e-Con e-News

Posted byee ink.July 11, 2026Posted inUncategorizedTags:China, economy, EPF, ETF, global-south, history, ILO, IMF, news, pension, politics, SBD de Silva, warwick-powell, World Bank

blog: https://eesrilanka.wordpress.com

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

e-Con e-News 05-11 July 2026

This week saw history slap us in the face once. And then twice. The massacre of prisoners & prison officials in the Negombo prison. Then the decision to renovate the English prison of Bogambara, built plumb in the middle of Mahanuvara, the ancient, historic & revered highland capital of Sinhalé, erected as an architectural tocsin to warn the country against resistance.

     Many of the prisoners in jails are just suspects, semi-rural, working class, lumpen proletarian, awaiting justice delayed. Much of the drugs they are accused of using, are just ground-up pharmaceuticals, awaiting analysis and identification. This week’s massacre was blamed on rival gangs battling for drugs in jail. Where have we heard of such before? Why, Haiti, of course. Meanwhile, local military forces, which were apparently unable to prevent or settle matters peaceably in Negombo, are being dispatched to Haiti to help imperialist forces led by the USA, Canada, etc, suppress gangs!

     Haiti, was where the first Europeans led by Christobal Colon aka Columbus landed to unleash genocide upon genocide of the original peoples – 65 years after the first Europeans colonized the archipelago of Azores off Africa in 1427 and began the Pope-anointed trade in slaves in 1431, and 13 years before the first Europeans landed on Sri Lanka in 1505, to set off unrelenting colonial despoilation, followed by the Dutch & English & now the USA.

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Whereas Cuba is being militarily surrounded & sanctioned by the USA in order to attempt to invade that long-resisting nation, Sri Lanka’s subjugation is now being brought about by economic & political means, and internal subversion. The latest & the biggest joke is the USA accusing Sri Lanka of ‘supposedly trading with countries using forced labour’. The even bigger joke is the earnest attempts to respond to such accusations. As the Sunday Times house-economist noted (see last ee) our government has not been told who these countries are that are ‘using forced labour’! Slavery, meanwhile, is still legal in the USA, in prisons (see their 13^th Amendment), so perhaps the USA means themselves! Yet, of course, they mean (without any evidence): the People’s Republic of China!

     The merchant media in Sri Lanka is paid to cling hard to our colonial master’s tails & tales, no matter what excrement they unleash on our heads. They rather seek to blame a bad white man, a Trump, or rogue state, Israel (read Jews), rather than seeing all of them as expendable expressions of the USA’s capitalist ruling class, which has long practised such schemes & schisms around the world.

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Linda McMahon is the USA’s 13^th Secretary of Education, who has been awarded the task of dismantling public education, and promoting its privatization. McMahon is a co-founder & CEO of World Wrestling Entertainment (WWE). The WWE stages colorful, loud & fake wrestling matches, with the real winners based on who, as winners and/or losers, can draw the biggest bets. McMahon is a long-time ally & major political donor to US President Don Trump. Trump’s demand last week for FIFA to abrogate its rules & rescind a red card of a US player in the WorldCup, is to signal he understands the frauds practised by Big Sport, where corporate sponsors feature larger than the players themselves and the nations they represent. The US government is handing out red cards to their purported enemies and revoking them from alleged friends, at will.

     The arbitrary, hypocritical & nonsensical nature of their demands reminds that rules & appeals to rationality & morality are for slaves. Masters set the rules and change them. The old golden rule is: they who own the gold (& your reserves!) make the rules. The new golden rule is: who owns the black gold (oil) makes the rules, or rather who can prevent its free flow, and makes it prices zip up & down, makes the rules. The job of the mass media (& the so-called social – not socialist – media) monopolized by multinational corporations’ (MNC) trolls, aka marketeers, is to divert & confuse us, preventing us from knowing our enemy & knowing ourselves.

     From the beginning of the latest round of wars unleashed by the USA (with their external poodle & pitbull states), the blame by its titling – Gaza War, Iran War – has sought to blame the victim, rather than the aggressor. The recent ‘oil crisis’ was created by the US attacks and subsequent raising of insurance rates by principals in London & New York… And yet, the media has to learn to divert from the true story….

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Sri Lanka has its own sources of energy & rare earths & minerals required to jump-start its industrialization. Just like the stalling of the development of Trincomalee, Hambantota, Galle & Colombo Ports, from expanding into modern industrial hubs, foreign companies are just sitting on & stalling the development of our mineral resources.

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The US government is dragging Sri Lanka before the tribunals of the World Trade Organization (WTO), claiming that our ‘taxation & valuation methods’ applied to imported vehicles, contradict international trade agreements Sri Lanka has signed. So reports the US embassy’s media lipstick, EconomyNext, which adds that the Sri Lanka government agrees with the accusation, and seeks to comply but such compliance would cause a ‘decline’ in the revenue needed ‘to ensure that the fiscal requirements of the country’.

