Posted on October 25th, 2018


In the modern world we rarely see direct military invasions. Foreign countries invade the economy instead. They create economic partnerships where the powerful country employs a large team of well qualified and trained professional to carefully study all the weaknesses and loopholes of the targeted country. They prepare a well planned and carefully worded agreements and present them to the targeted country saying they want to help smaller countries.  They have agents who start to publicly praise the said agreements and talk of the wonderful benefits that will come from it.  The staff of the small country then come under tremendous political pressure to expedite signing of the agreement to coincide with a preplanned state visit.

Tamara Kunanyagam and   Kamal Wickremasinghe have   looked at the external influences operating on the present Yahapalana government. Tamara starts by commenting on the ‘neo liberal wave’ which is controlling Yahapalana. The academic definition of Neoliberalism is not easy for the general reader to understand. I could not understand it either.  I am therefore providing a colloquial description of Neoliberalism, written with deep feeling by a victim of Neoliberalism. Here it is:

Neo liberalism is an anti-human economic prescription for life.  It is an ideology which denies the existence of community, society and even humanity, reducing life on earth into decimal points on a balance sheet. It is a series of ones and zeros in a computerized market system in which we exist only to serve the financial ends of multinational corporations.”

Neo Liberalism has been trying for the last 30 years to replace democracy with a market-based society. Neo liberalism believes that markets are more efficient than humans can ever be. It believes corporations can do no wrong, and celebrates inequality, claiming it encourages productivity because people envy the rich and try to emulate them.”

Neoliberalism is a form of economic nihilism. An anti democratic system that thrives on our confusion, despair and desperation. All that is left is the pursuit of profit.  Neoliberalism wants to destroy the income support systems on which people who are unemployed and those with disabilities and other low-income earners rely.

In Sri Lanka , says Tamara, the neoliberals seek physical appropriation of territory and all that it contains, targeting the very substance of sovereignty and independence – the inalienable right of the people to full and permanent sovereignty, including possession, use and disposal, over all their wealth, natural resources and economic activities.. In other words to take complete control of the country, like the colonial rulers did.

The State will be transformed radically from an entity in which popular sovereignty is vested and duty-bound to protect the interests of people and nation into one that serves the interests of a small oligarchy, becoming more not less authoritarian. Its role will be to deregulate all legal and administrative controls that interfere with their operations. This new system of law and government is known as Yahapalana in Sri Lanka, said Tamara.

Tamara says the current neo liberal wave, has its origins in the Mont Pelerin Society, a secretive organization founded in 1947 by Friedrich von Hayek of the Austrian School of Economics, with Milton Friedman of the Chicago School, later Economic Adviser to US President Reagan, Allan Walters, who became Chief Economic Adviser to British Prime Minister Margaret Thatcher, members of the US oligarchy, European aristocracy and other neoliberals.

Mont Pelerin Society was named after the place where the Society first met, the Swiss resort of Mont Pelerin.  Its headquarters are still in Switzerland. Membership in Mont Pelerin Society appears to be by invitation. Members are thoroughly screened and the screening process has tightened over the years. The members meet regularly.  There are annual conferences and regional meetings. The   meetings are not secret but the discussions are.  All discussions are ‘private discussions’.

Mont Pelerin Society members are today spread across 82 countries. They include former Australian Prime Minister John Howard, and former Czech Republic president Vaclav Klaus. The Mont Pelerin Society decided around the year 2000, to open up new countries to liberal ideas and to scout for potential new members in those countries. Sri Lanka   would have come into its orbit then. Today, Mont Pelerin Society proudly acknowledges Ranil Wickremasinghe, Prime Minister of Sri Lanka, as a member. The Society held a Special Meeting in Kandalama in 2004 when Ranil Wickremasinghe was Prime Minister.

The Mont Pelerin Society  was set up to  facilitate  the  exchange of ideas between like-minded scholars  wishing to strengthen the principles and practice of a free society and to study the workings, virtues and defects of market-oriented economic systems.” Mont Pelerin was firmly

against the welfare state and centrally planned economies.  It was also engaged in finding out how to combat the Marxism that was sweeping the globe at the time. It was therefore anti Marxist and anti-Socialism.

