Archive for the ‘Economy’

I’m no Jean Monnet but…: Thoughts on regional integration and state consolidation in South Asia

A case has been made by scholars better versed than myself, and continues to be so made, for a ‘South Asian Community’, centred on a single market. With a region that, with the remarkable exception of India, remains in impasse, such a regional integrative framework is ideal and essentially practical on various levels. Let us pull back from more specific observances to make some exploratory effort that lays the foundation for an advanced goal of regional integration. What dilemmas does one face when proposing to work on South Asia? That the region, belonging to that notorious grouping of the Third World, has remained handicapped by issues of poverty, development, ethnic riot, gender inequalities and infant constitutions is a popular representation. It is not contended here that these are not realities of the South Asian situation. The anchor for this examination lies in the simple statement that, in order for the South Asian region to draw upon its extensive resources and…

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  • 7 Apr, 2009
  • 9 Comments
  • Colombo,
    Economy,
    Politics and Governance

Behind the IMF bail-out and the state of the Sri Lankan economy with Harsha de Silva

An interview with eminent economist Harsha de Silva on the context leading up to and the fall out of the International Monetary Fund (IMF) bail-out package and the general state of the Sri Lankan economy. Harsha de Silva is a development economist by training and has over the last fifteen years worked across the emerging Asia region on development finance, public policy, reform and investment in energy and water, infrastructure regulation, socioeconomic and market research and on information and communication technology [ICT] for development.

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G- 20 and the World Economic Crisis

All appear bleak in the global economy as Group of 20 leaders gathered in London on Thursday, April 1, 2009. The financial crisis that began in last September has morphed into a severe global recession and it would turn into the worst downturn since the World War 2. OECD chief economist Klaus Schmidt-Hebbel observed that “the world economy is in the midst of its deepest and most synchronized recession in our lifetimes, caused by a global financial crisis and deepened by a collapse in world trade”. The World Bank forecasts contraction of 1.7 per cent in the global economy this year. According to the International Monetary Fund, the global economy will contract this year by between 0.5 and 1 percent. Unemployment in OECD countries would hit 10 per cent this year as their economies would experience 4. 3 per cent shrink this year. The impact of the global crisis would be disastrous for poor countries. World Bank President Robert Zoellick…

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Your opinion on a war ‘over in 3 weeks’ and a ‘post-LTTE’ Sri Lanka?

A senior government minister claimed today that the war would be over in 3 weeks. Whether we believe him or not, commentators like Ahilan Kadirgamar (writing in Himal Southasian, February 2009) have called attention to the dynamics of a ‘post-LTTE Sri Lanka’, suggesting that “Post-LTTE Tamil politics will have to move beyond ethnic and territorial concerns to forge solidarity among minorities, in order to reframe the ‘national question’ in Sri Lanka”. This is a decisive year for Sri Lanka, whether you choose to believe in these conjectures and formulations or not. On the humanitarian and economic fronts alone and in particular, current conditions cannot be sustained. For this and a number of other reasons, war in the manner it is being conducted today cannot be sustained for much longer. As Ahilan Kadirgamar goes on to note in his article, In a post-LTTE era, the Mahinda Rajapakse regime will be tempted to continue its politics of opportunism to consolidate and entrench…

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Petrol Pricing

Minister Bandula Gunawardene appeared on V and implicitly commenting on the Supreme Court decision perhaps made a point that all taxes are made by Parliament. Not quite since the Minister of fiancé can gazette orders under the Revenue Protection Act if my memory is right. True they have to be tabled in Parliament thereafter. The question at issue is not a change in taxes. The Supreme Court as far as I am aware has not changed the taxes on petrol. What it has done after consulting the Secretary of the Ministry of Finance who submitted pricing formulas decided to fix the price of petrol. It has taken into account the current taxes and levies on petrol. What it has done is to prevent profiteering by the CPC perhaps to cover up its losses on the hedging contracts and the defaulting in payments by the government departments like the CEB, the Railway and the Armed Forces. Should the public be called…

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A Spectre Haunting Global Capitalism

Alan Greenspan, former chairman of the US Federal Reserve, has described the current financial crises as “probably a once-in-a-century event”. Does he mean very long Kondratiff cycle? In a recent speech, French President Nicolas Sarkozy declared that “laissez-faire is finished, the all powerful market that always knows best is finished”. The crisis began at the financial end of the system, but appeared to be extending gradually to the real segment of the economy. The US motor industry has already come up begging for a bail-out plan. Last few months have witnessed that big companies that everyone though too big to fall have either submitted for bankruptcy, or been bailed out by the US government or been statized. This list includes AIG, Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch, Washington Mutual. City Bank that is also in crisis decided few weeks ago to sack 53,000 employees in its US operation alone. Dominique Strauss-Kahn expressed the gravity and…

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  • 27 Oct, 2008
  • 2 Comments
  • Colombo,
    Economy

The end of the “Gimme…, Gimme…” era?

