{"id":143992,"date":"2024-09-09T16:09:13","date_gmt":"2024-09-09T23:09:13","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=143992"},"modified":"2024-09-09T16:09:13","modified_gmt":"2024-09-09T23:09:13","slug":"fake-free-trade-zones-naked-garments-caging-sri-lankas-industrialists","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2024\/09\/09\/fake-free-trade-zones-naked-garments-caging-sri-lankas-industrialists\/","title":{"rendered":"Fake Free Trade Zones & Naked Garments: Caging Sri Lanka\u2019s\u00a0Industrialists"},"content":{"rendered":"

e-Con e-News<\/a><\/em><\/span><\/h2>\n\n\n
\"\"\/<\/figure>\n\n\n\n

blog: eesrilanka.wordpress.com<\/p>\n\n\n\n

\u2018Before you study the economics, study the economists!<\/em>\u2019<\/p>\n\n\n\n

e-Con e-News 01-07 September 2024<\/strong><\/p>\n\n\n\n

Elon Musk\u2019s Starlink, just like the IMF, wants to wait & see how our elections go, before they divulge their mysterious plans for Sri Lanka. Thus, their groupies & fanboys & fangirls breathlessly tell us: \u2018Authorities are planning for a Zoom meeting with Starlink.\u2019 However, the world is not wholly made up of such disoriented sycophants.<\/p>\n\n\n\n

     Zimbabwe has had to face severe sanctions, as imposed by the USA. The recent decision by Zimbabwe to give the go-ahead to Elon Musk\u2019s Starlink, however, is being viewed as a failure by Zimbabwe\u2019s<\/strong> \u2018indigenous cellular networks to invest adequately<\/strong>\u2019. <\/strong>Indigenization in Zim Telco<\/strong> failed because of \u2018self-centered indigenous entrepreneurs who only enriched themselves without R&D and developing Telco. (see ee Quotes<\/em><\/strong>)<\/p>\n\n\n\n

     As the critics of Starlink in Zimbabwe show, unlike our craven merchants, there are still independent people in this world who don\u2019t salivate while stargazing at celebrities. They don\u2019t believe in fairytales of superstars & entrepreneurs. They know such \u2018prodigies\u2019 are a product of a larger machinery that invents inventors & manufactures manufacturers, and makes machines that make machines. The Hollywood media glorification of the Jobses & Gateses, Musks & Zuckerbergers are pure squalid puffery, like some slime-ridden Fortune<\/em> 500 listing. Behind these individualized superstars are large armies of workers, including the weaponized divisions of the largest imperialists in the world.<\/p>\n\n\n\n

     Sri Lanka\u2019s import-export colonial plantation oligarchy \u2013 so addicted to the North Atlantic (where they stash their wealth & relatives) \u2013 are reluctantly waking up to the blockages put up by NATO\u2019s wars in East Africa & West Asia, in East Asia & right here in the ocean around us, which remains a colonial lake. This week\u2019s targeting of Swedish instructors training operators to conduct deadly attacks on Russia, made us also think about the role Scandinavian countries like Sweden have played in the old slavery & colonial game. Sweden\u2019s Nobel, it may be recalled, was one of the main instigators of the slide into Europe\u2019s World War 1\u2026 (see ee Focus<\/em><\/strong>)<\/p>\n\n\n\n

\u2022 The last few ee<\/em><\/strong>s have shown how \u2018the colonial project created an international division of labour to ensure that the colonized would never achieve modern industrialization<\/strong>\u2019, placing tailor-made fetters on Sri Lanka\u2019s fiscal & monetary sovereignty to perpetuate such underdevelopment. <\/strong>Also noting how Bangladesh\u2019s IMF agreement has furthered economic disaster<\/strong>, and will accelerate long-term chaos. It turns out that the IMF seeks to block the state\u2019s \u2018capacity to intervene<\/strong>\u2019 so that it cannot<\/strong> \u2018promote domestic industrialization<\/strong>\u2019. This ee<\/em><\/strong> looks at the agents in these acts of sabotaging industrialization.<\/p>\n\n\n\n

