5 February, 2023

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Ranil’s One Policy Framework, Debt & The System

By Ameer Ali

Dr. Ameer Ali

RW’s OPF

In his attempt to find peace with trade unions, President Ranil Wickeremesinghe explained to their representatives that working with “one policy framework” (OPF) is the only option to pull the country out of its morass. It should now be clear that this OPF carries IMF seal. RW should at least be given credit for being tenacious in advocating IMF intervention since the time he was in the opposition during Gotabaya Rajapaksa’s (GR) presidency. Now that he is the President and there is no way he is going to step back from that alternative. 

Even without RW’s commitment, IMF is the only choice available to seek help for any troubled or failed member of the neo-liberal family of open economies. IMF was created specifically for that purpose and its task is to discipline prodigal members and put them back on the right track. It is this exercise that is currently underway and RW’s OPF with his 2023 budget are therefore blueprints of IMF agenda. It is on that basis IMF agreed to extend emergency funding to the tune of $2.9 billion and that too in instalments, provided Sri Lanka comes to a settlement with its creditors regarding debt restructuring. 

President Ranil Wickeremesinghe

Once should not forget that IMF is also an unofficial debt collector for private creditors, several of whom are party to Sri Lanka’s debt. Once IMF funds are released there is the possibility of receiving another lot of $5 billion from other agencies such as the World Bank and the Asian Development Bank. RW and his CBSL Chief are hopeful that the funds would be made available without undue delay.  In his latest address to the parliament, the President had told members that debt restructuring talks with India and China had been successful without revealing any details. India had already notified IMF that it would support Sri Lanka’s efforts at restructuring. However, accusations and counter accusations between the respective ambassadors of US and China in Colombo over this issue do not augur well for a speedy resolution.   

Debt Cancellation or Reduction

In the meantime, 182 experts of whom many are non-economists, had called for cancellation of Sri Lanka’s debt and talks on debt negotiation. They have pointed out and quite rightly that private creditors own almost 40 percent of Sri Lanka’s debt stock and mostly in the form of International Sovereign Bonds (ISB), and that they receive 50 percent of the country’s external payments. “Such lenders” the experts stated in their memorandum, “charged a premium to lend to Sri Lanka to cover their risks, which accrued them massive profits and contributed to Sri Lankas’s first ever default in April 2022. Lenders who benefited from higher returns because of the “risk premium” must be willing to take risk. Indeed, ISBs are now trading at significantly lower prices in the secondary market. In this context, giving private bond holders an upper hand relative to sovereign debtors in the Paris Club and the IMF’s requested debt negotiations violates the basic principles of natural justice”.    

Unfortunately, it is not natural justice but self-interest that is the lifeblood of the global economic order. Where is natural justice when one percent of the world population holds as much wealth as the rest ninety nine percent? True, several countries have cancelled their debt unilaterally, but have they prospered as a result? Unless the neoliberal global economic order is thrown out and a new order based on justice and fairness is introduced, there is no way countries like Sri Lanka could get out of their indebtedness. So long as countries wish to remain in the system, problems created by the system could only be resolved by applying the corrective mechanism that the system recommends. Debt restructuring and not cancelling is its recommendation. Period. 

It is one thing to argue for debt reduction as CBSL’s Chief Dr. Weerasinghe had appealed to India and China. But it is totally another for experts to agitate for debt cancellation, because unlike in other countries, Sri Lanka’s debt problem is only one aspect a more complex crisis emanating from a system driven by ethnonationalism and a majoritarian political ideology that had given a blank cheque without accountability to managers of the system.   

As long as borrowing and spending without accountability becomes the norm for governments, that practice would one day exhibit its real cost to the public. Sri Lanka is such a basket case. “Neither a borrower nor a lender be;/ For loan oft loses both itself and friend, and borrowing dulls the edge of husbandry”, counselled Polonius his son Laertes in Shakespeare’s Macbeth. The last few words of that counsel could may well be applied to the situation facing this country. Not only its husbandry but the entire economy is in tatters because governments without any accountability went on a spending spree with money they did not have. They even waged a war with borrowed money.        

