{"id":150688,"date":"2025-07-13T17:17:50","date_gmt":"2025-07-14T00:17:50","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=150688"},"modified":"2025-07-13T17:17:50","modified_gmt":"2025-07-14T00:17:50","slug":"sri-lankas-dangerous-myths-export-traps-free-trade","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/07\/13\/sri-lankas-dangerous-myths-export-traps-free-trade\/","title":{"rendered":"Sri Lanka\u2019s Dangerous Myths: Export Traps & Free\u00a0Trade"},"content":{"rendered":"

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

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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 06-12 July 2025<\/strong><\/p>\n\n\n\n

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

The Vass season commencing with the Esala Moon in its waxing, sees the Yala harvest in full blush, in Ampara, Kilinochchi, Mullaitivu, Trincomalee, Batticaloa, Wayamba and other green fields south. However, the incessant rains (especially in the east and southeast) have not only diminished the rice harvests, but a lack of sunlight (not the imported English brand!) has also affected the growth of fruit and vegetables, as well as storage. Nonetheless, the Yala\u2019s swishing and gnashing of imported scythes & sickles and the humming & revving of imported harvesters, and who makes them, are not much heard from the Colombo media. The only hammers (imported along with the gavels of justice) we hear, are from the capital\u2019s condos in the making (built not to house but for speculation). So where are MTV\u2019s mammotied superstars? Is this not a national question, too?<\/p>\n\n\n\n

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

\u2018Under the concept of Smart Agriculture, its subsidiary\u2026 imports<\/p>\n\n\n\n

& distributes a wide range of advanced agro-machinery,<\/p>\n\n\n\n

including several models of automatic paddy threshing machines<\/p>\n\n\n\n

\u2026along with paddy drying machines, rice packing machines,<\/p>\n\n\n\n

black-seed removal machines, & coconut oil extraction machines.\u2019<\/p>\n\n\n\n

\u2013 an Ad parading as news (see ee Agriculture<\/em><\/strong>)<\/p>\n\n\n\n

We keep asking, \u2018Why can\u2019t we make them here?<\/em><\/strong>\u2019 After all, the only swishing & humming & gnashing we now do hear is around the reaction by a media full of the letters being sent around the world by the US government imposing taxes & threatening various tariffs & types of retaliations if their dictats are not obeyed. While the media is eager to portray such doings as the work of a madman turned man-of-letters it is clear, this is the latest act by the stage manager in the theatre of imperialism to stall its supposed decline as the US begins to join other stagnating European economies, and as usual wishes the rest of the world to pay for an over-extended and exorbitant joyride they wish to continue.<\/p>\n\n\n\n

     Nothing exposes current US policy more than the harangue in the US letter to Brazil, demanding its government halt the trial against former president JM Bolsonaro, for trying to instigate a military coup after he lost the last election. It is clear their overall aim is not just an attempt to stunt & stall all our relations with the People\u2019s Republic of China (PRC), along with BRICS, BRI, etc., but the escalation of their wars in Asia, Africa and the America, to ensure our underdevelopment.<\/p>\n\n\n\n

     Sri Lanka is of course no stranger to such US & European interference, even before Trump\u2019s current stenography (recall the banning of the sale of US sulphur fungicide after Sri Lanka signed the Rubber-Rice Pact with the PRC in 1952), and not a day passes without Sri Lanka being cajoled to stay on the rollercoaster ride the USA\u2019s IMF<\/strong> has designed, and buy an even more expensive ticket to stay onboard their Titanic<\/em>, while participating in the \u2018extraordinary economy of the USA\u2019.<\/p>\n\n\n\n

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

\u2018Goods transhipped<\/strong> to evade a higher tariff will be subject<\/p>\n\n\n\n

to that higher tariff. Please understand that the 30% number<\/p>\n\n\n\n

is far less than what is needed to eliminate the trade deficit<\/p>\n\n\n\n

disparity we have with your country. As you are aware, there<\/p>\n\n\n\n

will be no tariff if Sri Lanka or companies within your country,<\/p>\n\n\n\n

decide to build or manufacture products within the USA<\/strong> &,<\/p>\n\n\n\n

in fact, will do everything possible to get approvals quickly,<\/p>\n\n\n\n

professionally & routinely \u2013 in other words, in a matter of weeks.\u2019<\/p>\n\n\n\n

