What victory are we celebrating in Sri Lanka?

(June 18, 2010, Colombo - Lanka Polity) Sri Lanka celebrates the war victory marked by killing of Tamil rebel leader Velupillai Prabakaran on May 18, 2009 a year and a month later. The victory celebrations were postponed a month ago since the floods displaced around half a million people, a large number from Colombo itself.

Yesterday an ethnic Sinhala man was arrested by police for enlarging a photo of Velupillai Prabakaran. Police intelligence officials are now interrogating him to identify may be his mindset. It seems having a photo of Prabakaran in possession a sin if not an offence in post-war Sri Lanka.

It is not a bad idea giving another holiday to Sri Lankan workers. But, the government need to tackle the issue of a large number of employees especially in the public sector idling on working days as well.  

Even an year after the war, the only change perceivable in Sri Lanka is the relative peace of being free from frequent bomb explosions. Ethnic polities are still as much divided as they were in the war time.

No person with a sense can say that the country is in the path of development about which the government boasts. No serious rapid growth of investments and growth of tourists that will be effective to achieve the goal of being Asia's Wonder.

One thing happening in Sri Lanka is the development of infrastructure with the funds raised from the open financial market at relatively higher interest rates. Massive rackets of commissions and other malpractices haunt this 'development.'

The nation is entangling in a crisis of debt day by day.

The most crucial issue of Sri Lanka at the moment is the number of terms the President can hold the post and the successor of President Mahinda Rajapaksa, either his son or one of his powerful brothers.

We, the Sri Lankans, have got up late on Wednesday and in front of the television watching the victory parade lazily sipping tea.


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Sri Lanka further into the debt crisis

(June 16, 2010, Colombo - Lanka Polity) 'Sri Lanka government has plans to sell $275 million of dollar-denominated bonds locally this month to pay for maturing debt.

Three months ago, Sri Lanka failed to raise a targeted $100 million through a debt auction.

The Central Bank of Sri Lanka will issue $175 million of two-year debt and $100 million of three-year paper, the Central Bank of Sri Lanka said on its website.

Subscriptions for the so- called development bonds close on June 18.

The nation raised $92 million by selling development bonds through competitive bidding in March, and the central bank subsequently raised $8 million through placements that month.

Sri Lanka's public debt repayments and interest is amounting to 767 billion rupees this year. It is 44 percent of the overall budget expenditure of 1,780 billion rupees.

Last year government debt hit 4.1 trillion rupees. Of it, 1.8 trillion rupees was foreign debt, a 22 percent rise, according to Central Bank annual report: “The ratio of debt service to government revenue increased further to 117.5 percent from 90.5 percent.,” the report said. Total debt servicing rose by 39 percent to 825.7 billion rupees in 2009, including a huge interest payout of 309.7 billion rupees that comprised 26 percent of total expenditure.

World Bank Director for South Asia Ernesto May launching the World Bank’s South Asia Economic Update 2010 in Colombo last week noted: “South Asia has very high levels of public debt—over 60 percent of GDP for the region. As seen in Europe with markets focusing on highly indebted countries, markets will start penalising those with high debt.” He pointed out that Sri Lanka’s debt was the second highest in the region after the Maldives—increasing from 81 percent of GDP in 2008 to 86 percent in 2009.

Out of this massive debt services burden, 36.5 percent is for foreign debt. Sri Lanka should target investment led growth and minimize borrowings which could lead to a future debt crisis, former Malaysian prime minister, Mahathir Mohamed said. "Don't depend too much on loans, the better thing of course is to invite foreign investors to come in and create jobs and bring in capital into the country," Mohamed told reporters at a media briefing in Colombo.

Allocations for health and education were as low as 52 and 46 billion rupees respectively—a total of 10 billion rupees less than for 2009. The budget for 2009 was itself 12 billion rupees lower than the amount for 2008. The combined allocation for health and education this year is less than half of defence expenditure in 2010.

The government promised an IMF team in May that it would considerably reduce recurrent spending. It intends to cut government subsidies to the Ceylon Electricity Board, Petroleum Corporation, Central Transport Board, railways and postal services. Total losses in these sectors amount to 49 billion rupees and can only be reduced by axing jobs, cutting wages and increasing prices.

Meanwhile, the defence budget at 202 billion rupees ($US1.8 billion) or 21 percent of the total expenditure of 974 billion rupees allocated to government ministries. At a convention of public sector trade unions that are under Trade Union Confederation last week, Joseph Stalin Fernando, the national organizer of the trade union coalition argued that the government is increasing defense expenditure to suppress the workers' struggles.