*<\/p>\n\n\n\n

University of Colombo professor Sirimal Abeyratne<\/strong> is Chair<\/strong><\/p>\n\n\n\n

of the Central Bank\u2019s Stakeholder Engagement Committee<\/strong><\/p>\n\n\n\n

of Sri Lanka<\/strong>, which he does not declare in his weekly<\/p>\n\n\n\n

column on \u2018Down-to-Earth Economics\u2019 in The Sunday Times<\/em><\/p>\n\n\n\n

\u2013 see ee Focus<\/em><\/strong>, Imperialist Seduction of Central Bank Officials,<\/p>\n\n\n\n

Economists, Professors & Newspaper Columnists<\/p>\n\n\n\n

*<\/p>\n\n\n\n

England\u2019s government<\/strong> is still busy, \u2018worried\u2019 about us, from still so far way, worried about the conduct of capitalist elections (they\u2019ve sent spies here dressed up as \u2018Commonwealth\u2019 experts to monitor them, see ee Random Notes<\/em><\/strong>). Their English ruling class has shown us how to put on expensive farces, like their recent election<\/strong> which replaced as Prime Minister an Indo-African moneylender who claimed to be an Englishman with a knighted Scotsman disguised as a Labourite \u2013 who upholds the same imperialist policies as his Conservative predecessor. The English government has also published a book to tell us how we should run the economy: Sri Lanka: from Debt Default to Transformative Growth, An Essay Series<\/em>, edited by Ganeshan Wignaraja & Dirk Willem te Velde:<\/p>\n\n\n\n

*<\/p>\n\n\n\n

\u2018Launched on August 22 by ODI global affairs think tank<\/strong>,<\/p>\n\n\n\n

ahead of the polls, this collection of essays features contributions<\/p>\n\n\n\n

from renowned Sri Lankan & international experts delivering<\/p>\n\n\n\n

27 concrete proposals on how to steer the country from<\/p>\n\n\n\n

debt distress<\/strong> to a path of lasting economic prosperity\u2019<\/p>\n\n\n\n

Ooops!<\/em> What on earth is ODI?<\/em><\/strong> Is it cricket? No, it is a department of the English state! England\u2019s Department for International Development (DFID)\u2019s Overseas Development Institute<\/strong> (ODI). And what the book inadvertently offers (midst a cataract of innocuous-sounding acronyms like ODI, DFID, etc) is a glimpse into the (we won\u2019t call it corrupt<\/em>, even if it smells & sounds, & feels like it; let\u2019s call it for what it is: capitalist<\/em><\/strong>) nexus of imperialist governments & public officials in Sri Lanka: diplomats, those \u2018independent\u2019 Central Bank officials, universities, and independent \u2018think tanks\u2019, etc.<\/p>\n\n\n\n

     Even FT<\/em> columnist Charith Gunawardena writes on \u2018ODI\u2019s \u2018From debt default to transformative growth?\u2019: \u2018While pragmatic on the surface, [the book] fails to address the root causes<\/strong> of Sri Lanka\u2019s economic challenges and overlook the importance of prioritising the wellbeing of its people & the environment<\/strong>.\u2019<\/p>\n\n\n\n

     So, here\u2019s yet another expensive English lesson<\/strong> about Sri Lanka\u2019s current despond, and the chemistries being injected to revive the old import-export colonial plantation system<\/strong>. There is absolutely no mention in the book, of the need for a policy of modern machine-making industrialization and the path we must take to achieve this. But why should the English, home of the first Industrial Revolution, tell us? Don\u2019t do as they say. Do as they do.<\/em><\/strong> The only machines referred to in the book are when one \u2018Professor\u2019 speaks of the Sri Lankan \u2018rich who drive cars that consume high levels of petrol and who are able to use air conditioners & washing machines in their homes\u2019 (Devarajan).<\/p>\n\n\n\n