\u2013 see ee Economy<\/em><\/strong>, Trump invites Sri Lanka<\/p>\n\n\n\n

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

So here it is. The USA wishes Sri Lanka\u2019s extortionist merchants & usurers to do in that white-settler fortress, what they refuse to do, & were prevented from doing, inside Sri Lanka: build & manufacture<\/strong>. There is no way, the US government would allow \u2018our\u2019 merchants to play their low-wage garment game, as they do here. Then again, in this season of financial sorcery, London-chartered accountants keep giving each other awards and declaring they are in no way involved in enabling tax evasions & foreign exchange frauds! KPMG & EY executives cannot be jailed, when they are hired as government economic advisors! While multinational frontman Elon Musk, who once declared \u2018We will coup who we want!<\/strong>\u2019, is allowed to run his snooping satellites over our mouths & ears. Then, we get  a trail of foreign officials, from white war criminals to Black misleaders, parading in as philanthropists, from the Blair Institute, to the Mbeki Foundation, and this week, the GM-seed vending & Microsoft-Word-Trojan-Horse riding Bill Gates Foundation, all offering unwanted advice and dubious concern. And curiously, with the US playing \u2018original tax gangsta\u2019, England shows up all friendly-friendly, declaring zero-tariffs for Sri Lankan goods and ruling out an \u2018ICC probe into Sri Lanka war crimes allegations\u2019! After all their human rights sermons? Just like that?<\/em> Yes, just like that. (Their) God save their King!<\/p>\n\n\n\n

     Meanwhile, the Central Bank, while allowing banks to seize the property of debtors without having to resort to the courts, is expressing concern about our<\/em> financial literacy, along with the UNDP. ee<\/em><\/strong> has always pointed out, it is strange that we have such a so-called high literacy, while being unable to compute the difference between a merchant economy & a modern industrial society. Perhaps they can enlighten us about how the IMF insists that second-hand \u2018pre-loved\u2019 car imports should be our main source of revenue (see ee<\/em><\/strong> Quotes<\/em><\/strong>). Then there\u2019s the US thinktank Advocata telling us that car imports are not paid for by dipping into scarce foreign reserves, but by dipping into the dollars sent back by workers abroad, and from exporters\u2019 profits, even as the Treasury seems to disagree!<\/p>\n\n\n\n

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

The latest US tariffs<\/strong> have exposed \u2018a dangerous truth\u2019<\/strong> that Sri Lanka\u2019s \u2018decades-long dependence\u2019 on the \u2018free trade dogma championed by the IMF & World Bank <\/strong>has left it economically vulnerable, strategically irrelevant, & dangerously underprepared<\/em> for the real world, declares Kenneth de Zilwa (see ee<\/em><\/strong> Focus<\/em><\/strong>). Relentlessly pushed by the IMF & WB since 1965 to slash tariffs, deregulate markets, open capital accounts, and privatize state assets, Sri Lanka has been left with a \u2018hollowed-out industrial base<\/strong>\u2019, an \u2018overdependence on contract manufacturing<\/strong>\u2019 (labour-intensive primitive assembly), predominantly exporting raw material exports<\/strong>. If the European Union (EU) goes through with its threat to revoke their GSP+ (which de Zilwa calls \u2018a form of geopolitical leverage, tethering Sri Lanka\u2019s market access to 27 international conventions covering everything from human rights to governance to environmental protocols\u2019, just as England\u2019s Unilever & other multinationals have demanded), Sri Lanka will face \u2018the same economic collapse again\u2019, because we have \u2018no economic sovereignty<\/strong>\u2019, as both the President & former Treasury Secretary have declared.<\/p>\n\n\n\n

SL has entered into 17 IMF programs<\/strong> since 1965.<\/em><\/p>\n\n\n\n

Ironically, every IMF program, while promising<\/em><\/p>\n\n\n\n

stability, has been followed by more borrowing,<\/em><\/p>\n\n\n\n

not less. Every one of them promised \u2018growth\u2019,<\/em><\/p>\n\n\n\n

\u2018stability\u2019, & \u2018investor confidence.\u2019<\/em><\/p>\n\n\n\n

Instead, they have \u2018fast-tracked privatization of state assets that are essential for industrialization<\/strong>\u2026 with national assets sold off at a discount, and Sri Lanka\u2019s long-term capacity to control its own energy, transport & production sectors irreversibly diminished\u2019 (see ee Focus<\/em><\/strong>, USA\u2019s Tariff Blow & Free Trade Myth: SL Economic Trap Exposed).<\/p>\n\n\n\n

