Political economy of bond scams and other thefts
Posted on November 28th, 2017

By Dr Kamal Wickremasinghe Courtesy The Island

The current situation relating to government corruption and malfeasance in Sri Lanka, viewed in the light of election promises made in 2015, reminds us of a particularly keen universal truth observed by the former French President Charles de Gaulle. He is supposed to have quipped: ‘In order to become the master, the politician poses as the servant’. The observation appears to aptly describe the current Sri Lankan situation.

Clearly, the shameful theft of public funds and phenomenal waste that followed the 2015 regime change show that the promises of cleaning up politics in the country were a pack of deceitful lies concocted by a bunch of desperate thieves who had been languishing out of power for two decades. They got around to making hay at the first sign of sunshine!

To digress for a moment, the political and personal life of Charles de Gaulle, who was elected prime minister of France in 1958, and later became the first president of the Fifth Republic in 1959 under a new constitution, provides a useful reference point forthe analysis of the political ‘rot’ in contemporary Sri Lanka. While in office, de Gaulle is, on the record for taking great care to separate his private expenses from official funds. On retirement in 1969, he refused the two substantial pensions he was entitled to as a retired army general and president, and chose to receive the much lower pension of a colonel. He didn’t burden the state for too long anyway, dying a little over a year after leaving office. He was as unassuming in death as during life, and was buried quietly without any so-called ‘dignitaries’ in attendance, without flowers or wreaths, all at his request. His grave lies in a village of fewer than 700 inhabitants, near Troyes in the east of France, next to the graves of his wife and daughter, marked only by a tombstone with the simple inscription ‘Charles de Gaulle, 1890-1970’.

Judging by those standards, the current political culture in Sri Lanka characterised by politicians of dubious integrity feasting on meagre public funds like ‘pigs in swill’, is clearly a curse on the nation.The manner in which gluttonous politicians motivated by ‘entitlements’ of office such as permits to import and sell luxury cars, and other perks — rather than the faintest notion of public service —is truly nauseating; Compared to the standards set by former politicians of the ilk of Dudley Senanayaka, M. D. H. Jayawardena, M. D. Banda, Colvin R. de Silva, C. P. de Silva, and a few others of that particular generation, the current political culture in Sri Lanka deserves condemnation as worse than deplorable.

There is an added dimension to the current culture of political corruption in Sri Lanka: a particularly depraved value system evident among the corrupt politicians. As has been pointed out previously in these columns, attempts being made by the UNP politicians implicated in the bond scam to portray their dastardly crimes somehow ‘excusable’ show the severity of hold of this inverted value system on their minds.

The public display of the new ‘vice as virtue’ culture began with the former minister Ravi Karunanayake’s refusal to acknowledge the corruption — of the type blind Freddie could see, as the saying goes — involved in alleged acceptance of financial and material benefits from a business crony. He seemed to rely on the strange defence that he was not the only politician engaging in such behaviour! He attempted to lay the blame on others in government, and presented his own interpretation of ‘friendship’ in blaming friends who failed to come forward in his defence. Unbelievably, following the scandal, he seemed to accelerate political moves to advance his position among the UNP youth, with the help of a bumptious political sprout in the Ja-Ela area.

Another minister notorious for his frugality with the truth, Rajitha Senaratne, tried to make the criminality involved in the bond scam ‘light’ by citing the lack of foreign expert involvement in calculating the loss the bond robbery caused! Minister Sujeewa Senasinghe, whose mobile phone call records prove he is as guilty as sin, saw similarities between his plight and enemy plots against the Buddha! And he blamed the President for starting the commission of inquiry that exposed his misdemeanours.

The abominable behaviour of such politicians stealing public money that is the property of hopelessly poor, with no compunction, points to an obvious clouding of their minds by limitless greed. The fact that the particular malaise afflicts the relatively younger UNPers suggests that the minds of these devotees of unbridled capitalism (of the 1977-type) are being occupied by the globalised free market values system promoted by American neocons through education and popular media. The political economy of the forces behind this corruption is deserves critical examination.

