{"id":148201,"date":"2025-02-23T18:17:41","date_gmt":"2025-02-24T01:17:41","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=148201"},"modified":"2025-02-23T18:17:41","modified_gmt":"2025-02-24T01:17:41","slug":"the-secret-evasions-of-englands-ceylon-tobacco-company-in-sri-lanka","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/02\/23\/the-secret-evasions-of-englands-ceylon-tobacco-company-in-sri-lanka\/","title":{"rendered":"The Secret Evasions of England\u2019s Ceylon Tobacco Company in Sri\u00a0Lanka"},"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 16-22 February 2025<\/strong><\/p>\n\n\n\n

The deadly, malignant role played by England\u2019s Ceylon Tobacco Co (CTC) in Sri Lanka is a story yet to be told, and the media sure ain\u2019t gonna tell it. The media\u2019s function in Sri Lanka is to create diversionary dramas<\/strong> that take us away from the manoeuvrings of huge multinational corporations (MNCs) \u2013 with budgets larger than countries. The media have to churn out soap operas (for they own the soap, too), that have absolutely no impact on \u2013 nor offer insight into \u2013 transforming the merchant-run plantation economy that dominates the country. Then again, why should they bother? The media, too \u2013 at least the variety mislabelled as \u2018free\u2019 and \u2018independent\u2019 and \u2018national\u2019 \u2013 is controlled by these very MNCs. <\/p>\n\n\n\n

     This week\u2019s ee<\/em><\/strong> begins a glimpse into CTC, owned by British American Tobacco (BAT), which operates an over-100-year monopoly. The media & those thinktanks that love to whinge & whine about the economy \u2013 that love to go on about free trade<\/em>, etc \u2013 dare not approach, let alone touch CTC. How CTC not only deprives the country of revenues but also spreads cancers to both smokers & the peasants that grow their tobacco, leaving the state with a huge health bill!<\/p>\n\n\n\n

     The news this week was dominated by the farce of a boxed-in 2025 budget, \u2018formulated to augment state revenues within limited fiscal space\u2019.  Imposed by the IMF\u2019s \u2018parameters\u2019, the \u2018appropriations\u2019 are being accompanied by screeching hallelujahs in high notes (\u2018positive\u2019, \u2018bold\u2019); by bass demurrals in low notes from the merchants (\u2018the proof of the [English] pudding is in the eating\u2019). Meanwhile, chattering \u2018renewable\u2019 green monkeys trip the national grid. And fearsome falsettos crescendo about murder most foul in a courtroom where justice is otherwise meted out (with a little help from USAID, see ee Random Notes<\/em><\/strong>). <\/p>\n\n\n\n

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

In Sri Lanka too, the true history of the media<\/em><\/p>\n\n\n\n

and its oligarchic owners is yet to be written\u2026<\/em><\/p>\n\n\n\n

(see ee Focus<\/em><\/strong>)<\/p>\n\n\n\n

Not a day \u2013 nay, a minute \u2013 goes by without some negative media reference to China \u2013 the People\u2019s Republic, that is \u2013 and its \u2018conniving\u2019 Communist Party. This week we heard again in the supposedly nationalist Island<\/em> newspaper from \u2018a PhD candidate of political science at Wayne State University, USA\u2019, one \u2018Mitchell Gallagher\u2019. This \u2018doctor in training\u2019, ominously intones \u2013 \u2018As Africa toes Chinese line\u2019:<\/p>\n\n\n\n

\u2018Yet as CGTN Africa<\/em> & Xinhua<\/em> become entrenched in African media<\/p>\n\n\n\n

ecosystems\u2026 Will Africa\u2019s journalists & press be able to uphold<\/p>\n\n\n\n

their impartiality & retain intellectual independence<\/strong>? As China<\/p>\n\n\n\n

continues to make strategic inroads in Africa, it\u2019s a fair question.\u2019<\/p>\n\n\n\n

(Island<\/em>, 21\/02\/25, see ee Media<\/em>)<\/p>\n\n\n\n

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

Really! In Sri Lanka, 90% of all foreign news, even about countries right next door, has to come from the English King\u2019s BBC<\/em><\/strong>, etc. Talk about trenches! This constant demonization by the \u2018global\u2019 north\u2019s media of a rising Asian country blathers on, despite revelations of how \u2018USAID spent $7.9mn to train Sri Lankan media\u2019. This ee Focus<\/em><\/strong> therefore reproduces Shiran Illanperuma\u2019s foray into \u2018How Chinese Capacity Building & USAID Slush Funds Reveal Ideological Biases of Our Media\u2019, and offers startling revelations about China\u2019s media.<\/p>\n\n\n\n

    And as for USAID, while the media focuses on their more wild & weird ways, they yet lament that \u2018poor\u2019 countries will now suffer minus the USA\u2019s weaponized philanthropy. This ee<\/em><\/strong> Focus<\/em><\/strong> therefore peeks also into their more pernicious role in Sri Lanka, with the CTC, the US NGO Care International<\/strong> & the local Ministry of Health (!!!) pushing US soya beans: Charles Abeysekera\u2019s \u2018A Transnational in Peasant Agriculture: the Case of the Ceylon Tobacco Company\u2019 (1985) looks at how the monopoly of CTC in the manufactures & sale of cigarettes continues undisturbed. CTC impoverishes Sri Lankan farmers and holds them hostage to their financing & inputs. Meanwhile, <\/strong>CTC, which plays tax-collector for the state, has \u2018brought no foreign capital<\/strong> into its operations in Sri Lanka\u2019 since at least 1932, and \u2018all capital increases since then have been derived from accrued earnings in Sri Lanka\u2019! FDI, anyone!<\/strong><\/p>\n\n\n\n

