Opinion
China has overtaken the US – says IMF
It was expected but not so swiftly, possibly the Covid-19 has expedited what was inevitable. A report published in “The Our Asian Times” on 1st December 2020, titled ” IMF Admits China Has Overtaken The US As The World’s Largest Economy; But Why Is The Media Silent?” says the world has to wake up to the new reality – China is the undisputed new economic super power.
In the past, economists have traditionally been using the index called MER, which means Market Exchange Rate, to calculate the GDP when comparing the economic performance of different countries. This method has been viewed with extreme suspicion as it doesn’t reflect the real figures because it underestimates the buying power of currencies of many countries. More reliable and now widely accepted yardstick called the Purchasing Power Parity (PPP) which is used by IMF, enables you to compare how much you can buy for your money in different countries.
To explain this further, according to the traditional exchange rate, one US Dollar is equivalent to 6.9 Chinese Yuan, but 6.9 Yuan can buy in China more than one US Dollar in America. On this basis 99 trillion Yuan the Chinese produced in 2019, is equal to USD 26 trillion which is much greater than the USD 21.4 trillion America actually produced in 2019. This is the PPP method which is said to be better than the MER method to compare economies.
The IMF is clear in its report, it says “PPP eliminates differences in price levels between economies and thus compares national economies in terms of how much each nation can buy with its own currency at the prices items sell locally. Using the PPP method, the Chinese economy is determined to be USD 24.2 trillion compared to America’s USD 20.8 trillion”. This is a huge difference, for USD 3.4 trillion is lot of money.
After the IMF, the CIA also decided to switch from MER to PPP in its Annual Assessment of National Economies. The CIA Fact Book notes “The official exchange rate measure of GDP is not an accurate measure of China’s output; GDP at the official exchange rate (MERGDP) substantially understates the actual level of China’s situation, GDP at purchasing power parity provides the best measure for comparing output across countries”
Everybody knows that IMF is pro-US in its approach in matters of global finance and economy. In the 1970s, the IMF and the World Bank were restructured to serve neoliberalism which the US and Europe embraced and forced on the rest of the world, letting loose the market forces which have really ravaged the economies of the poor countries. Therefore the IMF could be considered a tool of the US and Western powers. It would not dare lie regarding the economy of its biggest sponsor. The CIA is the central intelligence service of the USA and it is advising the US government about the seriousness of the problem due to Chinese ascendancy. CIA too , will not give wrong information to the US government.
One cannot be surprised by the Chinese phenomenon. It’s economy has been growing at the mind-boggling rate of 10% in the last 30 years. Only the Covid-19 succeeded in bringing it down and that too, by a small margin. China is expected to contribute 1/4 th of the global growth next year, mainly in the manufacturing sector.
Joseph Needham who had studied ancient Chinese science and technology, has commented on the capability of the Chinese and the uniqueness of their culture.. The methods adopted by the Chinese have bewildered Western social scientists and economists. Some believe that it is the habit of thrift of the people that had contributed to the economic growth as the rate of savings in China ranges around 25%. Others think it is due to the concept of Township and Village Enterprises that has been adopted recently. However, Needham and his associates think the close affinity between the Chinese people and the government to be the secret of their success.
The world has to come to terms with China. The Western countries cannot continue to treat China as an outcast and do its utmost to undermine its development and spread of influence. Australia for instance, supports all such efforts of the US though China is its biggest trade partner. It had agreed with the US policies regarding sanctions on China and implemented similar measures, but complains to the WTO when China retaliates.
One hopes, for the sake of world peace and prosperity that these big powers would stop their childish rivalry and work together. One hopes the new US President Joe Biden would change their policy towards China. He must realize that greater benefit would result to the US, as well as the world by adopting a lesser confrontational approach. If the US and China come to be lesser rivals and greater trade partners the rest of the world could be expected to be more peaceful and conciliatory. Middle East could be less of a cauldron, South Asian rivals may mend fences. China itself would be less belligerent in its neighborhood.
More money would be available everywhere for health and education, employment and culture as the defense budget could be cut as there is no need to spend on weapons as there is no threat of war.
But is this wishful thinking. Would weapons industry allow Biden, even if he wants to, to make peace when their economy, employment, growth and power depends on the perpetuation of a war situation cold or hot in the world.
N. A. de S. Amaratunga
Opinion
Has Malimawa govt. become Yahapalanaya II ?
Malimawa government and Yahapalanaya are dissimilar in many respects, the most important being whilst Yahapalanaya had to manage with a balancing act in the parliament, Malimawa has the luxury of a massive parliamentary majority. However, they share one thing in common; the main plank for the election of both presidents Dissanayake and Sirisena was their solemn pledge for the eradication of corruption. It looks as if both have failed miserably, on that count!
