29 November, 2022

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Lanka Adrift In Tempestuous Seas

By Kumar David

Prof. Kumar David

There are three dangerous global trends. The first is not new, it is the growth of right-wing extremism in the US; the second is more recent and commenced in 2022 with the Russian invasion of Ukraine. The third is the prospect of Sino-US military hostilities. All three will affect this country. Right-wing extremism turned perilous in the US with the election of Donald Trump whose Administration has lived alongside hate groups and an extreme legislative agenda (anti-environmental, anti-feminist, anti-LGBT). In the state of Idaho extremist Ammon Bundy has a chance of being elected State Governor. 

America

With disarray in the Democratic Party which fears defeat in mid-term Congressional elections in November and a likely return of Trump to the presidency in 2024, the stage is set for a further drift of the US to right-extremism. Trump seems near certain to be re-elected in 2024 unless convicted of illegalities and barred from contesting. But this may lead to unrest led by the large white working-class base of the Republican Party. It is reasonable to speculate that the United States is on its way, if it happens then for some years only I am sure, to turning right-extremist. What difference will a temporary death of democracy in America mean for midgets like Sri Lanka?

The truthful answer to this is curious; it belongs in the domain of “known unknowns” meaning that we know that the effect could swing in two entirely different ways. The US is the world’s premier military and diplomatic, and one of two leading economic powers. Its influence is large and if it chooses to hound Lanka’s war-criminals and leaders who savaged human-rights it can make life hard for such vermin. On the other hand a right-extremist influenced USA may swing the other way, it could for reasons of its own cut a deal, as it has often done, with the military, leaders who are the scourge of democracy and mass murderers – think Pinochet and dozens of brutal Latin American regimes in the last 50 years.

Russian military losses in Ukraine are huge; some estimate as high as 60,000. (Ukrainian military losses seem to be less than a quarter of this). Both sides are digging in for a cold winter of attrition and trench warfare extending well into 2023; the invasion truly is a gigantic Putin blunder. The Ukraine-Russia policy of zero-integrity Trump’s mongrel hypothetical second Administration, supported by fascist trends in the US can be bizarre. His empathy for Putin, antipathy to NATO and the resemblances of US right-extremism to its European counterparts make outcomes unpredictable. Meanwhile Ukraine’s Zaporizhzhia nuclear plant is under attack by Russian artillery; bombing nuclear power plant is not banned by international law. It’s a dangerous world. Big countries have deep enough financial pockets and sufficient economic resources to mollify their populations, a small country is a hapless skiff adrift on a tempestuous ocean.

Europe

Outcomes seem more predictable in post Ukraine-invasion Europe. Western Europe’s choices are stark. The continent is desperate to minimise dependence on Russian gas, coal and strategic materials – the poor spend an astounding 50% of their income on energy. Germany’s long-term energy plans have come unstuck, the drive to a green future has been reversed. Mothballed coal power stations are to be brought into service and three nuclear power plants that were to be decommissioned have been given a lease of life. This is bad news all round, instability in energy markets is not good for anyone, especially small fry. 

Apart from energy dependence, Germany, Europe’s largest economy, is also dependent on Russian metals and minerals as are other European industries to varying degrees. Russia has rich reserves of manganese, chromium, nickel, platinum, titanium and the conventional materials iron ore, copper, tin, lead, tungsten, diamonds, phosphates, and gold. Siberia nurtures one-fifth of the world’s timber. Although Lanka is of miniscule significance, Europe’s desire to keep open international supply chains on which its industries depend will be helpful in our quest to preserve GSP+ benefits. 

On other counts too, the post invasion environment is troublesome. Russia is the largest urea exporter; one reason for surging fertilizer prices is prices of natural gas and energy needed in urea production. (As of mid-2022 there were indications that urea prices would decline in later this year due to a slow start to seeding in the US). Russia is one of the world’s largest exporters of nitrogenous fertiliser, phosphates and potash. Ukraine and Russia are big food exporters and the imbroglio will lead to higher global food prices. All these concerns affect Sri Lanka agriculture directly and via their effect on world food prices. 

