all other things within the God-given Earth and the Universe to serve mankind. This gives knowledge, soundness and power to reason and forbidden truth in the current global affairs.

We, the HumanityLook for Peace, Solidarity and Security

The planet Earth is not a dead orbiting object but a living entity providing continuous nourishment to human life and existence to all other living beings. When nations and leaders subscribing to political absolutism start acting like God and challenge the sanctity and limits of the Laws of God; historically speaking they become an object of unthinkable natural calamities-earthquakes, wildfires, floods, deaths and destruction. The Divine Revelations (The Qur’an: 40: 64), remind us, who we are and what relationship do we enjoin to Earth and its sustenance that supports our life and existence:

It is God Who made for you the Earth as a resting place and the sky as a canopy; and has given you shape and made your shapes beautiful,                                             

And has provided for your Sustenance, of things pure and good;  Such is God your Lord. So Glory to God, The Lord of the Worlds.

We must connect people to people across the globe to be active participants in delivering a new and more viable common future of unity, happiness and future-making. They used to export weapons to wage wars, now exporting wars and media propaganda and are profiteering from the emerging crises all over the globe. Replacing human consciousness of peace and security with repulsive ideas of despotism, the warlords are corrupting human values, new-age visions and concepts of healthy standards of peaceful co-existence as they see it as a threat to their plans.

Caitlin Johnstone (“We never really had a chance to build a healthy world” Information Clearing House: 09/11/22) is a courageous Australian thinker and writer and author of Woke: A Field Guide for Utopia Preppers.  She outlines a candid message of human suffering:

And we wonder why everyone’s so dysfunctional and self-destructive. ….We never really had a chance to build a healthy world. Our ancestors went from running away from monsters with sharp fangs to burning witches and heretics to fighting world wars to giving birth to us, and that wave of fear and chaos carried forward right into our own psyches and into the psyches of everyone else on this planet without skipping a beat. If you look at where we came from and how we got here, it’s amazing we’re even as functional as we are.

So we’re all innocent, in the end. Again, we must of course push to bring consciousness to the parts of humanity that have taken a wrong turn — to the war criminals and plutocrats and managers of empire, and all other abusers and the abusive systems which elevate them. But underneath that fierce burst of light there can also be a deep compassion and understanding born of a lucid seeing of how we got here in the first place.

We know fossil fuel emissions, oil spill-overs, deforestation and technological destruction of life and earth can be reduced and managed but none will dare to initiate the remedial measures for change. We know global political problems can be resolved through dialogue but none will take action to communicate to perceived enemies. We know COVID-19 Pandemic could be managed as did Ibna Sina (Avicenna: Canon of Medicine), during the 10th century of herbal medicine. Why are the global leaders, scientists and so-called smart experts shame of not exploring other workable remedies for a sustainable future? Knowledge and sciences are not fixed entities. We the People must reason for an instinctive recognition of social, economic and political injustice across the globe and logically try to transform the world of political wickedness, disharmony, socioeconomic and political deprivation and exploitation into a world of moral, intellectual and spiritual reasoning and be passionate and hopeful for constructive changes in thoughts and behaviours – be it the policing or the masses march on streets and halls of fame, our aim and wisdom must be focused on purpose – a different and a better world of tomorrow and continuous change to be monitored and assessed by the people of knowledge and reason to ensure that we do not cross-over the limits of the Laws of Nature deserving punishment from God –  the Creator and Sustainer of all the lives, the Earth and the Universe that matter to us all as human beings.

The Four Front+ War or World War III: A Sketch

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The dysfunctional, aged President of the United States slowly made his way up to the rostrum in the US House of Representatives. All 535 Members of Congress were in attendance along with US Supreme Court justices, senior military leadership from the Pentagon, plus members of the president’s cabinet. The event was the annual State of the Union address. The venue was the US Capitol building. Tonight, on a blustery January evening, the president’s remarks would focus on the status of the 4+ front war that the United States and its proxies were engaged in, the economic crisis, and the need for sacrifice and tough decisions. Most americans were dealing with food, product and gas rationing. Wage and price controls were in effect. Antiwar protests in America’s big and small cities was a daily occurrence. Crime rates had soared: murder and theft could not be contained. The chamber was somber. No applause took place even when the president was announced by the Sergeant of Arms to the collective assembled in the Capitol building: “Ladies and Gentlemen, the President of the United States.” You could hear a pin drop.

Outside on that unusually cold  and windy night stood one thousand DC national guard soldiers  who had formed a ring around the Capitol building. Machine gun emplacements were stationed at key spots around the building. Snipers from the FBI, Secret Service and the Homeland Security were assigned to the tops of nearby buildings. Missile defense systems were setup atop empty parking lots nearby the People’s House and the Supreme Court. A second ring of security was arranged and this one included thousands from the DC police force and nearby jurisdictions in Virginia and Maryland. Undercover operatives were infiltrating the crowds of protestors who braved the wickedly cold and windy night.

The security forces ringing the Capitol complex could see the glow from fires set by rioters. Those rioters were angry about shortages caused by a war which the US instigated some years back. Stores that carried any food or clothing were being looted despite armed security guard’s presence. The rioters would just shoot them and carry on with the looting. Office buildings were not immune. Groups of Blacks, Whites, Latinos, Homeless and vagabonds had formed militias to carryout their tasks. Fires were set as if to say: “The Roof is on Fire, Let the MF Burn.”

On that freezing January evening, paramilitaries stationed in the two rings ostensibly protecting the People’s House wished they could have been assigned duty to fight the rioters so they could be near the warmth that the fires provided.

One national guard member was looking up at the stars in the sky and thought it was a comet, then there were three more. “Cool,” he said. And as soon as he got the “L” out of his mouth to finish getting out the word “Cool” he noticed a stream of light heading toward one of the comets. The stream of light met the comment and exploded. But now he saw that the other comets were moving faster and towards the Capitol complex. Those in the two security perimeters who had a view of the sky were no longer cold. They knew what was in store for them. Some ran to the streets, some tried to make their way into the People’s House where an underground trolly connects the House and Senate buildings.

A few minutes before the national guard member notice the comets in the sky. The millions around the USA viewing the State of the Union were in for some real entertainment. The president was grabbed and escorted, or rather carried out, and taken to a tunnel that runs from the Capitol building to the Pentagon and White House. Screams could be heard and the elite of the country scrambled around like ants, rushing for the exits or the basement of the Capitol building. Simultaneously the millions in the USA must have been surprised when at the bottom of their television sets appeared, “This is not a test…” Handhelds everywhere began beeping with the same message being broadcast.

The National Security Agency blanked the broadcast but some feeds from the chamber still managed to appear. The floor of the Capitol was like a punk rock mosh pit. Uniformed and suited officials jumping all over each other to get shelter somewhere. Some just stayed in their seats not bothering to move. They knew what was coming. A well known US Army 4-star general, just sat there, not moving an inch. He had waved off his security detail and saluted them.

The 4-Star had protested vehemently in White House security meetings that launching US nuclear weapons at, and on, Saint Petersburg, Vladivostok, Pyongyang and Teheran would be the worst decision in the history of US governance and would not change the situation on the 4+ fronts that the USA was fighting and losing. It was time to accept the stalemate and rush to the negotiating table before Hell was called up.

A 300 kiloton nuclear warhead had hit almost dead center on the Capitol Hill area.

The national guard member outside who thought they were comets finally realized what they were. He took out his firearm and started shooting at it. He saw a bright light, felt a slight sting and then nothing.

Path to Oblivion Over a No Name Country

The tabletop eggheads in the Think Tanks, the anti-Russian-Chinese-Iranian-Asian racists in and throughout the US government, and military, were aching for a conventional war with Russia and they got that sometime in 2023 after the Russians pushed Ukrainian forces all the way to the Dnieper crushing themas a functional military. Ukraine now had control over the western part of Ukraine. Russia had destroyed Ukraine as a viable nation in spite of the entirety of US NATO support.

“Something has to be done,” the American gangsters in Washington, DC argued. And so it was that in 2023 that the conventional war campaign began against Russia. Expecting total victory and the Russia’s government to fall, US and NATO operatives were put in place through Russia to conduct subversive operations: sabotage and inciting violence and revolution were their tasks. Already the American and Western mainstream media outlets had softened up American minds through their daily print and digital products to demonize Russians and distract Americans from the facts on the ground.  The mouthpieces of the US government and business—the New York Times, Washington Post, Wall Street Journal, CNN and the like—did a bang up job at their tasks. They did so well that that they turned the American public into a collective Chance the Gardner from the movie Being There.

The Beginning of the End

The attack on Russian forces in the east of Ukraine began with the Suppression of Enemy Defenses (SEAD) usingelectronic and networked EA18G Growlers, F-35’s, F16CJ’s who swooped in from the West and south in an attempt to take out Russian S400-500 SAM sites scattered throughout the new Russian provinces in the East.Sea launched US cruise missiles, and high flying B-2/B-21’s made for the skies over enemy territory and plied their wares. Power grids were hit, the Kerch bridge was destroyed. The American pilots in their USAF F22’s and F-15 Grim Reapers kept the skies clear for a time.

On the ground Russian T-90 and US M1A1 Abrams tanks took to battle against each other with mixed results. Accompanying Russian troops was the 9M133 Kornet while US soldiers carried Javelin anti-tank missiles. These two weapons proved to be deadly for the tank warriors on both sides.

The tide began to turn when Russians started to take out USKC135 refueling aircraft and strike US-NATO logistics chains running at sea (ships) and air to ground level (rail-road-parachute drops of gear). The Russians used long range missile fires to do the job. As they typically do, the Russians used their vast territory and knowledge of the terrain to wear down US troops coming in from Romania (101st Airborne) and Bulgaria (British, etc.) The Russian ultimately regained the initiative and began a slow push back push back the gains the US and its proxies had made in Eastern Ukraine. In short, they fought their way back to the banks of the Dnieper thanks to help of other countries unexpected actions that had the result of stretching the US to the breaking point.

It turned out to be a simple problem: The US-NATO alliance could not supply its armed forces or protect its supply chains. The countries of South America, Central America, India and Africa refused to assist anyone. They sat the war out and waited for US-Western hegemony to be defeated.

These and other factors caused the American governing elites to proclaim there was an existential threat to US hegemony and way of life.

Quick Summary: Four Fronts +

The USA had counted on the conflict being confined to Russia-Ukraine but, as usual, the armchair warriors did not think of broader and unintended consequences.

Initially the Russians had difficulties dealing with the US invasion. It needed time to adjust. China could read the writing on the wall and knew that it was next on the sanctions-invasion chopping bloc. China to supplied Russia with thousands of drones large and small, small weapons and ammunition. It secretly sent troops to fight along side Russians on the ground. More importantly it sent some of its aircraft and pilots to muck up American air forces in the skies. The US pilots were stellar but they could not get reloaded with ammunition and fuel quick enough to get back into the fight. Aircraft based on carriers were particularly vulnerable. The US Air Force would often return to land bases whose runways were pocked marked from Russian or Chinese munitions.

Belarus, a Russian ally entered the war from the north pounding into the cities of Kiev and Kharkiv and pushing their way south to hookup with Russian forces,

With the US bogged down in the former Eastern Ukraine, other countries decided to settle scores.