However, the trade unions failed to gather the expected number of participants to the convention and some trade union leaders expressed wonder why the workers were so unresponsive in a time the government is breaking the promise of Rs. 2500 per month salary hike for public servants.

(Sources: World Socialist Website, Lanka Business Online)


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Sri Lanka regime's ugly game in between India and China

(June 14, 2010, Colombo - Lanka Polity) 'Though the Tiger is no more and Lankan Tamils are cowed, Indian Tamils and Diaspora Tamils together can still pose a formidable challenge to Colombo. And their capacity to do so will remain so long as the problems of the Lankan Tamils are unresolved."
-Thisaranee Gunasekara evaluating the outcome of the IIFA-2010 Bollywood award ceremony held in June in Colombo.

Sri Lanka President visited India following the IIFA debacle and the Hindustan Times had to report "The Pro-Tamil group's protest against visit of Sri Lankan president Mahenda Rajkapsa turned violent on Saturday (June 12) when suspected pro-tamil activists blasted railway tracks, just before a passenger train was to enter Perani railway station in Villupuram district, some 70 km south of Chennai in the wee hours."

This news creates a picture of a Tamil struggle in which the Sri Lankan part appears relatively peaceful amidst miserable conditions of the war-affected community while the Indian section looks getting more militant than before in addition to its successful lobby politics that made the IIFA a great disaster for Sinhala chauvinist Sri Lanka government.

Tamil struggle poses to envisage in a broader spectrum of a struggle of world Tamils for a state. Being the heart of the Tamil polity, the Tamil Nadu with its 70 million Tamils naturally becomes the epicenter of the new struggle.

In a time the capitalist world is facing its worst economic crisis in the history, it is natural that the struggles against the system may restructure aiming outcome amidst a possible world crisis.

India is a nation threatened by a number of nationalist struggles seeking restructuring of geo-politics. Therefore, due to clearly understandable reasons, India cannot give way to the rise of the new wave of Tamil nationalism in Tamil Nadu.

One way of curtailing the trend is to find a sustainable solution for the ethnic problem of Sri Lanka. The island nation is the melting pot of the Tamil nationalism.

Thisaranee Gunasekara says "In a speech to a group of businessmen, on the first anniversary of the defeating of the LTTE, (Sri Lanka Army Commander) Gen. Jayasuriya said that “it is up to the government and the people now to fund the root cause of the problem and give a proper solution… I believe in the end a proper solution is needed” (The Straits Times – 11.6.2010).

"Unfortunately his words are likely to be unheeded, if not scorned. The Rajapakses will not deliver a political solution, because they do not believe in the existence of an ethnic problem, as the President himself had stated, publicly, time and time again. Disbelieving in the existence of an ethnic problem, they, logically, do not see the need for a political solution."

However, The Hindu reported Union Home Minister P. Chidambaram said on Saturday that there are positive signals from Sri Lanka on finding an amicable and acceptable solution to the issue of Tamils, who are fighting for equal rights.

But Thisaranee Gunasekara contradicts this idea. She says "Not only will the Rajapakses not deliver a political solution; even the restoration of normalcy or a real improvement in the living conditions of the North-Eastern Tamils is unlikely to happen, except marginally and minimally. The fact that the 2010 budget sets aside Rs.201 billion for defence but only Rs.2 billon for resettlement demonstrates the very low priority accorded by the government to Tamil wellbeing. It also reveals the regime’s inability/unwillingness to see the nexus between development and security. Given such a militarist mindset, reconciliation is but a mirage, a delusion spun occasionally by the state media, for purposes of propaganda."

Thisaranee points out that Sri Lanka will swing like a pendulum between India and China to manage the situation and eventually the island nation can be the battleground of the cold war between the two super powers. But one point she forgets is that India is more important to China than Sri Lanka and another 1987-like scenario can re-emerge.

In 1987, J.R. Jayawardane, who was playing in between India and Western super powers keeping all its eggs in the West's basket was eventually betrayed to India by the West that he venerated and kept his all trusts. China never bothers about the ethnic problem of Sri Lanka. She will not wage war against India once India attempts to use its powers to solve the problem. The possibility of China advising Sri Lanka one day to give way to India is very high. In such context, it will be the end of the road for the game of the Rajapaksas.

Wihat is this game? It is none other than playing in others' soft corners permanently hoodwinking the world and sustaining the misery of the minorities of the island. Rajapaksas should be defeated in this game if Sri Lanka as well as the world polity needs to progress.

