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Public enemy number one: Inflation? Accumulation of public debt?

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Convict a man for his convictions?

by Usvatte-aratchi

The prosecution of Charles, King of England (and …) on the 20th of January 1649, was led by John Cooke, for whom the trial was ‘not only against one tyrant but against tyranny itself’. “The charge stated that, having been ‘trusted with a limited power to govern by, and according to the laws of the land, and not otherwise’, Charles had engaged in ‘a wicked design to erect and uphold in himself an unlimited and tyrannical power to rule according to his Will, and to overthrow the Rights and Liberties of the People. He had levied war against Parliament and the people it represented, had solicited foreign invasions and renewed the war, all to uphold his own interests and those of his family, against the ‘public interests, common right, liberty, justice and peace of the people of this nation. Thus, Charles was a ‘Tyrant, Traitor and Murderer, and a public and implacable Enemy to the Commonwealth of England.”

‘Then the clerk rose and read out the sentence ….’that the said Charles Stuart, as a Tyrant, Traitor, Murderer and a public enemy, shall be put to death ….’

‘… this was a court that swept away the ‘distinction of quality’, making ‘the greatest lord and the meanest peasant undergo the same judicatory and form of trial’ as each other.’

(p. 253, The Blazing World…’, Jonathan Healey, 2023.)

During the last two months or so, three statements deeply affecting economic policy have come out from the highest authorities in the land: the Supreme Court heard a petition from several citizens regarding the infringement of their fundamental rights by actions or lack thereof on the part of some of the of highest public officers of state and convicted all of them of the alleged infringements; a former president of the republic who also held the portfolio of finance in his governments declared triumphantly that he had reduced taxes year after year from 2010; the Governor of the Central Bank delivered a lecture in the University of Colombo on ‘Inflation- public enemy number one’. All three statements contain elements central to economic policy and more immediately to the present economic crises. Unfortunately, there has been no public discussion of these statements, except on television. In general, the anchors of these programmes on television have not been persons with learning and professional experience in economic policymaking. Nor did they give evidence of being familiar with current writings on economics or economic policy. These observations are truer of the daily newspapers (Sinhala and English) that I read. I lack the energy to discuss these questions adequately. I invite those better equipped to take them up in earnest.

Inflation/stagnating economy

The Governor of the Central Bank, speaking from his high chair, may see inflation as public enemy number one. The Central Bank operates at the short end of the capital market (money market) to keep prices, including the price of other currencies, reasonably stable and the banking system functioning well. In this small economy, keeping the banking system stable has turned out to be unusually difficult. Enterprises have no way of raising long-term capital in the absence of a functioning share market, long-term lending institutions or personal funds pooled together for the purpose. Prior to the introduction of the principle of limited liability (Laws were enacted in Britain in 1844), wealthy persons pooled their resources and ran large-scale operations (East India Company). But railways, telephone systems, later shipping companies and oil companies, became far too large to be financed and managed in that manner. Last century, as individual inventors came out with innovations that would become the foundation of large enterprises bringing in huge revenues in a short while but were highly risky, a new source of capital emerged: venture capital. In our economy, some of the richest people cannot openly invest their funds because their wealth has been accumulated in breach of the law. Even before black money came to darken the prospects for the development of a capital market, the skies were gloomy.

The rollover of short-term loans and advances from commercial banks has been a long-term feature of the way firms (except plantation companies which sold their shares in the London Stock Exchange) satisfied their long-term capital needs. (I vaguely recollect that N Ramachandran of the Central Bank wrote a paper on this in the 1960s.) When the market for their output collapses, borrowers cannot service their short-term loans and seek another roll over, the banking system becomes unstable. When banks quite properly prosecute errant borrowers in court, the owners go on television to blame the banks and the government. Relatively large companies finance their activities by withholding taxes payable to the government. The unpaid taxes, running into several hundred million rupees, become interest-free long-term loans from the government (taxpayers) to those enterprises. Recourse to law is an essential part of how economies function. The Central Bank cannot lend to banks to extend credit to enterprises. Solutions must be sought elsewhere.