     EconomyNext fails to explain how spending scarce dollars on consumer goods ensures fiscal needs. The USA WTO move echoes IMF & Chamber of Commerce demands that the government keep importing cars! ‘The Chamber’s Secretary General Shiran Fernando has even claimed, ‘the government must stop treating the automotive industry as a reactionary tool to hit short-term fiscal targets and instead recognise it as a core driver of national industrial development’! Fernando even hilariously claims Sri Lanka’s automotive trade ‘is currently in a nascent stage regarding vehicle assembly, component manufacturing…’ How’s thaaaat?!!! ‘Nascent’ for this Fernando appears to be: forever pregnant but never delivering!

     The WTO story is suspicious because the USA has also been blocking the functioning of the WTO’s dispute settlement mechanism by refusing to appoint new judges. It is also unclear what interest the USA has in Sri Lanka buying imported cars. Japan views Sri Lanka as a ‘Kanatte’ (cemetery) for their old autos, due to Japanese laws demanding Japanese replace their cars every few years, to supposedly comply with their pristine environmental laws, but are enforced in actual fact to provide a stable ‘home market’ for their industries. Most of the cars imported into Sri Lanka are renovated wrecks from Japan, making Panchigavatte, Sri Lanka’s most expensive real-estate due to it being a retail outlet for Japan’s auto parts – clutches & brake pads & bumpers, mainly – from the constant clogging of & chaos on Sri Lanka’s jammed & killer roads.

     Perhaps the US concern relates to the Intellectual Property (IPR) ‘rents’ the USA still receives from the Japanese auto industry, which owes its existence to being an offshoring colony for the USA’s economy. Japan apparently pays the USA at least ‘$8-11billion yearly for all US patents, trademarks, & trade secrets.’ It pays several $billions more for the privilege of having to entertain 98 US military bases! In the 1920s, when Ford & General Motors built the first car factories in Japan and dominated the market, they also taught Japanese engineers how mass-production assembly lines worked. The USA turned to promoting Japan’s auto industry in the 1960s to discipline its own unionized auto workers. Detroit, once the world capital for the auto industry, is now a cracked-out disaster zone. 

     The other joke coming out of the USA this week is the World Bank (WB aka IBRD) declaring Sri Lanka as an ‘upper middle-income’ country once again! The announcement was greeted with much derision, not to mention, grim mirth, in Sri Lanka, since impoverishment & malnutrition is ‘booming’ (see ee Quotes). The USA’s WB apparently determines such categories every few months and is based on per-capita income. This average income business, makes ee recall Indian scientist DD Kossambi’s fine repartee about the uselessness of such indices as ‘per-capita income’ & GDP – ‘It is the rare Indian who eats the grain assigned to him by the statistical averages.’

     Perhaps the new Chairman of the Employers’ Federation of Ceylon (EFC) can better tell us why the World Bank decided to make such a pronouncement. The new EFC chair, Sanath Manatunge, is also a member of the World Bank Group’s Private Sector Advisory Council. Who else is on this WB Council we are yet to find out. And Manatunge, in that incestuous oligarchic world of ruling merchants & money lenders, is also Managing Director/CEO of the Commercial Bank of Ceylon, Chairman of the Sri Lanka Banks’ Association, and ‘member of the UNICEF Business Council, the Ceylon Chamber of Commerce, as well as an Ex-Officio Member of the Stakeholder Engagement Committee of the Central Bank of Sri Lanka’ (see ee Who’s Who), and a Member of the Project Steering Committee (PSC) for the Central Bank’s Fraud Risk Management (FRM) System! Perhaps he can divulge other secrets as well!

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Sanath Manatunge should also be called to answer for the EFC’s reckless attempt, along with a ‘renegade’ UN’s ILO (International Labor Organization) & IMF (International Monetary Fund) in tow, to hijack the Employees’ Provident Fund (EPF) and & the Employees’ Trust Fund (ETF). They wish to remove this ‘multi-trillion-rupee pool’ from under the Central Bank (CBSL), and put it under a ‘tripartite’ board and get it to ‘invest aggressively in the private sector!’ Dhanusha Pathirana lays out the invidious stratagem they are deploying, playing on media tropes of ‘corruption’. A few weeks ago, ee 20 June 2026 noted how the CBSL itself is misusing its control over these pension funds to play the market to private benefit, midst ‘ongoing macroeconomic stagnation, high inflation, & suppressed consumer demand, the private sector’s own profit margins… facing stagnation, uncertainty & decline’ (so much for ‘upper-middle-income’!) They are claiming that:

‘Private equity & debt markets offer higher yields than

inflation-ravaged Government securities. While appealing,

this narrative entirely ignores the rent-seeking nature

& the historical track record of Sri Lanka’s financial elite.’

The alternative solution, declares Pathirana, is to force the current regulators to ‘share the destiny of the people they serve’ so that ‘CBSL officers, asset managers & trade unions’, ‘tea estate worker & the factory labourer’ will ensure no manipulation ensues!