Mont Pelerin Society poses as an intellectual non political academic body, but it is clear that from the outset it had had a political, interventionist purpose.  Its activities included, involvement with practical policy questions.”  Mont Pelerin Society was successful in manipulating two economies, UK under Thatcher and USA under Reagan. Mont Pelerin also became powerful in Australia, but its influence was speedily detected and exposed. There were angry references to Mont Pelerin in the Australian media.

Mont Pelerin Society shapes economic policies by infiltrating and controlling governments through a powerful elite-led global policy-planning network of over 500 think tanks and numerous business schools, corporate-backed Foundations, media, and University economics departments transformed into ideological centers of neoliberal strategy, said Tamara. Projects are presented as civilizing measures associating Western civilization with progress and development.   “Big government” was equated with totalitarianism.

Mont Pelerin Society works through think tanks, notably, the Washington-based Atlas Network of nearly 500 organizations in 93 countries founded by MPS member Antony Fisher with the support of Milton Friedman and Margaret Thatcher. These think tanks pose as learned societies that are earnestly trying to determine the best interests of the public.

The two most visible MPS linked think tanks in Sri Lanka masquerading under the guise of impartiality, providing cover for the political establishment and profoundly influencing policy changes and far- reaching reforms – including Constitutional – are the Institute for Policy Studies, Sri Lanka and Advocata Institute, continued Tamara.

These two  organizations  illustrate how Western governments, corporates and their think-tanks function together to hijack State sovereignty; how foreign-funded, foreign-controlled entities unaccountable to people and State penetrate Government and work from within – without any impediment – to implement an alien agenda. They highlight the importance of knowing the sponsors and donors of reports from alleged think tanks that advocate sale of the country, and the lobbying connections of its authors, continued Tamara.

Institute for Policy Studies (IPS), Sri Lanka’s main economic policy think-tank claims it is “independent,” but only from the Sri Lankan State, not Western governments or their oligarchs. When established by an Act of Parliament in 1988, it was located in the Finance and Planning Ministry, but co-financed by the Dutch Government and run by a Resident Coordinator from the Dutch Institute for Social Studies.

In 2006, it announced it was moving to full financial independence, but signed an agreement with the Dutch Government to finance construction of a new office building. Today, its direct and indirect donors have expanded to include Canada, the UK and Norway, US corporates, banks and equity funds channeled through the Hewlett Foundation and Bill & Melinda Gates Foundation. They finance its core activities via The Think Tank Initiative, a project of the Canadian government-owned International Development Research Centre, set up to influence policy changes in the South by promoting the establishment of think tanks, said Tamara.

Institute for Policy Studies plays a critical role for the Government, providing cover for unpopular policies and external involvement. In April 2015, only three months after his own appointment, Prime Minister Wickremasinghe appointed Singapore-based Professor Razeen Sally, also a member of Mont Pelerin as IPS Chairman. Sally is Adjunct Scholar at Cato Institute, the most prominent US neoliberal think-tank founded by MPS member Ed Crane. Razeen Sally is also Founder/Co-Director of the Cato-related European Centre for International Political Economy  (ECIPE)linked to Brookings Institute which is the most influential neoconservative think tank in the US.. ECIPE is listed on the Atlas site

(Cato Institute was founded by petrochemical billionaire Charles Koch. Koch is a leading member of Mont Pelerin.  Cato institute has  called for  the total abolition of the welfare state and the privatization of  government institutions  Cato opposes minimum wage laws, overtime regulations, and prohibition of  child labor.)

Institute for Policy Studies  was involved in organizing the January 2016 Sri Lanka Economic Forum under the patronage of President and Prime Minister, bringing together – directly or indirectly – the Harvard University’s Centre for International Development, which works with the PM’s Office, BOI , Development Strategy and International Trade Ministry, the US Administration, George Soros and his Open Society Foundation to prepare the Government’s three-year economic development plan that became Vision 2025. This set the stage for developing government policy along areas identified by the Harvard team led by the Director Prof. Ricardo Hausmann. Subsequently, the PM’s Office and Finance Ministry sent teams to Harvard for a study course, said Tamara.

