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

e-Con e-News 31 August – 06 September 2025

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In 2021, NATO members sent 21 warships into Asian waters

where they conducted joint operations with all the regional navies

that the USA is trying to pull into alignment against [China]…

– see ee Sovereignty, The EU: Fascism is coming home

The USA’s Pacific War Forces and allied Quad members (Australia, India, & Japan), plus lesser ‘allies’, are participating in Exercise Pacific Angel 2025 from September 8-12, hosted on Sri Lanka’s soils & seas (including Trincomalee!). It is no serendipity perhaps, that on the same day, the United Nations Human Rights Council (UNHRC) is launching ‘sessions’ which threaten to haul Sri Lanka up before the International Criminal Court (ICC). This charade against a member nation has never been asked for by the UN General Assembly (UNGA) or UN Security Council (UNSC, see ee Quotes).

     The US war games will be followed by a US trade team who will visit Colombo in mid-September for talks following up on US threats to impose punitive tariffs on our pre-industrial exports, which go mainly to the US and Europe. Presidential Advisor Duminda Hulangamuwa discloses that a State-Owned Enterprises Bill will be tabled this month, with the government also promising to liquidate 33 public enterprises (including Lanka Cement).

      It has thus come to pass that Sri Lanka is being subjected to such threats and straitjacketing by the scum of the earth (as the poet Bertolt Brecht called the Nazis) now led by England, since their big daddy the US is the one major country that refuses to submit itself to such ‘international’ tribunals. We also should note the media adoration evoked by England’s recent promise of ‘duty-free’ access to some of their markets. Duty free indeed! This cringing obsequious subservience has to do perhaps with the import-export merchant mafia that hold the country’s economy hostage due to their addiction to the fleshpots (markets) of the US & EU. The merchant mafia are therefore beholden to their largesse, as these mercantile agents of underdevelopment also stash their profits in tax hideouts under the watchful eye of the imperialists, instead of investing in modern industrial production here. (see SBD, ee Focus)

     It is in preparation for such September ‘games’ that saw the present Sri Lankan government avoid the large Shanghai Cooperation Organization (SCO) meeting in Tianjin, China, where the world was given a thrilling glimpse of future possibilities. Then 2 days later, on Sept 3, many world leaders including those of China & Russia & free (DPR)Korea were in full view in Beijing, celebrating the 80^th anniversary of China’s crucial role in smashing Japanese fascism. We must also recall that far more Asians & Africans were killed in those wars than those European imperialist countries, who many colonial troops fought for, would dare admit – even as US leaders claim it is they who have won all world wars! The US has certainly profited from the ‘peace’(s) that followed, even as they have never allowed much peace for much of our world, which has continued to be colonized by other means.

     It is the threat of such a good example, as displayed by China, Russia & free Korea, for other countries to achieve the velocity needed to escape the imperialist orbit, that sees the US and their lesser poodles in Europe & the East escalate their plans to maintain their hegemony, not just through direct warfare but via ‘economic sabotage, social unrest, and psychological attrition’ to attempt ‘gradual internal collapse’ among their perceived main enemies (see ee Quotes, Destabilization…).

     Israel’s (read: the USA’s) air strikes assassinating the Prime Minister of Yemen & other senior civilian ministers last week has been followed by the US declaration of a change of name from the Department of Defence to the Department of War, reverting to its original name from 1776. Recall that England’s Department for War & the Colonies was a cabinet-level position created in 1801, while it was waging war on Sri Lanka. In 1854 it was split into the Department for War and Department for the Colonies. From 1966 it was renamed the Ministry for Commonwealth Affairs; and after 1968 became Ministry for Foreign & Commonwealth Affairs, renamed Ministry for Foreign, Commonwealth & Development since 2020.

     Thus, we find that ‘Development’ is a direct descendant of ‘War & the Colonies’; ‘development’ being a term suggested by the multinational corporation (MNC) Unilever’s public relations department in the 1950s to replace more direct terminology, at a time of so-called post-colonialism. It is no wonder that under their tutelage, we find so many ministries in Sri Lanka, with ‘development’ in their name. At the same time, the USA now reaches back, to its own genocidal settler colonial origins. (see ee Focus, SBD de Silva’s Political Economy of Underdevelopment)

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• The news this week suggests that the US will move to impose its old Monroe Doctrine over the entire western Atlantic and escalate wars against Venezuela & long-US-blockaded Cuba first. ee goes to press, noting that several of the websites we depend on (eg, Moon of Alabama, Radio Havana)for news with a difference, keep being blocked or hacked. Indeed, we learned this week of the phenomenon of ‘shadow banning’ by US ‘social media’, eg, Youtube, Facebook, Instagram, X etc, where posts that contradict the hegemon are hidden away, downplayed or outright blocked unbeknownst to users (see ee Sovereignty, Chinese professor explains why India fails to reach its potential). It is therefore good to record that Nepal has outright & publicly banned such US social media. Let us see how that works out. Meanwhile, due to the opposition by the USA’s Uber, etc, and certain local ‘services’, the Sri Lankan government has again postponed its VAT tax on Digital Services (purportedly even demanded by the USA’s IMF).