In the red-golden glow of the global financial crisis, many are looking inwards to see how they allowed it to happen. Skeptics of globalization such as Korten, Stiglitz, Ralston Saul and Pilger envisioned the collapse and warned of the impending apocalypse fueled by consumerism and greed. Their warnings were left unheeded. The very foundations of US capitalism seem to have been ravaged. Heidi Crebo-Rediker, Co-Director, Global Strategic Finance Initiative, New America Foundation and Former Managing Director/Head of European Debt Capital Markets, Bear Stearns catured the sentiment; “What happened over this past week to US capitalism is truly historic.” Since 1864, American banking has been split into commercial banks and investment banks. But now that’s changing. Bear Stearns, Lehman Brothers, Merrill Lynch, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants still standing. The idea of the free-market economy is challenged. The near nationalization of AIG, America’s largest insurance…

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Measuring poverty differently

What comes to mind when one hears the word poverty? Scarcity, shortage, paucity, deficiency, dearth are words that are in the Thesaurus. Yet, the word confuses me in the way it is commonly used. I live in Sri Lanka, a developing country with GDP of about US $1,000 per capita. In western terms, this is a poor nation. I became a resident of Sri Lanka in 1988 having lived in Canada for 15 years. Economically, Sri Lankans have less material wealth than an average person in the west. In happiness, I am not sure. I am confused about the word because in the last 20 years I have had a fulfilling life of abundance of whatever is needed to be healthy, happy and lead a meaningful existence. I have been fortunate to encounter an abundance of colourful, interesting people and nature’s bounty. I have had experiences where I have seen the best and the worst in people and the beauty…

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The end of neo-liberal economics: Great Crash of 2008 and the demise of the Regan-Thatcherism

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The end of neo-liberal economics: Great Crash of 2008 and the demise of the Regan-Thatcherism Kumar David The ‘global-state’ (G7 and some G20 governments, central banks, and the IMF and IBRD multilateral agencies) intervened in the international banking system during the October 11-12, 2008 weekend, financially on an unparallel scale, and politically with resolute, coordinated, authority. One is left wondering what is left of global finance capital that is distinctively capitalist anymore. The implications of intervention on such a scale are momentous for international banking and finance. If the intrusion goes much further, British, French, German and other governments will become the primary owners of banks in a watershed reversal of Regan-Thatcher neo-liberalism after 30 years. For the ilk of Francisco Fukuyama, this is the end of his-story.  One more thing, US global financial hegemony is over, forever, that is for sure; an economic-multipolar globe based on a new sharing of global power-positions is taking shape. For years I have…

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Corporate Scandals with Impunity

One of our top listed companies which was picked for a top award by a Business Magazine was recently faulted by the Supreme Court in the case filed by Mr Vasudeva Nanayakkara re the privatization of Lanka Marine Services. The bunkering business was a government monopoly carried out by a government owned company- Lanka Marine Services. The government had decided to privatize it but not before liberalizing the bunkering business which was to be done in one year. The Cabinet had decided to recommend the issue of 3 licenses to carry on the business. But the Chairman of PERC had decided to privatize it before such liberalization. The Chairman Dr P.B Jayasundera says the Supreme Court in its judgment “instead devised and carried out without any authority of the Cabinet a process for the sale of the Lanka Marine Services while the monopoly was still intact.” According to the findings of the Supreme Court the Chairman BOI had manipulated the…

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The Rajapakse regime: Rewarding the corrupt and sheltering the criminal?