What Dr. Dayan Jayathilaka has to say is different. "When we antagonized India we could not win the war, but when we correctly managed relations with India, we won the war. If India had opposed us or not supported us, we may not have been able to win or withstand the Western moves to stop the war. There is a saying that there is no such thing as a free lunch. Every relationship is reciprocal. Sri Lanka has to reciprocate for India’s support," he says.

"We must bear in mind that we still need that support because, though the hot war has been won by us, a cold war continues against us in the global arena.

"We need India’s support to balance off those who are hostile to us or are influenced by the pro-Eelam trend in the Tamil Diaspora. India is our buffer with the USA. Delhi is under pressure to take a stand hostile to us, or to stop supporting us. That pressure comes from Tamil Nadu but not only from Tamil Nadu...from India’s civil society as well as some of India’s Western friends. If India stops supporting us, not even the Non Aligned Movement will defend us fully, because they take their cue from respected Third World states such as India." Dr. Dayan Jayathilaka adds.

In this context, the progressive elements of Sri Lanka must try their best to manage the conflicts as subtly as they can to achieve better results for the polity.

It should be understood that the attempts of a section of Sri Lankan business community and the left forces to mobilize people against India citing 'aggressive' nature of proposed Comprehensive Economic Partnership Agreement (CEPA) etc. are indirectly promoted by the ruling elite to maintain their chauvinist base of the politics. Progressive forces of the Lankan polity should work to broaden the purview of the polity to enhance their ability to grasp the better and sustainable outcome instead of narrow, quick popularity.


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Basilian neo-liberalism, Mahindian nationalism and high level Sovereign Rating Committee of Sri Lanka

(June 12, 2010, Colombo - Lanka Polity) Central Bank of Sri Lanka (CBSL) has initiated a programme to take the necessary steps to upgrade the country’s sovereign rating.

The significance of this move is that the government has moved further in the Basilian doctrine of neo-liberalism and it has appointed top officials of Indian company and and a local agent of a multi national consortium into this committee. This is a move against Mahindian nationalist and national economic policies that frequently denied Indian and Western multi national penetration of local economy.

Reportedly, this has annoyed local business leaders. After all, the two companies Nestle and IOC does nor or negligible very little to change Sri Lanka's performances according to these ratings, they point out.

“As announced in the Central Bank Road Map 2010 and beyond, the Central Bank of Sri Lanka (CBSL) will take the necessary steps to upgrade the country’s sovereign rating from the current B+ (stable)/B(positive) to an investment grade of BBB- or higher over the next four year period,” says the Central Bank.

Central Bank says that towards this end, a carefully designed, forward looking and effective strategy will be implemened with the participation and co-operation of the all stakeholders, country authorities, private sector business leaders, chambers and rating advisors.

Central Bank announces that it has now appointed the following high level Sovereign Rating Committee, which will make regular reviews on the developments of the economy and convey these improvements to the rating agencies through rating advisors to upgrade the country’s rating level.

Mr K G D D Dheerasinghe, Deputy Governor, CBSL (Chairman)

Mrs J Mampitiya, Assistant Governor, CBSL (Deputy Chairman)

Mr K D Ranasinghe, Chief Economist & Director of Economic Research, CBSL

Mr C J P Siriwardena, Superintendent of Public Debt, CBSL

Mr. U.R. Seneviratne, Deputy Secretary to the Treasury

Mr C N Wijayasekera, Additional Superintendent of Public Debt

Mr. Ashroff Omar, Chief Executive Officer, Brandix Lanka Ltd

Mr. David Saudan, Managing Director, Nestle Lanka PLC

Dr. Anura Ekanyake, Chairman, Ceylon Chamber of Commerce

Mr. Upali de Silva, Secretary General, Sri Lanka Banks’ Association

Mr. Dilith Jayaweera, Managing Director, Triad Advertising

Mr. K.R. Suresh Kumar, Managing Director, Lanka IOC Ltd





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Will state capitalism be a solution to global crisis of the capitalism?

(June 10, 2010, Colombo - Lanka Polity) We reproduce this column written by Dr. Wickramabahu Karunarathna to LakbimaNews since it is one of the very rare occasions the leftist activists of Sri Lanka attempt to address the core political issues rather than the day to day economic struggles.

As far as we have understood, Dr. Wickramabahu seems to say that state regulation of the capitalist system will be inadequate to overcome the global economic crisis. He does not provide a clear answer regarding solution though he implies socialism will be inevitable. After all, socialism is yet to be defined in the modern context, as we perceive, the veteran Marxist can clear the issue if we are wrong.