Globalisation of ‘greedis good’ mentality – An American initiative

Indisputably, there is a link between the values that seem to make stealing public money acceptable in the minds of UNP politicians, and the fouling of the early Marxist prediction that socialist revolution that could offer some hope for the poor was inevitable in all capitalist societies: the link is the global spread of capitalistic value system primarily designed to conceal class contradictions in capitalist societies, and to safeguard geopolitical dominance of neocolonial powers, as first expounded by the Italian communist Antonio Gramsci.

Prior to Gramsci’s systematic exposition of the pervasive power of ideology on societies Karl Marx himself had recognised that capitalist economic exploitation was accompanied by an underlying scheme of ruling class ideas and values that systematically misrepresent the true nature of social relations in the consciousness of subordinate classes. Marx noted that the capitalist value system acted to prevent the working classes from rejecting oppression. Friedrich Engels used the phrase ‘false consciousness’ to describe the state of mind among workers, peasants and serfs, created by the dominant class to systematically conceal the subordination and exploitation that is routine under capitalism; Vladimir Lenin argued that the power of ‘bourgeois ideology’ was such that, left to their own devices, the proletariat would be content with seeking improvement of their material conditions ‘within’ the capitalist system — accepting crumbs that are handed out to them rather than claiming a rightful place at the table. Lenin however held that, all in all, culture was ‘ancillary’ to political objectives.

It was Antonio Gramsci who greatly enriched Marxist theory by systematically analysing and extending the fundamental importance of overcoming the cultural, ideological, and intellectual traps for the success of the proletariat struggle. Imprisoned by the Fascist dictator Benito Mussolini for nearly a quarter of his short 47 year life, Gramsci developed the notion of ‘hegemony’ used by the capitalists to ‘manufacture consent’ among the working classes, writing his Prison Notebooks.

The bourgeois state, Gramsci suggested,‘manufactured consent’ by shaping ideas and beliefs of the working classes through the establishment media, education systems and religion so that people of all classes would help to maintain the status quo rather than revolt against it. Such servility is caused by their misapprehension among the working classes that the good of the bourgeois represents their own good. Hegemony thus, is the ‘cultural, moral and ideological’ leadership of capitalists over allied and subaltern groups (all groups outside the hegemonic power structure) laid down in the form of universal norms, institutions, mechanisms and general rules of behaviour which support capitalism.

In Gramscian terms, America has exerted pervasive power over the world over the last 70 years or so through the international financial system — Bretton Woods system — established at the end of the second war, and the international order based on specific norms, values and rules promulgated through American foreign policy. The globalisation push that began in the 1970s sought to reinvigorate and reinforce this value system.

Keen observers of Sri Lankan politics and politicians would note that the younger breed of UNP politicians implicated in the bond scam are those who have grown up under this ‘greed is good’ value system without any compassion, or indeed conscience, about robbing the poor for their own personal advancement. They constitute a naturally allied group (like the prime minister) and many subalterns targeted by the hegemony. Others who have received US education in obscure state universities act to perpetuate the system that nourishes corruption, without necessarily being involved in corruption themselves. Politicians like Rajitha Senaratna — and other hangers-on (who have become ‘part of the furniture’ of Sri Lankan politics over the last two or three decades) defend corruption as a means of securing funds for realising their own political objectives, and as a matter of political survival when committed by others.

The nuts and bolts of American hegemony

America’s assumption of the global neocolonialist power status was an outcome of the second war; Having emerged from the war as the only unaffected economy with its physical infrastructure intact, and excess capital, American influence was dominant in France, Britain, and West Germany, the former industrial heart of Europe. American troops were occupying Japan, the only important industrial power in the Pacific. America expressed its new found sense of power and ‘destiny’ with refrains like ‘America has come of age’ and the 20th century would be ‘the American century’. Significantly, the US had the power to ‘enforce’ its will if need be, derived from its monopoly on the atomic bomb.