OPF without System Change

Coming back to RW’s OPF, the question is even if the expected funds are made available what and how much is it going to achieve? Although RW tried to inject a degree of confidence when addressing the parliament, the ground situation looks dire. For instance, for the first time in history shortage of funds has compelled the government to delay payment of salaries to higher grade staff. Central Bank Executive Officers Union, which is normally a conservative body, has now raised concerns over the inequities and other harms contained in RW’s high tax budget.  RW’s reluctance to face Local Government Elections is further sign of the underlying economic pessimism.    

The primary objective of IMF however, is to stabilize Sri Lanka’s macroeconomic foundation and put the economy back on growth path. But whether that growth path would be sustained to realize RW’s high-tech driven export-oriented turbo economy by the year 2048, without changing the existing socio-political and ideological paradigm is the challenging issue. It is the need to get rid of that paradigm and bring about SYSTEM CHANGE that the aragalaya youth rose in revolt, but suppressed by RW. Yet, he appears to have understood their message, but is unwilling or unable to translate that message into practice because he nis trapped by a political situation that will not allow him to tamper with the system. Already, one of his bold moves to tamper with it is provoking trouble.

The ideological base of the existing system is Sinhala-Buddhist nationalism and its political manifestation is Sinhala-Buddhist majoritarianism. It is this ideology and politics, backed by all the constitutions except the Soulbury one, that are at the root of decades of ethnic disharmony, riots, civil war, economic mismanagement, corruption, and today’s bankruptcy. To deny this link is to misread history.  

It is at least to soften the rigidity of this ideological base that RW took the initiative to resolve the so-called national question. In his last visit to Jaffna, he promised Tamils that the controversial 13th Amendment, controversially authored by India, would be fully implemented. He has also conceded to allow national anthem to be sung in Tamil followed by a speech in Tamil at the forthcoming Independence Day celebrations. 

Given the prospect of local council elections looming large these concessions appear to have fallen as manna from heaven to the demagogues of Sinhala Buddhist nationalism. Already, a member from one of the anti-RW-MR coalitions had written to the Mahanayakas reminding them that such concessions would lead to division of the country. Needless to point out that these prelates do not need any reminder from any political charlatan, because prominent members of the Sangha had been the architects and arbitrators of the system in operation. In the absence of any alternative and pragmatic program to counter IMF-RW OPF, ethnonationalism would remain the last resort to win electoral contests by competing coalitions. Even if RW were able to postpone elections the national question over the 13th Amendment would remain a hot potato and the system managers would use it at their convenience when the time comes. Without changing the system, the economy would continue to remain fragile and RW’s OPF is only an ointment to a deeper wound.        

*Dr. Ameer Ali, Murdoch Business School, Murdoch University, W. Australia

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Latest comments

  • 6
    4

    Amir dude: The Washington Twins and Colonial Club de Paris are in need of reform if not outright closure. Only a moron would go back to the IMF after 16 failed previous Bailouts!
    New non-OECD /PC bi-lateral Sovereign State creditors (India, China, Saudi Arabia, etc.), have no compulsion or reason to follow the Washington Twin’s and PC timelines and frameworks for Debt restructuring, also as they do not charge the predatory interest rates that Eurobond private market lenders do.
    The onus at this time is on the IMF and PC that represent the EuroBond traders, İSBs like BlackRock, J.P. Morgan, Allianz, Amundi etc and Hamilton Reserve Bank that caused Sri Lanka’s First Ever Sovereign Default in the first instance, to move ahead with their debt cancellation of the Odious SL debt, and Not delay further, trying to force Asian Giants China and India to sit with third rate hedge funds like BlackRock and Bond Traders of the PC.
    The delay is all about the Washington Twins trying to get the new Asian donors/ creditors to play by their old colonial Club rules for debt negotiations/ haricuts.. or. Geopolitics!

    • 5
      4

      It is quite clear that Sri Lanka is an Economic Proxy War site by the imploded Euro-American empire on Asia and emerging Economies -BRICS Plus in “The Asian 21st Century”. The NATO-AUKS war machine and nuclear submarines are now in Sri Lanka’s Maritime Exclusive Economic Zone as the Amercian War game CARAT/ MAREX which caused massive environmental damage and beached and killed hundreds of Whales and Dolphins in Lanka unfolds.
      Most important India and China and BRICS and ASEAN countries that are bi-lateral Asian lenders are Sovereign State Parties, which are not part of the OECD’s Colonial Club de Paris and it is unlikely that China or India would join the PC anytime soon given that the whole (neo)colonial financial system which has debt rapped so much of the Global South’s days are numbered, as there is a move to de-dollarize and exit US dollar debt traps… the current global financial system is doomed due to excessive corporate greed and INEQUALITY.
      Nor have China or India forgotten Euro-American (neo)colonialism and the Covid-19 mRNA injection fiasco, or the “century of humiliation’ with the Opium wars waged by the UK and France!

