{"id":242768,"date":"2025-07-28T03:29:42","date_gmt":"2025-07-27T21:59:42","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=242768"},"modified":"2025-08-06T10:30:58","modified_gmt":"2025-08-06T05:00:58","slug":"navigating-crisis","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/navigating-crisis\/","title":{"rendered":"Navigating Crisis\u00a0"},"content":{"rendered":"

By Sarath de Alwis<\/a> –<\/b><\/span><\/p>\n

\"\"

Sarath de Alwis<\/p><\/div>\n

\u201cThe winds and waves are always on the side of the ablest navigators.<\/em>\u201d – Edward Gibbon <\/span><\/p>\n

At a recent book launch organized by Advocata Institute, Former President Ranil Wickremesinghe made a startling statement. A substantial section of the cognoscente on economics in our land perceives him as our preeminent strategic thinker. Commenting on US Tariffs he said \u201cUS is a member of the OCC. And the US has signed on to the EFF and their time limits which means they must help us now\u2026 Otherwise they are in breach of the agreement.\u201d\u00a0 \u00a0<\/span><\/p>\n

\u201cThey are preventing us from repaying bondholders, the former President pointed out adding \u201cAnd now we must tell the IMF\u2026tell the bondholders to go to the U.S. and collect the money.\u201d<\/p>\n

He hoped the current administration will succeed in getting the Trump tariff down as Sri Lanka \u201ccannot survive with 30 percent\u201d.<\/p>\n

The gathering he addressed had many outstanding people in the field of finance and commerce.<\/p>\n

None seemed to remember that Mr. Wickremesinghe in 2007 as leader of the Opposition and the UNP wrote to the foreign banks that a \u201c<\/span>future UNP government would not permit the repayment of the proposed US $ 500 million bond. His government did not repudiate the ISB debts. Instead, it \u00a0 <\/span>tripled ISB borrowings.<\/p>\n

The IMF is the Global Overseer ensuring good behavior of debtor countries. The Land of Trump with a 36 trillion dollars debt is exempt from its watch.<\/p>\n

The US Dollar is the main global reserve currency \u2013 which the French have insistently maintained as \u2018an exorbitant privilege\u201d<\/p>\n

The former President\u2019s cynical economic wisdom is shared by many who are pleased to see AKD\u2019s cautious compliance of the IMF\u2019s conditions.<\/p>\n

Our Strategic Thinker\u2019s cavalier advice brings to my mind Barbara Tuchman\u2019s luminously wise observation in her celebrated tome \u2013 The March of Folly.<\/p>\n

\u201cWooden headedness, the source of self-deception, is a factor that plays a remarkably large role in government. It consists in assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs. It is acting according to wish while not allowing oneself to be deflected by the facts.\u201d<\/p>\n

President Trump\u2019s Bully Pulpit postures have not intimidated China. We are helpless onlookers of a greater game.\u00a0 \u00a0<\/span><\/b><\/b><\/p>\n

Economic Counsellor and Director of Research of the IMF-\u00a0 <\/span>Pierre-Olivier <\/span>Gourinchas<\/span><\/a><\/span><\/span> \u00a0<\/span>in a commentary on global economic growth made on\u00a0 <\/span>22<\/span>nd<\/sup><\/span> April 2025\u00a0 noted that the<\/b> Global Economy has entered a new era.<\/b><\/span><\/p>\n

\u201cThe global economic system under which most countries have operated for the last 80 years is being reset, ushering the world into a new era. Existing rules are challenged while new ones are yet to emerge. Since late January, a flurry of tariff announcements by the United States, which started with Canada, China, Mexico and critical sectors, culminated with near universal levies on April 2. The US effective tariff rate surged past levels reached during the Great Depression while counter-responses from major trading partners significantly pushed up the global rate.\u201d\u00a0 \u00a0<\/span><\/b><\/p>\n