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Financial institutions have opened Letters of Credit

(LCs) worth $530mn so far this year

for the importation of ‘over 70,000 vehicles’

(see ee Focus, SL’s Automobile Market: Subliminal

economic bubble? – Adheeb Anwar)

• Another horrific bus crash near tourist-infested Ella, recalls how this ‘mass murder on wheels’ was accelerated by the IMF-guided ‘explosive growth’ of Finance Companies (FCs) after 1977. Adheeb Anwar, in this ee Focus, asks if ‘Sri Lanka is repeating a global mistake?’, as local banks & finance companies are throwing money at people to purchase new vehicles, so as to profit from the interest rates that stem from loans – escalating further debt. It’s not new to Sri Lanka, of course. The Central Bank of Sri Lanka (CBSL) linked this motorized mayhem, post-1977, to the larger banking system providing ‘market space’ to Non-Banking Financial Institutions (NBFI). The FCs exploited demographics; as bankers financed imports to serve this then burgeoning ‘market’ (see ee 1 Jan 2022, World Bank driving madness on our roads). Meanwhile, as other commentators have pointed out, rather than being subject to the whims and loans of US economic and military policies, IMF, etc, why couldn’t these banks have invested instead in modern industrialization and attendant workers’ skills, and pay off Sri Lanka’s so-called debts?? How much of Presidential Advisor Hulangamuwa’s mention of the need for mechanisation and wage reforms, in the plantations in his media-headlined address to the 171^st annual general meeting (AGM) of the powerful Planters’ Association of Ceylon (PA), fell on deaf ears and how much fell on fertile soil is yet to be seen.

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• With all this money being thrown to purchase other countries’ industrial goods, this ee Focus looks at how the People’s Republic of China (PRC) has allocated its resources and invested in modern ‘green’ production by coordinating policy between the central government & local authorities.

     In contrast, a ‘politically powerful class‘ of import & export merchants, holds Sri Lanka in thrall to imperialism, in the absence of a state capable of subordinating their trading interests to production capital – this is a major theme in SBD de Silva‘s work. SB saw a profitable congruence, rather than any conflict, between mercantile interests here and industrial & mercantile interests abroad. He provided examples from Japan, as well as the white Dominions of Canada, Australia and New Zealand, where English capital invested in modern industry. He contrasted them to, eg, Sri Lanka, India, Iran, Turkey, where the foreign exchange assets of colonial governments were invested mostly in government or municipal securities in the metropolis. ee Focus therefore continues reproducing Chapter 1 of de Silva’s The Political Economy of Underdevelopment (PEU). Here SB further takes apart various claims – to plantations being modern & capitalist vs a backward peasant sector – by eminent economists such as DR Snodgrass who wrote extensively on Sri Lanka, as well as Gunnar Myrdal, HW Singer, etc, as well as Sri Lanka’s own (LSSP theoretician) HA de S Gunasekera, and India’s Romesh Dutt famous for his ‘drain theory‘. In contrast, SBD points out that Sri Lanka has large surpluses that are also squandered inside in the country.

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Clearly, with the US offshore procurement (OSP)

& (Military Assistance Program) MAP collectively

equalling between 40-60% of South Korea’s

gross capital formation during the late 1960s,

their significance for the ramping up

of Korea’s industrial ‘takeoff’ was enormous.

(see ee Focus, Chaebol & US MIC)

• ee Focus also continues looking at US-occupied (South) Korea’s industrialization, examining the growth of their Hyundai conglomerate becoming ‘one of the world’s best-known construction and heavy industry companies,’ again through supporting US wars. Yet are these Korean companies, or mere adjuncts of such large US multinationals as the US Halliburton subsidiary Raymond, Morrison-Knudsen, Brown&Root, JAJones (RMK-BR)? 

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‘Fiscal illusion is a term… often used to explain

how governments & fiscal policymakers

navigate budgets in ways that mislead voters,

helping them gain & maintain popularity.’

– see ee Economists, How we are being misled…

• ee Focus also continues our look at New York’s political machinery, through Gustavus Myers’ 1917 History of Tammany Hall, that famous New York ‘charity’. We see how, even as the name of Tammany Hall became an international byword for corruption, its ‘wonderful instinct of self-preservation’ enabled it to rise from the ashes, through its link to New York’s ‘largest and most energetic part of the voting population – the Irish’. Look how it claimed to be ‘a real reform body’ while advancing their old ways and furthering political fortunes. Fiscal illusions, indeed!

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Contents:

September’s US War Games & Fiscal Illusions as Merchants Squander Sri Lanka’s Riches