     Shantayanan Devarajan<\/strong> is a well-domesticated yankified student of Princeton & Berkeley, a World Bank hack, who taught at Harvard Kennedy School, and has now been rewarded as a Professor of the Practice of International Development<\/strong> at Georgetown University\u2019s School of Foreign Service<\/strong>. Devarajan\u2019s concern is taxes. He blames regressive tax policies that subsidize such lifestyles of the \u2018rich\u2019. Yet he acts unaware of the policies that only promoted the old policies of the spendthrift white non-settler colonial white man. And ultimately, his attack is on any attempt by Sri Lanka to industrialize. Devarajan is a big fan of the import-export mafia & their fake industry:<\/p>\n\n\n\n

*<\/p>\n\n\n\n

\u2018One case [where there] was rapid economic growth & poverty reduction. That<\/p>\n\n\n\n

was in the late 1970s, when the country decided to remove import barriers<\/strong>. At that time,<\/p>\n\n\n\n

there was great concern that import-substituting firms<\/strong>, & therefore the manufacturing sector,<\/p>\n\n\n\n

would collapse. The small garment sector that catered to the domestic market feared that it<\/p>\n\n\n\n

would not survive the influx of cheap imports. Instead, when trade was liberalised<\/strong>,<\/p>\n\n\n\n

the economy boomed<\/strong>. Per capita GDP growth accelerated. The unemployment rate fell<\/p>\n\n\n\n

to 4%. Rather than collapsing, the garment sector took off, thanks to cheap<\/p>\n\n\n\n

imported inputs & foreign investment. In per capita terms, Sri Lanka\u2019s garment<\/p>\n\n\n\n

exports to the US far exceeded those of Bangladesh, China & India.\u2019<\/p>\n\n\n\n

Shantayanan Devarajan, Accountability:<\/em><\/p>\n\n\n\n

The Key to Sustained & Inclusive Growth in Sri Lanka<\/em><\/p>\n\n\n\n

*<\/p>\n\n\n\n

The fraud<\/strong> of the so-called \u2018garment industry\u2019 <\/em><\/strong>is exposed here in an excerpt from the parliamentary Hansard<\/em>, in SBD de Silva\u2019s The Political Economy of Underdevelopment<\/em><\/strong>:<\/p>\n\n\n\n

\u2018Hon R de Mel [Minister of Finance<\/strong>]:<\/p>\n\n\n\n

In other words, up to date the only attraction in Sri Lanka is to collar the quotas<\/strong><\/p>\n\n\n\n

which are still available to Sri Lanka. Korea has exhausted her quota. Hong Kong<\/p>\n\n\n\n

has exhausted, Singapore is exhausting; so the only thing [foreign investors]<\/p>\n\n\n\n

find attractive in Sri Lanka is to collar Sri Lanka\u2019s quota. Do you agree?<\/p>\n\n\n\n

Mr AY Gnanam<\/strong> [a leading Sri Lankan industrialist]: I agree.<\/p>\n\n\n\n

Hon de Mel<\/strong>: Could Sri Lankan industrialists not have got this quota<\/p>\n\n\n\n

and done this industry without any foreign help<\/strong>?<\/p>\n\n\n\n

Mr Gnanam<\/strong>: If you had announced your offer of a 5-year tax holiday<\/p>\n\n\n\n

to industrialists in your last but one Budget, then all the garment industries<\/p>\n\n\n\n

would have done very much better than anyone else, because Sri Lanka has<\/p>\n\n\n\n

got the best garment industries\u2026 If they were allowed to export [with a tax<\/p>\n\n\n\n

holiday] they would have done without the Free Trade Zone.<\/p>\n\n\n\n

de Me1<\/strong>: In other words, the FTZ has only deprived the <\/em>Sri Lankan industrialists<\/strong>.\u2019<\/p>\n\n\n\n