  • 5
    5

    Finally Ameer: the One Policy Framework is a waste of time and sold to promote Euro-American dollar Debt trap neocolonialism and Super Imperialism and should and will be opposed!
    The Global South has had enough of the West’s Fake Unity, and gamed Consensus, and Staged Exogenous Economic Shocks – from Covid-19 biowarfare, to Climate catastrophe stories and Fake Debt data – after all Sri Lanka’s external dollar denominated debt at the time of Default in April last year was $ 26 billion and NOT 53 billion as is made out!

    • 3
      5

      I don’t understand sums of money that are much more than a few thousand rupees.
      .
      The 53 billion figure is repeated here, too:
      .
      https://www.youtube.com/watch?v=NDT_rpCncBc&t=19s
      .
      Please resolve this issue before the sum of money becomes more than centillions.
      .
      https://www.thoughtco.com/zeros-in-million-billion-trillion-2312346
      .
      But then, I was taught in Primary School that you couldn’t just leave it like that. You have to state whether they are apples or oranges, but then we have stopped importing those, together with kankun from Thailand. But we are importing eggs, aren’t we?
      .
      Do you actually blame me for giving up?

    • 4
      3

      “The ideological base of the existing system is Sinhala-Buddhist nationalism and its political manifestation is Sinhala-Buddhist majoritarianism. It is this ideology and politics, backed by all the constitutions except the Soulbury one, that are at the root of decades of ethnic disharmony”
      Now you’re talking, Dr. Ali! Good to see you dropping the mindless Ranil-bashing. It wasn’t Ranil that let the SB genie out of the bottle, it was that conceited idiot SWRD. He operated under the Soulbury constitution. RW has taken the first firm steps to cut the monks to size, including their access to subsidized electricity. The brainwashing of children in daham pasalas must also stop.

      • 4
        0

        old codger

        “Now you’re talking, Dr. Ali! Good to see you dropping the mindless Ranil-bashing.”

        Did you notice during his National Pongal speech Ranil (purposely) did not mention North and East on the contrary he just mentioned he would sort out Jaffna problem.

        What is/was his agenda?
        Also when he was in Trincomalee he mentioned the economic integration of West, North West, North, and part of Eastern province. Has he secretly decided to carve out Batti from Eastern province as part of his solution to “TAMIL PROBLEM”?

        Any how what do you read from Jaishanker “Ji’s” joint press conference?

        EAM: Press Remarks in Sri Lanka (January 20, 2023) Ministry of External Affairs, India. https://www.youtube.com/watch?v=qdUBzm3SwK8&t=198s

        • 2
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          Native,
          “Also when he was in Trincomalee he mentioned the economic integration of West, North West, North, and part of Eastern province. Has he secretly decided to carve out Batti from Eastern province as part of his solution to “TAMIL PROBLEM”?”
          Ranil is good at grand plans, and he knows what to say to a particular audience. But he still has to get round the “apey hamuduruwos “.
          Any idea what happened to the three planned nuclear power stations?

          • 2
            0

            old codger

            “Any idea what happened to the three planned nuclear power stations?”

            Perhaps Champika and Udhaya are awaiting for oil from the Gulf of Mannar to run these nuclear power stations. Perhaps Wimal Sangili Karuppan Weerawansa is working on the project and drawing up the actual plan, all what he wants is Ranil’s approval.

            Mahanayakes will have to review the project and …….. approve its viability….

            Weerasekere the prince of darkness may object to it … on security ground, …

            Kamala believes he is the ultimate authority to authorise it.

            There are too many stages ….

            By the way Hindians were planning to build 21 Nuclear power stations through out the country and even recently promised to export uninterrupted supply of electricity to this island.