Israel went ahead and conducted air and missile strikes on Teheran’s nuclear facilities, power grids and ports.  It also hit Damascus. Iran immediately responded by launching missiles at the Suez canal and Bahrain (home to the US 5th Fleet). They caused some damage to US war ships incapacitating them in the Straits of Hormuz. They also launched missiles into Tel Aviv and Jerusalem. The oppressed Shia in Bahrain revolted. Hezbollah invaded Israel with its Iranian proxies. Americans and Russian ground units in Northern Syria started fighting against each either. The Palestinians went into urban warfare mode against Israeli troops and settlers. ISIS remnants took opportunities to kill and loot wherever chaos reigned, which was just about everywhere. Someone in the White House said, “Send in the Marines” to Iran in amphibious attacks. And so they went. The Marines were successful in the beginning taking some territory but Iranians can fight too, and they did. Not since the Korean War had the Marines had to fight against human waves in the thousands.

North Goes South

A blistering artillery assault took place on Seoul destroying parts of the city. The US responded with its standard SEAD air attack knocking out the aged SAMs and aircraft North Korea possessed. That was good news but the North Koreans had, for years, built an underground country under the surface. Dropping JDAMs on a mountain tops or slopes where it was thought the Korean military was hiding was a waste of time and effort. The North Koreans may not have been good fighters at first, but they were fanatical and learned fast, just like the Russians and Iranians. They swarmed in human waves over the 38th parallel breaching defense lines there. US and South Korean troops met the advance and pushed back thousands. But as was the case on the Russian and Iranian fronts, the US was running out of ammunition, fuel, food: there just wasn’t enough to kill hundred’s of millions in a conventional war. Hight tech Virginia class subs were chasing inferior North Korean subs under the ocean.

With the US on the ropes losing on the other Fronts and having to transfer fighting forces from one theater to another, China went after Taiwan. The timing was right. Neither the Chinese in the PRC or on Taiwan had done any significant war making. But with three million or more soldiers that the Taiwanese and Americans would face was a mountain too high to climb. With 1.5 billion people in the PRC,  acceptable casualty rates for China would be in the many thousands. And the sheer number of equipment that the PRC, the manufacturing center of the world, could produce was astronomical. With US assistance the Taiwanese were able to hold off most of the first amphibious wave from China, though Chinese Marines were able to establish a bridge head on the shores of Changhua County. Submarine warfare proved to be critical on this front. Virginia attack class subs had their work cut out for them. China had dozens of stealthy diesel subs and the US submariners just couldn’t get them all, particularly when they were trying to defend the SLBM’s of the US fleet. The PRC was able to easily supply its troops on Taiwan as the war progressed.

The + front was in the US homeland. The American public had no interest in having its sons and daughters called up to fight in a Four Front War. As many as 100 million adult Americans opposed the war. Besides their kids would be sent to fight against billions around the globe and for what? Another war the US instigated in 2014?

When millions of Americans heard the news about the destruction of the US leadership in the People’s House, they said, “Good.”

Exclusive: Sino-Lanka Everlasting Friendship for Greater Rejuvenation

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The following essay is based on the speech made by the author at the Parliament of Sri Lanka recently, during his maiden official visit to Sri Lanka

Thank you for your invitation and it is my great honor to deliver a speech about Chinese path to Modernization and Sri Lanka China Common Prosperity here in the Sri Lanka parliament.

This is my first visit abroad since assuming office as President of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), and I choose Sri Lanka for special reasons:

——We come here for our ever-lasting friendship. This year marks the 70th anniversary of the Rubber-Rice Pact. In the 1950s, China as a newly founded people’s republic, was facing strict blockade of import by the West and Sri Lanka was facing serious economic difficulties as a result of both a crop failure of rice and the West’s control of rubber export. Under this circumstances, China and Sri Lanka came to the consensus of the Rubber-Rice Pact, which reflects the true meaning of South-South Cooperation and is the symbol of the two countries’ traditional friendship. We hope this visit will strengthen and enrich our ever lasting friendship.

——We come here for win-win cooperation for common development. Development is the key to solve all problems. Nine years ago, President Xi Jinping proposed the “Belt and Road” initiative for building a better world for all. It has now become one of the most popular international public goods and the most extensive international cooperation platform. Sri Lanka is the pearl on the Indian Ocean and an important hub along the 21st Century Maritime Silk Road. Now it is time for us to uphold the principle of Extensive consultation, Joint contribution, Shared benefits, and commit to the “Five-Pronged Approach”(Policy Coordination, Connectivity of Infrastructure , Unimpeded Trade, Financial Integration and People-to-People Exchanges)and the hard connectivity of infrastructure, soft connectivity of laws and regulations and heart to heart connectivity of people-to-people friendship, translating our traditional friendship into win-win cooperation for common development.

——We come here for the better future of the people. China has achieved the First Centenary Goal to get out of poverty in all respects and is marching on a new journey to modernization. China has the strong commitment, ability, experience to share all we have with our Sri Lanka friend to achieve common prosperity. The main purpose of my first visit to Sri Lanka is to learn who you are?what do you have? what do you need and Where can we go something together for a shared future of our two countries and two peoples.

Now, I would like to take this opportunity to share some of my views and ideas about China,and the Chinese path to Modernization and where for us to go together in the future for China Sri Lanka win-win cooperation.

  1. Who is China?

——China is Old and Young

• An ancient civilization of more than 5000 years history with Four Great Inventions of printing, paper making, compass and gun powder.

• A young republic of 73 years and 44 years of reform and opening -up to the outside world.

——China is Big and Small

• Over 1.4 billion population with 56 ethnic groups.

• No.3 land size of 9.6 million square km, but less than 1/3 of world average in per capita arable land.

• 17.7 trillion USD GDP in 2021 but every achievement we made shared by over 1.4 billion population is small.

——China is Not Developed but Very Promising

• Per capita GDP 125,50 USD in 2021. Ranking 68th in the world according to the World Bank.

• In most of the ancient times, China was the biggest economy in the world.

• In 1820, China’s GDP accounts 1/3 of the world.

•But unfortunately to say that we closed our eyes and felt sleep when the western industrial revolutions took places. In 1840, China felt into a semi-colonial and semi-feudal country after the Opium War.

• In 1921, founding of CPC and changed the destiny of the Chinese Nation.

• In 1949, founding of the PRC, China’s GDP was only 17.9 billion USD.

• In 1978, China’s reform and opening-up. China’s GDP was 149.5 billion USD( 1.79% of the world, 6.33% of the US, 14.8% of Japan).

• In 2001, China joined the WTO. China’s GDP was 1.34 trillion USD( 4% of the world, 12.7% of the US, 31.2% of Japan).

• In 2010, a year of great significance, China’ GDP was 6.09 trillion USD(9.2% of the world, 40.6% of the US), surpassed Japan as the 2nd largest economy.( 2014_2021)

• In the past 10 years of the New Era, under the strong leadership of President Xi Jinping, China has made historic achievements in development and undergone historic changes in the country:

  • China’s GDP has increased by 126% compared with 2012, reached 17.7 trillion USD in 2021(18.5% of the world economy, 77% of the US, 356.7% of Japan), contributing over 30% to the world economic growth annually, more than the combined contribution of all developed countries including the US, the EU and Japan. China has become the largest trade partners with over 140 countries and regions, become one of the largest FDI destination and one of the largest sources of FDI and tourists worldwide.
  • China has applied a new development philosophy. Historically, China felt sleep and missed the chance during the 1st and 2nd industrial revolution, and wake up to follow up in the 3rd industrial revolution. But in the New Era now, China has been catching up and among the first square in the 4th industrial revolution with the lead in 5G, AI and New Infrastructures.
  • China has lifted the last 100 million rural population out of poverty, having made sure more than 1.4 billion people have all gotten out of poverty, leaving no one behind and fared-welling to famine, poverty, war, homelessness and pandemic.
  • China has translated the philosophy of clear water and green mountains as better as gold mountain into reality, contributing 1/4 of the total newly added forest coverage in the world. With strict law enforcement,Air, land and water pollution are forbidden. 
  • China waged a battle against corruption on unprecedented a scale and have achieved an overwhelming victory and fully consolidated the gains in our fight against corruption. According to an opinion poll done by the Harvard University for over 10 years, the Chinese people’s approval rate for the CPC and Chinese government has been maintained over 90%, topped all the world.
  1. Why can China make such great success?

In China, it is our common belief that the key for success is Unity and Stability for Common Prosperity, andhow to get there? At least, there are 3 main reasons worth of mentioning:

(1) Upholding the strong leadership of the CPC and Socialism with Chinese Characteristics                                                                                                                                                                             

• Socialism with Chinese Characteristics not only kept the essence of socialism which is strive for common prosperity, but also solved the question of how to fully leverage the decisive role of the market in allocating resources and give a better play to the role of the government. Adhering to Socialism with Chinese Characteristics, with concerted efforts of the Party, government and people, China has created the 2 miracles of rapid economic development and long term social stability.

• The CPC was founded by the people and is the party of the people, by the people and for the people, always putting people first, the CPC has no selfish interest except the fundamental interests of the nation, country and the majority of the people. It is only such a selfless party that can unite the whole nation as one to the right road of Socialism with Chinese Characteristics and make sure all the achievement and progress China makes shall be shared by all instead of few and get the true supports from the majority people.        

•There are 2 vivid examples of the CPC’s people-centered philosophy of development:

One is the fight against poverty. Under the leadership of the CPC, China gives full play of the superiority of Socialism with Chinese Characteristics, alleviated over 850 million people out of poverty, contributing 70% of the world’s total poverty reduction and achieved the poverty reduction goal of the UN SDGs 10 years ahead of schedule. In the past 10 years in particular, under the strong leadership of Pres. Xi Jinping, China has won the war against absolute poverty and got almost 100 million people out of absolute poverty and make sure that the total population of over 1.4 billion in China out of poverty,left no one behind.

The other is the fight against Covid-19. In responding to the sudden outbreak of Covid-19, the CPC and the Chinese government  insist putting the people and their life above all else, tenaciously pursued a dynamic zero-Covid policy, China has the lowest Covid-19 incidence rate and death toll among the world’s major countries. It is estimated that if adopting to a lie flat policy as the west and US, China’s Covid-19 incidence will reach over 100 million with 1.55 million death.

(2) Adhering to the reform and opening up policy

It is well known that since 1978, China has adopted to the policy of economic reform and opening up to the outside world.

How to develop China? Reform ourselves and open up to the outside world——Why? We need jobs and well being for our people—To develop our country, we need capital input, technology and know-how.

We believe that only economic development can solve all the issues we had and will have.

We believe that only internal and external investment leads to production, only production can create jobs and promote development. Only development leads to a good life for the people.

We also believe grants can survive a country but cannot sustain country’s development, only foreign investment project can create jobs for our people and sustain our economic growth. We also believe that one foreign investment project is one vocational-technical school to train our people and drive our economy to growth.

But how to attract foreign investment to a poor country like China at that time, China is a socialist country to open to capitalist. We have had a lot of concerns and arguments.And we are so lucky to have the Chief Engineer of reform and opening up, Mr Deng Xiaoping.He said, poverty does not belong to socialism, it doesn’t matter whether the cat is black or white, as long as it catches mice.  

China opened the chapter of Socialism with Chinese Characteristics and Economic Development become the central task of the CPC since then on.

We have kept reforming ourselves, including our minds, policies, laws and systems of the planned economy that did not fit the market economy nor foreign investors, and opening up to the outside world, so as to make sure the investors’ interests being protected and more coming to China.

In 1980, the 1st Special Economic Zone in China was launched in the city of Shenzhen, a small fishing village at that time, now a big metropolis with more than 17.68 million population and the GDP of 481 billion USD surpassing Hong Kong (368 billion USD).  

From 4 Special Economic Zones (Shenzhen, Zhuhai, Shantou, Xiamen) to 14 Coastal Open Cities (1991), WTO (2001) and to now 21 Pilot Free Trade Zones nationwide and the Hainan Free Trade Port.

