e-Con e-News

Posted byee ink.March 14, 2026Posted inUncategorizedTags:China, geopolitics, history, India, Jaishankar, pence, politics

blog: eesrilanka.wordpress.com

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

e-Con e-News 08-14 March 2026

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‘Indian Foreign Minister S Jaishankar recognized Hambantota

harbour as a Chinese military facility that underlined an

intimidating foreign military presence in the Indian Ocean’

(see ee Focus, Jaishankar)

The Indian Foreign Minister’s response last week to a planted question by WION‘s Palki Sharma at Delhi’s Raisina Dialogue 2026, diverted to talking about a non-existent Chinese miltary base in Hambantota, to avoid answering more searing questions regarding India (and Sri Lanka’s) knowledge of the USA preparing to attack an Iranian ship in the sea nearby. So-called social media foggery then took over creating further useless fuss over the Sri Lanka Foreign Minister’s presumed inability to answer questions in clear English, diverting more from the Indian Foreign Minister’s outre assertions.

     The Indian government had been the first to be asked to invest in Hambantota harbor & airport, but had refused to help develop the southeast region, because they were prioritizing the arming and promotion of terrorism in Sri Lanka’s north and east at the time, especially to grab Trincomalee port. Sri Lanka’s foreign officials at (and after) the Raisina Dialogue 2026, did not challenge the Indian assertion about a foreign base. Instead media in Sri Lanka focused on the Lanka Foreign Minister’s English. The use of English, rather than speaking in our own language and using translators (as most independent countries do at international fora), is less an issue of linguistic prowess than appearing to be an attempt at furthering ‘strategic ambiguity’ in dealing with current challenges, more contentious than most foreign officials, Oxford-house-trained or not, have ever had to deal with.   

     The US submarine attack led to the mass killing and drowning of cadets (invited as guests to participate in an Indian-led ‘friendly’ international exercise in what India likes to call its backyard). The resulting ecological damage, has not even drawn the criticism of the numerous (US & EU-funded) environmental NGOs – the silence of these ecological lambs, who normally bleat loudly at the slightest slick of oil, is deafening; they who cry about coral reefs, birds & beasts (which get more publicity than our cultivators – see ee Agriculture).

     The renewed US-led colonization project has seen the USA blow up pipelines (Nordstream, etc.) and attempt to grab or hold on to ‘chokepoints’ (Sri Lanka, Diego Garcia, Red Sea, Persian Gulf, Malacca, South China Sea, Arctic Sea, Greenland, Panama, Venezuela/Trinidad, etc.) so as to prevent the wider industrialization of our world, let alone the modernization of China, Russia, Africa, and Sri Lanka. Their final dream (or nightmare) may be to grab the labor power and unified market of the now People’s Republic of China, and seek to return China to its pre-Liberation sick-man status.

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The first illustrious personage to make the claim that Hambantota port was becoming a forward military base for the Chinese Navy was by US President Donald Trump’s first Vice President Mike Pence in 2018. This claim too came as a diversion, for it was made soon after media revealed that Sri Lanka had granted logistic hub status to the USA. To take ‘advantage of a growing naval partnership with Sri Lanka’, the US Navy had first operated the air logistic hub in late August 2018, when the USS Anchorage (LPD 23) visited Trincomalee to support the US Essex Amphibious Ready Group as it transited the western boundary of the 7th Fleet area of operations (See ee December 2018)

‘The Nimitz-class aircraft carrier USS John C Stennis (CVN 74) established the hub in Sri Lanka to receive support, supplies & services at sea. A C-2 Greyhound carrier onboard delivery aircraft accessed the hub’s strategic location before bringing supplies to the Stennis. ‘The primary purpose of the operation was to provide mission-critical supplies & services to USA Navy ships transiting through and operating in the Indian Ocean… The secondary purpose [was] to demonstrate the US Navy’s ability to establish a temporary logistics hub ashore where no enduring US Navy logistics footprint exists.’ The hub concept enabled the use of an airstrip and storage facilities to receive weapons and other materiel, and ‘move out in various directions in smaller shipments, allowing ships to continue operating at sea by receiving the right material at the right place & time’.