     Abeysekera also exposes how CTC uses third countries \u2013 where they do not have industrial operations \u2013 as channels to transfer \u2018inputs\u2019 (cigarette papers!) from countries where they do have industrial operations, to Sri Lanka, to inflate prices & avoid paying taxes. Even more interesting is the role played by numerous accounting firms in the game of transfer pricing<\/strong>, an act which would surely burn a hole in the widespread huffing and puffing about local \u2018corruption\u2019. He quotes an UNCTAD<\/strong> report of 1978: <\/p>\n\n\n\n

\u2018One of the salient features of TNC operations\u2026 is the absence<\/p>\n\n\n\n

of rigorous public accountability<\/strong> of their corporate practices.<\/p>\n\n\n\n

Discourse & analysis is all the more vital since economic<\/p>\n\n\n\n

intelligence of such relevance is invariably shrouded in secrecy<\/strong>,<\/p>\n\n\n\n

strikingly so in respect to transfer pricing techniques<\/strong>. This is<\/p>\n\n\n\n

particularly evident in the Developing countries where knowledge<\/p>\n\n\n\n

of the financial marketing & output decisions of the TNCs\u2019 global<\/p>\n\n\n\n

decision making power is confined to rudimentary data eg, the<\/p>\n\n\n\n

conventional corporate balance sheet which is largely stripped of<\/p>\n\n\n\n

any content. Data concealment is assisted by the giant accounting<\/strong><\/p>\n\n\n\n

firms acting in alliance with corporate power<\/strong>.\u2019 (see ee Focus<\/em><\/strong>)<\/p>\n\n\n\n

While recognizing the straitjacket the government must operate within, the Sri Lanka Administrative Service Association (SASA)<\/strong> praised the budget, and the government\u2019s commitment to curbing \u2018tax evasion by implementing digital financial transaction systems\u2019. But what of the massive evasions of CTC, Unilever, Exxon and other multinationals? Indeed, we look forward to a government that can also ensure investment in modern industry, but this can only be enabled by controlling these MNCs, their accounting firms and their \u2018chambers\u2019 of merchants, that get away with a more pernicious form of robbery and <\/em>murder in the country.<\/p>\n\n\n\n

     The Frontline Socialist Party (FSP), which is deployed by the media to hit the government with Left hooks, recalls Margaret Thatcher saying her greatest accomplishment was \u2018Tony Blair & Blairism\u2019. The decades-long effort to tame the JVP through mass murder and now sweet lullabies, recalls SBD de Silva\u2019s cautioning about how \u2018merchant interests\u2019 have resisted the progressive policies of governments with \u2018boundless ingenuity\u2019. Hence one of the SJB\u2019s leading merchant triplets, Kabir \u2018Kanay\u2019 Hashim, has offered to cut off his ear, Van Gogh style, if the government actually establishes a development bank, as promised in the budget. Meanwhile, the government has also promised an \u2018Industrial Zone dedicated for Chemical Manufacturing\u2019 in its budget: <\/p>\n\n\n\n

     We have noted over the last few months benign and intriguing references to the Institute of Chemistry Ceylon<\/strong>, holding a Christmas Party (toasting themselves with lots of local chemicals no doubt), and then recently hosting a \u2018Global Women\u2019s Breakfast 2025\u2019 with the US-based International Union of Pure & Applied Chemistry. England\u2019s Royal Society of Chemistry also had their \u2018delegates\u2019 visit the Institute of Chemistry Ceylon. We wonder why? England\u2019s CTC & Unilever & ICI\u2019s CIC are among the biggest importers of chemicals into the country. ee<\/em><\/strong>will also look into CTC\u2019s umbilical links to gaseous Exxon and Deloitte.<\/p>\n\n\n\n

     e<\/em><\/strong>e<\/em><\/strong> Readers may recall our recent references to Germany\u2019s dye industry, which during their First World War quickly turned their dye factories in making \u2018high explosives & noxious gases\u2019, and another ee Focus<\/em><\/strong> on US-occupied Korea\u2019s Heavy-Chemical Industrial (HCI) policies<\/strong>, which shifted Korean manufacturing into \u2018more advanced markets\u2019. Unilever et al would not be amused\u2026<\/p>\n\n\n\n

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

CTC and their English twin Unilever operate in Sri Lanka through 100s of \u2018independent\u2019 front companies, and we therefore found it intriguing this week that Unilever launched a \u2018Rs3.8mn malt drink & food manufacturing plant\u2019, claiming it is their \u2018largest investment in South Asia<\/strong>\u2019. Hindustan Lever anyone? \u2018Industry & Entrepreneurship Development Minister Sunil Handunnetti calls the \u2018investment\u2019, \u2018a testament on confidence<\/strong> on the Sri Lankan economy by a leading multinational such as Unilever\u2019. Apparently, it was \u2018built using state-of-the-art technology<\/strong>\u2019, \u2018with local engineering<\/strong>.\u2019 There is no mention of where and how the raw materials, including chemicals and machinery and parts, have been and will be made. Which again makes us invoke VS Naipaul\u2019s classic novel The Mimic Men<\/em> (1967):<\/p>\n\n\n\n

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

\u2018Industrialization<\/em><\/strong>, in territories like ours, seems to be a process of<\/em><\/p>\n\n\n\n

filling imported tubes & tins with various imported substances<\/em><\/strong>.<\/em><\/em><\/strong><\/p>\n\n\n\n

Whenever we went beyond this, we were likely to get into<\/strong> trouble<\/strong>\u2026<\/em>\u2019<\/p>\n\n\n\n

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

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

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The Secret Evasions of England\u2019s Ceylon Tobacco Company in Sri Lanka<\/a><\/blockquote>