19 September, 2018

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Economic Disparity & Nationalism – Part I

By Lionel Bopage

Dr Lionel Bopage

The cold war in the form that existed in the last century disappeared with the collapse of the state capitalistic model of ‘socialism’ as was practised in the Soviet Union and the Eastern Bloc. The world is left with a few countries that follow the same state capitalistic model. Despite the belief that the cold war ended with the collapse of the Soviet Union, a new cold war appears to have emerged with a vengeance. Though the protagonists of this appear to be the corporate capitalist interests of the United States and its allies versus the Russian Federation and its oligarchs, the real focus of the west’s fear and ire could be the Peoples’ Republic of China.

Since the collapse of the Soviet Union, the corporate capitalist system has reigned supreme almost all over the world, with its attendant severe socio-economic and cultural crises. Peoples’ democracy in the proper sense of the word has not been able to survive with the reappearance of unbridled capitalism in the corporate and state sectors. Such crises have made many western capitalist societies almost dysfunctional. Under open economy and free market conditions, economic disparity has continued to surge, mainly due to the regulatory environment imposed by the ruling corporate interests and the free hand given to them to increasingly monopolise global resources.

Historically and in the present era, governments elected by the populace that are not compatible with the interests of powerful capitalist conglomerates and states have been overthrown by killing tens of thousands of men, women and children to bring to power corporate friendly tyrants. The United Nations is also not immune; it has been made to toe the line of neo-liberal and conservative regimes with threats of sidelining it financially. It has been used against those who oppose the new neoliberal agenda. In this sense, the United Nations has turned out to be an impotent, stranded entity, a mere voyeur, made to watch impotently as blood is been spilt in every corner of the world.

Economic Disparity

Corporate economists are neither concerned about humanity nor are they compassionate. They do not care about economic and income disparity; for them people are either consumers or units of production. Their logic is that people need to work harder to access upward social mobility. Income inequality they argue, keeps their motivation up. They assert that wealth redistribution through social security measures and other welfare programs are expensive. So, despite many faiths preaching compassion, the world has become a more miserable place. Opportunities for economic growth and development have tumbled further downwards.

International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) are not institutions propagating humanitarian views. Yet, they have concluded that income inequality is affecting economic growth. The Center for European Economic Research (ZEW) has contested these findings, but realpolitik indicates that income inequality is on the rise and low-income households increasingly find it difficult to invest in higher education. Thus, their opportunities for upward social mobility are impaired.

According to the World Inequality Report, income inequality in all regions has increased in recent decades, and in the Middle East and sub-Saharan Africa inequality is obscenely high and persistent. Inequality in India and China are also of massive proportions. The gap between these countries and those in the west has become narrower, thus reducing global inequality. The global Gini Index* has dropped to 65 due to rapid economic growth in several Asian countries. By 2035, the Index is expected to drop to 61.

Rise of nationalism

Accordingly, global income inequality between nations though high is reducing, however the gap between the rich and the poor within countries has widened. Such trends as a whole and individually may explain the rise of populism, nationalism and protectionism in some parts of the world. Regimes pursuing a capitalist path of development have found it difficult to reverse or control this trend of increasing inequality. As recommended and sometimes demanded by the IMF and the World Bank, structural reforms in the form of privatisation of public assets have been carried out in many such countries with devastating results impacting on social fabric.

Regimes in Sri Lanka have pursued a similar path. The global experience during the past several decades is that such measures have made these countries rich as a whole, but with income inequality predominating. In this process, governments have become poorer. According to the World Inequality Report, this is one of the major factors restricting the ability of regimes in tackling inequality.

The current situation in Sri Lanka exemplifies this process. It is characterised by the loss of confidence in both state and corporate sectors and institutions, erosion of social bonds and increasing uncertainty about the future. Widening inequality has significantly affected economic growth and macroeconomic stability. Inequities related to accessing education, health care, and finance have become prevalent. Thus, certain segments of society are being subject to persistent disadvantage.

*Gini Coefficient of zero denotes everybody enjoys the same income, while 100 denoted one person receives all income.

