7 August, 2020

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Lessons Learned & Need To Rethink 

By Rusiripala Tennakoon –

Rusiripala Tennakoon

No one can foretell what accidents and disasters will happen and when. But mankind has always paid heed to possibilities. Some disasters arrive with little forewarning. And when a disaster strikes, it takes away the time to prepare against. Hurricanes, earthquakes, tornados, wild fires, floods and the likes, all take us unawares most of the time overtaking the human conquest of technology and beating the highly advanced and sophisticated forecasts. 

Some disasters are natural while some are man-made. Causing destructions to the environment by the humans has been a root cause for many natural disasters.  It is difficult to draw a line to divide them as  natural and man- made because human element is almost always associated with the disasters directly or indirectly.  Preparedness and lessons learned from the history will certainly help mitigate the impact of natural disasters. However, some calamities and troubles can be directly attributed to human involvement. History is full of chapters about human conflicts that have developed into wars and finally leading to world wars engulfing the human fate in worse forms than under natural disasters.

The World war 1 began in July 1914 and ended in November 1918 claiming 17 million human lives and injuring over 20 million. The crisis sparked off an incident due to the assassination of a nobleman from Austria by a person from Serbia supported by a nationalist organization there. The climate for such a flare off remained ripe and ready associated with the economic competition, nationalism, imperialism and unresolved territorial disputes that prevailed as hidden embers. For many countries, in addition to the loss of human lives and national wealth, funding the war had severe economic cost which affected their asset bases and the general survival. WW1 ended with many nations coming together to sign the Treaty of Versailles on the positive side and also paving the way to one of the deadliest global pandemics on the worse. This came to be known as the ‘Spanish Flu’ which killed an estimated number of 50 million people around the world (between 1918 and 1920). The entire world became victims of this natural calamity and our ancestors in Sri Lanka too succumbed to it sacrificing more than 57,000 lives.

In the aftermath of WW1 The League of Nations was founded on 10th Jan 1920 to maintain world peace. But the Treaty and the League of Nations did not serve the purpose of its mission and twenty years later disastrous Second World War started. This was an instance of history proving that precautionary measures taken by humans do not always yield expected results.  

It became a global war and lasted from 1939 to 1945 pushing the countries in the world into two opposing military camps Allies and the Axis. About 3% of the world population lost their lives estimated to be around 75 million. The war brought in disease and starvation in addition to the genocide, massacres and devastation due to mass bombings. Started by Adolf Hitler by invading Poland on 1st September 1939, it spread to Britain and France within two days. When it ended with the surrender of powers headed by Hitler’s Germany the war had engulfed the entire world. The war culminated to its zenith with the US detonating two nuclear bombs in Hiroshima and Nagasaki areas in Japan on August(1945) 6th and 9th one after the other. The ruination caused by the bombings were beyond  any human apprehension. Under any standard it was an act of barbarism, immoral and no doubt a war crime which amounted to state terrorism. The estimated deaths in Hiroshima was around 140,000 and 70,000 in Nagasaki. And by no means it was a correct account of the human carnage which extended to several years after due to radiation after effects.

With so many dead and incapacitated permanently, cities crumbled down to rubble, human refugees thrown all over, the second world war causing unbelievable hardships, compelled the world to bring about required changes to continue human lives humanly. This  tendency and acceleration gave birth to several newly created institutions with the conviction of upholding universal standards under notions of common humanity. This brought about the replacement of the failed League of Nations with the United Nations Organization. Several leading nations which did not care to join the league of Nations earler agreed under the new situation to join. This movement brought about several other organizations to deal with the economic situation. Bretton Woods System, World Bank, IMF and the General Agreement on Trade and Tariffs were among those. This shows how the humans react amidst differences that exist to face up to situations resulting from disastrous occurrences.

In the post war period, it is noteworthy, that there was no peace  treaty for settlement as was seen after the first world war. But countries entered into number of separate agreements on an ad hoc basis. However, the institutions that were established played a prominent role in keeping the different countries of the world tied together. There is no doubt that these institutions effectively assisted the countries to overcome the impacts of the war as well as many other situations that arose later. They proceeded to create many other affiliated and new institutions and organizations in the course of time. 

The World bank for example which serves the purpose of mainly the poverty alleviation and providing grants to governments for that purpose, has established other institutions; the IBRD (international bank for reconstruction and development), IDA (international development association), IFC (international finance corporation), MIGA (multilateral investment guarantee agency),and ICSID (international Centre for settlement of international disputes).  

The IMF now spread over 189 countries, was established for the primary purpose of creating and preserving the stability of the international monetary system. Today the IMF provides loans to member countries to tide over their balance of payments problems and to restore conditions for economic growth. IMF also is involved with governments to update their economic policies and improve Growth. Over the years of existence IMF has become the last resort for emergency financial and economic situations of the members. Assistance is provided but always in exchange of dictated structural adjustments. It is known to instruct governments to spend less than they earn to assure the buildup of surplus needed to repay the debt. Bailout packages appear to be one of its cardinal roles today. 