How to attract the foreign investment and keep them stay well? To attract the foreign investors, some of their concerns shall be answered.

Business is Business. As we know that investors look like flying birds in the sky, they are looking food to survive and safe places to live.

Preferential Policies &Law Enforcement (Legislation):

In our development process, it is the preferential policies to attract them to come and it’s the laws and Law Enforcement to ensure the investors here is safe for long term development (Legislation is very important)

Now China has the implementation of Foreign Investment Law and the Pre-establishment National Treatment (PENT) with a negative list for foreign investment, to make sure the lawful interests of foreign investors fully protected.

Foreign exchange: lack of foreign reserve and intensively controlled —from a highly controlled foreign exchange management system to the realization of convertibility of Current Account, enabling all the investment & profit been remitted inward or outward China in RMB or foreign currency.

Visas permit: from a single-entry visa for 3 months to multiple entry visa for 3 month/6 months/1 year, to permanent work permit and the permanent residence permit (Chinese Green Card).

Muti-lateral and bilateral free trade arrangements: From joining the WTO to RCEP, China has signed 19 free trade agreements with 26 nations and regions.  

(3) Sticking to the path of peaceful development and seeking for Win-win cooperation for common development

The love of peace is in the soul and blood of the Chinese nation. As the ancient Chinese philosopher Confucius said: No matter how strong a country might be, the aspiration of war will definitely lead to its ruin.The Chinese people are the peace loving one.

After the Opium War, China has been invaded by the western powers and our people keep the memory of being bullied and cherish the value of peace.

Based on the traditional Chinese culture of peace and harmony and Chinese people’s sincere hope for a better world, President Xi Jinping proposed the initiative of Building a Human Community with a Shared Future and 3 approaches to realize this grand vision of building a better world for our future generations:

• The first approach is to hold high Humanity’s Shared Values of peace, development, fairness, justice, democracy and freedom, advancing Whole-Process People’s Democracy, and building a New Type of International Relations. So far, China has established diplomatic relations with 181 countries world wide.

The second approach is to carry out the Belt and Road Initiative and Global Development Initiative so as to achieve win-win cooperation for common development. China has signed over 200 agreements or MoUs with 149 countries and 32 international organizations. More than 60 countries have joined the Group of Friends of the Global Development Initiative. The value of trade in goods between China and the Belt and Road countries exceeds 12 trillion USD. It is reckoned by the World bank that from 2015 to 2030, the Belt and Road Initiative may contribute 1.6 trillion USD to the world and help 40 million people out of poverty.

• The third approach is adhering to the New Vision of Security featuring common, comprehensive, cooperative and sustainable security and implement the Global Security Initiative, to build a world of lasting peace and universal security, common prosperity, openness and inclusiveness, justice and equity, cleanness and beauty.

With a strong leadership, unity and stability, economic, social and technological foundation, especially nationwide networks of the modern infrastructures, China gets read to grow faster and run well, providing a new option for our fellow emerging markets and developing countries.

Ⅲ. Where for China to go?

The 20th National Congress of the Communist Party of China, which attracts worldwide attention, has come to a successful conclusion recently. As a Party delegate, I’m honored to participated in the congress.

The 20th National Congress of the Communist Party of China is a meeting of great importance,make it clear the road map and blueprint on Where for China to go and how to get there. The meeting has three major important achievements:

The Most Important Achievement is Comrade Xi Jinping was re-elected unanimously as the General Secretary of the Party Central Committee and the new ideas, new concepts and new perspectives of Xi Jinping Though on Socialism with Chinese Characteristics for a New Era has been written into the Party Constitution. Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole has been established and Xi Jinping Thought on Socialism with Chinese Characteristics has been defined as the guidance of the Party.

This reflects the whole party and nation’s appreciation of the historic achievements and great changes in the past ten years and their expectations for Comrade Xi Jinping to steer the giant ship of China’s rejuvenation through the wind and waves to strive in unity to build China into a modern socialist country in all respects.

The 2nd Important Achievement is the Congress has determined the central task for the CPC for next 5 years and beyond, which is to lead the Chinese people of all ethnic groups in a concerted effort to realize the Second Centenary Goal of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization.

Chinese modernization is socialist modernization pursued under the leadership of the CPC. It not only contains elements that are common to the modernization processes of the all countries, but is more characterized by features that are unique to the Chinese context.

——It is the modernization of a huge population. China is working to achieve modernization for more than 1.4 billion people, a number larger than the combined population of all developed countries in the world today.

——It is the modernization of common prosperity for all. Achieving common prosperity is a defining feature of Socialism with Chinese Characteristics and the goal of our modernization drive is to bring prosperity for all and prevent social polarization in order to meet the people’s aspirations for a better life.

——It is the modernization of material and cultural-ethical advancement. We will both lay a solid material foundation for our people’s life and a culture of conviction and confidence for our people’s souls, in order to promote all-round material abundance as well as people’s well-rounded developments.

——It is the modernization of harmony between humanity and nature. As Pres. Xi tells us that Lucid waters and lush mountains are invaluable assets. We shall protect the nature as our own eyes and pursue a sound development path with higher production levels, better living standards and healthier ecosystems to ensure the sustainable development of the Chinese nation.

——It is the modernization of peaceful development. In pursuing modernization, China sticks to following a new path of peace, win-win cooperation for common development, instead of the old path of war, colonization, or plunder. We believe peaceful development is the keys to China’s achievements and development and we will never follow the old and disastrous roads as the west did.

The 3rd Important Achievement is that the Congress has draw the blue print and principles, new philosophy and approaches to realize the Chinese Modernization.

——To realize the Chinese Modernization, we shall adopt a two-step strategic plan: Basically realize socialist modernization from 2020 through 2035; Build China into a great modern socialist country from 2035 through the middle of this century, that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful

——To realize the Chinese Modernization, we must, first and foremost, pursue high-quality development. Development is our Party’s top priority in governing and rejuvenating China, because without solid material and technological foundations, we cannot hope to build a great modern socialist country in all respects.

——To realize the Chinese Modernization, we must follow the worldview and methodology of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era with the following 6 Musts as its core:

⦁ We must put the people first.

⦁ We must maintain self-confidence and stand on our own feet.

⦁ We must uphold fundamental principles and break new ground.

⦁ We must adopt a problem-oriented approach.

⦁ We must apply systemic thinking.

⦁ We must maintain a global vision.

. How to transform our traditional friendship into win-win cooperation for common development?

【In the report of the 20th National Congress of the CPC,  General Secretary Xi Jinping elaborated the founding mission of the CPC in the full context: it is dedicated to pursuing happiness for the Chinese people and rejuvenation for the Chinese nation and it is also dedicated to human progress and world harmony.】

Lin Songtian, President of the CPAFFC, talking to the Parliamentarians during the event at the Parliament of Sri Lanka [ Photo: Sri Lanka Parliament/ Sri Lanka Guardian]

The 20th National Congress of the CPC not only opened the chapter of the New Journey of the New Era for China, but also provided New Opportunities and New Options for other countries especially friendly countries like Sri Lanka.

The CPAFFC is China’s national people’s organization engaged in people-to-people diplomacy, featuring “Four Friendships”, namely friendship cities, friendship associations, friendship organizations and friendship personnel.

Its mandate is to give full play to people-to-people diplomacy, mobilizing non-governmental resources to promote mutual understanding, friendship and win-win cooperation between Chinese people and people from other countries.

Next step, we will work together with our Sri Lanka friends to focus on some priority areas, as following:

——Personnel exchanges. Seeing is believing.We will build a platform for exchanges and cooperation between the our two peoples, displaying the essence and fruits of the traditional friendship between China and Sri Lanka and promoting people-to-people exchanges in key areas such as parliament, local government, youth, think tanks, and media to promote and enhance mutual understanding and friendship between our two peoples.

——Capacity building. Through “receiving friends in” and “sending professional personnel out”, carry out activities for capacity building. For example, we will try to organize the Chinese young and professional poverty relief cadres to Sri Lanka to stay and have a deep study tour to the village or local governments, look for ways out to fight against poverty. We will also try to organize experts from the National Development and Reform Committee (NDRC) and local DRCs to Sri Lanka to study its national development plans, policies and government services, so as to help promote Sri Lanka to Chinese business and interested parties.

——Win-win cooperation. The CPAFFC is willing to work closely with the Sri Lanka Embassy to China and Sri Lanka friendship organizations to hold promotions and functions for Sri Lanka’s goods, resources, development plans, favorable policies for FDI and government services, so as to encourage and attract more Chinese businesses to invest in Sri Lanka.

——Give full play to friendship cities. China and Sri Lanka currently have 11 pairs of friendship cities. The CPAFFC is willing to:

⦁ further promote exchanges and cooperation between local governments, friendship cities in particular, in the fields of culture, education, tourism, public health, and vocational technical schools in particular etc.

⦁ help to set up new friendship city relations on the premise of complementary and sustainability.

⦁ enrich the content of cooperation between friendship cities, and making friendship city a bridge and a binding force for mutual understanding, friendship and trust between people s of China and Sri Lanka.

To my conclusion, let us to work together to bring our everlasting friendship to a new high and bring more benefits to our two peoples. Thank you all for your attention and hospitality.

Sri Lanka:  Correct The Price Distortion for A Sustainable Development – Part 2

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This is the second part of this series by the author, Click here to read the first part -Editors

Water Supply

Providing safe drinking water and improved sanitation services have been the government’s priority for many decades. In 1975 National Water Supply and Drainage Board (NWSDB) was established, and the responsibility was transferred to it. Before that, it was a local government function, and cost recovery was not considered an important issue. The local authorities provided Dug wells in rural areas, and the pipe-boned water supply was limited to urban areas. Their priority was to roadside public stand posts for free water, and the domestic connections were charged a nominal amount. Hence water was considered a free public good without a price.  Irrigation for agriculture is still a free public good with no price.

With the introduction of the Community Water Supply Projects, pipe-borne water supply was expanded to many rural areas, and today 58% of households have access to pipe-borne water. Gradually NWSDB expanded its operation to rural areas with high population density. The capital costs of projects are now shared 50:50 between the treasury and NWSDB. Still, domestic water is considered a government responsibility and only a part of the cost is recovered from the poor. Yet 25.8% of the total production falls under the non-revenue water category, which is put into the water supply system but not billed. This is mainly due to poor maintenance, leakages, and management issues such as water thefts, calculation errors, etc.

The average unit cost of producing potable water has increased from Rs.48.87 in 2020 to Rs. 60.63 in 2021 (Economynext 05.06.2022). According to the Water Tariff Revised in 2022, water is billed under 12 different categories for different purposes at different rates. Samurdhi beneficiaries are charged a nominal tariff of Rs.5.00 per unit for the first five units (5000Lt.), Rs. 10.00 per unit for the second 5 units, and Rs. 15.00 per unit for the following five units. Accordingly, 15,000 Lt. per month is highly subsidised for them, and the subsidy element (tariff below the cost of production) exists for up to 25 units (from 16to20 units Rs. 40 and 21 to 25 units Rs.58 per unit). In contrast, Domestic(other) Category consumers will have to pay four times higher than the Samurdhi recipients for the first five units (Rs. 20.00 per unit), and the subsidy element exists only for up to 15 units. Beyond that, an exceptionally high punitive tariff, which increases with the usage from Rs.86.00 up to Rs. 238 .00 per unit, is being changed.