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Speaking of the World Bank’s purported foolishness, the ‘deep disconnect between orthodox doctrine & actual economic problems’ is another focus of this ee. ‘More Exports! More Foreign Investment! Free Trade! Protection!’ – cry the economists. But is it really about trade? Or, production? The joke of the IMF declaring their operation a success, with the patient almost dead, is the yawning chasm between the prognostications of merchant media economists (including some earnest leftwing commentators), their searing indices calling for more exports & investment – while the US President & his EU poodles keep crossing their legs like coy virgins – is laid bare by Warwick Powell in his classic (though sometimes daunting prose) exposition, arguing insistently, ‘Trade Policy is the Wrong Focus: Prioritising Directed Capital Allocation for Productive Capacity should take Center Stage’. While Powell ‘s main target is the accusations (falsely) made against the People’s Republic of China (PRC), the eerie resonance in Sri Lanka’s media of the parrotings of Washington, London & EU bean counters, suggests we can learn much from his work: ‘The primary policy focus should not be trade policy in the conventional sense. It should be the explicit direction of capital – domestic & cross-border – toward activities that augment productive capacity.’

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Speaking of China, this ee Focus reproduces ‘The CPC’s Decisive Role in China’s Rise to Economic Superpower’ by Dayan Jayatilleke, reprinted in the Island as a translation from the original Sinhala speech delivered at the 105^th anniversary celebration of the Communist Party of China, organized by the CGTN Sinhala Service and hosted by the Communist Party of Sri Lanka. Polemicist Jayatilleke seeks to explain the seemingly extraordinary rise of China, not on the basis of nationalism solely, but on the specific role played by the CPC and Marxism Leninism. He describes the open struggles against, and within, the party to forge a ‘correct line,’ as conditions change.

     When facing external peril (Japan, Europe, the USA) and internal enemies (capitalists, merchants & landlords), there is a need to differentiate between a national bourgeoisie & a comprador class. And most importantly, the importance of recognizing that the main force, in our countries, is the rural peasantry, and the need to rid ourselves of archaic residues that serve reactionary forces and weaken us all, but especially them. He also describes the need to rely on enriching the countryside to develop modern industry. Jayatilleke, however, omits to mention the monumental infrastructure built – ‘free’ of foreign loans, ‘greater than the Great Wall’, that laid the basis for industrial development – during the Great Proletarian Cultural Revolution, much maligned especially in the English media.

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In January 2025, the US government announced its ‘total elimination policy’ to allegedly destroy drug cartels & transnational criminal organizations. This strategy, however, began with the US military kidnapping of Venezuelan leader Nicolás Maduro, and has amounted to ‘an aggressive maximum-pressure campaign to completely eradicate socialist & nationalist governments in the Western Hemisphere’. This US aggression has taken place with the almost total agreement of Europe & other countries. The last ee explained in detail & tabular illustration, the economic & military character of the forces arrayed against most of the world by the 49 countries of the ‘Global North’. This week’s excerpt of the Tricontinental Institute’s Hyper-Imperialism: a Dangerous Decadent New Stage, details the rise of the 145 countries loosely called the Global South, necessitated by the aggressions of the US-led military bloc.  This excerpt describes the forces both uniting & dividing us, with the Global South lacking cohesion, Having distinct yet different ideologies & political agendas. Yet, having all endured centuries of invasion, humiliation & depredation, therein also lies the possibility of a shared better future. The essay describes the various efforts to unite in the face of ‘imperialist overexpansion’, and the irrational fears evoked in the white countries by China’s lifting of millions of people out of impoverishment – the threat of a good example. It also describes the models offered by such countries as Cuba & Vietnam & free Korea, which remains the white man’s premier bogey… (see ee Focus)

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The technological stagnation in the plantation system,

involving a low level of labour productivity,

went hand in hand with low wages

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There is no class fraction of employers that are greater whiners than the ‘planters’, when it comes to paying their workers, proper wages. The media is full of their complaints. And no such class fraction that has caused greater impoverishment of the workforce as a whole. This ee Focus excerpt of SBD de Silva’s classic The Political Economy of Underdevelopment, begins Chapter 12 on ‘Labour Relations in Plantations’. This excellent chapter compares the treatment of Indian & Chinese workers in Malaysia, comparing different types of slavery: chattel, indentured & waged, and the conditions which gave rise to such relations. SBD described the non-market forces used to create, retain & reproduce a captive labor force, separated from the rest of the country. The intermediary role played by the kinship & caste of kanganies in the recruitment, disciplining & exploitation of workers. Free and spontaneous emigration was unacceptable to planters and their colonial state. Restrictions on the worker’s living conditions and lifestyle were aimed at instilling conformity. No improvements were to be allowed for housing. Labor relations were based on the recovering their investments in such labor by any means. The isolation of the worker from their surrounds was reinforced by linking them to the villages of their origin in another country…

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Contents:

IMF, ILO & Employers Federation of Ceylon Set to Rip off Workers’ Pensions