It is difficult enough to project prices for 12 months and central bankers who predict prices for five years (Recall the 2007-2008 market crash.) must be bonkers. Central banks have instruments to intervene in the short-term market to stabilize the economy. Managing the public debt and the employees’ provident funds is none of its legitimate business, though acts of Parliament may make it legal. The Central Bank has no instruments to promote economic growth and development. But it can ruin the march to economic progress by messing up the short-term functioning of markets. Yet, the long run in which economic growth takes place is not a succession of short runs for the policymaker. The Central Bank had better dwell on the short end.

My understanding is that the public enemy number one in this economy is its stagnation. Look at the results of government policies and the behaviour of ‘absent entrepreneurs. After all, in this country, the government sector has rarely exceeded 30 percent of the total economy. If the economy has not grown, the heavier responsibility lies with private sector entrepreneurs. A newspaper publisher, owners of a few passenger transport companies, branches of a few multinational companies and a few retailers did not make an indigenous capitalist class.

In elementary terms, economies function with labour and capital. Economies grow when the employment of labour and capital increases. [(Those familiar with the economic history of England may recall trends after the Black Death (latter half of the 14th century) there.)] Labour is a complex input as capital is. A taxi driver is not the same input as a designer of a motor vehicle; a data entry clerk is not the same provider of labour as a designer of a robot. A spade, a capital good, is very different from a fast computer, another capital good. A combined harvester is very different from a woman with a scythe in Minneriya, though both may engage in agricultural operations. Economic growth takes place when labour and capital grow and when workers become highly productive with the use of advanced capital. Look at what has happened in Sri Lanka. From about 1960 to 2000, Sri Lanka has had a gift of a youthful population as China has had from somewhat later and as India and most of Africa still have. They have used that ‘population dividend’ to grow rapidly. In addition, Sri Lanka has had a healthy, literate young population. About a quarter of that potential work force has emigrated. Highly skilled workers among them flew away periodically, as they do now. The consequence has been that a healthy, literate and skilled labour force has been gifted to the workforce of other countries. The gross domestic output of the UAE, Greece, South Korea and the United Kingdom have grown faster and that of Sri Lanka has stagnated.

If your concern were with the gross domestic output of the world that is fine but if your concern were with the GDP of Sri Lanka, these movements of population created problems. With gross mismanagement of the economy, they sum to crises. The estimate of the Statistics Department that the unemployment rate in Sri Lanka is 4%, (giving statistics a bad name) hides the reality that 20% of the labour force (labour force comes from demography and work force from economics.) left the country to join the workforce of other countries. A more realistic number would be that 25% of the labour force was unemployed and that 20% of the labour force emigrated, leaving 4% of the work force unemployed in this country. By the middle of the 1960s, South Korea was as poor as we were and its rising labour force faced unemployment. (Recall the ‘Saemaul Undong’ movement). Now, it is a regular importer of unemployed educated young labour from this country. Two factors were responsible for this divergence. There was no class of entrepreneurs who sought new technology and large and expanding markets overseas. And we were governed by a class of people who excelled in plundering the public wealth rather than promoting economic growth. Individuals and families that rose from rags to riches in one generation were those who plundered the public purse, in diverse ways, rather than innovating entrepreneurs. These are public enemies number one in this society. (Thomas Stockton was not; Peter Stockman was an enemy of society. [Henrik Ibsen].)

Government expenditure without taxation

It was shocking that a former President and Finance Minister, in a press statement a few days back, triumphantly declared that he had reduced taxation from 2010 to 2014. Indeed, he was not the only Finance Minister in the country who betrayed its interests by failing to raise tax revenue to pay for rising government expenditure. Anyone interested in the figures can easily access them in the Annual Reports of the Central Bank. If you raise government expenditure and reduce government revenue, you drive your society to a crisis. When that economy is one highly dependent on imports, even for its mere survival, and a government fails to implement policies that promote exports and there are no enterprises that earn foreign exchange, there is a balance of payments crisis. Hence the economic crises that we suffer from. The choke points were designed by government policymakers and ‘absent entrepreneurs. They are public enemies of this society.