     The revelation about the USA’s ‘hub’ led to great political turmoil: then-President Maithripala Sirisena clashed with then-Premier Wickremasinghe’s attempt to privately partner with US ally, India, to run the East Container Terminal (ECT) of the Colombo harbour. The battle over ownership of the ECT led to the sacking of Wickremesinghe. It was unclear if the UNP had consulted President Sirisena about the setting up of the US logistic hub in Sri Lanka. Mahinda Rajapaksa, on Dec 16, 2018, warned of the possible implications to Sri Lanka by giving US access to Trincomalee and getting entangled in superpower rivalry. This was soon after Rajapaksa gave up the premiership to enable Sirisena to reappoint Wickremesinghe, as ordered by the Supreme Court.

     In March 2007, Sri Lanka had entered into Acquisition & Cross-Servicing Agreement (ACSA) with the USA. The then-Defence-Secretary Gotabhaya Rajapaksa and then-USA-Ambassador Robert Blake secretly signed the ACSA in Colombo. Left parties at the time condemned the ACSA, both in & outside parliament.

     The agreement, valid for 10 years, was meant to facilitate transfer and exchange of logistics supplies, support and re-fueling services. The ACSA was again officially extended in 2017, but this time, 10 times larger than the 2007 agreement, again secretly. The announcement of the US setting up of a logistic hub in Sri Lanka was meant to hint that this US agenda was proceeding. ACSA is to be re-signed in 2027, and the USA aims to use acquiescence to their war plans, as a precondition for the IMF bailing out the government again, in 2028. In the meantime, the IMF WB keep acting coy, with the Central Bank governor in tow, tail wagging, makes rosy forecasts, while demanding privatization of national resources, knowing their bosses in Washington could wage war anytime, to upend any such forecasts, destroying any such ‘restructuring’, and insisting we have to repay unpayable debts to Wall Street….

The refusal of the 2015-2019 Sirisena government to sign the accompanying SOFA (Status of Forces Agreement), which would allow US boots on Sri Lankan soil, nor to finalize the MCC (Millennium Challenge Corporation) to enable deeper economic penetration, led to his removal and repeated demonization as a rural rube in the English media.
     The Indo-Lanka Defence Forum 2018 edition (Vol 43: 2) dealt with Sri Lanka’s transformation into a global maritime hub, while protesting Chinese ships entering Sri Lanka’s ports – in particular, a submarine Colombo port call in 2014. The ILDF edition described the growing alliance between India & USA, listing major forces’ locations, military exercises & engagements coming under the US Pacific Command (USPACOM) – the USA’s oldest & largest military command. In 2018, the Trump administration renamed the Pacific Command as Indo-Pacific Command to supposedly signal India’s importance to the US military due to US intrusions into the South China Sea.
     The ILDF edition listed India & Sri Lanka as US allies along with Japan, South Korea, Australia, Vietnam, Singapore, the Philippines, Malaysia, Indonesia, Guam, Cambodia, Bangladesh, the Maldives, Thailand, Mongolia, Brunei, Timor-Leste, Tonga, & Mongolia. The one-time Indian High Commissioner in Colombo (1997-2000) and National Security Advisor (NSA) Shivshankar Menon’s memoirs Choices: Inside the Making of India’s Foreign Policy (Oct 2016) indicated that New Delhi (& the USA) wanted the Rajapakses out of power due to their friendly SL-China relations. Menon quipped that Sri Lanka is an ‘aircraft carrier, parked 14 miles off the Indian coast’.
     Ajit Doval, who succeeded Menon as NSA, demanded Gotabhaya Rajapaksa do away with major Chinese-funded operations including the Colombo Port City project. Sri Lanka is yet to inquire into the covert US funding to oust the Rajapakses, despite US Secretary of State John Kerry’s revelation that US$585mn was spent on projects in Nigeria, Myanmar & Sri Lanka to ‘restore democracy’.’ The April 2019 terrorist attacks, which India claimed to have been aware of in advance, were meant to be a warning….

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‘If the Sinopec refinery was built & operated by now,
during this crisis, India, Pakistan, Bangladesh, Maldives
& Thailand will be buying petroleum products from
Sri Lanka rather than India. Call me a puppet, but my
opinions are always in national interest of Sri Lanka.’
– Yasiru Ranaraja, Director, Belt&Road Initiative (BRISL, 13 March 2026)

The first roadblock to the Hambantota Port project was placed by England’s P&O, for if Hambantota was developed as a major hub port it would pose a threat to Indian ports, like Mumbai’s Nhava Shiva developed by P&O and now competing with Colombo. England’s colonial Peninsular & Oriental Steam Navigation Co, has long controlled shipping in this country (now through their so-called ‘local’ conglomerates, Keells etc), and the role of sludge funders like US BlackRock (which has replaced Goldman Sachs in the anarcho-capitalist pandemonium). A New York Times article by Dharisha Bastians, with background research by Aneesha Guruge of the US NED-funded Verite Institute, provided an extremely biased account of Hambantota port, adding to the US government’s nightmare fantasy about China’s supposed maritime ‘String of Pearls’. Ironically, Hambantota was also claimed as a rival to the Vizhinjam Port, site of the recent nearby international naval exercises in Thiruvananthapuram, Kerala, after which the US submarine torpedoed Iran’s IRIS Dena.

