e-Con e-News

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

e-Con e-News 17-23 May 2026

India & Japan are in a mighty, mighty hurry. A USA-inspired urgency. They are renewing pressure on Sri Lanka ‘to expedite industrial & trade integration’. And they have a plan – an economic caste system: Sri Lanka has to only produce ‘inputs’, India will capture ‘assembly margins’, and Japan shall capture ‘technology rents & FDI returns’ (see ee Focus).

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‘An analysis of the bidding documents, amendments

& official clarifications exposes a procurement

structure that goes as a simple service contract but

sets up ‘a monopolistic trap’ for the government

at the end of the agreement’s tenure.’ – see ee Industry,

Proposed contract for e-passports…

So, what exactly do such ‘technology rents’ mean? An e-passport scam was exposed this week, involving a French & Finish contract with the Department of Immigration & Emigration (DIE)? DIE has been trapped, failing ‘to cap prices for post-contract software licence renewals’,. Thus DIE has granted ‘absolute pricing power’ to the USA’s Oracle, Microsoft (Windows) & antivirus providers, – they will have to be paid ‘to keep the base servers running…’ for now & through our next lives (see ee Random Notes).

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The education system and the corporate media must share the blame for enabling such innumerate, industrial illiteracy. The media are bribed to amplify the incessant press releases proclaiming the ‘$Billions’ of aid by the IMF, World Bank, ADB, EU, etc. Our education doesn’t teach us that such ‘aid’ doesn’t mean we get the cash to spend on our own priorities. This ‘aid’ means we have to buy their overpriced industrial machineries, goods & services, and pay them back with under-priced primary (natural: human & no-human resources) and depreciating cash, forever. 

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So, why are India & Japan in such a rush to make Sri Lanka submit to this economic caste system?

‘India & Japan both require an external fix

for their internal economic problems

– Sri Lanka is that fix!’

According to Shiran Illanperuma (see ee Focus) both Japan’s & India’s economies are not what they claim themselves to be. Japan is stuck: a declining power, it seeks salvation by playing the role of the USA’s police dog in East Asia (see how Japan’s PM bent down on her knees before Australia, to apologize for killing a few thousand white people there in World War II. She apparently can’t ever apologize to Sri Lanka, China, Korea, or Vietnam, wherein Japan’s Asian victims number in the millions….

     Meanwhile – in the land of opium-trading nabobs & maharajahs & nizams & jaghirdars & sahibs, usurious Parsi and Jain, Banias, Chettiar & Bohras, rentier Tatas, Adanis & Ambanis (all funders of the ruling BJP) – a service-sector-dominated India has to play the same obsequious role in our region.

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This week saw the US Government dismissing fraud charges against Indian billionaire Gautam Adani (who has taken over Colombo Port). Adani is accused of bribing Indian officials and lying to US investors to obtain a solar energy project in India. Adani’s case was dropped by the US government after Adani appointed to his legal team Robert J Giuffra Jr, one of US President Trump’s personal attorneys. Perhaps Kapila Chandrasena, who the USA was hounding to target the Rajapakses, would still be alive if he had hired the ambulance-chasing shyster Giuffra. However, Adani also had to pledge a $10billion investment in the USA. The US government then announced a $275million settlement with Adani over alleged sanctions violations involving Iran.

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Japan and India are all part of the US Indo-Pacific Strategy, which is rousing tensions & militarization to squeeze Asia. They all have a plan. But does Sri Lanka have a plan? No.

‘Colombo must have its own clearly defined objectives

& parameters before embarking on a readymade strategy

to fix someone else’s problems.’

Illanperuma examines the more dynamic models offered by modern Vietnam & China in the context of the General Secretary of the Communist Party of Vietnam & President of Vietnam Tô Lâm’s recent visit to Colombo:

‘Vietnam did not conduct shock therapy or

wholesale privatisation – it instead conducted

a very deliberate process of selective FDI with

technology transfer, industrial clustering,

& development banking’

He reasserts:

‘Sri Lanka’s real problem is that it does not

have a plan for itself, even as regional &

global hegemons integrate us into their plans’

(see ee Focus)

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• Trillions & billions and profits & assets galore greet every reader of any business news in Sri Lanka. The bankers lounge in ecstasies. Some of their employees, feeling perhaps left out of the fun, have sought to make a few under-the-table withdrawals by hook & by crook. Why not?  Criminals only have Sinhala village names in the media. Yet people are dying while the banks are making a killing. And how are banks doing it? By investing in real production?