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

\u2022 <\/strong>While a most corrupt merchant media overflows with the detailing of the retail dishonesties of carrom-board bribing politicians & the extremisms of trade unionists etc, the Communist Party has recalled (see ee Focus<\/em><\/strong>) the stalwart contributions of SA Wickramasinghe, Udakendawala Siri Saranankara Thero, MG Mendis, Pieter Keuneman, etc, leaders of the CPSL over the last 8 and more decades, who give lie to the media cry that \u2018nothing\u2019 has been accomplished in this last 75 years. The CPSL highlights their role in the freedom struggle, let alone the Republican Constitution of 1972, which nominally broke off our subjugation to the English monarchy, 25 years after \u2018Soulbury\u2019 independence.<\/p>\n\n\n\n

     The CPSL lists their striving for \u2018free\u2019 education, early industrialization, nationalizing transport, ports, energy, as well as the sterling-pound estates, establishing factories such as Oruwala Steel, Kelani Tyre, Minneriya, Pugoda, Thulhiriya, Veyangoda textile industries etc, and linking to the socialist world. Their struggles have enabled an Employees Provident Fund (EPF), 8-hour workday, overtime pay, holiday schemes & retirement pension, and resulted in very low maternal & infant mortality rates, high literacy, very high life expectancy at birth, etc. However, the loss of \u2018economic sovereignty\u2019, which we have not really had for over 500 years, was exacerbated after 1977, sabotaging the early gains. And, despite the media pointing away from the merchants who are agents of multinational corporations (MNCs), it is the US, English & EU\u2019s shrill promotion of an import\/export policy that turns out to be the real cause of the dollar deficit, with the tax policy resulting in the rupee deficit, with the ensuring borrowing policy born from the economic strategy implemented since 1978 resulting in a so-called \u2018aragalaya\u2019 that was orchestrated into calling in the IMF (see ee Focus<\/em><\/strong>, 2nd<\/sup> Freedom Struggle Against Imperialism to Win Economic Sovereignty).<\/p>\n\n\n\n

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

\u2018It is true that Ceylon had her own version of the enclosure movement<\/strong>,<\/p>\n\n\n\n

& the effects of such ordinances as the Crown Lands (Encroachments)<\/strong><\/p>\n\n\n\n

Ordinance of 1840<\/strong> & the Waste Lands Ordinance No l of 1897<\/strong><\/p>\n\n\n\n

on the condition of the peasantry were disastrous. However,<\/p>\n\n\n\n

what appears to have taken place was that the peasantry was deprived<\/p>\n\n\n\n

of the village chena & forest land, thus causing impoverishment<\/p>\n\n\n\n

but not reducing them to the level of landless paupers.\u2019<\/p>\n\n\n\n

Finally, this ee Focus<\/em><\/strong> concludes Chapter 6 of SBD de Silva\u2019s classic, The Political Economy of Underdevelopment<\/em>. Here SBD expands on his division of the world into the white genocidal dominions<\/strong> of \u2018new settlement\u2019, settler colonies<\/strong> and non-settler colonies<\/strong>. He emphasizes how in non-settler colonies such as ours, the export sector was a creation of foreign capital<\/strong>. Perhaps due to larger military priorities, they sought to impoverish yet not pauperize the peasantry, while suppressing any attempt at industrialization, to prevent the forming of an industrial proletariat. In the settler colonies in Africa, the white settlers happily (for them) encroached on the rights of the indigenous people without restraint. Deeply committed to settler interests, the colonial governments officially sponsored & even subsidized immigration, as the settlers were the sole source of revenue. Many of the officials were themselves settlers, acquiring houses and farms, and their political interests even overrode those of the metropolitan government. \u2018They put local interests<\/strong> before imperial interests<\/strong> & minority interests<\/strong> before majority ones<\/strong>.\u2019<\/p>\n\n\n\n