     Hambantota lies close to one of the biggest trade routes in the world, the east-west main trade flow in the Indian Ocean. Hambantota historically as well as potentially, was & could be, an industrial hub, rebirthing the colonially devastated and underdeveloped southeast hinterland surrounding it. China Merchant Holdings holds a 70% stake in Hambantota port for 99 years, with the remaining shares in the hands of Sri Lanka. It should be noted: ‘Port terminals in New York & Long Beach are managed by Chinese companies. But people do not term Darwin & Long Beach as China’s colonies!’ The agreement between China & Sri Lanka on Hambantota port contains a clause that ‘strictly prohibits’ the Chinese from using the port for military purposes. Between 2009 & May 2018, 422 warships belonging to 27 navies across the world arrived in Lanka’s ports for operational, training & formal visits. India topped the regional list with 83 visits, while Japanese naval ships undertook 69 visits. Ranking way below them, China made 33 visits, Bangladesh had 29 visits, Russia 27, and Pakistan, 24 visits – (As for US & European visits? Not so closely tabulated, perhaps…)

     Ironically, the first practical Hambantota proposal came in a 2002 GoSL report, Regaining Sri Lanka: Vision & Strategy for Accelerated Development, with former PM Ranil Wickremesinghe’s pro-USA UNP in government, but failed to make headway. 23 years later, as the port advances, the Daily Mirror last year noted: ‘If a Chinese oil company comes here, they have higher technologies… Sinopec’s refinery in Sri Lanka places it in direct competition with India’s interests in expanding its role as an energy supplier… Sinopec, the leading Chinese petroleum company that has sought to invest in Sri Lanka, is facing obstacles in pressing ahead with implementation’ – of the Sinopec refinery in progress in Hambantota… It was meant to be part of a proposed major high-tech industrial zone for Sri Lanka’ – a future potential now under US and Indian threat, the threat of a good example!

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• The long ongoing, blatant (yet mostly surreptitious) suppression of Sri Lanka’s attempts at modern industrialization, let alone the sabotage of our endeavors to attain energy self-sufficiency, have long been the earnest hankering of this newsletter eCon-eNews, which exists as a tribute to the work of SBD de Silva, as well as other industrial trailblazers such as Anagarika Dharmapala & DJ Wimalasurendra.

     As we approach our New Year (2570!), midst the US-led devastation of West Asia (& in the not-so-distant background, the open US strangulation of Cuba) Sri Lanka agonizes once again with the private & foreign control over supplies of energy, beseeching petroleum products from Russia & India (which has been ‘allowed’ by the USA to get oil again from Russia).

The Ceylon Electricity Board (CEB) is dead! – This week heard and saw the ‘auspicious’ headlines that 6 new ‘private’ companies have taken over ‘operations of Sri Lanka’s power utility’ (see ee Random Notes), a demand by the US government’s IMF, which no doubt will demand under the table, acquiescence to US corporate control. 

     The recently publicity given to the ability and attempts by US invaders to paralyze power supplies & networks (Venezuela, Cuba, Iran…), before military attack, makes us recall, how in 2023, with a ‘final draft of the new Electricity Act to go before Cabinet in June’, a government under the unelected President Ranil Wickremesinghe, announced:

‘US conglomerate General Electric Co (GE) would set up a modern

Distribution Control Centre for the Ceylon Electricity Board (CEB) –

‘a Consortium led by GE T&D India Ltd & GE Digital Services Europe’

was contracted to establish a SCADA-supported Distribution Control

Centre for Western Province South. 1) A SCADA (Supervisory Control

& Data Acquisition) System is the heart of an ADMS (Advanced Distribution

Management System). A distribution SCADA system’s primary function is to

support distribution operations through telemetry, alarming, event recording,

& remote control of field equipment… Richardson Projects, as the local partner

of GE, is pleased… Richardson represents ‘a few of the world’s renowned brands,

including but not limited to Eaton – US Sediver – France, Polycab – India, Inael

– Spain, Elcon – Italy, Imefy – Spain, EPE – Malaysia, Hexing – China.‘

(see ee Industry, General Electric)

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Electricity networks are highly complex and interconnected systems.