Convict convictions

In November, the Supreme Court distinguished itself by convicting seven people, who, several citizens had petitioned the court, had violated their fundamental rights. (It is useful to remember that the court comprised not merely the judges but also counsel who were officers of the court.) Many had come to believe that several of the respondents in that case were above the law. The Supreme Court, to our delight, gave life to Dr. Thomas Fuller’s 1753 dictum that ‘Be ye never so high, the Law is above you’.

However, that ennobling decision gave rise to a conundrum, entirely outside the court and solely in my mind. Economics is not physics; economists’ attitudes to policy vary with the culture in which they grew up, where they were schooled (‘freshwater schools’ or ‘saltwater’ schools in the US) and what history they had read. An Englishman who had read about Hitler’s atrocities in Germany may have a predilection to dislike ‘etatism’. An economist who grew up in Peradeniya from about 1957 to about 1970, had a good chance of disapproving neo-liberalist economic policies. IMF policies from about 1990 were associated with neo-liberal economics, the Washington Consensus. To construct a hypothetical case: if an economist who disapproves of IMF policies happens to be in a place of high responsibility for economic policymaking, he/she faces a dilemma. A wise choice is to refuse to seek appointment to such a position. But men/women are ambitious. There is a responsibility falling on those who appoint him/her to make sure that the prospective appointee is vetted for his/her attitudes to pending centrally important questions so as to avoid creating a dilemma for the appointed person and an embarrassment for the government. The appointee has a second choice: resign from his /her position when he /she learns of the imminent dilemma. If, however, a person continues to remain in that high position, and those with the authority fail to remove him from office, it is fair to assume that those who appointed him concurred with the appointee’s approach to policies. And, indeed, it may be that such confluence of attitudes, determined that that particular person was appointed. Does his conduct amount to behaviour that denies fundamental rights of other citizens? If it does, what happens to his fundamental right to live by his convictions? He is not crying ‘fire’ in a crowded theatre. God exists; God exists not. Is such a citizen an enemy of the people? Cannot a citizen live by his convictions but be convicted?



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Eastern University and the making of a culture of peace

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by Jehan Perera

There is an important change in the way peace is being understood in Sri Lanka. The notion that peacebuilding is not simply the responsibility of governments, politicians and peace organisations, but is also a responsibility of educational institutions, appears to be permeating the consciousness of at least a section of the academic community. This was visible on International Peace Day at an event held at Eastern University by the Faculty of Health-Care Sciences. The event was unusual not least because the medical and nursing faculty of the university had decided that peacebuilding was relevant to its academic and professional responsibilities.

Peacebuilding has too often been treated as something undertaken after conflict, when the fighting has stopped and the immediate task is to rebuild relationships between communities. But peace cannot be sustained by governments and peace organisations alone. If it is to become long lasting, the values and practices of peace have to become part of the institutions through which a society educates its younger generations. Universities and other educational institutions are therefore important to peacebuilding. They are among the places where the foundations of a culture of peace can either be built or neglected.

The experience of the Faculty of Health-Care Sciences at Eastern University provides a practical example of what this can mean. Led by its Dean, Prof Thillainathan Sathaananthan, the faculty organised an event which went beyond the ordinary academic scope of a medical faculty. University academics are experts in writing project proposals and applying for research grants. On this occasion, the members of the Faculty of Health-Care Sciences used those skills to apply for a UNESCO grant that they won to conduct an International Peace Day event. The significance lies less in the Rs 200,000 grant than in the decision to use the university’s institutional capacity and resources to invest in peacebuilding. The event at Eastern University needs to be understood as more than a successful university programme. It represents a possible paradigm shift in peace thinking.

Institutional Commitment

The Peace Day event obtained the support of the university administration, including Vice Chancellor Prof P Peratheepan, and reached out to secondary schools in the vicinity to mobilise their attendance. The event itself was meticulously organised. There were cultural items including traditional and modern dance and song in the three languages, performed by combinations of solo, duet and multiple singers, dancers and actors drawn in part from nearby secondary schools. There was a panel discussion by senior academics on the general theme of peacebuilding and how to prepare for it. A discussion among the students followed, where each student spoke on behalf of a religion that was not theirs. This is significant because peacebuilding cannot remain an idea discussed by specialists at conferences. It has to become part of the way institutions educate and prepare people for life in a plural society.

