e-Con e-News

blog: eesrilanka.wordpress.com

‘Before you study the economics, study the economists!’

e-Con e-News 23 February – 01 March 2025

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‘Our economy is running on conditions.

There is no economic independence or sovereignty –

it is under probation and being monitored.’

– President AK Dissanayake, 2025

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‘The nature of the political life of our island must be understood.

We were a colony, a benevolently administered dependency. So long

as our dependence remained unquestioned our politics were a joke.

– The Mimic Men, VS Naipaul, 1967

And so it turns out be, as other leaders – in Sri Lanka and around the world – have long known: that a party may ‘be in office, but not in power’ (see ee Quotes, Cheddi Jagan). This ee reproduces some choice & apt excerpts from Sir Vidia Naipaul’s 1967 novel (see ee Focus), which is said to be partly based on the repeated Anglo-US coups in Guyana in the 1950s and 1960s.

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‘Soon we saw that there had been no need, that our power was air.

We had no trade unions behind us, no organized capital.’

– Mimic Men, VS Naipaul

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And so the ‘stark admission’ from Sri Lanka’s President, has opposition critics declaring that the NPP government – which ‘has so far backed down from its campaign promise of renegotiating the unfavorable debt restructuring agreement brokered by the IMF’ – has, in fact, done so knowingly and willingly.

    The IMF’s ‘ambitious and often brutal austerity programs’ are indeed politically, socially & economically unfeasible. The government’s new budget missing the IMF’s deficit target, appears to be due to its promise to resume ‘public capital investment’ – nationally owned assets used for industrial productivity. However, these ‘public investment will be the first line of expenditure to be slashed’, predicts Shiran Illanperuma (see ee Focus)… unless… unless… 

    The ‘Global South now spends more in debt payments than it receives in grants & loans’, and we are ‘cursed with low growth rates due to a lack of investment’, especially ‘investment in the manufacturing sector’, which ‘is key to technological upgrading, upskilling labor, and unlocking rapid growth in the Global South’. Instead, ‘services have accounted for 81% of new foreign investment projects between 2020-23’.

     So, even as there is a ‘renewed push’ for industrialization across many countries – from President Lula da Silva’s New Industry Brazil (Nova Indústria Brasil/NIB) program to the Made-in-China 2025 program, ‘it is unlikely that any government in Sri Lanka can formulate & implement such cohesive plans without confronting the IMF & private creditors which have severely restricted the country’s economic sovereignty’.

     Meanwhile,  there was news this week too that the US-dominated IMF and World Bank are tying aid to Lebanon to ‘normalization’ of relations with Israel, and the disarming of Hezbollah (see ee Sovereignty).

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Has anyone noticed the eerie homophony between Sri Lanka’s SERU (State-Owned Enterprise Restructing Unit) and Ukraine’s SOERA (State-Owned Enterprises Reform Activity in Ukraine)?

    Another fake WWF (World Wrestling Federation) drama – better called, dissimulation – was staged this week in the USA’s Oval Office, showing Ukraine’s leader bantering with the US President. Then there is the kalabala (yet more kayfabe?) about USAID’s supposed demise, which is meant to divert from the real story:

    So keep dreaming! The US is reorganizing & outsourcing Empire. It is attempting to freeze their war on Russia (as it has done with its wars on Korea & China – Taiwan). The US is not ending their war in Ukraine, which they have all but lost. This is also evident in the US Vice-President JD Vance’s Munich speech, telling Europe to buy more US weapons rather than make their own, to attack Russia and China. Their Department of Government Efficiency or DOGE device is meant to sharpen ‘the tools of the US Empire – not dismantle them’ (see ee Sovereignty, US is Reorganizing/Outsourcing Empire)

    So Trump will surely come for Sri Lanka’s rare earth minerals next (if they haven’t already). US President Donald Trump is reported as yearning for rare earth minerals from Canada, Greenland & Ukraine so as to downgrade Europe’s & their settler states’ reliance upon Chinese exports of these hard-to-find materials. Like from Ukraine, the US can now demand, ‘Pay your debt or we’ll swipe – errrrr, swap – Sinharaja & all our graphite & yet unrevealed minerals & fuels in Sri Lanka.

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Recall: Ecuador’s government completed a Galapagos Debt for Nature Swap in May 2023, repurchasing $1.6billion of Ecuador’s outstanding bonds at ~40 cents on the dollar, saving Ecuador $1.1bn in debt service repayments. The Global Green Growth Institute (GGGI), funded by the Latin American Development Bank (CAF), acted as advisor to Ecuador’s Ministry of Economy & Finance on this ‘green’ transaction. 5 months later, Quito ratified the Status of Forces Agreement (SOFA) with Washington. In December 2024 Ecuador’s President and Banana Co. Oligarch Daniel Noboa permitted the US military to use the environmentally fragile Galapagos Islands as a base for regional surveillance, to combat ‘drug trafficking, illegal fishing’ to prevent ‘violent conflicts… between narco-terrorist groups fighting over drug export routes’. Sound familiar? The archipelago had been declared a World Natural Heritage Site by UNESCO in 1978.