            Is there anyway Tamilnadu could export separatism through these electrical grid? The China’s Man in Sri Lanka may oppose it on the basis that Hindia’s supply won’t be decent enough.

      • 6
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        OC
        The SB genie owes its clout to Anagarika. It was lurching in dark corners.
        Even SWRDB did not even try to make Buddhism anything like the state religion. He used the clergy, forgetting that it was a two-way process. He paid with his life, and Mrs B kept them at a distance during her first term.
        Then came Dudley, who pandered to them in disastrous ways like the Poya week and preferential treatment in public facilities.
        Mrs B and the Left yielded but slowly. Remember when the man who declared that he will use the bricks of Ruwanwelisaya to build public toilets carried flowers to the Maligawa.
        The big upsurge was when the Sihala Urumaya/Jatika Hela Urumya made an impact.
        There are the few who are obsessesed with their stupid utterances which failed to materialise, but are reluctant to let go of them.
        CT is not quite the place to deal with mules.

        • 1
          0

          SJ,
          “Remember when the man who declared that he will use the bricks of Ruwanwelisaya to build public toilets carried flowers to the Maligawa.”
          Who was that?

          • 3
            4

            Laurel & Hardy (OC and Vedda ) still at it !

          • 0
            0

            Colvin in his rebellious young days.

      • 3
        7

        May be they should go about half naked with a Pottu !

        • 0
          0

          Deepthi dear,
          You seem highly interested in our nakedness, but don’t want us to talk about yours……..
          Not that we would be interested. 🤯😵‍💫

    • 0
      0

      Dinuk, in light of what you say, why doesn’t this New non-OECD /PC bi-lateral Sovereign State creditors (India, China, Saudi Arabia, etc.), or at least China, cancel or restructure the debt SL owes them? After all, they are not supposed to be the greedy 1% of the world, like PC, owning all the resources.

      No, they are in the Game of Thrones stupor to wrest control from the West and PC. And Ranil- Rajapaksas are thick in the midst of the battle for control, over the backs of the Hardworking-Suffering&Starving-Lankan-Masses, and enjoying every minute of it.

  • 0
    0

    Remember, IMF and other Western-block loans were for mIcro-economic policies; for farmers to till their fields; for animal husbandry to give eggs, and fishermen to give fish. China loans were for MAcro-economic policies for massive infrastructure projects so we could look like the West and overtake them. Now as that didn’t happen i.e. West being overtaken, China, Saudi are not forgiving our debts. India is pretending to.

    • 0
      0

      Good morning.

  • 4
    0

    old codger

    “Now you’re talking, Dr. Ali! Good to see you dropping the mindless Ranil-bashing.”

    Did you notice during his National Pongal speech Ranil (purposely) did not mention North and East on the contrary he just mentioned he would sort out Jaffna problem.

    What is/was his agenda?
    Also when he was in Trincomalee he mentioned the economic integration of West, North West, North, and part of Eastern province. Has he secretly decided to carve out Batti from Eastern province as part of his solution to “TAMIL PROBLEM”?

    Any how what do you read from Jaishanker “Ji’s” joint press conference?

    EAM: Press Remarks in Sri Lanka (January 20, 2023) Ministry of External Affairs, India. https://www.youtube.com/watch?v=qdUBzm3SwK8&t=198s

    • 4
      2

      NV,
      “Has he secretly decided to carve out Batti from Eastern province as part of his solution to “TAMIL PROBLEM”?”
      So that, the Pasikudah resort of Esmond W is out of the Eastern Province!!!???
      Good farsighted move!!???????

  • 4
    2

    We are talikng about IMF for nearly a year starting with Gota Basil and Ranil but nothing so far happened other than inflation rise and no money to pay salary and Samugthi.

    • 2
      1

      In fairness to the IMF, although I dislike involvement with it, borrowing from it is not like going to nearest pawn shop.

  • 2
    0

    It’s only SB- ethno nationalism in the parliamentary seats ( and some of their hanger-ons). Rest of the SBs would prefer their bellies filled. So would Tamils. Hence the fear of elections.

  • 5
    1

    Can Buddhism be sustained without electricity?

    • 7
      1

      nimal fernando

      “Can Buddhism be sustained without electricity?”

      Yes most definitely, even without the Buddha.

      • 2
        0

        “Can Buddhism be sustained without electricity?”