On the other hand, is state control of the capitalist economy so new? Capitalism thrived through national states and even in the age of global capitalism, the state control is still predominant even in the developed countries although it is theoretically expected the market will regulate the system itself.

More or less, the extreme control of the market by state through price control, prohibitive tariffs, tax reliefs and state enterprises has become Sri Lanka's present day practice. The government is trying on one hand to liberalize market more through Comprehensive Economic Partnership Agreement with India while it is trying to accumulate a bigger share of capital through measures like acquiring the stake of Emirates of Sri Lankan airline on the other hand. It can be an innovative move of the economic pundits of the unconventional Rajapaksa regime. Who knows what miracle they will perform? They are the people who crushed the elusive Tamil Tigers in a war that no one expected would be able to be so blatant and disregarding of human rights.

The global crisis, which we are experiencing right now is the deepest and the most widespread crisis, since the 1930s by any reckoning. It has changed the attitude of pundits of global capital. The glory days of free market are gone with the crisis. Then, we were told by writers, artists and academics that “Greed or desire is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.” In fact the founder of modern psychology, Freud saw all human behaviour as motivated by drives or instincts, which in turn are the neurological representations of physical needs. On the one hand these instincts perpetuate the life of the individual, and on the other the life of the species. Thus he became a guru for those who wanted the free market economy to rule the human life. Many have accepted the idea that humans are just naked apes and the man is just a hunter. Market is the modern hunting ground. However, all these optimistic Neanderthal thinking has been slowly abandoned for more realistic ways for capitalism. It is the path of compromise and social peace.


Desire dominated
New thinkers promoted by the International Monetary Fund, now argue that it is wrong to forget the institutional foundations of markets and to equate the free market with unregulated markets. Furthermore, they argue that whatever market monitoring that was there, was insufficient to guard against opportunistic behaviour, of unregulated, profit-seeking individuals taking risks by which they stand to benefit and others to lose. In other words man has to come out of desire dominated thinking, to care for others. Big banks and multinational companies too should remould their ethical frameworks. All this time the global capital arranged its affairs with least regard for ethical structures put forward by Mohamed, Jesus or Buddha. Of course the system preached that it is involved in a messianic mission to save religion from blood thirsty terrorists. But within the market mechanism there was scant regard for ethical thinking. Now the global capital is searching for truth and benevolence.


In an earlier analysis of the global crisis Daron Acemoglu, one of the new IMF thinkers, states: “A deep and important contribution of the discipline of economics is the insight that greed is neither good nor bad in the abstract. When channelled into profit-maximizing, competitive, and innovative behaviour under the auspices of sound laws and regulations, greed can act as the engine of innovation and economic growth. But when unchecked by the appropriate institutions and regulations, it will degenerate into rent-seeking, corruption, and crime.” I am glad to hear that the beast has to be controlled! However, the position today is that the desire is natural and it is the duty of the society to control. I thought Buddha said more or less the same thing. According to him the desire makes the human, an alienated person. The determination of desire by care will remove this alienation. The path for that nirvana is the collective, democratic praxis; the path of sanga. No, I am wrong; capitalism even with state control cannot get that far.


State capitalism
So we are in the middle of state capitalism as a temporary way out of this debacle of cyclic crisis. In spite of new terminology and man made confusion, the global system has entered the stage of state capitalism. I have nothing more to add than to quote from one of my teachers Fredric Engels. “In any case, with trusts or without, the official representative of capitalist society - the state - will ultimately have to undertake the direction of production. But, the transformation - either into joint-stock companies and trusts, or into State-ownership - does not do away with the capitalistic nature of the productive forces. ... It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.”

Is China behind CEPA protests in Sri Lanka?

(June 07, 2010, Colombo - Lanka Polity) Sri Lankan President Mahinda Rajapaksa is to visit India since tomorrow and the bilateral talks are expected to focus Comprehensive Economic Partnership agreement (CEPA) that was supposed to be signed two years ago but stalled.

Two weeks back, several hundreds of protesters took to the streets against CEPA claiming it would hugely benefit the neighboring country by forcing the domestic industry into appalling risks. A high profile lobbying is underway against the trade pact which is yet to be made public.

Many highly educated, including doctors and engineers who were part of the recent protest along with businessmen expressed their fears that the island could be dominated by cheaper and skilled Indian services at the expense of the domestic industry.

However, Jose Roy writing to www.toboc.com says "this argument is unfounded as India’s educated unemployed were largely jobless because their reluctance to work for less or in remote places. Moreover, Sri Lanka being a country less than half the currency value of India would not have to panic about the products or services from India going cheap rather can ensure superior quality which could help the country build its economy on a firmer footing."