It did not take very long for Yahapalanaya’s first act of corruption; the bond scam. COPE, headed by the veteran politician D E W Gunasekara, picked on this but to prevent the presentation of the report, Sirisena dissolved the parliament which was done at the request of the Prime Minister Ranil, to whom Sirisena was obliged for the unexpected bonanza of becoming president. This enabled the second bond scam to take place, also masterminded by Ranil’s friend Mahendran, imported from Singapore!
Malimawa convinced the voters that they are the only group that could get rid of the 76-year curse of corruption and made a multitude of promises, most of which are already broken! What is inexcusable is that, in a short space of time, they seem to have become as corrupt as any previous government and they seem to excel their predecessors in doling out excuses. Of course, they have a band of devoted social media influencers who are very adept at throwing mud at their opponents which they hope would help to cover up their sins. How long this strategy is going to work is anybody’s guess!
Some of these issues were addressed in an article, “Squeaky clean image of JVP in tatters” by Shamindra Ferdinando (The Island, 22 April). I hasten to add that, though some of his supporters are still trying to paint an honest image of AKD, he should be held responsible for many of these misdeeds and irresponsible acts.
One of the first acts of the newly elected president AKD was to appoint two retired police officers, who openly worked for the NPP through the Retired Police Collective, to top posts; Ravi Seneviratne as Secretary to the Ministry of Public Security and Shani Abeysekara as the Director of CID. Both of them held top jobs in the CID when the Easter Sunday attack took place and were blamed, by some, that they too failed to prevent this horrendous act of terrorism. In addition, there was a case against Seneviratne for causing accidents whilst under the influence and Abeysekara was exposed as a ’fixer’ by the infamous Ranjan Ramanayaka tapes. No one would have objected had they been appointed after their names were cleared but AKD’s rash decision to appoint them, disregarding all norms, clearly showed what his long-term strategy was. Was this not political corruption?
Now these two tainted officers are heading the search for the mastermind of the Easter Sunday attacks! Are they being used to divert attention away from Ibrahim’s family that was supposed to have funded the project? After all, Mohamed Ibrahim, the father, was on the national list of the JVP, and the two sons were the leading suicide bombers. It is a matter of great surprise that the Catholic church led by Cardinal Ranjith is not demanding the removal of these two officers from the investigation, who obviously have a conflict of interest. It becomes even more surprising when the demand is made for the Deputy Minister of Defence Aruna Jayasekara to resign, for the same reason; as well stated in the editorial, “Of masterminds” (The Island, 21 April).
The first act of the new parliament was to elect ‘Dr’ Ranwala as the speaker and pretty soon his doctorate was challenged. He stepped down to look for the certificate, which he is still looking for! Though some of the ministers too have admitted that Ranwala may not have a PhD, AKD seems silent. When Ranwala was involved in an RTA, police had run out of breathalyser tubes and blood was taken after a safe period had elapsed. Why has AKD no guts to sack him?
Episode of the release of 323 containers, without the mandatory inspections, seems to be receding to the past and the long-awaited report may be gathering dust in the president’s office! It is very likely due to political intervention and we probably will never know who benefitted.
A minister, who claimed that he is living on his wife’s salary and on the generosity of the party faithfuls, seems to have been able to build a three-storey house in a suburb of Colombo. He claims that when he made that statement, his father was alive but has since died and he has inherited everything as he is the only son! What a shame that Marxists do not believe in sharing the family wealth with sisters? Though the opposite may be true, his explanation that he was able to build a house in Colombo by selling the land in Anuradhapura rings hollow!
The worst of all was the coal scam which would have long lasting consequences on our economy. I do not have to go into details as much has been written about this but wish to point out AKD’s role. In spite of ex-minister Kumara Jayakody being indicted by CIABOC, AKD continued to give unstinted support till it became pretty obvious that he had to go. In fact, he is being charged with an offence which was committed whilst he was serving the Ceylon Fertilizer Company which was under the purview of, guess who? AKD when he was the Minister of Agriculture.
Devastating report from the Auditor General,before Jayakody’s resignation, would not have happened if AKD had his way. He attempted a number of times to get one of his henchmen appointed to this coveted post, overlooking those experienced officers in the department. AKD’s political machinations were thwarted thanks to the integrity of some members of the Constitution Council. If not for them, AKD’s nominee would have been in post and, perhaps, his friend Jayakody would still be the minister.
Malimawa seems to have beaten Yahapalanaya rather than being the second!