There are four other categories where the tariff is much below the cost of production, namely, (a) Non-Samurdhi Tenement Gardens, (b)Public Stand Posts, (c)Schools, religious and charitable institutions, and (d) Local Authorities.  It means that out of 12 categories, 5 have a substantial subsidy. The tariff for the other seven categories (production-oriented) is much higher than the cost of production. In addition to the usage charge, a monthly service charge, increasing parallel to the consumption, is also levied from those categories. Therefore, the tariffs applicable to production-oriented and non-samurdhi household categories are punitive and discouraging. For instance, tariffs for the port and shipping, SOEs, BOI companies, and industries are Rs670, Rs.116, Rs.85, and Rs 82 per unit, respectively.

However, the NWSDB has demonstrated that it can recover a considerable portion of the subsidy cost through punitive tariffs from production-oriented and high-user domestic categories. According to the 2019 Annual Report, the losses for 2018 and 2019 were Rs. 1,176 and Rs. 580 million, respectively. According to the Economynext-05.06.2022, the NWSDB had posted a profit of 507 million rupees in 2020 but again lost 3,087 million in 2021, with salaries rising 19 per cent. If not for the salary increase, the NWSDB could have remained at least at the break-even point in 2021. With the tariff revision in 2022, it may reach the break-even point. Unlike other SOEs, NWSDB delivers essential public goods without a massive loss. This is mainly due to the capital costs subsidy granted by the treasury and the tariff structure to charge more from whom it is affordable to pay. But NWSDB is also overstaffed, and remunerations are relatively high.

Due to the scattered nature of housing and settlements, the capital cost of water distribution in rural settlements is very high. Many rural water supply schemes are found in hilly terrain in the wet zone, where water sources are abundantly available in good equality. Still, due to the hilly terrain, the capital cost of the distribution network is high. But in contrast, drinking water is a critical issue in the dry zone, covering about 70% of the country’s land area. This is the area chronic kidney disease is prevalent and suspected that the cause is poor-quality drinking water. Unlike in the wet zone, water sources are not found easily, and the quality is also unacceptable. Dry zone communities face many inconveniences and opportunity costs, such as risky long-distance travel and consuming many hours of the day to collect a pot of drinking water. If they purchase potable water from the market, they will have to pay more than Rs.50.00 a litter. Under this scenario, selling one unit (1000 litres) of water for Rs. 5.00 or Rs 20.00 in the wet zone and urban areas can’t be justified on humanitarian grounds. Therefore, financing potable water for the dry zone is justifiable, even at a higher cost, considering social justice and equal access to safe water. Further, the NWSDB must take serious action to reduce the 25.8% non-revenue water supply to a technically acceptable minimum level to increase its revenue. Currently, six tariff categories are below the cost of production, which seems highly irrational.

Instead of ad-hoc political decisions to revise the tariff for electricity and water from time to time, it is more logical to commission an in-depth study to restructure the tariffs to make water and electricity prices affordable to domestic users, discourage excessive unproductive use of subsidised products and remove punitive tariffs from the production-oriented categories.

Aviation

The national carrier rebranded as Sri Lankan in 1998 following its partial acquisition by Emirates. In 2008, the government re-acquired all the shares and management rights from Emirates. Then the accumulated profit of Sri Lankan was Rs. 9.288 billion (Wikipedia). In any case, Sri Lankan was not a burden to the treasury; instead, a share of the profit was paid to the treasury from time to time. It was revealed at the COPE meeting in July 2022 that the loss of the Sri Lankan as of 31 March 2021 from the day it was taken over from the Emirates was 372 billion, and the daily loss is about Rs 84 million.  Mihinlanka, which commenced its business in 2007, also amalgamated later with Sri Lankan with an accumulated loss of Rs 13 billion.  In 2020 Sri Lankan’s debt obligation exceeded Rs 372 billion. Also, its net worth was negative Rs.262 billion. Most of the above debts are to the Bank of Ceylon, the People’s Bank, and the CPC. Further, it had sovereign guaranteed internationally issued bonds worth UDS$ 175 million. If the government declares insolvent or shuts down the airline, the two banks and the CPC must write off all debts. This will severely affect the two banks’ liquidity, sustainability, and profit. The CPC is also heavily indebted to the above two banks. So eventually, that burden also will pass to two banks. The government owns two banks, and finally, all these responsibilities fall on the shoulders of the taxpayers. Moreover, the government could face multiple jurisdictions worldwide regarding the non-settlement of foreign liabilities.

Subsidising essential services is understandable. But subsidising foreign travel by affluent Sri Lankan citizens and foreigners has no meaning for the taxpayers. More than 99% of taxpayers do not benefit from this colossal subsidy. Many airlines provide services from and to Colombo to many destinations, even at a lower price than Sri Lankan. So, Sri Lankan does not fill any service gap too. If there is any justification for continuing the operation of Sri Lankan with subsidies, it would be to support tourism and strengthen linkages with foreign economies. In any case, earning from tourism cannot compensate for such a colossal loss/subsidy. It may be possible to justify the operation of a national carrier for national pride. If so, the airline must be restructured and scale down its operation to match that intention without a loss, at least on a cost-recovery basis.

 However, the establishment of Mihinlanka Airlines, re-acquiring Sri Lankan from the Emirates, and pumping public funds to Sri Lankan to expand its operation without a well-thought business plan are economic crimes for which the decision makers are responsible.

 Lose-Making SOEs

Subsidising the losses of state-owned enterprises (SOEs) and selling their products below the cost of production also amounts to direct subsidies to their employees and indirect subsidies to consumers while distorting the market prices. Sri Lanka has 527 SOEs. Of which 52 have been classified as “Strategically Important “enterprises by the general treasury. But some strategic enterprises, which are involved in purely commercial activities, such as CEB, CPC, CWE, CTB, Sri Lankan, Hotel Development Lanka Ltd, etc., have been running as loss-making enterprises for many years.

 Out of the non-strategic enterprises, 287 SOEs are also commercial ventures that can be run more efficiently by the private sector. According to the information available from the Department of Public Enterprise, out of 527 entities, only 57 are self-funding. In 2019, the total losses sustained by 52 SOEs amounted to Rs 151 billion. According to the above information, budgetary support amounting to Rs. 49 billion has been provided to loss-making institutions, of which Rs. 20 billion was for recurrent expenditure. Most SOEs’ pricing is not cost-reflective and sells their goods and services below the cost of production(subsidising). Perhaps, if the price becomes cost reflective, their products may be unaffordable to the people because the cost of production is very high due to inefficient management, wastage, and corruption.

 The private sector may produce those at a lesser cost resulting in lower selling prices and tax revenue for the government. According to the Advocata research team, the total accumulated loss of strategic SOEs from2006 from to 2020 amounted to Rs 1.2 trillion. As per the Public Finance Data, the top five losers, namely, CPC (Rs.628 bl.), Sri Lankan (Rs.248 bl.), CEB(Rs.47 bl.), Airport and Aviation Services (Rs.6 bl.), and SLTB (Rs.1 bl.) have recorded a total loss of 930 billion for the first four months of 2022. The government revenue for the same period is only Rs 543.6 billion. SLTB has a loss of Rs.1 billion in providing transport facilities for many middle- and low-income commuters. But Sri Lankan has a loss of 248bl., which provides aviation facilities to a minimal number of well-to-do Sri Lankans and foreigners.

When SOEs in short of funds or on the verge of bankruptcy, they do not follow the due process to borrow, liquidate or re-structure the business. They borrow inputs from other SOEs or borrow money from state-owned commercial banks. But it is done not on the strength of their balance sheets but at the request of the treasury, sometimes on verbal instructions, even without a treasury guarantee.  They continued to do so for many years. For instance, Sri Lankan, GCR, and CEB borrow their inputs from the CPC and keep accumulating debts.  The CPC borrows from the Peoples Bank and Bank of Ceylon to fill that gap. If CPC can’t borrow further due to cumulative outstanding debts, the treasury issues a long-term financial instrument to the CPC and passes the liability to the next generation. The CPC trade it and settle previous loans, and continues borrowing. This is a big cross-subsidy between SOEs. This amounts to a pyramid operation by the government. This can’t continue forever, and all resources will get exhausted and may collapse all institutions at once. It is advisable to allow major institutions to operate independently. Then who can sustain will sustain on its own strength. Others may get a boost to adopt sound management practices or restructure/privatise/liquidate.

But trade unions and politicians argue that those enterprises should come under state ownership to ensure the national interest and to prevent exploitation. As discussed above, the exploitation of consumers and taxpayers is very high under state ownership. However, policymakers may have a genuine interest also to keep essential services like energy, transport, health, education, etc., under government control to ensure the national interest/national security, respond to disasters, and assist the poor. But there are many low-cost and efficient solutions to achieve such objectives.  For instance, petroleum infrastructure and regulatory power may be kept with the CPC while allowing the private sector to import and sell fuel competitively. Railway Department can own the railway infrastructure and regulatory authority, while the private sector is running trains. Such arrangements ensure the government’s control over the service while the advantage of quality and price competitiveness passes to the consumers.

The impact of subsidising the loss of SOEs is not trickledown down to the large segment of the population, the consumers, and the taxpayers. But some groups with a vested interest have developed private sector phobia and hold the taxpayers and consumers to ransom for their economic, political, and power gain. Employees want to keep those under state ownership to secure higher income and fringe benefits with little or no work. Trade union leaders want to maintain SOEs at any cost to demonstrate/excise the power and authority and strengthen linkages with the upper echelons of political parties. Politicians wish to use the employees and other resources free for election campaigns and give jobs to their supporters. Further, they can support campaign funders by appointing them to management boards and promoting business linkages such as contracting, outsourcing, granting business permits, etc. Also, sometimes they can financially benefit by being involved in corrupt practices in procurement, service delivery, and recruitment.

But the public is happy if the quality of goods and services is satisfactory and reliable at a reasonable price, regardless of the ownership of the business. For instance, if a reasonably priced, reliable power supply is available, the customers don’t want to verify whether it is by the CEB or a private supplier. The customers don’t consider whether the fuel is from the CPC or Indian Oil Company if it is reliable, convenient and reasonably priced. But without knowing the facts, the taxpayers and the consumers also fight against the privatisation of loss-making entities.    

In the case of infrastructure or capital expenditure, passing the liability to the next generation is justifiable because they also become beneficiaries of those investments. But recurrent /consumption expenditure incurred by SOEs like SLTB, Sri Lankan, and Railways is only for the benefit and convenience of the present generation. Accumulating losses, defaulting and long-term borrowings for such expenses means passing the liability of luxurious consumption of the present generation (politicians, employees, trade unions) to the next generation, for which decision-makers have no rights. It is an unforgivable, very dangerous economic crime. If the private sector runs those commercial activities, the government can collect more revenue as taxes instead of subsidising the losses. Also, the government will have more time and resources to do its primary function, governing the country, which has been neglected hitherto by all governments.

To Be Continued

What Sri Lanka Can Learn from China’s Bitter Experience

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9 mins read

The following article, describing the economic growth of China, extracts information from “The Power of Capitalism” by Rainer Zitelmann. The reader is encouraged to refer to this book for more details and references.

The Great Leap Forward

Mao Zedong wanted to turn China into a shining example of Marxist Socialism, and in 1957 proclaimed the Great Leap Forward to the “worker’s paradise”.

The population was informed of the plan “to overtake all capitalist countries in a fairly short time, and become one of the richest, most advanced and powerful countries in the world”.

This ambitious experiment started with millions of farmers (around one-in-six of the population) being forced to work on massive irrigation projects such as dams and canals without sufficient food or rest. The removal of a large part of the agricultural workforce was one of several reasons for which famines started to spread across China.

During this period private ownership was abolished, and peasants were forced to leave their properties and live in factory-like barracks.

Private plots, which comprised “houses, animals and trees” were confiscated for the purposes of “benefiting production and control”. Homes were to be dismantled if a commune needed bricks, tiles, or timber.