There is no debate that these institutions and bodies has served the member countries in a big way. But it is not an end in itself. World is realizing fast that bailouts are not the panacea for the economic ailments. We have many examples from the European region itself. After bailouts unemployment remains high, minimum wages continue below accepted standards. Government spending on essentials such as education and health have been reduced by 50%. Even in the current Pandemic situation we observe immoral political interventions by those who could influence the IMF. Countries under various embargoes are deprived of their rights to assistance rather hypocritically.

World is trying to face the economic downturn resulting from the CORONA pandemic in such a scenario. Can the orthodox institution system meet up to the need? The distance the World economy  traversed so far has ended up at lamentable levels. Current situation of the distribution of the wealth of the world will throw some light on this presumption.  

A recent UN based report on the wealth inequality across the world population (OECD in 2012)indicate as follows;

Percentage of the Population              Number                             % Ownership of Wealth

Top            0.6%                                       42          million                     39.3

Next          4.4%                                       311        million                     32.3        

Bottom     95%                                       7068       million                     28.4

 Credit Suisse- on Wealth Distribution (2018), summarized the position as follows in one of their reports;

  • Half of the world’s net wealth belongs to the TOP    1%
  • Top 10% of the adult population hold                          85%
  • Bottom 90% hold the remaining                                   15%
  • Top 30% of adults     hold                                                97% of the total wealth of the world.

This is the inequality that exists today. International Institutions and Organizations do not appear to address this reality in that sense. It is important to understand why these differences and inequalities exist and the causes for such. The effects of this inequality will not be confined to only the poor countries, there will inevitably be issues and cause for resentment to the rich countries as well with high political consequences. 

The ever growing emphasis on the ‘market economy’ should be reviewed from the point of view of ‘social desirability’. In an abstract sense, a market economy is meant to promote individuals and corporates to freely produce, buy and sell any products or services . But absence of such circumstances lead to ‘market failure’ which in turn lead to the inequalities. Such failures contribute to growing inequalities further aggravating the position if unaddressed early.

Many criticisms are levelled In such a context against the established institutions. There is a growing concern to bring proposals to reform the international monetary system to be made more development oriented, and that it should happen as part of the overall effort to establish a new international economic order, providing for ‘fully representative management of the international economic system’. It will be difficult for a body composed of unequal ownership based on the value of shares held, to equitably address social inequalities! 

This shows that even before the onset of the CORONA virus disaster there was a growing economic cancer. Unfortunately, world was not in a mood to focus on such a situation. But now many are looking for remedies to the economic debacles in the wake of the Corona effect. Countries compelled to grant moratoriums to the economically affected people are turning towards International Organizations for similar concessions for them. We see suggestions of this nature emanating from parties claiming as ‘meaningful relief’. The problem is so many are eligible under the vulnerability. If an assessment is made by those institutions, they will tend to look at the worst affected in priority those ruined their economies due to other bungling before Corona. So if some country wishes to address the International, before they address the issue at a global level, a more meaningful approach may be required beyond the begging bowl strategy.

Emergence of new bodies to fill the vacuum created in their objectives and services by the WB and the IMF deserves to be taken into consideration in this regard. It is relevant to reflect on some developments taking place in the Asian region. Despite the historical tensions prevailing among countries in this region, In order to maintain the required stability, Asia’s major powers have formed several new organizations recently. Asian Development bank (ADB), regional forums like ASEAN,EAC RCEP are some of those. The most recent development is the Asian Infrastructure Investment Bank (AIIB). These organizations will be able to steer Trillions of dollars’ worth of financing around the region.

Crisis hit countries have to think twice before finalizing bailout packages or obtaining grants under severe conditions on the grounds of the hardships they would cause to the population to suffer more. In the modern world it has become fashionable to liberally grant facilities to falling businesses. The reality behind this is public being made to bear the losses of the private. In other words, converting private debts to public debts. 2008 Financial crisis caused due to the foolhardy lending policies led to a mortgage crisis resulting in billions of public money being pumped in for the rescue.

Economic advisers and policy makers should open their eyes towards the hard way to find solutions to the economic problems now faced. There is nothing so sacrosanct in running with a begging bowl. Temporary restructuring may be helpful politically. Still we need sound policy formulations of our own to develop the economy in a sustainable manner. 

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Latest comments

  • 3
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    Rusiri, my mom is a Nonagenarian and she in her experience she tells me the situation now seems to her much bleaker than what she faced after WW 2 and she seems depressed worrying about it. In My opinion top 10% not only owns 85% of wealth but holds power. Their influence is what decides the fate of bottom 90%. Politicians and policy makers , either belong to the top 10 % or are mere messengers of the top 10% in helping their agendas. An influential economist , once told me, these 10% where ever they are work in unison , so that they stay in the top to maintain their stronghold. He also believes , most of the major events including elections, power, wars,policies are planned, scripted and staged according to the top 10%. He believes majority are either not known or under the radar (make sense)and prefer to remain same. Few we see in real world as rich and powerful are again , mostly messengers. I am not sure about this fact.