 

Sino-US conflict

The danger of spreading Sino-American conflict is chilling for everybody, especially the countries of East Asia, the Far East and the littoral states of the Indian Ocean. Nancy Pelosi’s high-profile visit to Taiwan at this time was foolish and provocative. Pelosi visited the island in defiance of threats from Beijing which views Taiwan as a breakaway province and warned it would consider the visit a major provocation. It was undertaken entirely in the hope of gaining votes for the Democrats in the November 2022 Congressional elections, which expectation will come to nought. It so incensed China that for the first time it conducted military drills that butted into Taiwan’s territorial waters. Outright Sino-US conflict confined even to this theatre is unlikely because neither side has the appetite to escalate, but the visit has destabilised the region and increased the cost of shipping in East Asia and through the Malacca Straits. 

A lot is at stake for Chinese leader Xi Jinping who is making an unprecedented since Mao bid for a third term. Xi who came to power in 2012 placed reunification-with-Taiwan high on his agenda; perhaps he will live to regret it as he will be unable to deliver within any foreseeable time-frame. He may wish to turn to domestic issues but it is hard to see how he can link these to the Pelosi visit.  China is plagued by a property crisis, and an economic slowdown due to its strict zero-Covid lockdown. According to Hong Kong’s South China Morning Post there are fifty million empty flats in China which threaten to plunge the property market into chaos. These two factors have provoked protests but Xi will not be able to link them to the Pelosi visit and distract attention away from domestic failures. It is most unlikely that Xi’s grip on power will be challenged at the 2022 Congress in November but his inability to deliver on reunification will make him look weak in the ensuing period – Party Congresses are held every five years.  This his third-term is likely to be his last.

 

China is unable to make a critical building block of the global economy: top of the line silicon chips. It buys 60% of the world’s supply of semiconductors to drive its vast industrial product output; 90% are made outside the country or by foreign companies in China. It spends more buying computer chips than importing oil. But it is struggling to keep up in the technological arms race. Why? Its champion in the foundry industry (makers of integrated circuits) Semiconductor Manufacturing International Corp last year announced plans to build a 28-nanometre chip but this technology is a decade behind TSMC’s 3-nanometer chip. Taiwan Semiconductor Manufacturing Corp is the world’s top chip maker.

TSMC’s dominance ensures Taiwan’s grip on 60% of the global chip business. Furthermore, nine out of the ten outfits which design rather than make chips (“fabless” or non-fabricating outfits), and also drive innovation are US based; the tenth, MediaTek, is Taiwanese. In various ways the US controls half the global chip market and China only 10% and these are technically less sophisticated, more useful for industrial than military uses. China is pouring billions into a chip-building but faces strategic impediments. It is shackled by geopolitical tensions, a hawkish Washington and economic damage caused by its own zero-Covid policy. The sun does not seem to be shining brightly on President Xi. Increases is cost of Chinese merchandise, disruptions to supply chains and big increases in shipping prices are more bad news. For foreign countries the negative effect is the rising costs of Chinese products.

I do not want to sign off on a depressing note, surely there are things we can do. I have been boringly insistent that we as a country have no option but to tighten our belts. Provision has to be made for the poorest but everybody else will feel the pinch. A graded system of price differentiation for all classes, except income tax gradation, is not feasible. Income tax on the rich will certainly have to be raised and a wealth tax and an inheritance tax introduced. True everybody, not only the rich benefited from 70 years of eating more than we produced and from extravagant imports paid for by profligacy in foreign and local debt. However, it is also true that expensive luxuries (fancy cars, foreign travel, fashionable merchandise) were almost entirely for the benefit of the affluent. An incomes and taxation policy that targets better off incomes is justified.