The Harvard operation, kept secret until the last minute, was funded by multi-billion dollar hedge-fund crook George Soros. Soros became known as the world’s premier currency speculator after demolishing the British monetary system in 1992 in a single day and pocketing more than US$ 1 billion at the expense of the British taxpayer.

IPS aggressively promotes the sale of public assets and State owned Enterprises (SOEs) to Western corporates and replacement of Public Utilities Commission Board members with so-called “independent directors,” meaning foreign, because according to Sally, “having independent anybody in Sri Lanka is very difficult at the moment.” In an interview to Advocata Institute, Sally declared that the “first best solution to the running of SOEs in Sri Lanka is to have a timetable to privatize.” To combat popular opposition, he recommended starting with partial privatization putting into a holding company enterprises that operate in a commercial sphere, then “gradually” increasing private sector stakes until “the time is right politically” to move into majority private ownership, continued Tamara.

Advocata Institute” another influential think-tank linked to MPS and the US Administration, was launched in May 2016 at the Lakshman Kadirgamar Institute. Advocata belongs to the Atlas Network. Advocata describes itself as an independent policy think tank, dedicated to economic development through free-markets.

Atlas Network, to which Advocata belongs, declared it had a commitment to privatize strategic and non-strategic SOEs despite “immense political risk.” It claimed Advocata was “widely influential in this ongoing reform process” and had “spurred” the move to privatize, its report becoming the Government’s “go-to reference” on SriLankan Airines giving “the final push needed to get the government to put the struggling business up for sale.” Sri Lanka was among 10 countries Atlas considered it had “invested successfully” and won, said Tamara.

Advocata’s inaugural report, ‘The State of State Enterprises’ written before the institution existed, disclosed the Advocata project, sale of all SOEs, non-strategic and strategic. It argued reform should go beyond the 55 strategically important SOEs, which, it claimed, had made enormous losses a comprehensive productivity study should determine whether to shut down, privatize them  or hold under a holding company, said Advocata.

Three months later, Development Strategies and Trade Minister, Malik Samarawickrama, used Advocata findings to justify “far-reaching privatization plans.” One month later, Cabinet approved the Prime Minister’s proposal to hire the US firm McKinsey and Company for US$ 2,3 million to establish a Central Programme Management Unit in his Office for “accelerated economic transformation” to monitor projects fast-tracked under a new Development (Special Provisions) Bill that would give sweeping powers to restructure and transform the economy.

Advocata recommendations for Budget 2017 included ‘reactivation’ of so-called Dead Capital, a doctrine articulated by Peruvian economist Hernando de Soto, MPS member associated with Advocata partner, Property Rights Alliance. Advocata was referring to the some 987,000 acres vested in the Land Reform Commission also special mention of “prime real estate blocks” in major cities like Colombo which were occupied by schools, government ministries, and other facilities, which “greatly outweigh their economic value.”

‘Reactivation’ would involve obtaining the value of Dead Capital through accounting property rents at market value and establishing a Land Asset Sales Programme “to dispose of surplus or underutilized land” to be run by “an independent body free of political influence to minimize corruption.” Vision 2025 outlines a programme of legal reform on the lines proposed by Soto, said Tamara.

Advocata organized a forum in October 2017 to coincide with the release of the annual Economic Freedom of the World Report by Canada’s Fraser Institute, in which Sri Lanka was given a low ranking, primarily because of “weaknesses in the legal system and property rights.” Atlas and Fraser, both think tanks founded by MPS member Antony Fisher, partnered the event. A month later, the Central Bank Governor announced legislation to establish a land bank, consideration of land titling, removal of “archaic” laws,

Another vehicle for intervention in Sri Lanka is the Millennium Challenge Corporation (MCC) of the USA, which has a Project Unit physically located inside the Prime Minister’s Office within the strategic Policy Development Unit.1 It claims to be “independent,” but is a US government body chaired by the Secretary of State with, on its Board of Directors, the Treasury Secretary, USAID Administrator, and US Trade Representative. Given its strategic location in the PM’s Office, the question is posed whether and to what extent it is involved in shaping the country’s economic and trade policy and drafting Vision 2025, unveiled only a few months after Cabinet approved establishment of the unit.