People were also banned from eating at home. Food was served in canteens often hours away from the workplace. This forced people to move to the sites of canteens and live in crammed spaces with no privacy.

Food production was too low and due to the climate of fear created by their own works the Communist Party officials avoided acknowledging the problems. Communes that submitted false data showing phenomenal harvests were taken at face value, while those that submitted realistic numbers were punished.

There were also logistical problems which resulted in large parts of the harvest being destroyed by pests, in particular sparrows. Mao mobilized the entire population to wave sticks and brooms to create a racket that would scare away these birds. This was so effective that pests controlled by sparrows flourished with catastrophic results. The government then sent a “top secret” request to the Soviet Embassy for 200,000 sparrows.

Despite the worsening famine the government was loath to lose face. They were too proud to suspend Russian grain exports, defer debt repayments or accept Western offers of aid. In keeping with the ‘export above all else’ policy they even donated wheat to Albania and other allies when the famine was most severe. According to government propaganda, the Chinese economy was going from strength to strength and breaking records.

Mao was particularly obsessed with steel production. In 1957 steel production was 5.35 million tons and in 1958 the government set a goal of 12 million tons. At the time, Chinese steel was largely produced in small blast furnaces (many of which were unfit for purpose).

The piles of iron ingots produced by rural communes were too small and brittle to be usable in the modern rolling mills. The lack of good raw material led to party cadres going from door to door confiscating household and agricultural equipment such as farm tools, water wagons, cooking utensils, iron door handles and even women’s hairclips. Later Mao was forced to admit that “only 40 per cent is good steel”.

Mao was aware that millions would have to die to bring about his bright future. He told Soviet leaders “We are prepared to sacrifice 300 million Chinese for the victory of the world revolution.”. He said of labour-intensive steel manufacturing: “Working like this, with all these projects, half of China may well have to die. If not half, then maybe one-third or one-tenth – 50 million – die.”

Mao’s experiment caused 32.5 million people officially (unofficially around 45 million) to die between 1958 and 62. Most died of starvation, but around 2.5 million were tortured or beaten to death, killed because they were rich or dragged their feet, or killed because they spoke out or were simply not liked.

The Chinese historian Jisheng says as follows: “The starvation that preceded death was worse than death itself. The grain was gone, the wild herbs had all been eaten, even the bark had been stripped from the trees, and bird droppings, rats and cotton batting were used to fill stomachs. In the kaolin clay fields, starving people chewed on the clay as they dug it. There were frequent cases of cannibalism. At first, desperate villagers would only eat the cadavers of animals, but soon they started digging up dead neighbours to cook and eat. Human flesh was sold on the black market along with other types of meat”.

Mao was eventually forced to abandon his Great Leap Forward. However, this did not stop him from launching his even more radical Cultural Revolution in 1966 where hundreds of thousands were killed in forced labour camps.

Learning from the world

Following Mao’s death in 1976 the government sensed that the Chinese people had had enough of socialist experiments.

Mao’s immediate successor, Hua Guofeng, paved the way for Deng Xiaoping to contribute towards China’s transformation. Deng and his party members took some Confucian wisdom to heart: “By three methods we may learn wisdom: first, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest.”

Having learned some hard lessons the Chinese looked at what was happening in other countries. From 1978 began the busy period of foreign travel to bring back valuable economic insights.

Chinese delegations made trips to more than 50 countries including Japan, Thailand, Malaysia, Singapore, the US, Canada, France, Germany, and Switzerland. Deng asked the delegations to see as much as they could and to ask questions about how economies were managed.

The delegations were greatly impressed by what they saw in Western Europe: modern airports such as Charles de Gaulle in Paris, car factories in Germany and ports with automated loading facilities. They were surprised to see the high standard of living even ordinary workers enjoyed. Deng himself traveled, and after an eye-opening visit to the Nissan plant in Japan, he commented, “now I understand what modernisation means”.

The economic dynamism of neighboring countries, such as Japan and Singapore, were seen as role models. Lee Kuan Yew, the founding father of Singapore, remembers “I had told Deng over dinner in 1978 in Singapore that we, the Singapore Chinese, were the descendants of illiterate landless peasants from Guandong and Fujian in South China … There was nothing that Singapore had done that China could not do, and do better. He stayed silent then. When I read that he had told the Chinese people to do better than Singapore, I knew he had taken up the challenge I quietly tossed to him that night fourteen years earlier.”

The delegations’ findings were widely circulated in China. It led to the realisation that the alleged benefits of socialism for the working class were based on lies and fabrication. Deng noted repeatedly “The more we see (of the world), the more we realize how backward we are”.

Difficulties with privatisation

However, this newfound enthusiasm did not instantly result in a conversion to capitalism. It was a slow process of transition, starting with tentative efforts to grant public enterprises greater autonomy. This process, which relied on initiatives from both the grassroots as well as top-down from policy, took years or decades to mature.

Peasants began to circumvent the official ban on private farming. Since they were able to achieve far greater output the party cadres allowed it to carry on, and starvation was alleviated long before the ban was finally lifted. By 1983 all Chinese agriculture was de-collectivised.

The 1980s saw the establishment of an increasing number of collectively owned enterprises and township and village enterprises. Being legally owned by municipal authorities, the distinction between state and private ownership was blurred, resulting in these companies having the guise of public companies but being de-facto privately run. Between 1978 and 1996 the total number of employees in these companies rose from 28 million to 135 million, while their share of the economy grew from 6% to 26%.

Subsequent waves of privatisation saw municipal owned companies become less important compared to genuine private businesses.

Individuals who started or worked for private businesses suffered hardship and discrimination. Parents wouldn’t allow their daughters to marry someone who worked for these businesses as their economic prospects were uncertain.

Eventually, more people came to realize that running a business conferred financial advantages as well as greater levels of freedom. Self-employed barbers were earning more than state hospital surgeons, street vendors more than nuclear scientists.

The number of self-employed household businesses and single proprietorships increased from 140,000 in 1978 to 2.6 million in 1981. However, the proponents of socialism passed a resolution which saw over 30,000 arrested. In many cases their only crime was making profits or employing more than the legal limit of seven people.

Special Economic Areas

The erosion of socialism was accelerated by the creation of Special Economic Areas (SEA) where socialism was suspended, and capitalist experiments were permitted.

Shenzhen was an area through which, year after year, many thousands would try to illegally escape to Hong Kong. When the authorities investigated in more detail, they found refugees had set up businesses across the Shenzhen River in Hong Kong territory, where they were earning a hundred times more than people in the mainland.

Deng’s response was that China would need to increase living standards to stem the flow. Shenzhen then became the site of the first SEA experiment.

The experiment was so successful that, only a few years later, the authorities had to build a barbed-wire fence to cope with the influx of migrants from other parts of China. Soon other regions also began following the SEA model.

Low taxes, land lease prices and bureaucratic requirements made SEAs extremely attractive to foreign investors. The economies were less heavily regulated and more market-oriented than those of many European countries today.

The co-existence of public and private enterprises

Over time economic reforms became half-hearted. Public enterprises continued to co-exist with private businesses and SEAs. This co-existence caused a chaotic pricing situation, leading to inflation, discontent, and unrest.

Proponents of socialism believed that the reforms had gone too far. In response, Deng (who held no public office at the time), decided to intervene and visit Shenzhen. He expressed his amazement at the extent of the region’s transformation. He was impressed by the magnificent boulevards, resplendent high-rise buildings, busy shopping streets and seemingly infinite number of factories. The people were dressed in fashionable clothes and were the proud owners of expensive watches and other luxury items. Their incomes were three times higher than in the rest of China.

Deng’s tour and subsequent criticism of those who opposed reforms were featured prominently in Chinese media. Deng and his fellow proponents of free-market reforms continued to pay lip service to socialism, but they redefined the term to mean an “open system that should ‘draw on the achievements of all cultures and learn from other countries, including the developed capitalist countries”.

Increasingly, the reformers won the day. Capital investments in private businesses multiplied by twenty. In 1992, 120,000 civil servants quit their jobs, and 10 million took unpaid leave to set up private enterprises. Millions of university professors, engineers and graduates followed suit.

Furthermore, the list of government-set prices for raw materials, transportation services and capital goods was shortened from 737 to 89, with a further reduction to only 13 in 2001.

Reforming the public sector

The reformers hoped to make public enterprises more efficient by introducing performance-related payment schemes and replacing high ranking cadres with professionals. However, these changes failed to address the key issue, which is that public enterprises cannot go bankrupt.

In a market economy a constant selection process takes place which ensures only the survival of well managed companies that satisfy consumer demand. Badly managed companies go bankrupt and disappear, freeing up resources for other ventures. This natural selection does not occur in public enterprises, as losses are financed by the taxpayer. Thus, public enterprises were frequently in bad economic health.

Furthermore, in the market economy there are strong natural incentives to build and maintain a good reputation for the long term. With public enterprises these incentives do not exist and so executives were more interested in raising their income for the short term. Since there was no means for consumers to hold dishonest executives accountable, corruption was a persistent problem.

Still privatisation continued and by 1996, the share of public enterprises had dropped by about 50%, and around 30 to 40 million people had lost their jobs.

Income inequality

China’s development demonstrated that, rising economic growth, even with rising inequality, still benefited the majority of the population. Deng instructed “let some people get rich first”.

Contrary to popular belief, the statistics showed that the relative income gaps were narrowest in the regions with highest per capita GDP, where the markets were most open and companies made the highest profits. Regions with low growth and more restrictive conditions had wider relative income gaps.

Conclusions

In 2016 China overtook the US and Germany to become the world’s largest exporter. The quality of life for ordinary citizens had improved beyond recognition.

Many economists and politicians believe that the impressive growth is due to a special “Chinese way” which comprises a high degree of government influence.

This was not the case. The Chinese progress was not dissimilar to the progress of other developed nations, such as the UK, US, Germany, South Korea and Japan, which were all facilitated by reducing government involvement and increasing freedoms.

Chinese growth happened partly through the SEAs, and partly by decentralizing power to local governments, which in turn circumvented restrictive laws insuch a manner as to create the space needed for both private business and privatisation.

China grew not because of a special way of government, but rather in-spite of it.

Ukraine: Zelensky’s Politics of Contrast

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6 mins read

According to a New York Times report of March 1985, former president Ronald Reagan had this to say about the infamous Nicaraguan Contras (guerrillas) who were opposing the Sandinista Communists in that Central American country:

“Speaking about Nicaragua, Mr. Reagan called the rebel forces “our brothers” and ”freedom fighters.And we owe them our help,” he said. ‘You know the truth about them, you know who they’re fighting and why. They are the moral equal of our Founding Fathers and the brave men and women of the French Resistance.”We cannot turn away from them,” he said. ”For the struggle here is not right versus left, but right versus wrong…In making his speech today, against the backdrop of a campaign for renewed Congressional financing for the rebels, the President also sought to provide assurances against United States military involvement in the region.

Fast forward to a report in Associated Press in April 2022:

“President Joe Biden pledged an additional $1.3 billion Thursday for new weapons and economic assistance to help Ukraine in its strong but increasingly difficult battle against the Russian invasion, and he promised to seek much more from Congress to keep the guns, ammunition and cash flowing.The latest military aid, Biden said, will be sent “directly to the front lines of freedom“…Sometimes we will speak softly and carry a large Javelin, because we’re sending a lot of those, Biden said, paraphrasing Theodore Roosevelt and referring to an anti-tank missile system.”

Biden has referred to sanctions as a new form of Statecraft. No, it’s just robbing nations of their money.