    • 0
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      Dear Chiv,

      What do you think about the relation between BCG and COVID 19..
      I happend to read about in depth and noticed that the countries that are entitled with universal BCG vaccination, from earlier day on and their COVID 19 infected patient numbers are much lower than that of the europeans and americans.. latter both nations have never been subjected to BCG vaccination. Sure, there are multi factors on the number variations of the patients, but we see significant differences in these two groups. Dont you think so ?

      • 1
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        This guy Rusiripala was repeated invitees by SIRASA on Bond SCAM coverage … two years ago –

        I have not the least respect on this guy – knowing that these buggers were there at the time BP Rajapakshes ruined CB since 2005. Not having done the due, but only to partially attack RANIL-SIRISENA as if BOND SCAM was born in the GOOD GOVERNANCE govt – the damage made to previous govt was beyond estimation.

        These men work for a CONTRACT being signed between SIRASA and SIRISENA THE MOST abusive among all in SLFP today. There had been speculations, that SIRISENA gave them lot more conssessions regarding the quota of FREQUENCIES… however, there had been no open discussions on that topic in public- sIRISENA should be hung for all the high crimes let happen and let the bugger be returned today, …. because to the manner they promised the nation in 2015 , he had been showing the posterior rather than supporting the govt hismediation created then.

    • 3
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      ” Chiv” welcome back after a short self isolation.
      But your friend Thonda MANY is still sufering from GothaD- 20

      Let me help you with the fo;;owing.

      1) He also believes , most of the major events including elections, power, wars,policies are planned, scripted and staged according to the top 10%.

      *** In Sri Lanka it is not 10% but by a smaller figure. In a Democracy they are stage managed but with the support of the Majority which is what you call by CONSENSUS. But in a Dictatorship such as Sri Lanka under Gotha yes it is Scripted.

      2) He believes majority are either not known or under the radar (make sense)and prefer to remain same. Few we see in real world as rich and powerful are again , mostly messengers. I am not sure about this fact.

      *** You have got the facts wrong. The Majority are known and easily identifiable and you see many of them commenting on CT. .

  • 1
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    Sri Lanka is already suffering from unlimited loans for high interest for investing in unproductive investments. The main income comes from tourism, srilankan employees working in other nations and money sent by Tamils from western nations. Easter bombing and Corona impact is going to be extra ordinary high and it is impossible to get out from this. The wealthy nations are severley affected and you won’t be able to any help including loans. Only source is China and it is not going to free and it will come only with selling our lands and industries. Mahinda family may get additional benefits and they may now claim that it is another victory for Mahinda family. Using this as a political advantage Mahinda family may get two third majority in parliament to get the wanted dictatorship which is disaster for ordinary Sinhalese and lots of people may have to loose their lives in poverty.

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    Babalath Appu, if the numbers turnout to be true, then BCG may be one factor out of many possibilities attributing to immunity. Also we Asians in general are exposed to many other pathogens in our routine life. For example in India people are exposed to TB and there by acquire immunity. Just to clarify BCG protects primarily from Bacterial infection where as what we are facing now is a Viral onslaught. Though both may have structural difference, immune system is complex and is a possibility. These observations and hypothesis need to be further explored for future use. What is also interesting is other than anti viral medications two other medicines which got wide publicity (again hypothesis) are one anti malarial and other is used against worm infestations. Both of them works against parasites which are totally different from above two (bacteria and virus).

  • 3
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    Lessons Learned & Need To Rethink

    On 9th April, hundreds of people in Doluwa, in the Kandy district, came to the road demanding food and relief in the context of the three-week-long indefinite curfew. Media coverage showed one woman saying she had only had boiled jackfruit for four meals, another man asking what he could give to his four children to eat and several complaining that they were helpless as they could not engage in daily work that was their livelihood. One woman said there were many poor families, but they had observed assistance being delivered on a political level, another man accused officials of distributing (assistance) to their own families and another man said people won’t gather like this if distribution (of assistance) was done equally to all. Close examination of the TV news broadcast with a video of the protest[1] indicates this was a spontaneous protest by people desperate for food and other essentials to sustain their lives. There were no visible leaders or placards that are common in most organized protests. However, the next day, police had arrested one person who had participated in the protest and he has been remanded till 16th April 2020[2].

    *** Sri Lanka under Gotha is is in overftive tryig to give the impression that they are leading the fight against COVID -19.They are LYING through their teeth for political mileage claiming to be 9th in the World in the pecking order. What a laugh
    That is why they are in a hurry to have the elections before the truth comes out of the Human tragedy unfolding through STARVATION which will be much worse than the damage inflicted by Corona.
    Gotha has no friends in the World for help. No Loan from IMF the only source if MR is elected. but the starving millions might save the day. God only knows

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