If there is one thing that is crystal clear about the Mahinda Rajapaksa administration, it is that it rewards wrong doers and punishes the righteous. The President’s decision to include the Treasury Secretary P.B. Jayasundera in his delegation to China for the opening ceremony of the Olympic games days is a case in point. Just days after the man found guilty of corruption in the privatization of Lanka Marine Services Limited by the Supreme Court and fined Rs. 500,000, the President’s action illustrates that anybody has a place in the regime’s inner circle as long as he is a “yes man.” The Court upheld the findings of a the report released months earlier by the Parliamentary Committee on Public Enterprises (COPE) which said that the privatisation of LMSL when Jayasundera served as the Chairman of Public Enterprise Reforms Commission (PERC) had been “executed blatantly without Cabinet approval, with several flaws causing loss and detriment to the Government.” But the abject…

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Idols of the Market-Place

One of the well-known parts of Francis Bacon’s philosophy is his enumeration of what he calls “idols” by which he means bad habits of mind that cause people to fall into error. One is “idols of the market-place”. Though I use it in different sense, some respondents to my article have demonstrated that they have difficulty of escaping from what is generally called TINA (there is no alternative) mindset. I am not surprised if the respondents to my article are young economics graduates as nothing other than the neo-liberal economics is taught in their class rooms. I will confine myself here to substantial arguments and no intention deal with substantial criticisms though they are valid within limits. Suffice is to say that ‘distant’ does not mean that I have been out of the discipline. Let me begin with opening two paragraphs from a recently published book by a Harvard University professor. “On a visit to a small Latin American country…

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Going for the Kill in More Ways than One

What does the failed abduction attempt against Namal Perera of the Sri Lanka Press Institute (SLPI), which turned into a brutal assault on him and his friend Mahinda Ratnaweera , Political Officer at the British High Commission, tell us about the Rule of Law, human rights protection, the culture of impunity and law and order in Sri Lanka today ?   It took place in close proximity to a major security checkpoint, an army installation and ironically enough, the media ministry and not in the early hours of the morning or at dead of night, but in the evening on a busy road with considerable traffic.   The sheer chutzpah and audacity of the attackers is a further reminder of the culture of impunity.  Who would dare to perpetrate such a dastardly deed in this vicinity at this time if they were not “cock sure” of being able to get away with it?  How will the array of apparatchiks and flunkeys…

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  • 1 Jul, 2008
  • 1 Comment
  • Colombo,
    Constitutional Reform,
    Economy

GSP PLUS AND THE NEED FOR CONSTITUTIONAL REFORM: WHAT WE DID AND DID NOT SAY

Rohan Edrisinha and Asanga Welikala    The Political Watch Column of the Sunday Island of 22 June titled Opposition at Sea  included a critique of an article co-authored by us which was published on Groundviews (and in the Sunday Leader) sometime ago, in which we argued that if Sri Lanka was serious about ensuring that its laws were compatible with the International Covenant on Civil and Political Rights, a constitutional amendment to its bill of rights was desirable. We are disappointed that the columnist has either completely misunderstood several of the arguments put forward or distorted what we stated. We recognized in our article that one of the EU requirements for the extension of the GSP Plus privileges was BOTH ratification and effective implementation of several international treaties and covenants including the International Covenant on Civil and Political Rights. As the columnist rightly pointed out, ratification is one matter, implementation another. But our point was that even with respect to…

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The Dead-End Formula of Neo-Liberal Economics

Although I teach economics at the University of Peradeniya for my bread and butter, I have been quite distant from the discipline for sometime and my readings on the subject has been quite limited to the two courses I teach at the university. My principal research work is on conflicts. Hence, it was not strange for people to call me oftentimes as a teacher attached to the Department of Politics. However, in the last three four months, I had to re-enter this interesting area of work as I was invited to make comments on two books, one in Sinhala (Sri Lanka Arthikaya edited by O G Dayarathna Banda et al) and one in English (Development and Conflict by Kumar Rupesinghe). I had to refresh my knowledge and do some additional readings in the course of my preparation to make these two presentations. More I read on the subject, more I got convinced on the ineffectiveness and the incorrectness of the…

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About Groundviews

Located at the Centre for Policy Alternatives in Colombo, Sri Lanka, Groundviews is a citizen journalism website that uses a range of genres and media to highlight critical perspectives on governance, reconciliation, human rights, the arts and literature, democracy and other issues. The site has won two international awards, including the prestigious Manthan Award South Asia in 2009. The grand jury's evaluation of the site noted, "What no media dares to report, Groundviews publicly exposes. It's a new age media for a new Sri Lanka... Free media at it's very best!"

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