Same Old Song and Dance

I’ve been thinking to myself, where have I seen the current Russia-Ukraine war verbiage/template before with the same presidential speeches, the insidious censorship? Hey! It is the return of the pro-Contras format, except the Ukrainians are a million miles away and they have flags with the colors of the National Football League’s Los Angeles Rams.

The Washington Post and the New York Times—and the former military talking heads on NBC, CBS and CNN portray Zelensky as pure of heart, courageous, and leading the charge on the Donbass frontlines. And according to General Mark Milley, Chairman of the US Joint Chiefs of Staff, saving the Western way of life is at stake, or at least Europe’s, and on Zelensky’s broad shoulders this task must fall (until he has to exercise the US promised Golden Parachute on his exit).

“What’s at stake is the security of Europe,” Milley said, adding that Russia’s invasion “is the greatest challenge to the security of Europe since the end of World War II…And indeed, you can easily make the case that what’s at stake is the global international security order that was put in place in 1945,” reported Business Insider in April 2022.

“Milley said the post-war world order has prevented great power war, and underlining that entire concept is the idea that large nations will not conduct military aggression against smaller nations, and that’s exactly what’s happened here, an unprovoked military aggression by Russia against a smaller nation.”

General Milley, what about Vietnam, Panama and Grenada? I mean, you are a Princeton graduate.

So, how did that Nicaragua thing work out? A CIA led war in and out of that country, plus a nifty CIA campaign to sell drugs in the USA to make money to buy weapons and supporting material for the Contras;  the Iran Contra Scandal out of which came the sentences placed on US officials Elliot Abrams, John Poindexter, and Secretary of Defense Casper Weinberger (they all were pardoned by Reagan’s successor, former president George H.W. Bush).

According to the Harvard Crimson reporting in March 1986;

“…it is clear now that the Contras are entirely a creation of U.S. foreign policy–dependent on their paymaster for their limited ability to inflict malicious harm on the Nicaraguan people.There should also be little surprise at the Contras’ brutal methods. Reports from Nicaraguans who have left the rebel organization indicate that 46 of 48 Contra field commanders are former members of late dictator Anastasio Somoza’s National Guard. And, as if their experience in oppression were not enough, CIA advisers supplied the exiles with a training manual which encourages political assassination and details methods of torture.”

Ditto for the Ukrainians too!

Gary Webb, RIP

Gary Webb of the Mercury News wrote a series called Dark Alliance which exposed alleged CIA involvement in supporting drug running in the USA which was then used to funnel cash proceeds to the Contras. Webb was pilloried by the New York Times, Washington Post and LA Times and was basically “canceled” his career ended when he resigned from the Mercury News.

Think of it. US officials were pardoned (see above) for their roles in the Iran Contra scandal and Gary Webb’s journalism career was tanked in what was a USGOV-MSM setup to discredit him. Controversy still remains over Dark Alliance but it shows how powerful the USGOV-MSM is when it decides to eliminate a journalist who causes trouble. Who is going to be the next Gary Webb?

With the current mainstream media blackout over any criticism of Ukraine—which is the direct result of an effective US military information support operation (MISO) deployed to shape global environments/opinions— no notable MSM reports on Ukraine black market weapons sales, Ukraine using lunatic World War 1-style infantry attacks, crushing opposition parties, censoring criticism and media, attacks on Kherson repeatedly repulsed by the Russians, etc. All we get is MSM visiting the front lines with the 101st Airborne in Romania which is ready to fight yesterday!

It is probably one of the better US government propaganda efforts; well, then again, there are so many US campaigns to choose from. But they all have the same set of lies that support them, always with the words freedom, from the Contras to the Ukrainians. But here is the reality:

“Even before the war erupted, there were ugly examples of authoritarianism in Ukraine’s political governance. Just months after the 2014 Maidan revolution, there were efforts to smother domestic critics, which accelerated as years passed. Ukrainian officials also harassed political dissidents, adopted censorship measures, and barred foreign journalists whom they regarded as critics of the Ukrainian government and its policies. Such offensive actions were criticized by Amnesty International, Human Rights Watch, the Organization for Security and Cooperation in Europe, and other independent observers. The neo‐​Nazi Azov Battalion was an integral part of President Petro Poroshenko’s military and security apparatus, and it has retained that role during Zelensky’s presidency.

Indeed, some repressive measures deepened under Zelensky even before the outbreak of war with Russia. In February 2021, the Ukrainian government closed several (mostly, but not entirely pro‐​Russia) independent media outlets. They did so on the basis of utterly vague, open‐​ended standards. Zelensky has now used the war as a justification for outlawing 11 opposition parties and nationalizing several media outlets. Those are hardly appropriate measures in a democracy, even in wartime,” according to a report in the American Conservative Magazine in October 2022.

West Seeks to Expunge a Civilization

And why the longing to expunge Russia from the face of the earth? Why the hiding behind “I am a minority and my ancestor was killed by the Soviets? Is every Russian guilty of the past? I mean, give me a break. When Russia’s mobilization officials started to call up the wrong citizens and botched up the first steps of the process, it was the Russian people and the media that protested. The president of Russia Valdimir Putin owned up to the error and it was fixed.

I just can’t figure out the basis for the hatred of Russia unless it is that US political and military leaders are so incompetent they don’t know how to deal with an emerging multipolar world.

I was in Russia in 2014 roaming around by myself from Moscow to Crimea and I saw nothing that would threaten me except running out of US dollars, which I did, as US sanctions took effect in the summer of 2014. I could not use my credit card either due to the sanctions. I was in a fix so a history professor that was showing me around Crimea—who worked for the tour company that booked all my flights and hotels—lent me $100 on behalf of the company on a handshake with a promise I would send cash when I returned to Virginia. I did that one day after I got back. Anywhere I went I was usually asked where I was from. I’d say the United States of America. No one attacked me. I was treated with respect and a helping hand wherever I went.

Perhaps the most interesting place to visit was a former Soviet-era nuclear submarine pen in Crimea. It was turned into a tourist attraction. Talk about capitalism!

According to Vladimir Putin who spoke for hours at the recent Valdai Club (can any US politician do that plus Q&A, or can any US citizen listen for hours), the West has gone crazy, indeed:

The very liberal ideology today has changed beyond recognition. If initially classical liberalism understood the freedom of every person as the freedom to say what you want, to do what you want, then already in the 20th century liberals began to declare that the so-called open society has enemies – it turns out that an open society has enemies – and the freedom of such enemies can and should be limited, if not abolished. Now they have reached the point of absurdity, when any alternative point of view is declared subversive propaganda and a threat to democracy.

Whatever comes from Russia is all the “intrigues of the Kremlin”. But look at yourself! Are we all that powerful? Any criticism of our opponents – any! – is perceived as “the machinations of the Kremlin”, “the hand of the Kremlin”. This is some nonsense. What have you fallen to? At least move your brains, state something more interesting, state your point of view somehow conceptually. It is impossible to blame everything on the machinations of the Kremlin.”

Bangladesh as UNHRC Member

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4 mins read

In the recent past, Human rights are perhaps one of the most talked about issues in Bangladesh, nationally and internationally.  Bangladesh on October 11 achieved its membership in the United Nations Human Rights Council for the term2023–2025 with the highest vote from the Asia-Pacific region. In the election, 160 countries among 189 supported Bangladesh’s membership in the United Nations General Assembly in New York, which is an outstanding achievement for the government. It is mentionable, this would be the fifth term of Bangladesh as a member of the 47-member UNHRC. In the previous UNHRC elections, Bangladesh won in 2006, 2009, 2014, and 2018; effectively for all possible terms as per the rules of business of the Council.

This achievement is a great honour for Bangladesh as a country, and also a warning of responsibility in the midst of criticism from the United Nations, the United States, and other countries regarding the allegations of disappearances and human rights violations. The task of the Human Rights Council is to monitor the human rights situation of member countries around the world and make necessary recommendations. Bangladesh is now one of the countries responsible for taking care of human rights situations in different countries. Truly speaking, this victory will enhance the image of Bangladesh and the current government in the international forum.

Victory at UN

As a responsible member state of the UN, Bangladesh remains committed to making all efforts to ensure the promotion and protection of human rights nationally and globally. This prestigious win is a manifestation of recognition by the international community that Bangladesh’s human rights situation is not alarming, and the government is quite aware of ensuring human rights. This UN council takes care of human rights in all countries of the world. So, if Bangladesh’s human rights state had been terrible, 160 countries would not have voted for it to join the Human Rights Council.

The result of the vote is also a big blow to the active groups that continues to try to embarrass Bangladesh and its government in the international arena by spreading false information about frequent human rights violations in the country. This nullifies the ongoing smear campaign with falsified and fabricated information by some politically motivated vested corners at home and abroad aimed at negatively portraying the human rights situation of Bangladesh a foreign press ministry press release said.

The human rights situation in Bangladesh is not satisfactory according to the United Nations. They urged Bangladesh to improve its human rights situation. Last year, the US imposed sanctions on RAB and six of its former and current officials.  They are ignoring the requests to withdraw it despite the situation’s improvement. Against this backdrop, electing Bangladesh as a member of the United Nations Human Rights Council is proof of the international community’s deep confidence in Bangladesh’s contribution to the UN human rights system and ability to carry out the duties of the Council under the leadership of Prime Minister Sheikh Hasina. Undoubtedly, such a position of Bangladesh in the United Nations will take Bangladesh a step forward in making its human rights more integrated.

International Community’s Deep Confidence

At the invitation of the Government of Bangladesh, Michelle Bachelet, the UN Human Rights Commissioner visited the country in August this year and held a series of consultations with the relevant stakeholders in Bangladesh. However, Bachelet did not mention anything alarming about the human rights situation in the country in the written statement she handed over to journalists before leaving Bangladesh at the end of her scheduled visit. As she called on the government to discuss with various parties to update the Digital Security Act, she also praised the steps taken by the Bangladesh government in various fields, including the Rohingya issue.

Cases of human rights abuses in various countries including Venezuela, Afghanistan, and Myanmar have come up in the latest report of the UN. But Bangladesh is not among these countries. On the contrary, the incident of sheltering the Rohingya minority fleeing from the massacre and persecution of the military forces in Myanmar has also been highlighted. Through this, the humanity that Bangladesh has shown by sheltering the Rohingyas in danger has been highlighted as a unique example in the international arena including the United Nations.

This observation of Michelle Bachelet about the human rights situation in Bangladesh proved that Bangladesh is respectful to the international human rights mechanisms and there is nothing to worry about the human rights situation in Bangladesh.

This paper however does not suggest that Bangladesh does not have any case of human rights violation. In fact, human rights challenges are faced just like any other country in the world does. Unfortunately, rule of law, democracy, and human rights are subjected to the enormous challenge of manipulation of the superpowers which want to impose imperial designs on the world in the name of peace. However, some isolated incidents have occurred in Bangladesh in which the rights of any individual or institution have been violated by some overenthusiastic members of the government or law enforcement that have embarrassed the government. But no such incident is happening regularly in Bangladesh that may be considered a human rights violation. As a result, it is not right to promote those incidents as human rights violations.

The Challenges Are Ahead

The issue of human rights is explicitly written in the constitution of Bangladesh. Article 11 of the Constitution states that “the Republic shall be a democracy in which fundamental human rights and freedoms and respect for the dignity and worth of the human person shall be guaranteed.” As a result, the state or the government does not have the power to take away the rights of any person or organization because the government runs the state within the guidelines of the constitution. Moreover, Bangladesh has an independent judiciary and a Human Rights Commission. These institutions should be strengthened so that any allegation of violence, extra-judicial killing, or unlawful detention against law enforcement agencies can be addressed immediately and effectively. Additionally, the law enforcement agencies of Bangladesh should be provided with intensive training to ensure that they do not violate human rights while combating terrorism and crimes unless in a given situation application of force is mandatory to save their own lives.