The Faculty of Health-Care Sciences at Eastern University has provided a model through its Peace Medicine course modules that were introduced to the curricular as a compulsory core course over 10 years ago. Two senior academics, Dr Kuveriel Eliyas Karunakaran and Dr Thillainathan Sathaananthan, have written a book on “Peace Medicine- A Health Care Concern” that was published five years ago. Its Peace Medicine Module integrates principles of medical ethics, compassion, equity, social justice and community engagement into health education and practice. In his introduction, former Vice Chancellor of Eastern University, Prof T Jayasingam noted “This book is an introduction to a theme which had already been operating in the Faculty of Health Care Sciences as a course.”

Doctors, nurses and health workers know better than anyone the harm that war and violence does. They are the people who treat the wounds and trauma that violence leaves behind. In a hospital, a patient is not asked what their religion or ethnicity is before they are treated. Health care is one of the places where peace is practised every day. The Faculty has therefore found a way of connecting its professional responsibilities with the wider social responsibility of peacebuilding. The question is whether this experience can be replicated throughout the country, at universities and at other educational institutions, so that peacebuilding becomes part of the consciousness of education itself. If that happens on a sufficient scale, it can begin to generate a culture of peace that becomes increasingly difficult to reverse.

Local Action

The Eastern University event corresponded closely to the United Nations theme for this year’s International Day of Peace, “Invest in Peace – For Everyone, Everywhere, Every Day”, which honours the “everyday architects of peace”, people driving local action, laying the groundwork for stability and building lasting peace from the ground up. The emphasis on investment is important. An investment means that something is put in: time, courage and resources. There is no more violent conflict in Sri Lanka today. But the absence of war does not automatically produce a culture of peace. The factors that fed the country’s conflict have not disappeared from the world. Racism, corruption and the violation of laws and human rights are the raw materials of conflict. So too are unresolved grievances, discrimination and the failure to recognise the suffering of others.

A country that does not deal with its past does not escape it. The past can return in the next generation. This is why the experience of Eastern University needs to be replicated countrywide, both at universities and at other educational institutions. The objective should not be to turn every academic discipline into peace studies. Rather, peacebuilding needs to become part of the consciousness of education itself. Eastern University shows that a medical faculty can develop Peace Medicine. A law faculty can examine the relationship between justice, rights and peace. Faculties of education can prepare teachers to work in diverse communities, while the humanities and social sciences can examine the different narratives through which communities understand their histories. Every institution can find its own way of making peacebuilding relevant to what it teaches.

Sri Lanka has had many declarations, pledges and programmes in the past. What matters is whether these produce changes in behaviour and institutional practice. Peacebuilding requires confronting difficult issues rather than avoiding them. It requires respect for different identities, but also engagement across those identities. It requires dealing with grievances in the present while also addressing unresolved issues from the past. It requires truth, accountability, reparations and guarantees of non-recurrence. It requires people to learn that the rights of another community do not diminish their own rights. The International Peace Day event at Eastern University was evidence of a change in the way at least some academics in a part of the country deeply affected by war are thinking about their responsibilities. Peace needs to be invested in and the most important investment will be in the minds of those who will inherit the future.

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Quality assured education commodities

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by Ahilan Kadirgamar

I have always noticed the little paper tags that are inside the packaging of some products that say quality assured or quality control. I often wonder who might have checked the product and stamped that tag, but I also forget the tag soon enough. Decades later, when I entered academia, I was taken aback by the emphasis placed on quality assurance in our universities. It is not something that could be forgotten and done away with; the entire university system is obsessed with quality assurance.

Beginning with the staff induction programme, quality assurance is drilled into the newly recruited lecturers. It is the norm, not seen as doing any harm and only trying to improve quality. It is accepted as given, and not questioned. Quality Assurance Cells and Committees are omnipresent and hover above the Departments and, at times, even the Faculty Boards. Quality Assurance reviews are feared by the Deans and Vice Chancellors. University life itself seems secondary to the rule of quality assurance. What do we make of this system of quality assurance and what are its implications for our university system?