Next day, President Trumps Treasury Secretary Scot Bessant reacted<\/b>. <\/span>The International Monetary Fund, he said, should be a brutal truth-teller. Instead, he claimed, it was \u201cwhistling past the graveyard.\u201d<\/b><\/span><\/p>\n

\u201cThe IMF needs to call out countries like China that have pursued globally distorted policies and opaque currency practices for many decades,\u201d he said.\u00a0<\/b><\/span><\/p>\n

The Financial Times qualified Bessant\u2019s remarks further. It said that Treasury Secretary Bessent<\/span> signaled that the fund was becoming too close\u00a0to Beijing, and said a key report published last year drew \u201cPollyannaish\u201d\u00a0 <\/span>conclusions on imbalances in the global economy, where Washington believes China is the prime culprit.\u00a0<\/b><\/p>\n

The Financial Times reporters got the US Treasury Secretary\u2019s mindset with absolute precision. <\/span>The\u00a0Pollyanna principle <\/b>is the tendency for people to recall whats favorable more accurately than unfavorable ones.\u00a0 <\/span><\/span><\/p>\n

The 36 trillion Dollar debt is not a comfortable truth.\u00a0<\/span><\/p>\n

The United States remains world\u2019s preeminent military power with its arsenal of Bunker Busting Bombs.<\/p>\n

But as an industrial power, the U.S. has been clearly overtaken. It is not falling behind. It is already behind China in some essential sectors. In a recent analytical essay \u2018Under Estimating China\u2019 in \u2018Foreign Affairs\u2019 two US China experts Rush Doshi and Kurt Campbell have\u00a0 <\/span>said: <\/b><\/p>\n

\u201cChina makes 20 times more cement and 13 times more steel than the U.S. It makes more than two-thirds of the world\u2019s electric vehicles, more than three-quarters of its electric batteries, 80 percent of its consumer drones, and 90 percent of its solar panels. China\u2019s shipbuilding capacity is several orders of magnitude larger than America\u2019s, and its navy will be 50 percent larger than the U.S. Navy by 2030.\u201d <\/b><\/p>\n

The tortoise has overtaken the Hare.\u00a0 <\/span>Aesop has told us how it ends.<\/b><\/p>\n

Notes:<\/b><\/p>\n

<\/b>https:\/\/www.imf.org\/en\/Blogs\/Articles\/2025\/04\/22\/the-global-economy-enters-a-new-era<\/b><\/span><\/a> <\/b><\/span><\/p>\n

https:\/\/fortune.com\/article\/scott-bessent-world-bank-imf-overhaul-mission-creep\/<\/b><\/a><\/span> <\/b><\/span><\/p>\n

https:\/\/www.theatlantic.com\/ideas\/archive\/2025\/05\/maga-maoism-trump\/682732\/<\/b><\/a><\/span> <\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

[…]<\/p>\n","protected":false},"author":86,"featured_media":238027,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,46,8],"tags":[],"class_list":["post-242768","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-constitutional-reforms","category-editorial"],"yoast_head":"\nNavigating Crisis\u00a0 - Colombo Telegraph<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.colombotelegraph.com\/index.php\/navigating-crisis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Navigating Crisis\u00a0 - Colombo Telegraph\" \/>\n<meta property=\"og:description\" content=\"[…]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.colombotelegraph.com\/index.php\/navigating-crisis\/\" \/>\n<meta property=\"og:site_name\" content=\"Colombo Telegraph\" \/>\n<meta property=\"article:published_time\" content=\"2025-07-27T21:59:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-06T05:00:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2024\/08\/Ranil-Wickresinge-phone.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"900\" \/>\n\t<meta property=\"og:image:height\" content=\"719\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Sarath de Alwis\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sarath de Alwis\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.colombotelegraph.com\/index.php\/navigating-crisis\/\",\"url\":\"https:\/\/www.colombotelegraph.com\/index.php\/navigating-crisis\/\",\"name\":\"Navigating Crisis\u00a0 - 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