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Latest comments

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    Good points! Thanks Mr. Lional Bopage!
    In a nutshell: Root cause of many wars and conflict is often economic inequality is Fake foreign aid, global business practices, and CORRUPTION of local elites who use ethno-religious Hate speech to distract masses.
    But Current model of development benefits Global 1 percent and impoverish rest!
    Trickle up, not trickle down with Fake experts, Fake knowledge and projects by international development industry is the norm.
    Current IMF/ WB and Trumpist Neo-liberal Development model in Lanka is colonialism by other means- one size fits all – despite galloping inequality and poverty ! so expect more conflict on horizon! Right wing Millennium Challenge Corp. is bringing Fake experts like Ricardo Hausmann to do Bondscam Ranil’s economic policy! But, Lanka needs people and environment friendly policy. But now has a Disaster Causing Dev policy due to Foreign Aid/loans that benefit donors security and business interests and National local political corruption

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      Lionel and Don, Right on.
      1. Sri Lanka’s absolute poverty line should be 3 $ a day. IMF/World Bank poverty line of 1.25$ is a JOKe!
      30 percent of SL population is poor today, while rich get richer.. Per capita GDP is not a measure of well being of a nation, in any case, as A. Sen and Stiglitz write.

      2. Corruption and money politics is institutionalized a caused by the Fake Aid and Debt trap.
      Dayasiri says 118 parliamentarians too money from Aloysius and Perptual Treasuries. All of them should be banned from Contesting in future elections. Bondscam Ranil must jailed with MR.

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        KAluphana: why Maithripala Sirisena is not giving the PCOLI report to the public ?. Why it is a Secret.

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    DS – MCC Fake expert on Sri Lanka, Ricardo Hausmann, spoke at LKI last week of the need for new immigration policy in SL and virtues of Diaspora talent for development..

    US citizen Gota, Singaporean Arjun Mahendran , and ICTA’s Murundan Kanagey are good examples of “Trickle up” of wealth to Global 1 percent Development model in Lanka! They bank their loot in Singapore and USA!
    Of course, Lanka needs new skilled workers, but Rather than invest in local research and development and talent who flee Lanka because of corruption and lack of meritocratic culture, Hausmann’s quick fix was: import the bond traders IT folk! He cherry picked examples US and Singapore for immigration policy, and did not refer to other Asian countries re. immigration or conflict.

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      They talk very superficial and all those solutions help them to achieve their targets.Do not think that CIA is not there in HArvard where it si important. Sri lanka’s problems are likke Ferdinand MArcos Running the country, chillies Pinochet running the country. there are no fidel Castros or Daniel dutertate’s that is why we have so many problems. What Lionel Bopage talk is also the book and not the reality on the ground. In order to talk about the Globe, you need to have some common understanding and cooperation among countries. but, a few countries are always there to undermine other countries.they are left only with Syria, IRan, china and Russia.there is lot of resisuitance to that. SO,how can you talk about a globally appicable index.

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      Dinuk- MCC is famous for Fake Xperts with no local knowledge!
      Ricardo Hausmann is selling outdated and pilloried neo-liberal policies and analysis that caused the global crisis of inequality, conflict and anti-immigrant populism and nationalism, in the first instance as a solution to these problems in Miracle of Modayas.

      No talk of root cause of lack of innovation talent in Lanka which is the Brain Drain from Lanka due to corruption and poor governance and low wages due to the Fake aid debt trap..

      Hausmann did a Superficial analysis with zero knowledge of Sri Lanka. only re-cycled graphs and charts from ADB and WB in his presentation. He is a dodgy tosh artist who is making big bucks from MCC, flying Harvard colours.. Fake development policies to advance US Deep state and access to Deep data in Lanka…

  • 0
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    Till recently economic disparity was caused by colonisers. This century ushered in an era where the ex-colonisers found it difficult to push their agenda.
    In Lanka, economic disparity is caused by corruption/nepotism/impunity.