Corporate speak

Universities globally have been going through major changes with neoliberal education policies. In many countries, universities increasingly became corporatised to be run like businesses in the 1980s. As state support for universities declined, cost cutting became the norm. They started hiring adjunct or part-time staff. Many public non-fee levying universities around the world began to charge fees. Decade by decade, tuition fees became more and more exorbitant, forcing students to take student loans. The total student debt in the United States now stands at close to US$ 2 trillion; which is about 20 times the GDP of Sri Lanka. As the higher education landscape transformed in the West, university administrations began to recruit Presidents, Vice Chancellors and administrative officials with corporate backgrounds and experience.

Such corporatisation of universities in the West has since been imported into countries like Sri Lanka, introducing a new corporate vocabulary, including quality assurance, graduate competencies, programme outcomes, intended learning outcomes, etc. University teaching has become secondary to documenting so-called outcomes. The teacher-student relationship, the environment of the lecture hall and even administering the university have been over-determined by the processes of ensuring quality. How did such major changes come about in such a short time? Indeed, academics of just two generation ago, would never have heard of these terms and processes in the Sri Lankan university system.

World Bank Trojan horse

Since the early 2000s there have been a number of World Bank projects that have drastically changed the character of Sri Lankan universities. Quality assurance as a central agenda within universities, and many other changes to the working of our universities, came through these World Bank initiatives. The Improving Relevance and Quality of Undergraduate Education (IRQUE) project and Higher Education for the 21st Century (HETC) project were two such earlier projects that set up the Quality Assurance and Accreditation Unit (QAAU) under the University Grants Commission (UGC) and established systematic quality assurance reviews for state universities. The public often thinks these are grants from the World Bank to modernise our universities. However, they are not grants but loans.

The most recent such project, Accelerating Higher Education Expansion and Development (AHEAD) is a US$ 100 million loan from the World Bank implemented from 2018 to 2023, which consolidated the quality assurance structures from the earlier projects. Furthermore, these projects are implemented with tremendous arrogance, prioritising their implementation over all other concerns in the universities, when the project over six years for example accounts for just one fourth of our budget allocation for universities this year.

The AHEAD project drastically changed course curricula, sought to increase student enrolment in science, technology, engineering, mathematics (STEM) disciplines, commercialise the university research agenda and create university-business linkages. All of this was pushed to supposedly help us face development challenges. We have heard the ideological attack on our universities and even students claiming they are “unemployable graduates”. These changes to our higher education system were supposedly going to create jobs and increase employment.

The irony of the AHEAD project is that just as it was ending in 2023, apparently after having reached its targets, the Sri Lankan economy was collapsing. The World Bank often gets the direction of causality wrong. It is the economy that creates jobs for graduates, and not the training or kind of graduates that create jobs. It is decades of World Bank policies, and those of its ideological twin the IMF, that have led to such high youth unemployment, not only in Sri Lanka but also in many other countries in the global South.

Sri Lanka entered an IMF agreement in March 2023 and started a new Country Partnership Framework with the World Bank in June 2023. These programmes have little to say about, and actively discourage, government initiatives that aim to create an industrial policy or an employment creation policy. Instead, they push for austerity measures, which not only restrict the allocation for education among other sectors, but also end up contracting the economy to the detriment of increasing employment. Their goal is the commercialisation of higher education, to make universities into businesses and run them like factories.

In this context, the ideology of quality assurance is powerful. The International Organisation for Standardisation (ISO), whose different standards are necessary for marketing, is the institution that came up with the concept of “quality assurance”. It promoted quality assurance as a process of identifying defected products. Therefore, when the World Bank promotes this conceptual framing, our students are, in fact, seen as products on the assembly line, with quality assurance processes aiming to prevent the release of defected products from the university system. For the US$ 100 million we borrowed for the AHEAD project and the many more million dollars in similar World Bank projects, there is no evidence of increased employment of graduates.

Commodity fetishism

Over a century and a half ago, Karl Marx critiqued the economic analysis prevalent at that time that associated some inherent or monetary value for commodities without considering the social relations that underlie the production of those commodities. Marx called this commodity fetishism. Furthermore, he theorised that such commodity fetishism was also a reason for the alienation of human beings from the world. If our labour and what we produce is seen devoid of the social relations that underlie them, we lose our connection with the people and the world. In this process we become alienated from what we produce and the world.