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Last week ee began our glimpse into the over-100-year monopoly of Ceylon Tobacco Co, owned by British American Tobacco (BAT). CTC has deprived the country of billions through such ‘normal’ multinational corporate (MNC) practices as transfer pricing, concealing this data aided by such giant accounting firms as Deloitte, etc. This ee continues Charles Abeysekera’s study: showing how CTC has along the way hijacked not just the Ministry of Agriculture, but also the state banks – Bank of Ceylon and People’s Bank (see ee Focus).

     Our story begins with the traditional village economy still based on paddy & highland crops including vegetables; cultivating tobacco only for itinerant Muslim traders – then gradually supplanted by this Anglo-American multinational. This ee examines ‘CTC in the Mahaweli Scheme’ – its active involvement in non-tobacco activities, which their merchant media present to the public as acts of benevolence. Such MNCs or TNCs (transnational corporations) have penetrated into peasant agriculture, also replacing the government and its agencies: irrigation and land development departments, state banks, the cooperative system, and state marketing agencies, totally controlling smallholding peasants, leaving them no choice over crops and cultivation practices. They have also been destroying the forest cover, with the Forest Department reserving the right to the Company to cut such trees for fuel, setting up such companies as Charlanka Ltd – a joint venture between the USAID-funded Enterprise Development Inc. and the Sri Lanka State Timber Corporation!

    The story describes how CTC established a restricted market by creating a new layer of middlemen mediating between CTC and tobacco growing peasants, who had no direct dealings with either the CTC or the banks. TNCs have, in effect, replaced the state… Here then is the untold story of the sabotaging of the Paddy Marketing Board, by CTC, etc, just as Sathosa (Ceylon Wholesale Establishment, CWE) has been hijacked by Unilever, and the Fertilizer Corp. by England’s ICI-CIC etc. Most interesting is their control over technology:

‘Contrary to the large colonial enterprises of the past,

TNCs are more interested in the control of activities

than in the actual ownership of natural resources.

The real basis for their powerful position, therefore,

is not the property of land or mineral deposits but the

ownership of the technical process which it is difficult to

attack by the normal procedures of expropriation & nationalisation.’

– EH Jacoby

Meanwhile, England’s CTC has been shutting down their reliance on local tobacco farmers. This week CTC was reported as claiming its revenue fell down in the December 2024 quarter, due to smuggling. However, other countries point out that it is the cigarette companies themselves who are smuggling tobacco and cigarettes into their countries, to avoid taxes. And even better: it is the sophisticated corporate tobacco networks, with their enormous ‘supply chains’ of marketers and salesmen, who are also involved in smuggling prohibited drugs!!! Gangsters, anyone?

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Last week, media in Sri Lanka reported that ‘Lord Swire’ visited Port City… England once forbade the Sinhala calling the Buddha – ‘King’ – Budhurajananwahanse. They wanted the Buddha referred to as Lord Buddha, because England’s King ruled over all of us, including the Buddha. So now here comes Lord Swire, real name: Hugo George William Swire – and how did this Swire become a Lord like the Buddha, in English? The Swires were big profiteers off English slave cotton from the USA, then turned to carrying opium on their shipping lines (P&O, anyone?) from India to China, linking to the pirates Jardine-Matheson (who became the biggest landowners & employers in Hong Kong, and are still!) and set up the opium-financing HongKong & Shanghai Bank! Lordy! Lordy! Lordy!… Buddhu Ammo!

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Germany’s just elected chancellor Friedrich Merz once represented BlackRock in Germany, 2016-20. BlackRock has become one of the largest non-German shareholders in many of the country’s most important companies – from Deutsche Bank to Volkswagen, BMW to Siemens (which helped hijack Ceylon Steel Corporation). It turns out Europeincluding their settler governments & their economic systems have been fully privatized entities effectively run by corporations & banks. Then again, let’s recall England’s Royal African Co with its monopoly over the slavery of Africans, and the East India Co later morphing into the opium-dealing ‘private English’ Jardine-Matheson (which still controls Hong Kong) and palm oil-loving Unilever (which still controls SL), Anglo-American (which still controls South Africa), CTC, ICI-CIC, etc…?

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Contents:

Ceylon Tobacco Company & the Hijacking of State Banks & Ministry of Agriculture