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    Dr. Lionel Bopage: At the end of the first paragraph, you mentioned: “… the real focus of the west’s fear and ire could be the Peoples’ Republic of China”. True. The West is in competition with each other and engaged in a big struggle to acquire the control of the economies and establish their supremacy of the two categorized, (“Third World Underdeveloped and ” Developing Countries in the Third World”) set of countries in the world, and further classified as “Poor Nations”. In that pursuit, the main “Goal” is nothing but “Profit” and that “Goal” sets everything from “Acquisition” to “Regime Change”. It is the POLICY of the so called West and “Big Powers” and well known to all and sundry. Now, as you pointed out , China is “Feared” and has become a “Thorn” in their eyes and it is very much understandable. Now the question, we in that “Third World” and the “Developing” countries, ask ,(as at present “facing” ; “experiencing” and “fearing”) is the “Modus Operandi ” adopted by the West “feared” China. What is happening in Sri Lanka and that “Participation” of China in Sri Lanka economy and politics, could be the “BEST” study for your next “Thesis” for yet another “Doctorate “. Please note, very recently China enrolled GOTA for a “Study Course” in a University and that was a few months before his “Viyath Maga” show at Sangri La. Very many of our “VVIPs” and “VIPs” were given this “opportunity”. Please study these “Side and Hidden” strategies along with what China is engaged in Sri Lanka, mostly “Using” their Government “Affiliated Banking Corporate” entities. Recently, one time your “Comrade” Anura Kumara Dissanayke sid in public: “We got a loan to build a port and now China has a port in Sri Lanka and Sri Lanka has a loan to pay back”. This is one “clue” for writing your next “Thesis”.

  • 1
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    Bopage introuduced terrorism to Sri Lanka in 1971

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    Don’t publis Part 11. Not interested please

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    Increase local production and reduce dependence on Imports.

    “The Singhalese within the last three hundred years have seen three European nations in succession take possession of their country and monopolise its productions for the enrichment of foreigners. The Portuguese and Dutch extorted its cinnamon and pearls, the British have covered its mountains with plantations of coffee, and its coasts with gardens of coco-nut palms; but each has failed in turn to inaugurate a policy that would tend successfully to elevate native industry, or emancipate the people themselves from their dependence upon foreigners for food. Tradition and their historical annals have familiarised them with the names of those sovereigns whose reigns were signalised by the promotion of the one paramount interest of their subjects, and whose memory is cherished with corresponding devotion. Even the rule of usurpers was characterised by generosity in the maintenance of the great works on which prosperity was so largely dependent. In the gloom of its decline the native chronicles of the island do not fail to record that, “because the fertility of the land had decreased, kings were no longer esteemed as before ” Sir James Emerson Tennent ( 1858 )

  • 0
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    the Head of Market Development at CSE Mr. Niroshan Wijesundere
    “A feature of the Sri Lankan Stock Market has been the fact that our market is largely not sensitive to developments in global markets, which has often worked to our advantage, especially when attracting fund allocations by frontier market focused foreign portfolio investors, as it gives them an opportunity to diversify. This unique feature and attractive valuations the market offers at present with a market P/E valuation of 10.83, which is significantly lower than our regional peers, is likely to further capture the attention of portfolio investors that are in the lookout for diversification opportunities,

    The American who set up the Bank of Ceylon also invented derivatives. Which is a complicated financial product that caused the 2008 crash. The Country is getting hammered because Sri Lanka does not have US trained Economists. Our ones have British degrees. They don’t teach you the Yankee system.
    Wijeysundara just explained how the country is used by the IMF and World Bank.

  • 0
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    The article by Dr Lionel Bopage would have touched nerves in the fifties, sixties, a little bit of early seventies but no more.
    He is absolutely correct in the statement ~ “………. In this sense, the United Nations has turned out to be an impotent, stranded entity, a mere voyeur, made to watch impotently as blood is been spilt in every corner of the world………..”. The ongoing genocide of Rohingyas is one example. Russia and China have become capitalistic and so are silent at the UN. By joining with ‘them’, China hopes to destroy the identity of Tibetans and Uighurs within this lifetime.
    .
    It is true that in the past and now, some countries did squeeze and are squeezing the hell out of ‘other’ countries. Corruption is used as the lubricant and is gaining recognition as a basic need to run ALL governments – some do it neatly, some are clumsy.
    .
    In SL, nearly five centuries of colonialism has left its mark by way of ‘economic disparity’. The remnants of the style of the last ruler was used by an enterprising politician to create the infamous language/religion-divide. Before we could count seventy, we have gotten into a realm of utter corruption/nepotism/impunity. This is the underlying cause of the ‘economic disparity’ obtaining. The corrupt have become filthy rich and cannot be dislodged. The poor keep on getting poorer. Ethno-Nationalism is used as comforters. The Armed services is mono-ethnic and the police nearly so and are a law unto themselves.
    Right under our nose, corruption is being respectified.
    .
    So Lionel, to cut a long story short, instead of Global Gini Coefficient, we must study the Local Gini Coefficient.
    Recall the Bopage definition ~ “Gini Coefficient of zero denotes everybody enjoys the same income, while 100 denoted one person receives all income.”