‘In a functioning market, high bank profitability should

signal efficient intermediation, savings being channelled

productively into investment, employment, & growth’

No way. Welcome to the Octopus who squeezes you, the Leech who sucks you dry & the Snake who swallows up your very being.

‘In 2023 alone, over 1,750 properties belonging to SMEs

were auctioned under the law. These were not abstract

balance sheet entries. They were factories, workshops,

warehouses, family homes pledged as collateral,

& the accumulated savings of a lifetime.’

The International Monetary Fund drives this highway robbery:

The IMF has called for the reinstatement of

parate execution, warning that prolonged suspension hinders

banks’ ability to manage non-performing loans & price credit

risks, potentially destabilizing the financial system. The IMF’s

concern is legitimate in principle but perverse in practice.

So writes CA Saliya in his perplexing disclosures on how Sri Lanka’s banks are basking in a bubbly bacchanal, while the nation starves (see ee Focus). He does not blame ‘borrower profligacy’. He lays his sights on internal policies: high interest rates (Hullo Central Bank?)  and mechanisms that ‘destroy the very collateral value it claims to protect’.

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‘Until World War 2 there were legal sanctions against

tea growing by Africans just as in Sri Lanka,

during the early years of the 20^th century, village headmen

were instructed to destroy rubber trees planted by the peasants.’

• The economic system of Sri Lanka, as framed by its ruling import-export plantation economy, is neither modern, nor industrial. This week’s ee Focus offers a complex & intricate excerpt of SBD de Silva’s classic The Political Economy of Underdevelopment, Chapter 10. SB counters the scholarly assertions about the management deficiency of peasants (which if there ever was, has been due to a lack of investment). He seeks to show:

‘That plantation crops could have been grown on smallholdings

as cheaply & effectively as on the plantations themselves, but

that the plantation interests together with the colonial state

actively impeded the development of smallholdings.’

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Using the ‘monopolistic practices of traders’ and deploying ‘legal-institutional barriers’, colonialism discouraged smallholdings, fearing they would ‘divert labour from estates’. They also aimed to push peasants towards less-remunerative farming, even as Kenya’s smallholders have produced comparative yields. Whereas each tea estate in Sri Lanka likes to boast its own factory, Kenya also has large cooperative factories.

     SBD challenged the notion that these estate plantation crops in Sri Lanka could even be regarded as industrial activity. They have limited the use of estate machinery to processing rather than for increasing the skills & productivity of the much more numerous labor used for fieldwork. The greater efficiency of larger plantation holdings is & was a myth. SBD concludes: There has been ‘no compelling reason for combining cultivation & processing under the same management’. 

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• Why is the USA so psychotically focused on strangling Cuba so as to grab it? The richest & most powerful country in the world seeks to undermine a proud nation 90 times smaller in size, with a population 30 times less. Socialist Cuba offers its people, better healthcare & education. Indeed, it can be reasserted, Cuba poses the threat of a good example. The USA have sought, by mass murder & bribery to prevent the rest of the Caribbean & the Americas from following Cuba’s example.

     This ee Focus concludes Prince Kapone’s response to such questions as: ‘Has socialism failed?’ He simply answers: ‘The first task… is not to answer the question. It is to reject it.’ Rather, the first tactical manoeuvre is to restore ‘scale, context & proportion’ to any discussion. His argument is that ‘the real question is whether it works’, and then to define what a ‘working’ socialist society actually means.

     Socialism’s record, in practice, comes from material life – ‘food, housing, education, healthcare, industrial capacity, life expectancy, literacy, social infrastructure’. This is undeniable. Kapone also points out: socialist countries arose not out of ‘a seminar hall’ but from ‘world war, civil war, economic collapse, & foreign invasion, counter-revolution, prolonged encirclement, blockade & subversion, wars against colonial & imperial armies, countering the crimes and deficiencies of capitalism. Compare the riches of Europe & their settler colonial states – to watch what is happening in Cuba, in Gaza, the frozen wars surrounding China, is to watch their newest re-enactments of an over 500-year-long history genocide & enslavement.  In truth, they are also rewinding Sri Lanka’s own history of invasion & destruction & continuing siege before our eyes…Viva Cuba! Jayaveyvaa Lanka!