The Indo-Sri Lanka Free Trade Agreement (ISFTA) signed in 1998 and which is effective since March 1, 2000 has been able to boost trade between both nations significantly with near equal opportunity for the Sri Lankans. The ISFTA that is confined to the trading of only goods pushed country’s exports by manifold from $55.7mn in 2000 to $516.4mn in 2007. Interestingly, the part of the business community lobbying against the CEPA hail the ISFTA.

On the contrary, in 2002, the traded volume between China and Sri Lanka totalled about $350mn, of which China's exports accounted for $340mn providing room for Sri Lankan exports at about a meagre $10mn. Although Sino-Lankan trade witnessed tremendous growth over the years with bilateral trade crossing $2bn in 2009, imports from China remained predominately greater than the efflux. However, an anti-Chinese lobby is almost invisible possible because China is not involved in internal politics of Sri Lanka.

The conservatism of a part of Sri Lankan business community regarding CEPA is highly controversial. But the worst is Sri Lanka's leftist People's Liberation Front (JVP) and some other elements disgruntled due to the rise of Mahinda Rajapaksa through Sinhala nationalism in which they had kept all their eggs might try to rouse anti-Indian sentiments among the masses investing in CEPA protests.

These elements may use the opportunity for raising funds and mustering broad-based support for an anti-Indian campaign that may ultimately lead to a racist movement against any attempt to bring a solution for the ethnic problem through negotiations.

Frustration led them in previous occasions as well to similar disastrous racist tactics to grab power that caused havoc to entire nation. The JVP uprising between 1987-89 and the toppling of the democratically elected United National Party government through a premature election called manipulating draconian powers of the executive presidency they themselves despised in 2004 are examples. The damages incurred to the Sri Lankan polity in these vicious circles are immeasurable.

The business community members that protest the CEPA must be considerate of this kind of adverse effects of their protests that might ultimately lead to disastrous effects on the nation.

We, as leftists, do not believe in the conservatism in the name of safeguarding national states economies. It is the task of the capitalists to move in the path of market liberalization. Socialists must fight against the capitalist system for the rights of the down trodden masses. However, we believe that the forward march of the human socio-economic systems must not stop at nation state. Therefore, safeguarding national economies and state apparatuses should not be in the agendas of the leftists. Socialism, though not clearly defined, is an advanced social system, one beyond the fullest potentials of the capitalist system, that has nothing to share with the backward nation states.

CEPA is not leftists' subject. However, leftists must evaluate the situation vis-a-vis their aim of socialism. Socialism will be a reality only in a context labor has achieved the freedom of mobility that capitalism has already achieved.

Lankan war was corporate one, says Arundhati Roy

(June 05, 2010, Colombo - Lanka Polity) The war in Sri Lanka was not just a war of the Sri Lankans against the Tamil people, according to writer-activist Arundhati Roy. "That was a corporate war. All the large Indian companies are now heading to Sri Lanka to make more money," Roy said on Friday. "The political parties of Tamil Nadu were the only ones who could have stopped the genocide in Sri Lanka, but they chose to stand by silently. A similar thing is happening in central India where tribals are resisting the takeover of natural resources by corporates."

Roy was speaking at a Convention on Operation Green Hunt and Genocidal attack on tribals by Indian State' organised in the city on Friday by the Federation Against Internal Repression. She said the resistance in central India was a fight against injustice and not a rebellion against the state as the government says it is. "The government is on the side of the corporates who want to take over the lands, forests, rivers, the traditional homes of the tribals. Operation Green Hunt follows the Bush doctrine of you are with us, or against us," she said. "Anyone who resists this corporate takeover, whether Gandhian, tribal or Maoist, is branded a terrorist," she said.

Turning her attention to the environmental impact of development, she said there was no ecological way to mine bauxite. "You can never mine bauxite and then turn it into aluminium without destroying the ecological balance of the mountains. The tribals have lived in harmony with the forests and nature for centuries," she said.

For over five years, some of the poorest, most marginalised people in the country have held off some of the world's largest multi-national corporations, she said, referring to tribals and adivasis across the country. "Every institution in this country has been corrupted but the spirit of our people remains strong," she said.

The people's struggles were not against democracy but the ways in which the mechanisms of democracy function. "You're a Gandhian if you protest on the road, and a Maoist if you resist in the forest. How can someone without food go on a hunger strike? To do Gandhian resistance, you need an audience, and there is no audience in the forest," she said.

-Times of India