Contradictions in policy space are unavoidable. Exchange controls have to be relaxed to attract foreign investment and the inflow of capital in general. Then the rupee-dollar relationship will decline at the cost of the former – will 2023/24 witness the horror of LKR 1000 to the $ and therefore near galloping inflation? [Galloping inflation grows at dual or triple-digit annual rates, usually for a brief period. Hyperinflation runs at hundreds or thousands of percent per annum and is a precursor of anarchy, revolution or fascism]. High interest rates to curb inflation will shackle growth, hobble small and medium enterprises and crush the informal sector. 

There is a reasonable chance that the country will navigate these torrents without shipwreck. Though there is all-round acceptance that some degree of belt-tightening is unavoidable, everyone, even aragalaya grants that revolution is not around the corner and agrees that the risk of anarchy is real. Trade unions, liberals and urban and rural folk agree that Ranil must, and can, be kept on a tight leash re democracy. Hence, I am moderately confident that bourgeois-democracy, albeit dowsed with economic hardship will come off the life-support system in say a year and that the IMF, India, Western capitalism, and China will wink and give us a hand to climb out of the mire. Reports say that preliminary agreement on a loan has been reached and will be announced a day or two after these lines are written.

Or like Toselli’s serenade is it only a ‘golden dream’, an improbable ‘vision fair’ that a Colour Revolution may deliver rewards? Perhaps I was optimistic when I gushed in this column on 24 April “The people’s uprising is a colour-revolution, a vision fair, a celebration of happier days to come. The light beaming from the radiant eyes of the young is the first time in our two-thousand-year story, to quote a comment, that we have seen anything like it”. I hope my lyricism is not lopsided. Never has a people’s uprising in Lanka driven out an unjust ruler. Regime change so far has always been by armies brought from India ( Moggallana) or conspiracy between Court and foreign colonisers (Kotte and Kandyan Kingdoms).

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Latest comments

  • 13
    7

    As a Sri Lankan I like Kumar David’s articles. He gives global and theoretical significance to the jilmarts of our politico-criminals.

  • 13
    5

    It has been adrift from the time of independence due to incompetent racist opportunistic rulers, who promoted the Mahavamsa mindset and Sinhalese Buddhist Chauvinism and still nothing has changed.

    • 4
      0

      … ‘nothing has changed.’
      A pretense to change has not changed!
      .
      The Aragalaya was fuelling change; Ranil doused it with a wet blanket!

  • 14
    1

    The Chances of Donald Trump or the Republican Thugs winning (similar to the Pohottuwaites) are growing slimmer by the day. Two elections for congressional seats, one in New York and one in Alaska were surprising wins for the Democrats in two seats that were held by Republicans of ages. The Democrats also have gotten the build back better bill and a range of other legislative victories that will count in the November elections. Add to this the massive unfolding investigation into the robbery and concealment of Top Secret Documents by Trump and any idiot can see where this is heading. Trump will be indicted and go to jail. The sensible voters, (not the viciously racist buffoons on the right) who form the majority are enraged at the threat to Democracy and also the ban on abortion. Already the establishment republicans like Mitch McConnel have given up on winning the Senate while Congress slowly slips away from their grasp. The writer needs an update or he has guidance from some terribly nasty and racist right wing Sri Lankan living in the United States There are plenty of them. Some may have come back to Sri Lanka to vote for the scoundrel family.

    • 4
      0

      Thiha , you are absolutely right and upto date. Regarding recent elections in New York and Sara Palin in Alaska are not trivial. Trump is in legal peril and still may escape to become President ( though his chances are lesser than first time) not assured as KD thimks. Regarding China’s debt there is more I wrote in my last week comment. With Russia I really don’t have all facts to comment.

