Neoliberal economic invasion of SL led by U.S.
Posted on April 9th, 2019

By Prof. Tissa Vitarana Courtesy Ceylon Today

BMost people in Sri Lanka are unhappy (Sri Lanka has dropped from the 116th place to the 130th place in the United Nations global ‘Happiness Index,’ out of 156 countries, this year), deeply concerned and bewildered by what is going on in our country. They keep asking what is happening, what is going to happen?”. The Ranil Wickremesinghe (RW) Administration is breaking down, and instead of the promised good governance there is a failure of governance, featured by open corruption from the very top, waste, disregard for the law of the land including the Constitution, nepotism, partisan abuse of State resources and lack of clear and consistent policy decisions, leading to a collapse of most utility services. 

The level to which the RW-led Government has sunk is clear from one example: The day light robbery at the Central Bank which is covered up and not taken up by the Financial Crimes Investigation Division (FCID), set up to take speedy action against financial fraud. The FCID has failed to get the evidence even to back up the serious allegations made against the previous regime, and is being used mainly to harass and take revenge from RW’s political opponents. There is a growth of the underworld and an increase in the drug trade with a breakdown of societal values. 

Administration and society itself is in a State of virtual chaos.


The economy too is in deep crisis bordering on bankruptcy. Prices are soaring, incomes are falling, personal debt is widespread, poverty, malnutrition and suicides are on the rise. The average economic growth rate has dropped from 7 per cent, during the Mahinda Rajapaksa (MR) regime, to 3 per cent with the RW regime. Small and medium-sized enterprises (SMEs) are closing down. Foreign debt has soared, reaching a debt repayment level of US$ 6 billion for this year, and similar levels for the next five years. The wrong tax policy, where 87 per cent of Government income comes from the people (99 per cent) and only 13 per cent is from the rich (1 per cent) is a major factor causing the adverse foreign trade balance, where the cost of imports is double the export earnings. The increased demand for US dollars (USD) has led to more and more foreign borrowing by the RW Government, and also opened the door for the sale of our assets to multinational corporations (MNCs), which had been banned earlier.


Superficially, these appear to be an outcome of mere incompetence and the clash of policies and personalities at the top. But they are part of, and hide, a well thought out and meticulously executed plan that commenced with the foreign plot led by the USA that toppled the MR regime in 2015, and installed a UNP/SLFP Unity Government, really led by RW. It is a part of the USA global pattern of regime change to install puppet regimes to implement neoliberal change.


Neoliberalism


Neoliberalism originated at a meeting of leading capitalist economists held in France in 1947, led by Prof. Milton Friedman, Head of the USA’s Chicago School of Economics, among others. These ideas were aimed at finding a means of sustainably emerging from the deepening global crisis of capitalism which was affecting the USA and Europe worst. The basic concept was that State regulation of the economy should be taken over by market forces. There should be maximal privatisation of the State sector. 

The development of the individual and private companies, maximising their profit, should be supported by the State, and not impeded in any way. Any action of the State for the common good that interferes with the advancement of the individual or private company is considered to be against human and fundamental rights. In fact, these ideas are included in the USA’s company law. The welfare State must be dismantled and handed to the private sector. With globalisation, the barriers of the nation State, acting in the interest of its people and national economy must be removed, to enable the free flow of money, goods, and services across countries. 

This enables private capital and giant multinational corporations from the USA and Europe to freely exploit our resources, like in the colonial period, without the need to physically occupy our territory. What is required is to have a puppet regime in power, which will facilitate the implementation of the neoliberal agenda. To ensure that this would be done globally the Washington Consensus was signed in the 1970s between the Government of the USA, the International Monetary Fund (IMF), and World Bank (WB).

Role of USA/IMF/World Bank

To compel our countries to fall in line with this neoliberal agenda, the internal policies should make us fall into a position of increased foreign debt. For this, our USD outflows should exceed inflows, by making Sri Lanka give up its self-sufficiency policy and become import-dependent. By minimising the tax burden on the rich (24 per cent upper slab), they can increase the import of luxuries (vehicles and similar items). 

The Government is thus forced to take more and more foreign loans and get deeper into debt. The IMF/WB then step in to help with concessionary loans (around 6 per cent interest), provided we conform with their conditions. This includes the complete dismantling of the welfare State and its sale to local and foreign private capital. Along with this the ban on the sale of land, and our national assets to foreigners, should be removed. The restriction of land holdings to 50 acres must go. The door must be opened for the free outflow of profits. The UNP Government has agreed with the IMF so that foreign MNCs can take over our economy.


One would expect RW as Premier not to allow such a thing to happen. But he is also Chairman of the Asia-Pacific Chapter of Conservatives International (headed by the Republican Party of the USA) and it this role that he fulfils. Agreements enable the USA military to make full use of our bases, including Trincomalee, and US troops while here are not bound by Sri Lankan law, but that of the USA. 

The UNP has surrendered our independence and sovereignty. In addition, the proposed Labour legislation, (12-hour working day, Saturday half a day with no salary increase) will help foreigners to further exploit our workers. The draconian Counter Terrorism Act (CTA) will enable the ruling Party to establish a Police State, and stay on in power without elections.

One Response to “Neoliberal economic invasion of SL led by U.S.”

  1. Christie Says:

    Hi Tissa.

    These Neoliberalism and other garbage may apply to some countries but not ours.

    Ours is an Indian Colony run by Indian Colonial Parasites.

    Our economy is in the hands of these Indian Colonial Parasites and India.

    Look at our trade figures and go for a walk in our whole sale market and tell me what you hear.

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