We are now in a world where our students themselves are fetishised as commodities for the market. Universities are no longer communities concerned about knowledge and human growth, but mere factories producing commodities, which have to be produced without defects to be marketed. In this way, quality assurance has become the cause for the alienation of students, academics and our universities themselves, from the larger relationship with our economy and society.

Our university system does need reform. It is grossly underfunded and not providing the financial support and facilities for our students. Universities have become hierarchical spaces without the academic freedom and democratic ethos necessary for producing knowledge. Academics and students need to engage more with their communities to make their learning and research meaningful, not to mention their contribution to and integration with society. However, when it comes to even questions of governance and regulation of the universities, such concerns are merely reduced to improving quality. In our contemporary times, this singular focus on quality assurance, as opposed to addressing the larger structural issues, is crippling our universities. There may be no way out, but to put back quality assurance where it started, those little tags on goods, to perhaps be noticed but quickly forgotten.

Ahilan Kadirgamar is a political economist and Senior Lecturer, University of Jaffna.

(Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies)

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Thailand’s biggest new global star …

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The entertainment scene, globally, is agog with excitement, and, why not!

Yes, a new global star has emerged … from Thailand, and she hit the headlines by winning America’s Got Talent.

Rattikarn Amloy, known to millions by her stage name Nene Royal, was crowned the winner of America’s Got Talent (AGT) Season 21 at the live finale at Pasadena Civic Auditorium, California, taking home the USD 1 million grand prize.

The 16-year-old rocker, from the holiday island of Phuket (I’ve been to Phuket, courtesy Tourism Authority of Thailand), has struck a power chord around the world, and is the first Thai national ever to win the hit NBC show.

She beat nine other finalists, including runner-up magician Geno Ploeger, after a blistering final performance.

Nene’s story is pure rock and roll fairy-tale. She says she picked up a guitar at age seven, fell in love at the first chord, and taught herself mostly by watching videos online. That dedication earned her a music scholarship to Kajonkiet International School Phuket.

Her audition at America’s Got Talent — a swaggering, shredding rendition of The Cranberries’ classic ‘Zombie’ — exploded online, amassing over 200 million views across AGT’s platforms, more than any act this season.

She kept wowing: ‘Hysteria’ by Muse, then ‘Black Hole Sun’ by Soundgarden which earned her Spice Girl Mel B’s Golden Buzzer, sending her straight to the live shows.

For the final, she unleashed ‘Seven Nation Army’ by The White Stripes. Judge Howie Mandel shouted: “You should win. Give her the million, America.” Mel B praised her “mysterious, mystical stage presence”.

And for the grand finale, she lived every teen rocker’s dream — performing on stage, alongside US rock giants Linkin Park.

When host Terry Crews announced her as winner, the teenager collapsed to the stage floor in tears. “I’m very happy and you know I’m emotional right now,” she said.

And Thailand erupted. Her school held watch parties, posting: “You did it, congratulations, champion. We are so proud of you.”

Even Prime Minister Anutin Charnvirakul sent a personal congratulation. He had earlier hosted Nene at Government House in July, where she played guitar while he sang a Thai rock song. His office said her talent “brought pride to Thai people.”

Corporate Thailand also rallied behind her — Charoen Pokphand Foods, owned by billionaire Dhanin Chearavanont, even rented a giant billboard in Times Square, New York, to cheer her on.

With her blistering guitar solos, rock-ballad shrieks and fearless spirit, little Nene Royal has just become Thailand’s biggest new global star.

What’s more, this amazing teenager will be bringing her powerful vocals, guitar skills and signature rock-metal style to the stage, as opening act, before one of the world’s biggest rock bands, America’s Avenged Sevenfold, in Singapore, on 13 October.

Unfortunately, we are still to see a local artiste, grab the spotlight, on a global scale … like Thailand’s Nene.

Yes, they do shine, but mostly on social media, and that, too, with the aid of AI (Artificial Intellegence).

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