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As the USA strives to escalate wars of the world, the need for our countries to unite grows more pressing day by day. The US-commanded military clique has expanded into almost all of Eastern Europe since the 1990s, and fully colonized Western Europe – most evident in their genuflection at the USA’s terrorism against Russia & Iran, which has damaged Europe’s economy as well. Thus, ee Focus also continues the Tricontinental Institute (TI)’s intricate elaboration of ‘Hyper-Imperialism: a Dangerous Decadent New Stage’ (see ee Focus). TI lists the USA’s abandonment of nuclear arms-control treaties, as well as compares national war budgets (‘the USA controls… an astounding 74.3% of all military spending worldwide’) and overseas military bases, which directly threaten Asian, African & independent American countries – ‘especially… the darker nations of the world’.

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‘Joint Apparel Association Forum (JAAF) said the country’s focus

should be on maintaining confidence, avoiding speculation &

supporting industries that generate foreign exchange’

– see ee Industry, JAAF says Rupee Depreciation

driven by global pressures, not economic decline

• So there it is: JAAF, one the foremost hoarders abroad of dollars, earned from sweating Sri Lankan labor, is stashed outside the country. The latest merchant media game is to blame only ‘external shock, not domestic excess’, whatever that means. ‘Domestic excess’ if any, is to be reserved for the Rajapakses, Sinhala Buddhists, and other ‘authoritarians’. The merchant media which has made an ‘industry’ out of wailing about corruption, is in fact, the most corrupt. They scream about retail corruption but in fact cover up the greatest wholesale swindles (which also include their owners & soap-sodden sponsors).

     The rag swindlers and tour operators and labor traffickers are only superseded by such multinational banks and corporations (MNCs) as Standard Chartered, Citibank, HSBC, Ceylon Tobacco (CC) & Unilever, with their transfer-pricing tricks. JAAF declares that conjuring optimism is what a supine media should be all about – ‘maintaining confidence’, avoiding ‘speculation’. We are sure they don’t mean avoiding speculation in real-estate (land)! They mean investing hope, sweat, and rupees in the import-export plantation fraud. These labor-intensive rag traders are also like the plantation traders & tourist shills. They are not industries. If the country was turned into one great garment workshop, one great estate, one great hotel, there would be no need for schools or universities. Because they’d only need seamstresses, tea-leaf pickers & rubber tappers & coconut grabbers & bedmakers, floor sweepers & tea pourers. Why are they so afraid of industrialization? It is simple. Why has much of North America & Europe de-industrialized? They fear the power of a national proletariat. Real industrial trade unions. This is why much of Sri Lanka’s & India’s workforce is atomized & fragmented & ’informalized’. The merchant fear of an organized working class has led to the enfeebling of nations. Hence, unless the current glooming wakes us up & unites us, we are doomed to continue failing to unite as a people with the countries that matter most in this world.

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Read the main media in Sri Lanka and you will only learn of the great things merchants & moneylender are up to! The companies proclaim, and the master’s voices amplify their claims in ‘breaking news’ & bold headlines.  They are big on green this & that, renewables & saving elephants & rare creatures. But in truth, they fear the growth of an energy secure & self-sufficient Sri Lanka. Their pesticidal ‘green revolution’, which is more like a homicidal white revolution, only exists to postpone a worker & peasant-led red revolution…

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As the moon unveils its naked shining at its fullest, we approach the birth of the Buddha who brought enlightenment to a world trammeled by brahmins & patricidal kings. The 2026 ‘Yala’ cultivation season has also begun. Paddy broad-casting is now in full sway. Those who promised to resurrect the great irrigation systems are yet to revive the solidarity these ancient hydraulic innovations once engendered. Now, only paddy prices have not been increased. With the state abdicating its primary role for food security, cultivators have to source fuel, fertilizers, pesticides, & tractors from private importer middlemen, who have also hiked transport charges, shipping costs, and packaging charges. The prices of food are being hiked. Will the wages of human labor also rise? Farm workers are sporadically employed due to the uneven nature of labor application in rice cultivation, and therefore need higher wages. These issues can only be resolved through rural industrialization. Such are the lessons, SBD de Silva tried to teach us. Such are the most vital lessons, yet to be learned by our leaders, even those who claim to be from the very villages they claim to represent…

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Contents:

Japan & India Have Some Caste Lessons for Sri Lanka