By Dr Upul Wijayawardhana
Opinion
Pot calling the kettle black?
Doctor Upul Wijayawardhana (eminent physician), posed a riddle for us. He wrote about that island Sri Lanka as ‘ this little dot in the ocean’ when deriding the remark of President Dissanayake who had said that Sri Lanka was a hunduva , a term that indicated a small volume: me hunduve inna puluvan da? (Can you live in this restricted space?) Most sensible people, even uneducated, judge that the volume of a little drop (of whatever) is smaller than that of a hunduva; so is weight. When the learned doctor emphatically maintains ‘….we are not a hunduva’ but ‘… a little dot in the ocean…’, is the pot calling the kettle black or worse?
Physically and population wise, Sri Lanka is neither ‘a little dot’ nor ‘a hunduva. This is all in the rich imaginations of Dissanayake and Wijayawardhana. I once counted that there were more than 50 members of the UN who were smaller than Sri Lanka in physical and population size. England was a sizeable island with a small population in the northwest corner of Europe in late 18th century when it began to become what China, with 1.3 billion people and jutting out to the Pacific, is now. From about 1850, when the population of Great Britain was about 20 million, less than that of Sri Lanka in 2026, it ruled more than half the world. Besides, do not forget Vanuatu, Kiribati, Cook Islands, Antigua and Barbuda, Barbados, Lesotho and New Zealand (who habitually beats us at cricket). New Zealand with 5 million population played against 1.5 billion population India (1:300) for the T20 cricket championship a few weeks ago. I quietly wished New Zealand would win; so much for crap about dots in the Indian Ocean or the south Pacific.
Dr. Wijayawardhana also wrote about history and about ‘The achievements of Hunduwa’. The massive reservoirs and extensive irrigation systems in rajarata and ruhuna as well as the stupa are indeed tremendous works of irrigation and bear witness to superior ingenuity and organising ability, for the time they were built. They compare very well among structures elsewhere in the ancient world. Terms like ‘granary of the East’ must be taken with more than a grain of salt. Facile use of such terms does not take account of whatever shreds of evidence there is of adversity in those times. Monsoon Asia over the ages has more or less regularly suffered from floods, droughts and consequent famines. The last dire famine was in Bengal in 1944. The irrigation works in Lanka were a magnificent response to those phenomena. The modern response has been scientific agriculture making India a major grain exporter, from near famine conditions in 1973-74. Recall Indira Gandhi’s garibi hatao (eliminate poverty) speech to the General Assembly of the UN, that year.
The bhikkhu who wrote down the tripitaka in aluvihara did so because there was the threat of a severe famine in the course of which learned bhikkhu might have come to harm. Buddhist thought over centuries had been passed from generation to generation vocally (saamici patipanno bhagavato savaka (listener) sangho) and the departure from that tradition must have required a major threat of famine. There are stories of bhikkhu from Lanka fleeing from dire straits. In the same vein, while the mahavamsa speaks of kings and their valiant deeds, there is little account of the large mass of little people who lived then. Sensible teaching of the history of a people must include the history of as much of the people as possible and some idea of the history of other peoples in comparable times to avoid feeling dangerously smug and arrogant, which we have seen many times over.
Usvatte-aratchi
Opinion
Ministerial resignation and new political culture
The resignation of Energy Minister Kumara Jayakody comes after several weeks of controversy over his ministerial role. The controversy sharpened when the minister was indicted by the Commission on Bribery and Corruption for a transaction he was involved in ten years ago as a government official in the Fertiliser Corporation. The other issue was the government’s purchase of substandard coal from a new supplier. Minister Jayakody’s resignation followed the appointment of a Special Presidential Commission of Inquiry to investigate coal and petroleum purchases. The minister who resigned, along with the Secretary to the Ministry of Energy, Udayanga Hemapala, stated that they did not wish to compromise the integrity of the investigation to be undertaken by the Commission of Inquiry.
The government’s initial resistance to holding the minister accountable for the costly purchase was based on the argument that the official procedure had been followed in ordering the coal. However, the fact that the procedure permitted a disadvantageous purchase which has come to light on this occasion suggests a weakness in the process. The government’s appointment of the Special Presidential Commission of Inquiry to examine purchases as far back as 2009 follows from this observation. In this time 450 purchases are reported to have been made, and if several of them were as disadvantageous as this one, the cost to the country can be imagined. The need to investigate transactions since 2009 also arises from the possibility that loopholes in official government procedures in the past would have permitted private enrichment at a high cost to the country.