The responsibility of looking after the human rights situation of various countries is entrusted to the council. Bangladesh should respect the trust that the member states have shown in Bangladesh and the current government in the vote of the United Nations Human Rights Council. Finally, everyone expects that as a member of the Human Rights Council, Bangladesh will be able to make a significant contribution to the implementation of UN principles in the field of human rights, especially in the context of emerging global challenges.

Power Hunger and the Hypocrisy Bankrupted a Nation

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11 mins read

Over the last several months, intellectuals, politicians, and international development agencies have discussed the Sri Lankan economy and fiscal policy more than ever for its mismanagement. The words “foreign Reserves” and ‘’foreign Exchange” have become a common topic even among ordinary people who have never used those words. They talk more about the dollar than the rupee earnings and think the dollar is the panacea for all the economy’s ills. At the time of independence, the world community thought Sri Lanka would be a model economy for most developing countries. Sri Lanka was the second most prosperous country next to Japan in the Asian region. The country had fulfilled most preconditions to take off on the growth tract. However, it struggled to reach the status of a lower middle-income country for 50 years till 1997, while many other developing countries surpassed Sri Lanka. Eventually, in terms of World Bank classifications, Sri Lanka was elevated to a lower middle-income country in 1997. Since then, it has struggled in the lower middle-income trap and reached the status of an upper middle-income country in 2019, after 21 years. But, within a brief period, in 2020, under the World Bank classification, Sri Lanka was downgraded again to a lower middle-income country due to the sharpening economic crisis.

Since the transfer of ruling power from colonial masters to local elites, the fiscal policy adopted by Sri Lanka is short-sighted, irrational, arbitrary and not growth-oriented or sustainable. Those are aimed at winning the heart of constituents to win the next election and remain in power forever. The budgetary policy is nurtured as a bribe to the constituents to grab or stay in power.   Throughout history, with changes in government or leadership, policies have oscillated between growth and welfare orientation without policy consistency. Therefore, frequent ups and downs are observed in the path of economic growth. This policy inconsistency has caused catastrophic long-term and short-term economic ramifications. In the 1970s, in the journey to industrialisation, the country faced a scarcity of all imported consumer and intermediate goods due to strict import controls. Rations, coupons, and permits became part and parcel of daily life. Two prices, the control price and the black-market price, became the normal market situation for goods. People had to spend their time in queues to purchase goods for a controlled price. The policy priority was the protection and encouragement of the producer. This was done at the cost of consumer rights and preference.

 In 1978, the policy was reversed and removed all import restrictions. The market was flooded with inferior, superior, cheap, expensive, wanted, and unwanted imported goods, prioritising the consumer and consumption. The producer has been deserted without policy support. Following the open economic policy for 24 years till 2017, the year of the highest per capita GDP, the growth rate was maintained above 4%, except in 2001, when a 1.55 % negative growth was reported. In 2002, followed by a negative growth rate, the country faced near bankruptcy, with the government’s debt reaching 105.5% of the GDP. In 2002, the government made several changes in the overall economic policy, including the fiscal policy. The approach was more focused on growth than welfare. Though many opposed pruning welfare programs and privatising public enterprises, the government exerted considerable fiscal control. It trended the debt ratio downward to 90.6 % by 2005, controlled inflation and commenced the gradual economic recovery. From 2005 to 2012, the country maintained a GDP growth rate above 5%, and from 2010 to 2012, it was above 7% for three consecutive years, and the per capita GDP rose above US$ 4077 in 2017. The main contributor to this rapid GDP growth was the construction boom in the public sector infrastructure, funded under local and foreign commercial borrowings. However, there were no adequate investments in goods and service production to sustain the growth momentum generated by the construction boom. As such, the economy could not substantially reap the potential of new infrastructure. In other words, the volume of investment made in the infrastructure within a brief period was beyond the economy’s absorption capacity. The government was forced to service loans before bearing the fruits of costly investments.

As a combined effect of many inappropriate economic and fiscal management decisions and political crises, the growth rate became negligible or has fallen negative since 2018. The GDP per capita income fell from US$4077 in 2017 to US$ 3815 in 2021. An 8.4% negative growth rate has been recorded for the first half of 2022.  The government’s debt ratio exceeded 100% again in 2020 and 107% in 2021. The credit rating of Sri Lanka has been downgraded to very low by rating agencies, disabling any further borrowings. Foreign reserves depleted to near zero, compelling for rigorous import control. The government was forced to print money relentlessly to meet its essential domestic expenditure leading to hyperinflation. It eventually defaulted on the repayment of foreign loans and relegated the country to bankruptcy. Days and miles-long queues for essentials became familiar scenes everywhere in the country. Now, the destiny of the proud and conservative Island nation is in the hands of its friends and enemies.

Is it a Premediated Bankruptcy?

At the time of Sri Lanka’s independence, her macro economy was very healthy. Balance of payment, foreign reserves and balancing the national budget were not significant issues. However, after 1957, Sri Lanka’s trade balance was always negative. As a ratio to the GDP, the trade balance was above minus 6% from 1990 to 2021. Consequent to a continuous and extensive negative trade balance, balance of payment and budget deficit, the government has been highly dependent on foreign borrowing for more than six decades.  During the 1970s and 1980s government’s revenue ratio to the GDP was above 20%. But since 1991, it has declined rapidly, reaching 8.6 % of the GDP in 2021

During the 1970s, the government debt ratio to GDP was around 60 % and reached 84% in 1980. From 1990 to 2000, the debt ratio increased above 96% and went to 105.5% in 2002. After that, a declining trend was visible, dropping to 77.7% in 1915 and remaining below 79% for three years till 2017. Again, the increasing trend was accelerated, jumping the ratio from 84.2% in 2018 to 107.1% in 2021. In the early stages, the borrowing was from multi-lateral and bilateral agencies on concessionary terms. Sri Lanka denied concessionary credits for many sectors after it became a lower-middle-income country. Then the government opted for borrowing from bilateral agencies at relatively higher interest rates and medium-term repayment periods. Since 2007, Sri Lanka has issued several international sovereign bonds with maturity periods of 5 to 10 years. By the end of 2021, the total outstanding external debt of the government reached US$ 50.7 billion, of which 47% is market borrowings, which are short-term and high costs. These market borrowings were mainly used to repay previous loans. Later, the government was compelled to do market borrowing to settle previous market borrowings, entangling the country into a debt trap.

From the 1970s to the 1990s, government expenditure was around 30% of the GDP. During this period, the government revenue ratio to the GDP was also high, about 20% or above. Till 2015, the overall budget deficit was high, above 7%.  Due to the policy changes in 2015, the budget deficit decreased to 5.5% in 2017 and 5.3% in 2018.  However, with the policy reversal in the latter part of 2019, it increased again, reaching 12.2% in 2021. In addition to the policy changes, the corvid-19 pandemic also contributed to the budget deficit and demanded more government expenditure than expected. Since 2020, these deficits have been chiefly financed from local borrowings and money printings, an inflationary tool.

While struggling to find additional revenue to meet increasing public sector expenditure, the new government made a highly irrational ad-hoc decision to reduce taxes in December 2019. The maximum personal income tax rate was reduced from 24.5% to 18%, and the thresh hold of taxable income was increased from Rs.500,000 to Rs. 3,000,000. Consequently, the total number of income taxpayers decreased from 1,705,233 in 2019 to 133,445 in 2020, reflecting a 92% reduction.  The VAT rate was reduced from 15% to 08 %, and the thresh hold for VAT registration was increased from Rs.12,000 to 3,000,000, resulting in a reduction of VAT registries from 28,914 in 2019 to 8,152 in 2020, reflecting an 83 % decline.  Also, the standard corporate income tax rate was reduced from 28% to 24%.

The Economic Service Charge, Nation Building Tax, withholding tax and Debt Repayment Levy was also abolished. After replacing the PAYE system with the APIT scheme, the total number of contributors dropped to 664 828 in 2020 and lost the mechanism for regular inflow of income, which used to receive without much cost and effort.  All these changes were made effective from the beginning of 2020, pending formal parliamentary approval. According to the Central Banks Annual Report 2020, the government tax revenue in 2020 has declined by Rs 518.4 billion compared to the previous year. Considering the high price level of 2022, which is affected by hyperinflation, the revenue loss may exceed Rs. 1,100 billion. The income tax reduction increased the purchasing power of the upper middle class and the rich, which created an additional demand to import non-essential or luxury goods, exerting pressure on already sicked foreign reserves.

Even before the said tax alienation, the government had faced a heavy budget deficit, a negative balance of payment and depleting foreign reserves for many years. The government was pressured to do more local and foreign borrowings to service previous loans and continue with the welfare and development-oriented budget. This is a significant fiscal challenge faced by all governments after depleting the avenues for foreign grants and concessionary credits. The IMF and World Bank kept advising Sri Lanka to take appropriate action to improve government revenue, rationalise expenditure, and minimise corruption instead of costly commercial borrowings.

While all these ailments are in the backdrop, the government has decided to reduce taxes significantly for unknown reasons without any cost-benefit analysis. One obvious thing is that the decision is not based on economic, social, or broader political interests. According to the Central Bank Annual Report -2020, “the government implemented measures to lower the tax burden of business and individuals, thereby supporting the rebuilding of economic activities and enhancing incomes of the people”. The isolated ad-hoc policy instrument did not work, while all other harmful factors for investment remained unchanged. Instead, it negatively affected the overall economy and government budget, creating multiplier effects.

Is it a result of Ignorance or a Political Gimmick?

As explained above, a persistent budget deficit due to declining government revenue, increasing expenditure, and unfavourable trade balance became a chronic issue. After opening the economy, the fiscal policy was more weighted toward a consumption-oriented economy than a production-oriented economy.  The constituents also got accustomed to using voting power to bargain for more and more government handouts. Political parties are also accustomed to pledging more and more subsidies and free goodies in their election campaigns(bribes) instead of telling the truth to the people and facing reality.

Since 1965, Sri Lanka has sought the assistance of the International Monetary Fund on 16 occasions for bailout packages to heal economic wounds, especially the negative balance of payment. The IMF assistance is always conditional that Sri Lanka will undertake structural adjustments for the long-term sustainability of the economy. Among them, fiscal and economic reforms such as the devaluation of the rupee, controlling the government expenditure, strengthening the government revenue, reducing the budget deficit, correcting the price distortion in the market, privatising the loss-making state-own enterprises, minimising/alleviating corruption, targeting the subsidies only to the poor, supporting an export-oriented economy are the prominent recommendations/conditions.  On every occasion, the same conditions have been enforced with some modifications. However, a new requirement has been proposed for the 17th occasion in 2022, requiring negotiating with lenders for credit restructuring. On every occasion, the government has agreed to IMF conditions. But, once the bailout package is disbursed, agreed requirements are disregarded and back to loosen fiscal policy for political advantage. No political party have learned a lesson from past mistakes and keeps repeating the same. They expect camouflaging fundamental issues to mislead the donors, and the people can continue forever.  Suppose we had fully complied with the agreed requirements and continued with a growth-oriented fiscal policy and economic restructuring for several years. In that case, we could have cured the wound permanently without recurring it. But the government’s behaviour is like enabling the patient to move from the sick bed; the patient escapes from the hospital without facing the surgery.