     In our case, with plantations, SBD claimed, export production<\/strong> did not involve the appropriation of peasant lands<\/strong>, and its labour requirements were met by organized migration from South India<\/strong>\u2026 SB then goes into a very interesting discussion of our \u2018peasant economy based on grain cultivation\u2019, with its \u2018considerable capacity for holding surplus labour:<\/p>\n\n\n\n

\u2018The peasant economy\u2026 was unable to effectively utilize the available<\/p>\n\n\n\n

number of labourers nor could it in the absence of organizational or<\/p>\n\n\n\n

technological changes release labour to other sectors of production<\/p>\n\n\n\n

(this \u2018irrationality\u2019 was largely due to the nature of labour demand<\/p>\n\n\n\n

& supply; the timing of labour requirements<\/strong> in grain cultivation<\/p>\n\n\n\n

based on monsoonal rains was<\/strong> both uneven & erratic<\/strong>, and the<\/p>\n\n\n\n

resulting variations in the demand for labour were aggravated by<\/p>\n\n\n\n

a maldistribution in the supply, intra-seasonally, inter-regionally,<\/p>\n\n\n\n

and even between holdings in the same district).<\/p>\n\n\n\n

\u2018If in the nonsettler colonies the process of economic development<\/p>\n\n\n\n

was not wholly amenable to market forces alone, in the settler colonies<\/p>\n\n\n\n

the development process was practically wrought by the political power<\/p>\n\n\n\n

of the settlers. The indigenous economy was virtually denuded of both<\/p>\n\n\n\n

its land & labour\u2026 The far more limited size of the indigenous population<\/p>\n\n\n\n

in these regions than in the settler colonies precluded complex inter-race<\/p>\n\n\n\n

problems and made the settlement of a white working class possible, with,<\/p>\n\n\n\n

a local or regional labour supply was virtually unavailable. Labour was<\/strong><\/p>\n\n\n\n

thus extracted by dismantling traditional economic structures<\/strong> \u2013 through<\/p>\n\n\n\n

taxation, land expropriation & by outright coercion<\/strong>.\u2019<\/p>\n\n\n\n

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

\u2022<\/strong> The media is trying to claim that \u2018Sri Lankan businesses\u2019 are branching out to Africa<\/strong> (see ee Who\u2019s Who<\/em><\/strong>). But nothing can be further from the truth! First, these companies are not even really Sri Lankan, even if they happen to be registered here. The technologies of these \u2018renewable energy\u2019 companies are all imported from abroad, with IPR royalties all paid to them. So, these \u2018local\u2019 companies are just fronts<\/strong> for imperialist countries. Is it true, that Browns Plantations<\/strong>, a subsidiary of \u2018Sri Lanka\u2019s\u2019 LOLC Holdings<\/strong> Group, is now \u2018the world\u2019s largest tea producer\u2019 after buying James Finlay<\/strong>, Kenya\u2019s tea estates business which is part of \u2018the Lipton tea supply chain<\/strong>\u2019? Really?<\/em> What has happened to the giant MNC Unilever, spawn of the East India Co? They\u2019ve just given up? Ha!<\/em> ee<\/em><\/strong> has noted before the involvement of the World Bank and various other European \u2018development banks\u2019 in the creation of such (micro)finance companies as LOLC, involved in ripping off rural people, women in particular, from for selling the industrial goods of MNCs.<\/p>\n\n\n\n

     It is therefore apropos ee<\/em><\/strong> recalls the work of novelist Sena Thoradeniya in translating such formidable African novelists as Kenya\u2019s Ng\u0169g\u0129 wa Thiongo and his revolutionary role. Thoradeniya laments how the media in Sri Lanka failed to acknowledge Ng\u0169g\u0129\u2019s death, instead highlighting a beauty pageant in Thailand. Thoradeniya challenges Sri Lanka\u2019s literary and media communities for their failure to appreciate the global impact of such African writers and calls for an \u2018intercontinental intellectual solidarity rooted in shared anti-colonial struggles<\/strong>\u2019. He urges us to \u2018recognize the parallels between African & South Asian histories <\/strong>\u2013 colonial exploitation, linguistic suppression, and resistance through storytelling\u2026\u2019 (see ee Random Notes<\/em><\/strong>)<\/p>\n\n\n\n

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

___________<\/strong><\/p>\n\n\n\n

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

\n
Sri Lanka\u2019s Dangerous Myths: Export Traps & Free Trade<\/a><\/blockquote>