Concerns have been expressed in the past that the purchase of coal and petroleum, often on an emergency basis, enabled the use of emergency procurement processes which do not require going through the full tender procedures. The government has pledged to eradicate corruption as its priority. As a result, the general population would expect it to do everything within its power to correct those systems that permitted such corruption. Accountability is not only forward looking to ensure non-corrupt practices in the present, it is also backward looking to ensure that corrupt practices of the past are discontinued. This would be a matter of concern to those who headed government ministries and departments in previous governments. Those who have misapplied the systems can be expected to do their utmost to resist any investigation into the past.
Politically Astute
One of the main reasons for the government’s continuing popularity among the general population, as reflected in February 2026 public opinion poll by Verité Research, has been its willingness to address the problem of corruption. Public opinion studies have consistently shown that corruption remains one of the top concerns of citizens in Sri Lanka. The arrests and indictments of members of former governments have been viewed with general satisfaction as paving the way to a less corrupt society. At the same time, the resignations of Minister Kumara Jayakody and Secretary Udayanga Hemapala are an indication that not even government members will be spared if they are found to have crossed red lines. This is an important signal, as public confidence depends not only on holding political opponents to account but also on demonstrating fairness and consistency within one’s own ranks.
There appears to be a strategy on the part of the opposition to target government leaders and allege corruption so that ministers will be forced to step down. Organised protests against other ministers, and demonstrations outside their homes, are on the rise. The government appears not to want to give in to this opposition strategy and therefore delayed the resignation of Minister Jayakody until it had itself established the Special Presidential Commission of Inquiry. It enabled the minister to step down without it seeming that the government was yielding to opposition pressure. In political terms, this was a calibrated response that sought to balance the need for accountability with the need to maintain authority and coherence in governance.
The demand by opposition parties to focus attention on the coal problem could also be seen as an attempt to shift the national debate from the corruption of the past to controversies in the present. The opposition’s endeavour would be to take the heat off themselves in regard to the corruption of the past and turn it onto the government by making it the focus of inquiries into corruption. The decision to set up a Special Presidential Commission of Inquiry accompanied by the resignation of the minister and the ministry secretary was a politically astute way of demonstrating that the government will have no tolerance for corruption. It will also help to remind the general public about the rampant corruption of past governments which prevents the opposition’s corruption accusations against the government from gaining traction amongst the people.
New Practice
The resignation of a government minister who faces allegations but has not been convicted is still a relatively new practice in Sri Lanka. The general practice in Sri Lanka up to the present time has been for those in government service, if found to be at fault, to be transferred rather than removed from office. This is commonly seen in the case of police officers who, if found to have used excessive force or engaged in abuse, are transferred to another station rather than subjected to more serious disciplinary action. A similar pattern was seen in the case of former minister Keheliya Rambukwella, who faced allegations of corruption in the health field but was reassigned to a different portfolio rather than removed from government.
Against this background, the present resignation assumes greater importance. It signals a willingness to break with past practices and to establish a higher standard of conduct in public office. However, a single instance does not in itself create a lasting change. What is required is the consistent application of the same principle across all cases, irrespective of political affiliation or convenience. This is where the government has an opportunity to strengthen its credibility. By ensuring that the same standards of accountability are applied to its own members as to those of previous governments, it can demonstrate that its commitment to good governance is not selective.
The establishment of the Special Presidential Commission of Inquiry, the willingness to accept ministerial resignation, and the recognition of systemic weaknesses in procurement are all steps in the right direction. The challenge now is to ensure that these steps are followed through with determination and consistency. If the investigations are conducted impartially and lead to meaningful reforms, the present controversy could mark a turning point. The resignation of the minister should not be seen as an isolated event but as the beginning of a new practice. If it becomes part of a broader pattern of accountability, it can contribute to a new political culture and to restoring public trust in government.
by Jehan Perera
-
News4 days agoRs 13 bn NDB fraud: Int’l forensic audit ordered
-
Business7 days agoHarnessing nature’s wisdom: Experts highlight “Resist–Align” path to resilience
-
Opinion5 days agoShutting roof top solar panels – a crime
-
News7 days agoGratiaen Trust announces longlist for the 33rd Annual Gratiaen Prize
-
News6 days agoFrom Nuwara Eliya to Dubai: Isha Holdings markets Agri products abroad
-
News2 days agoLanka faces crisis of conscience over fate of animals: Call for compassion, law reform, and ethical responsibility
-
News5 days agoChurch calls for Deputy Defence Minister’s removal, establishment of Independent Prosecutor’s Office
-
News15 hours agoNo cyber hack: Fintech expert exposes shocking legacy flaws that led to $2.5 million theft