Decisions affecting generation, transmission and distribution cannot

be treated purely as administrative or commercial matters.” – ee Industry,

Restructuring the electricity sector must not

compromise grid stability, warns senior engineer

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Just over 100 years ago, DJ Wimalasurendra had proposed a plan to generate our own energy security through ample hydropower (See ee, 01 Aug 2020, 05 Sep 2020, 19 Jul 2025). His plans were sabotaged by the English colonial government on behalf of what Wimalasurendra himself called the ‘big business’ of Shell & British Petroleum (BP), Boustead Bros & Whitehall Petroleum (now Pearson PLC, with a monopoly over textbooks & examinations etc). We should here recall that British Petroleum’s original name was the Anglo-Persian Oil Co (who along with the USA Rockefeller Exxon Co. have financed the coups and wars against Iran).

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‘In a series of speeches made at the State Council,

especially during 1933-4, Wimalasurendra identified the

broad alliance that worked against the Hydroelectric Scheme.

He used different names at times to identify this alliance:

‘Big Business’, ‘Oil & Coal Combine’, ‘Almighty Oil Interests’,

‘Big Business & Alien Combines’, ‘Imperialistic Element’,

‘Big Business Element’, ‘Big Business Party’.

– BD Witharana, Negotiating Power & Constructing

the Nation: Engineering in Sri Lanka

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‘During the advent of the 1^st industrial revolution

Sri Lanka was mostly under the rule of European Colonisers.

In 1815, Sri Lanka was fully conquered by the English Empire.

In fact, at that time, the English industrial policy was to prohibit

any form of industrialisation in any of their colonies, & to use them

only as sources of raw material to fuel up industrialisation in England.

In colonies they built canals & railroads and used steam engines only

to transport raw materials from inner parts of colonies to the seaports.

They set up government institutions that facilitated the extraction of resources

& did not set up complete sets of institutions that were necessary for

industrialisation & promoting economic growth & development within

colonies. Thus, Sri Lanka missed the 1^st industrial revolution.’

–       see ee Economists, HN Thenuwara: SL Should Regain

Missed Industrial Revolutions (cited by WA Wijewardena)

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• The ancient Sinhala familiarity with money, as described by SBD de Silva, deviates from the idyllic picture of a primitive rustic society untainted by the base metal”. This ee Focus continues Chapter 8 of de Silva’s classic, The Political Economy of Underdevelopment. Highland Sinhalé, though under siege for centuries by European invasions, were supported by people outside their territory, especially Sabaragamuwa and Matara. de Silva notes the external trade of the kingdom of Sinhalé was based partly on cash, and notes the money hoards uncovered midst the English conquest. The Sabaragamuwa district, a part of highland Sinhalé and governed by Sinhala law, yet had ‘adopted many of the habits & customs’ of the maritime provinces, riddled as it was with ‘numerous Moor and Chetty traders’. Cinnamon was an important source of foreign currency, and Sinhala were employed to carry cinnamon. Arecanuts, pepper, coffee, cardamoms & wax were secretly traded with Colombo.

     There were several species of coin, and traders were savvy about the purchasing power of the different currencies. The Sinhala declined to accept the official exchange rate. The spy John D’Oyly, who kept abreast of economic dealings, as a sources of intrigue, observed that Sinhala traders were well aware that, ‘the true value of any coin is the quantity of commodities it will purchase’. Local produce was shipped abroad to the Maldives and to Europe, and wealth was amassed by the privileged strata. The wealth of the highland Sinhala upper class was mostly based on a ‘rentier income’, from a variety of landholdings, and tributary payments, usually in cash, made during the Sinhala New Year for the annual renewal of appointments & reappointments & disappointments. There were trading monopolies, and the exchange of expensive gifts. The Sinhala chiefs also made clandestine profits, misappropriating state funds & making improper exactions of money from subordinates, including from collaborators with the English, all carefully observed and used by the spy D’Oyly to compromise highland Sinhala officials in his coup d’etat of 1815…   

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Contents:

US & India Prepare to Grab Hambantota Port Claiming It’s a Chinese Base