        Yes as a great life philosophy
        But in SL you need Anagikara to give a grandiose idea
        Banda,Mahinda and Gota to give and revive power
        not forgetting chinese friends to give comrades love money.
        Exchanging the new masters for the old as shock therapy.

    • 5
      0

      Nimal,
      “Can Buddhism be sustained without electricity?”
      Ìf Gota’s antics result in the end of Buddhism As We Know It, I’ll arrange 72 virgins for him……
      But real Buddhism will survive.

      • 3
        0

        “Ìf Gota’s antics result in the end of Buddhism As We Know It”

        OC,

        True …… I think, it made people to inquire/analyse/question the “Buddhism we know.” …… at least it’s a start …….. and I hope, the youth will break the cycle of blind unquestioned adherence of the past …….. where some people’s word was the law

        “I’ll arrange 72 virgins for him”

        Can you arrange some for me too? …….. I’ll have Native’s ones as well; I know he doesn’t want them. :)))

        • 2
          0

          Nimal,
          “I’ll have Native’s ones as well; I know he doesn’t want them. :)))”
          I know a 72 year old virgin…

          • 2
            0

            Great! …… If they breathe, they are my type! :))

          • 2
            0

            old codger

            “I know a 72 year old virgin…”

            Could deepti desperate Silva’s guru, guide, …. the old fossil have her.

    • 3
      1

      Nimal F.,
      That is a difficult question!! In my view as the Pirith is a recorded chant and “played back” through speakers, in my view Electricity is n integral necessity to Sustain Buddhism as practiced Now!!!
      Lord Buddha’s time it was different as the prayers by done physically by Monks in temples!!
      Technological advancement has made, availability of electricity IMPERATIVE means to that end!!!
      That’s the reason Sobitha Thero wanted reduction/special prices for religious places!!??
      Fair or not – different question, when people are deprived and partially starving!!!??
      Well BUDDHISM being given FOREMOST PLACE, the monks may have reasonable grounds!?

  • 0
    0

    hmmm …..CT commentators seem to be waiting in anticipation on the India merge…….only thing they can talk about to distract attention is the SB-ethno religious issue.

    But all know that it is no issue. It became no issue after the shock of country bankruptcy that will serve them and their children through several decades, and after all their hard work for generations

    Thus delusioned, India merge seems the only best choice, especially after Genuine sounding Indians have come before pleading for us to join them, and helping us out with a great many helps.

    As long us the land bridge doesn’t occur, and country secession doesn’t occur, India is indeed our blessed kinsman. IMF will also flow funds.

    But if the specified above means the opposite and create an Indian occupation and oppression for us, then the nation’s Socialist groups – JVP- will surely keep our nation united as a one and usher in the post modern period of all things environmental and organic. And India and IMF won’t mind that a bit either.

    • 0
      0

      But to you fellow commentators : Y’all are excitedly awaiting the India merge, aren’t you, land-bridge and secession and all, so you can make the quick commercial buck to get rich! Rajapaksas are also tentatively considering it, in anticipation of more Riches and Glory. It will be Ranil’s triumph moment also, especially the land-bridge with is his born destiny (how Indians are pretending that the area is sacred and won’t even let boats go over it).

      • 0
        0

        Ramona
        “But to you fellow commentators : Y’all are excitedly awaiting the India merge, aren’t you, land-bridge and secession”
        Don’t you think accession precedes secession?

        • 0
          0

          old codger,

          Ranil will ensure he glues the crown onto his head with the armed forces and torture chambers. Accession assured.

  • 1
    0

    Even without RW’s commitment, IMF is the only choice.

    Even WITH RW’s commitment, IMF is the only choice

    • 0
      0

      Even without RW’s commitment, IMF is the only choice.

      Even WITH RW’s commitment, IMF is the only choice and delaying to restructure the parliamentarian as the pohotuwa election time exposed RW all Bond scam so ample of proof is readily available. The steps to build the trust is taking time, Power is of two kinds. One is obtained by the fear of punishment and the other by acts of love. Power based on love is a thousand times more effective and permanent then the one derived from fear of punishment. Lanka leaders have lost all Condemning each this what we call digging the own grave

    • 0
      0

      Even the JVP will take IMF loans. They will have a better outlook for them.

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