On all previous occasions, the government approached the IMF before bankrupting the economy and benefited from bail-out packages. Since the beginning of 2020, the symptoms of the economic crisis have been visible. However, the government was reluctant to seek IMF assistance due to the possible challenging fiscal discipline that may enforce on the eve of the general election. Even after the general election, the government wanted to maintain a loose budgetary policy to accommodate popular election pledges. Towards the middle of 2021, it was clear that the economy would collapse without severe remedial actions and policy reversal. Even at this stage, the authorities did not realise the gravity of the situation and thought the same loosened policy could be continued with temporary homegrown solutions. An attempt was made to relieve the foreign exchange crisis by controlling the imports while keeping the value of the rupee artificially high. Also, the authorities believed the government could service all external borrowings without defaulting through the savings generated from import restrictions and printing money to finance the domestic expenditure, guided by the “new monetary theory”.  Available foreign reserves were used to service the external borrowings and maintain the rupee’s value artificially high. But they did not understand that this solution would deprive the people’s basic needs and collapse the domestic economy, which depends heavily on imported inputs.

At the beginning of 2022, it had proved that all homegrown solutions have miserably failed, and the country is running into a catastrophe. Towards the end of the first quarter of the year2022, the economy virtually collapsed, without foreign exchange to import petroleum, coal, gas, medicine, essential food items and many more. Eventually, the rupee was floated and allowed to depreciate. The immediate impact was the devaluation of the rupee by more than a hundred per cent pushing the cost-of-living sky high and days-long queues for all essentials, including fuel, food, and medicine. Meanwhile, the government was compelled to default on repayment of foreign loans to save the meagre foreign exchange for importing bear minimums. Due to the speculation of further devaluation of the rupee, foreign exchange earners stopped sending their earnings to the country through official channels. The country came to a standstill without inputs and mobility for industries, agriculture, and day-to-day operations for living. This resulted in multiplier effects such as constraints on industries resulting in low export income, high demand for imports, unemployment, low tax income to the government etc., creating a vicious cycle. It came to total anarchy, creating a political nightmare. Social unrest escalated to an unmanageable level, and eventually, the democratically elected president and prime minister were forced to resign.

Eventually, after failing all home-grown solutions, the government sought IMF assistance to bail out the crisis in April 2022. Then it was too late, and people and the economy suffered severely. Consequently, the recovery period will be much longer than the average IMF support program. Perhaps, it may take another five to six years to reach the per capita GDP to the 2017 level. If this decision had been taken at least in mid-2021, the recovery period could have been shorter, with less damage to the people and the economy. Relevant authorities could have bungled the episode from December 2019 to June 2002. But it isn’t easy to believe, as the president and finance minister were backed by many senior economists and experienced development administrators. Perhaps it may be the ego and deformed ideologies of the relevant authorities who are unwilling to listen to others’ views and productive criticisms. Another possibility is that some forces could have conspired by assigning bunglers to critical positions to mismanage the economy and thereby oust the non-political carrier president and capture power. This inference seems more pertinent, having observed entire political episodes from December 2019. Whatever the cause behind it, it has created long-lasting adverse socio-economic effects. Some of them are irreparable, such as child malnutrition and health hazards. Perhaps those who have abandoned farming may not be into agriculture again.

Conclusions

The limping economic legacy of over half a century has been further aggravated due to the nonsensical tax reduction in December 2019 and several other senseless decisions taken by the new government.  Accelerated unproductive government expenditure, such as recruiting 50,000 unemployed graduates and 100,000 unskilled less educated youths to the public sector, Weda Lakshayak (hundred thousand projects) and the 100,000 Km Road program, put more burden on the already unwieldy budget. Banning chemical fertilisers paralysed agricultural production. Alienating a considerable volume of government revenue, overnight switching to organic agriculture, and blindly trusting homegrown solutions for structural economic issues are the most preposterous decisions ever taken by a government. All these could have resulted from ill advice by bunglers guided by personnel agendas and deformed ideologies.

Since its independence, the power-greedy politicians competitively made Sri Lanka a nation lacking self-confidence and depending on subsidies and lives beyond its means. As a nation, Sri Lanka consumes more than it produces. To overcome this situation, we must learn to live within our means. There is no free lunch. Everything has a price. People must be ready to enter an era of new economic and political order. People must be prepared to produce more than they consume. Politicians in power should allow newcomers to take the reins and change the whole system to match the modern world instead of reinforcing the century-old corroded systems. The bureaucrats should be ready to switch on par with the contemporary world, proactive and able to drive the political masters on the right track instead of carrying forward the residua of feudal administration practices of their predecessors. All stakeholders in the governance system should be thoroughly determined to avoid financial and power corruption. We need a charismatic patriotic leader who can transform the whole society into a forward-looking, dynamic one.

Whither Colombia’s fragile struggle

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6 mins read

Each year, in the last weeks of September, the world’s leaders gather in New York City to speak at the podium of the United Nations General Assembly. The speeches can usually be forecasted well in advance, either tired articulations of values that do not get acted upon or belligerent voices that threaten war in an institution built to prevent war.

However, every once in a while, a speech shines through, a voice emanates from the chamber and echoes around the world for its clarity and sincerity. This year, that voice belongs to Colombia’s recently inaugurated president, Gustavo Petro, whose brief remarks distilled with poetic precision the problems in our world and the cascading crises of social distress, the addiction to money and power, the climate catastrophe and environmental destruction. ‘It is time for peace’, President Petro said. ‘We are also at war with the planet. Without peace with the planet, there will be no peace among nations. Without social justice, there is no social peace’.

Colombia has been gripped by violence since it won its independence from Spain in 1810. This violence emanated from Colombia’s elites, whose insatiable desire for wealth has meant the absolute impoverishment of the people and the failure of the country to develop anything that resembles liberalism. Decades of political action to build the confidence of the masses in Colombia culminated in a cycle of protests beginning in 2019 that led to Petro’s electoral victory. The new centre-left government has pledged to build social democratic institutions in Colombia and to banish the country’s culture of violence. Though the Colombian army, like armed forces around the world, prepares for war, President Petro told them in August 2022 that they must now ‘prepare for peace’ and must become ‘an army of peace’.

When thinking about violence in a country like Colombia, there is a temptation to focus on drugs, cocaine in particular. The violence, it is often suggested, is an outgrowth of the illicit cocaine trade. But this is an ahistorical assessment. Colombia experienced terrible bloodshed long before highly processed cocaine became increasingly popular from the 1960s onwards. The country’s elite has used murderous force to prevent any dilution of its power, including the 1948 assassination of Jorge Gaitán, the former mayor of Colombia’s capital of Bogotá, that led to a period known as La Violencia (‘The Violence’). Liberal politicians and communist militants faced the steel of the Colombian army and police on behalf of this granite block of power backed by the United States, which has used Colombia to extend its power into South America. Fig leaves of various types were used to cover over the ambitions of the Colombian elite and their benefactors in Washington. In the 1990s, one such cover was the War on Drugs.

By all accounts – whether of the United Nations Office on Drugs and Crime or the US government’s Drug Enforcement Agency (DEA) – the largest consumers of illegal narcotics (cannabis, opioids, and cocaine) are in North America and Western Europe. A recent UN study shows that ‘cocaine use in the United States has been fluctuating and increasing after 2013 with a more stable trend observed in 2019’. The War on Drugs strategy, initiated by the United States and Western countries, has had a two-pronged approach to the drug crisis: first, to criminalise retailers in Western countries and, second, to go to war against the peasants who produce the raw material in these drugs in countries such as Colombia.

In the United States, for instance, almost two million people – disproportionately Black and Latino – are caught in the prison industrial complex, with 400,000 of them imprisoned or on probation for nonviolent drug offences (mostly as petty dealers in a vastly profitable drug empire). The collapse of employment opportunities for young people in working-class areas and the allure of wages from the drug economy continue to attract low-level employees of the global drug commodity chain, despite the dangers of this profession. The War on Drugs has made a negligible impact on this pipeline, which is why many countries have now begun to decriminalise drug possession and drug use (particularly cannabis).

The obduracy of the Colombian elite – backed by the US government – to allow any democratic space to open in the country led the left to take up armed struggle in 1964 and then return to the gun when the elite shut down the promise of the democratic path in the 1990s. In the name of the war against the armed left as well as the War on Drugs, the Colombian military and police have crushed any dissent in the country. Despite evidence of the financial and political ties between the Colombian elite, narco-paramilitaries, and drug cartels, the United States government initiated Plan Colombia in 1999 to funnel $12 billion to the Colombian military to deepen this war (in 2006, when he was a senator, Petro revealed the nexus between these diabolical forces, for which his family was threatened with violence).

As part of this war, the Colombian armed forces dropped the terrible chemical weapon glyphosate on the peasantry (in 2015, the World Health Organisation said that this chemical is ‘probably carcinogenic to humans’ and, in 2017, the Colombian Constitutional Court ruled that its use must be restricted). In 2020, the following assessment was offered in the Harvard International Review: ‘Instead of reducing cocaine production, Plan Colombia has actually caused cocaine production and transport to shift into other areas. Additionally, militarisation in the war on drugs has caused violence in the country to increase’. This is precisely what President Petro told the world at the United Nations.

The most recent DEA report notes that cocaine use in the United States remains steady and that ‘deaths from drug poisoning involving cocaine have increased every year since 2013’. US drug policy is focused on law enforcement, aiming merely to reduce the domestic availability of cocaine. Washington will spend 45% of its drug budget on law enforcement, 49% on treatment for drug addicts, and a mere 6% on prevention. The lack of emphasis on prevention is revealing. Rather than tackle the drug crisis as a demand-side problem, the US and other Western governments pretend that it is a supply-side problem that can be dealt with by using military force against petty drug dealers and peasants who grow the coca plant. Petro’s cry from the heart at the United Nations attempted to call attention to the root causes of the drug crisis:

According to the irrational power of the world, the market that razes existence is not to blame; it is the jungle and those who live in it that are to blame. Bank accounts have become unlimited; the money saved by the most powerful people on Earth could not even be spent over the course of centuries. The empty existence produced by the artificiality of competition is filled with noise and drugs. The addiction to money and to possessions has another face: the drug addiction of people who lose the competition in the artificial race that humanity has become. The sickness of loneliness is not cured by [dousing] the forests with glyphosate; the forest is not to blame. To blame is your society educated by endless consumption, by the stupid confusion between consumption and happiness that allows the pockets of the powerful to fill with money.

The War on Drugs, Petro said, is a war on the Colombian peasantry and a war on the precarious poor in Western countries. We do not need this war, he said; instead, we need to struggle to build a peaceful society that does not sap meaning from the hearts of people who are treated as a surplus to society’s logic.

As a young man, Petro was part of the M-19 guerrilla movement, one of the organisations that attempted to break the chokehold that Colombia’s elites held over the country’s democracy. One of his comrades was the poet María Mercedes Carranza (1945–2003), who wrote searingly about the violence thrust upon her country in her book Hola, Soledad (‘Hello, Solitude’) (1987), capturing the desolation in her poem ‘La Patria’ (‘The Homeland’):

In this house, everything is in ruins,

in ruins are hugs and music,

each morning, destiny, laughter are in ruins,

tears, silence, dreams.

The windows show destroyed landscapes,

flesh and ash on people’s faces,

words combine with fear in their mouths.

In this house, we are all buried alive.

Carranza took her life when the fires of hell swept through Colombia.

A peace agreement in 2016, a cycle of protests from 2019, and now the election of Petro and Francia Márquez in 2022 have wiped the ash off the faces of the Colombian people and provided them with an opportunity to try and rebuild their house. The end of the War on Drugs, that is, the war on the Colombian peasantry, will only advance Colombia’s fragile struggle towards peace and democracy.

Source: Tricontinental: Institute for Social Research. Click here to read the original

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