In the wake of this new found global supremacy, America adopted a policy of massive rearmament and a programme of stationing troops and missiles overseas to back their plans for the future: in 1939, on the eve of the second war, the US had an army of 185,000 with no American troops stationed in any foreign country; The annual defence budget was less than $500 million. Today the US spends nearly $600 billion on its war machine. The military forces have grown to approximately 1.3 million troops on active-duty with 865,000 in reserve. Two hundred thousand active troops are deployed in 170 countries, unlike any other nation. The offensive war machine includes around 14000 aircraft and helicopters, 6000 combat tanks, more aircraft carriers, frigates, destroyers and a large number of submarines. All this offensive weaponry — always referred to as ‘defence’ equipment — is being amassed without a single rival to challenge their dominance in the world!

The apparently limitless growth of the US armed services created new centres of domestic power concentrated among suppliers to the military and weapons manufacturers —the military-industrial complex— and generals and admirals. These vested interests continue to portray the never-ending growth and expansion of the military as vital to safeguarding American ‘interests’. The military growth assisted US businessmen find profitable new markets and new sources of cheap raw materials and the military, overseas bases.

A notable feature of the remarkable growth of America’s military, economic and political power was the concentration of relevant policy making within a small coterie of political operatives with vested interests, later came to prominence as the neocons. These operatives coming largely from outside the national security bureaucracy, operate under the auspices of regimes of both political persuasions in Washington;

They invented a foreign policy based on the concept of ‘democracy promotion’ as the means of exerting influence on the developing world; They cunningly disguised a regressive foreign policy founded on economic aggression, racism, and insatiable hunger for resources as one with the noble aim of promoting democracy as a universal value and a struggle to preserve ‘freedom’ in the face of an alleged communist threat.

The emphasis on freedom is explained on the basis of purported moral convictions of the Puritan cultural foundations of America that all people are created equal, with inalienable rights. (Deceitfulness of this propaganda becomes immediately obvious when viewed against the annihilation of Native Americans, and slavery that facilitated the growth of the US for the major part of its 200 year history.) Contrary to their expressed commitment to promote democracy however, the US sponsored dictatorships in countries such as Nicaragua, Chile, the Philippines and Pakistan, while intervening in internal affairs of other countries for purposes far removed from the promotion of democracy.

American leaders since Woodrow Wilson have emphasised promotion of democracy abroad as a key element of America’s international role, evolving from around 1938 to the present, through such pivotal events and debacles as the second war, the Cuban Missile Crisis, Vietnam, and 2011 bombing of the World Trade Center in New York. Extremists like Ronald Reagan renewed the democracy theme to the level of a crusade with George W. Bush and Bill Clinton following later.

America acting to promote democracy universally is laughable in view of their own political system dominated by a peculiar duopoly, that has stifled political competition from other forces for more than a century. Democrats and Republicans sponsored legislation, upheld by the courts, ensure that candidates of other minor parties are discriminated through campaign financing hurdles, gerrymandering, and exclusion from access to media, limiting choices to the electorate.

Several events in the late 1960s and the military defeat in Vietnam were the only occasions that forced the neocon policy making cabal to take a repose from their push for bogus ‘democracy’: an exposé of covert CIA funding of the US National Student Association and journalists for promoting the democracy push, in the March 1967 issue of Ramparts magazine helped lift the veil of deception for the first time; Next came the defeat of the American military machine by Vietnamese peasants, followed by a number of revolutions in the developing world, showing them that power to destroy does not necessarily accrue power to control.The emerging changes in the international landscape, caused by the emergence of China is the focus of current machinations of the American neocons. It seems their strategy would be to form a common front against China, exploiting old animosities of countries like Japan and India.

The structurally embedded dominance of the neocons in American policy making over the last 50 years has ensured a profound impact on the rest of the world, irrespective of the party in power in Washington. They use their latent potential to devise and propagate ideology aimed at undermining international relationships, political structures and normative values that disfavour American hegemony, and to create regimes and political parties that serve their particular interests. Such cunning and tenacity explains the rapid birth of new operations on foreign soil in the form of ‘colour revolutions’, later transformed to ‘Arab Spring,’ — now faded into history as failed CIA operations — following the realisation of the limits to military power in the 1970s.