MCC’s so-called partnerships are based on coercion and prior implementation of political conditionality unlike traditional foreign aid. Also unlike traditional aid, MCC assistance involves an annual re-selection process. that permits coercion on a permanent basis, depriving the State of space for sovereign decisions, observed Tamara.

In February 2018, a delegation from the US-based financial advisory and asset management firm Lazard visited Sri Lanka to discuss divestment to foreigners  concluded Tamara.  As privatization advisor, Lazard involves both its advisory services branch and asset management branch. On numerous occasions, Lazard has undervalued the price of a company, enabling the latter to purchase the stock at low prices and sell it for a considerable profit, as it did with UK’s Royal Mail and Spain’s Airports and Air Traffic Management.

Kamal Wickremasinghe focuses on the second influence working on Yahapalana, the powerful Neo conservative” movement of the United States of America. A notable feature 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, which  later came to  prominence as the” neocons”, said Kamal. These operatives, coming largely from outside the national security bureaucracy, continues to function regardless of whether Democrats of Republicans are in power.

The Neo conservative movement (neocons”) is a US political movement, which openly advocates American  interference in international affairs, including the aggressive use of force. The Neocon foreign policy is cunningly disguised as one with the noble aim of promoting democracy and the desire to preserve ‘freedom’ in the face of a Communist threat.

The current ‘Neo con’  movement started around 1996 , led by the Jewish monthly review magazine Commentary”, edited by Norman Podhoretz and published by the American Jewish Committee. Norman Podhoretz is considered the founding father of modern neo- conservatism and there is a significant Jewish presence in the Neo con movement. But there are non Jews too in the movement, such as Jeanne Kirkpatrick.    The principal concern of the neo cons is Israel and their main focus is the Middle East, but the rest of the world is not forgotten.

The neoconservative dream world is a world in which the United States is the unchallenged superpower, immune to threats. In the Neocon view, the world can only achieve peace through strong US leadership backed with credible force. They believe that the US has a responsibility to act as a benevolent global hegemon.” In this capacity, the US would maintain an empire of sorts by helping to create democratic, economically liberal governments in place of failed states” or oppressive regimes they deem threatening to the US or its interests.

For example, the neocons objected to the Non Alignment Movement. The Non Alignment Movement 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, sent shivers down the spines of the neocons. They acted quickly to undermine the countries who led the NAM initiative, through covert programs, 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.

Neocons are not afraid to force regime change and reshape hostile states in the American image, said analysts.  They were responsible for fomenting color revolutions” in former Soviet republics.  They also have a depopulation policy for Asia.

The Atlas Network which has connections with the neo con Movement has been involved in regime change and destabilization in Latin America. In Honduras, it played an important role in the military coup against Manuel Zelaya, in Argentina, it helped topple Cristina Kirchner, in Venezuela, it supported the 2002 military coup against President Chavez and protests against his successor, Nicholás Maduro, in Brazil, it diverted public anger away from a bribery scandal involving all major political parties to focus on President Dilma Roussef, leading to her impeachment in 2016.

The Neo cons are considered war mongers. They have ‘a marked propensity for using force to achieve its ends.’ Any regime that is outwardly hostile to the US and could pose a threat would be confronted aggressively, not merely contained. If the Neo cons had their way, the US military would be reconfigured around the world to allow for greater flexibility and quicker deployment to hot spots in the Middle East, as well as Central and Southeast Asia. The US would spend more on defense, particularly for high-tech, precision weaponry that could be used in preemptive strikes. It must always act in its best interests.

At national level in developing countries, Neocons 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. This subservience may, says Kamal, flow naturally from historical family associations. Similarly, those below them, the subalterns seek to align themselves with ‘Neocon’ programs in the hope of benefiting from the ‘crumbs’ that would flow from Neo con interventions. The Neocons also recruit agents in the media to ‘push their barrow’

Neocons benefit from the fact that political parties in many developing societies operate as networks of patronage with party leaders distributing state money to loyal followers. The party protects corrupt members at any cost. The 2015 Bond Scam in Sri Lanka is a classic example of this particular mode of operation.

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. These poor 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, concluded Kamal Wickremasinghe.

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