(\u2018Parliamentary Series No17 of the 1st<\/sup> Parliament<\/p>\n\n\n\n

of the Democratic Socialist Republic of Sri Lanka,\u2019<\/p>\n\n\n\n

2nd<\/sup> Report, 22 Feb 1980, p27l)<\/p>\n\n\n\n

*<\/p>\n\n\n\n

\u2022\u2018Sri Lankan market too small for entrepreneurs, industrialists to survive<\/em><\/strong>: AKD,\u2019 headlines the Daily Mirror<\/em>. Adding: \u2018An NPP government will establish trade embassies in the African region to find emerging markets there\u2026 Only 3.8 million people out of the 22mn population come to the market for commercial purposes on a day, whereas some 400mn people come to the market in India.\u2019 While it is possible the JVP leader is being misquoted, as some of the more intelligent responses in the Comments Section<\/strong> point out: \u2018This comment seems off. No market is too small for entrepreneurs; markets should always be viewed in proportion. Many European countries have much smaller populations than Sri Lanka<\/em><\/strong> but are highly entrepreneurial & industrialized.\u2019 Also: \u2018Singapore has a small population with a small market\u2026 Switzerland has a small population & small market.\u2019 The arguments against industrialization come at us fast and furious from all directions\u2026.Left and Right, South, North, East and West.<\/p>\n\n\n\n

*<\/p>\n\n\n\n

\u2022 The Asian Progress Forum<\/strong> is launching The Political Economy of Sri Lanka\u2019s Debt Crisis<\/em><\/strong> on Tuesday, 10 September, at 4pm at the Russian Centre, 10 Independence Avenue, Colombo 07. This made us recall how there is a lot of hasty talk about \u2018political economy<\/em><\/strong>\u2019 these days. But are Sri Lanka\u2019s economic challenges only about debt and balance-of-payments? What are the missing notes, in this daily recited mantra about how lazy & entitled we act\u2026 Is everybody living beyond their means, or is it a particular class?<\/strong> And what about happiness?<\/strong> How do we build this path to happiness? Do we import the materials & skills?, or don\u2019t we also have to build the builders & the materials with our own resources? Do we keep importing a happiness that adds to more misery \u2013 importing a happiness<\/strong> of fleeting conspicuous consumption <\/strong>that multiplies debt only paid in part by exporting our wealth or workers & resources? An imported happiness<\/strong> that puts off our most needed priorities, a strategy for modern industrialization?<\/p>\n\n\n\n

*<\/p>\n\n\n\n

\u2022 Sri Lanka finds itself being tagged to the latest headline news. The latest is the recent arrest by France of billionaire Telegram founder Pavel Durov<\/strong>, who is also a citizen of St Kitts & Nevis, through its Citizenship by Investment Program. St Kitts & Nevis is also a tax hideout to the Hamilton Reserve Bank<\/strong>, which has taken Sri Lanka to courts in New York asking for full repayment of $250million plus interest in arrears. The Hamilton case is seen as a diversion to put more pressure on the country. Sri Lanka\u2019s finance ministry proudly announced an agreement with the ad hoc group of International Sovereign Bond (ISB<\/strong>) holders who hold ~50% of the total debt liability. Yet there is still no final agreement \u2013 it has to be endorsed by all of the ISB holders, especially Hamilton Reserve Bank<\/strong>, miscellaneous creditors, & the IMF!<\/strong> Meanwhile, there is little sunlight about the bond holders, including \u2018some of the world\u2019s largest financial institutions\u2019 seeking to intervene in the Hamilton Bank case against the Government.<\/p>\n\n\n\n

     Elon Musk & Wall Street\u2019s ISB sharks who are fronted by the IMF will just have to keep up their act of waiting\u2026<\/p>\n\n\n\n

*<\/p>\n\n\n\n

_________<\/strong><\/p>\n\n\n\n

Contents:<\/strong><\/p>\n\n\n\n

\n
Fake Free Trade Zones & Naked Garments: Caging Sri Lanka\u2019s Industrialists<\/a><\/blockquote>