The core postulate of the neoconservative designed American foreign policy of democratisation, is much to do with strengthening Israel’s position in the Middle East,promoted as the only truly democracy in a sea of dictatorships and corrupt regimes. The neocon plot to topple Saddam Hussein was concocted with the hope of triggering a domino effect in the Arab world, at least in Iran, for the benefit of Israel.Any accusations of the neocons wielding a disproportionate influence in US foreign policy, and neocons acting contrary to American interests, is quickly countered as anti-Semitic attacks, stifling serious debate.

The modus operandai and after effects of America hegemony

A remarkable feature of the aggressive neocon-designed American foreign policy is their total determination to annihilate any challenge to the hegemony by way of new groupings or policy ideas; they use all resources at their disposal, without any ethical concerns, to destroy such movements and people behind them, ruthlessly. The current state of decline of the Non-Aligned Movement (NAM) formed as an organisation of States that sought to remain independent during the Cold War provides the best example of their destruction of any organised opposition to western hegemony and neocolonialism.

The NAM that originated in 1955 during the Bandung Conference in Indonesia presented progressive proposals representing the wishes of the developing world such as peaceful settlement of international disputes, abstention from joining big power alliances and opposition to military bases of world powers in foreign countries. The NAM also gave full support to the armed struggles in Rhodesia, as well as apartheid Namibia and South Africa.

The area that irked the neocons most, however, was the NAM demands for reform in global governance including the UN and the Bretton Woods financial institutions, the World Bank and International Monetary Fund, and demand for a new International Information Order. These demands sent shivers down the spines of the neocons; They acted quickly to undermine the countries who led the NAM initiative through covert programs tofuel domestic rebellions (as in Sri Lankaand Indonesia) and used corruption to compromise political leaders and bureaucracies in other developing countries (such as India). Today, the NAM has been ‘deactivated’ for all practical purposes — as evident from the fact that only 10 developing country leaders attended the 17th NAM Conference held in Venezuela in 2017, with India being the most notable absentee.

At national level in developing countries, they seek to nurture local elites naturally ‘allied’ with their plans and ‘ambitious’ subalterns as agents. In the particular case of Sri Lanka, the prime minister and the crooks implicated in the bond scam fall neatly in to these groups, respectively. While the subservience of political elites in developing countries may flow naturally from historical family associations that have benefitted them, the subaltern seek to align themselves with neocon programs in a forlorn hope to benefit from the ‘crumbs’ that would flow from hegemonic interventions.

Neocons benefit from the manner of operation of political parties in many developing societies — not too different from the workings of aristocracy in feudal societies — as networks of patronage withparty leaders distributing revenue extracted from the state to loyal followers; The 2015 bond scam in Sri Lanka is a classic example of this particular mode of operation, hence the party structures and operatives acting to protect corrupt members at any cost. More than thirty ministers accompanying the prime minister to the Commission also showed that they are prepared to repay the debt to the leadership by way of public display of loyalty.

The neocons also recruit agents among the media to ‘push their barrow’ through the dispersion of typically regressive ‘ocker’ ideas such as: the need for developing countries to give priority to promoting the American version of democracy over national programs to enhance economic development, on the grounds that ‘man does not live by bread alone’!

Without exception however, governments brought in to power through American backed conspiracies have failed to flourish in the longer term. The plight of the current Sri Lankan government adds another case to the long list of such failures the world over. Such failures are attributed largely to the poor quality of people brought to power by the neocons, chosen for political expediency rather than for any level of competence in economic and other policy making or management in general. Such governments make poor economic decisions based firmly on American demands of the out-dated model of ‘opening up’ the economy for international capitalist exploitation. Thesepoor policy choices drive the economy to the ground,giving rise to increased debt burden and deep social crises, leading to the demise of such puppet governments.

One can only hope.

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