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    Lionel Bopage introudced terrorism to Sri Lanka. Thank you mate.

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    A leftist talks about Capitalism. Ha ha ha ha ha

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  • 1
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    I think in Sri Lanka racial disparity, language disparity,cultural disparity, political disparity and overall disparity in rights of citizens amid nationalism,pseudo patriotism and corruption is the current state of the failed nation. No foreign country,world bank, EU,IMF or China can save this country. Blaming them for our failure or receiving loans may further keep us in Denial but will not bring any change.

  • 0
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    “They assert that wealth redistribution through social security measures and other welfare programs are expensive” – They are very right. This is the problem SL is facing, just the word are different. Reduce the size of State-Sector!!!

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    Blaming the past colonialism and the present deals with( keeping in mind in some cases we pleaded them for help) international countries and world bank/IMF for all our current problems is like throwing stone at our own shadow. Wake up people ,stop whining and do not spit looking up at the sky. You who vote to bring these criminals to run the country and then find a way to blame others for your stupidity.The country is run with the help of loans and when election comes is there any one really discussing about the state of economy ???or fiscal deficits??? (leave alone IQ deficits). For past many years all I heard prior to an election was religion/race, who came first, who has rights, who need to go and post elections who should be marked,who should be screwed and taken out. Good luck citizenry, Long Live Lankawe.

  • 0
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    The knowledge of Economy is not so easy as that political reading by extremist outlook of anarchism .
    It is not possible want skip development theory by passes stage of capitalism. It will no work at all.
    The Failure of Soviet Union is one of the reasons that productive forces has not release by CPSU of Soviet Unions of USSR? Since 1945????
    The very reasons are that Soviet Union was vast land with ample natural resources but many of resources had been used by against war mongering Fascist=Nazi regime and Capitalism of Imperialist politics by USA UK one -side and other side Germany Italy and Japanese militarism since 1930 to 1945.
    Under the leadership Stalin of CPSU had been challenged by two front struggle to be safeguarded Soviet Union socialist state was unpersedant task.
    But Stalin won war and struggle against two fronts by power of the people’s of USSR’s their sacrifices in 1945.
    Since USA was played leading role of Imperialists political- economy by IMF and World Bank base on that through out that Globe-Economy since last 72 years. We need to read more on going Globalization by elites of have to have knowledge of current globalization since 1990? Yes world order has emerge but upside down by Old Order change need NEW one more time and space is demand by history.

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    The analysis neither economic nor politics of reading by writer ,but it is his reflected by the mindset of politically in backward that the level of mirror seems to be an anarchism by writer!
    Undoubtedly writer remain an ideology of extremism of that anarchist of ongoing crisis by since 2008 of Wall street collapse of US led financial market that did not understand by Writer?
    Indeed that Lack of uncertainties in local and global situation of crisis covered vast field.
    Sorry to say his knowledge quite insufficient of having of reading vast gap of knowledge economic ,
    Sorry to say that writer is lack this sphere of knowledge of Economics ?

  • 0
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    We know for sure external factors played a major part in our countries history even after the independence. It is the same for many other “developing” countries too…we are all on a “development mode” for a long time going no where except to accumulate more debt and is by design too. The UN Security Nations are like “drug barons” running “rehab centres”……it is a conflict of interest if peace and prospertiy is what we want to achieve for “all” in our planet? We are all kept at “boil state” by means of arming every “donkey” who want to fight for a cause and willing to kill his or her fellow citizen…..only cause we never fight is for our dignity/pride…….even after all the Mother Lankan children have died we are still fighting for something not sure what that is……as one earlier said we can always blame someone else (internally or externally)for all our screwups…..we will always live to fight another day……..since the war ended one would have throught we will sit down and take stock of all our mistakes………nop……we still have some causes to fight hence the “constitution assembly”…..not to worry….then we will have some more to fight thereafter forever….it is just another phase of more f**** ups to come and is beyond our imagination for sure. Who is walking through the country house to house (more like hut to hut) taking stock of what need to be done to empower each Lankan?……now we bring the same into the country to deliver more human rights…not the economics and not the science and technology…..and certainly not the educational institutions to get us all rid of this war mentality……entire nation needs psychiatric help to recover from this rotten mindset of Tamil and Sinhala s***. In fact no one can help us when we do not even want to help ourself??

  • 1
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    I think name of the game is make shanty countries all over the world and exploite those for the benefit of the FIVE EYES.

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