  • 12
    6

    If you’re reading the billionaire western media and the faithful repetition of what such media says, then yes, Russia has lost 60,000 personnel and Ukraine only 20,000. And following Russia’s seizure and annexation of Ukraine’s Zaporizhzhia nuclear plant, the largest nuclear plant in Europe, Russia is now shelling the plant and placing its occupying troops, Russian people and the entirety of Europe under threat of nuclear fallout. We all must broaden our reading so we don’t foolishly fall for such one-dimensional media activism. And we must be careful about how we line up words and phrases, otherwise we too may produce such gems: “The Ukraine-Russia policy of zero-integrity Trump’s mongrel hypothetical second Administration, supported by fascist trends in the US can be bizarre.”

    • 10
      7

      And we must be careful about how we line up words and phrases, otherwise we too may produce such gems: “The Ukraine-Russia policy of zero-integrity Trump’s mongrel hypothetical second Administration, supported by fascist trends in the US can be bizarre.”

      If Mr Sarath is suggesting that this sentence is grammatically incorrect, I firmly that that that he is wrong..

      • 6
        7

        Who said anything about grammar.
        Even the lines below are grammatically sound:
        “Curiously deep, the slumber of crimson thoughts:
        While breathless, in stodgy viridian,
        Colorless green ideas sleep furiously.”
        (text of poem titled “COILED ALIZARINE” from ‘The Night Mirror’ by John Hollander.)

    • 9
      6

      Sarath
      When one relies on the Western media for any news, one is asking to be fooled.
      No amount of learning helps one to be wise.

      • 9
        4

        Okay Sarath
        Let us get Dinesh Gunawardana to ban all foreign media including social media and import only the Chinese manufactured news. Dinesh loves banning, including Tamil version of national anthem.

        Truth seeking from China.

  • 12
    3

    Dr. KD: “Trump seems near certain to be re-elected in 2024 unless convicted of illegalities and barred from contesting.”

    I don’t see that. Many pro-Trump senate candidates in PA, OH, GA, and AZ. are struggling. The Republican party is going through a split; many traditional conservatives who wanted to give Trump a chance previously are now fed up with him. So you continue to show a recent pattern of getting things wrong. It might be due to your age, but I just needed to bring it up — incorrect assumptions won’t help the readers.

    • 3
      0

      Mitch McConnell dosen’t think Republicans will take control of Senate. Quite a few Trump candidates including Blake Masters and Dr. Oz are struggling. The house may go to Republicans. which is expected. What is for sure is the U.S justice system which does not wait or depend on anyone.

    • 2
      5

      Incorrect assumptions won’t help the readers of the Colombo Telegraph, because they are always biased and one-sided. In this Colombo Telegraph, 98% of mother Lanka hated people and 98% Tamils whereas 74.9% of Sinhalese Aryans and 11.2% Tamils living in Sri Lanka (Heladiva)

      • 7
        0

        NP,
        What’s a Sinhalese Aryan? The ones called Nanayakkara for example? Check out Nanayakkara Chetty Street in Thanjavur.
        Or the ones called Wickremesinghe? Please also check out Vickremasinghapuram in Tamilnadu. Then there are the Gunawardanas, Kulatungas, let’s not forget the Alahaperumas, Sangakkaras, Kurukulasooriyas, all sorts of Silvas and Fernandos. All very definitely Aryan .

        • 3
          0

          NP.
          I forgot, you really must check the telephone directories of Trivandrum and Chennai. How come all these Sinhalese Aryans migrated there??

      • 3
        0

        N. Pererass

        Why are you making an ass of yourself?
        We already know you are one.

  • 9
    9

    As usual Kumar tries to analyse the US through his Marxist lens.
    In his World anyone not onboard with the Left’s agenda is a right wing extremist.
    Let’s find the real Extremist…..
    *
    “Unrepentant Marxist” – Kumar’s own words.
    Support for GR right after he was elected – Kumar’s article is archived here somewhere.
    Support for China – one of the most brutal, evil regimes in human history. Kumar seems fine with it.
    An article praising some Chinese guy nobody has ever heard of.
    *
    Kumar – you don’t have the right to label anyone as an extremist! Hypocrite.
    Take a look in the mirror to see the real extremist!
    *
    Kumar still suffering from Trump Derangement Syndrome – there is nothing radical about Trump’s policies. The only threat to Democracy comes from the insane policies of the Left.
    *
    People vote for Trump because they are sick of the crazy policies of the Left.
    *
    The will of the majority is called ‘Democracy’ – in case anyone has forgotten.
    *
    There is no ‘Climate Emergency’ – lies to force through “The Great Reset”
    The current version of Feminism is a Cancer on Society – designed to destroy the traditional family.
    LGBT – tired of having this rammed down my throat. I don’t know any gay people who support ‘Pride’. month (it used to be one week – when did that change?).
    *
    I don’t like Marxists – especially the unrepentant ones. I make no secret of that!

    • 6
      2

      “I don’t like Marxists – especially the unrepentant ones. I make no secret of that!”
      Oh dear, where can these poor fellows seek consolation?
      *
      BTW
      Do you adore Boris Johnson?

  • 3
    0

    Lanka Adrift In Tempestuous Seas

    Still they cannot make a stable parliamentarian, The result has been a political representation that is grounded having the experience transition to sarvapakshaka government majority rule and a firm policy consensus towards is trouble. All are waiting for united parlimentarian Contingent on assurances from the parliamentarian has to become more stable to get the persuading of IMF

  • 6
    5

    “China is unable to make a critical building block of the global economy: top of the line silicon chips.”
    *
    Sorry to disappoint the author.
    A news story in SCMP (among several others) said in July that “Researchers at a Canadian tech analysis firm concluded that Shanghai-based SMIC has been able to produce 7-nanometre chips since last year.” (It was not a Chinese claim, but a discovery by a Canadian tech analysis firm.)
    *
    But there is something to cheer him too in the SCMP report:
    “SMIC’s advanced capability would put the company ahead of American and European peers, but it could also spur further US sanctions, analysts say”

    • 10
      3

      (It was not a Chinese claim, but a discovery by a Canadian tech analysis firm.)

      Since the story emanates from the west, can we trust Canadian news.

      • 3
        1

        Native KD ‘s facts about dependence on Taiwan chips and Russian resources may be true. But the chips supply chain from two largest, Taiwan semiconductor manufacturers ( TSM ) and United Micro Electronics are as old as those companies origin ( they were their before governments / leaders came to power) similar to South Korean Panel/ LED and Indian Pharma manufacturers. It’s like saying Tata , Birla will not exist without politicians/ government.

      • 0
        4

        Native Vedda, are you trusting CNN news?

      • 2
        3

        That was purely for the benefit of the likes of the glass ball gazer who only trust the likes of BBC and VoA.

    • 4
      5

      SJ

      This is the problem when people who are not in the industry read newspapers and come to conclusions. imo There is hardly a huge advantage in moving from 7nm (Which SMIC is able to produce) to 5 nm. The geometry mattered a lot when they transitioned from 180 – 90 50 45 to 22. But at the current geometries, the cost advantage is nonexistant as the die is so small and the chip is mostly wiring connections. While the authors who write these articles are talking about the holy grail for 5 nm they have no clue why it is even necessary. in the end, it will be impossible to get o 0 nm for silicon anyway. lol. because the chip would no longer exist.!!!

      Also as for the casualty figures of the Ukrainian war, I don’t think even the best-informed Americans believe their own propaganda. This is the same propaganda that created the Ghost of Kyiv which was later proven to be a complete fabrication. There is no balanced news in the US and the west as the press is in cahoots with the CIA and the MI6 and what ever other agencies. but our experts know any better.

  • 1
    0

    Lanka Adrift In Tempestuous Seas………….

    Yes; And we would have the first recorded instance of sinking ships fleeing the rat……………

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