Midweek Review

Against flawed assumptions and false analogies

Published

2 years ago

2020/11/25

Sahan Weerasooriya

By Uditha Devapriya

“It is not enough to have a philosophy, you have to have the right philosophy.”

— Joan Robinson to the then Central Bank Deputy Governor, quoted by S. B. D. de Silva

Academics and students tend to subscribe to certain dominant ideological paradigms, the assumptions which underlie them, and the conclusions those assumptions lead them to. Given that universities, particularly local universities, have turned into knowledge factories preferring unconditional acceptance to critical thinking, false paradigms and analogies get perpetuated easily. They get embedded in school curricula, public forums, and of course the public sphere: as much in the lecture hall as in parliament.

Most of these paradigms delve into what the best way forward for the country should be, economically and politically, or what it should not be. For instance, the Vehicle Importers’ Association of Sri Lanka in a recent letter to the President cautions him against the belief that local manufacture and assembly is the answer to Sri Lanka’s mounting debt and foreign exchange crisis. The reason, whoever wrote that letter avers, is that the process “does not add any value to the country’s economy and is merely designed for tax evasion and higher profit margins.” Further, it warns that “setting up a vehicle manufacturing plant is a lengthy process with extensive planning and research and development.”

This is more or less a rehash of the line that advocates of free markets and free trade take up. The 2021 Budget, with its emphasis on import restrictions and concessions to local businesses, including manufacturers, compelled the same response from these advocates in Parliament. According to them, it favours import substitution over export orientation, cuts the country from the benefits of free trade, and isolates it from the rest of the world. The one leads to the other: if we manufacture locally, we lose out on trade. If we lose out on trade, we lose out on everything. Ergo, we mustn’t think or go local.

Intellectuals and commentators, especially in (but not necessarily limited to) the English language media, tend to extol the virtues of free markets and the evils of state-led growth. They seem to think that Sri Lanka for the most has been caving into the latter paradigm: the state has widened at the expense of the private sector. The solution, according to pundits and analysts, is to let the market decide, and to limit the government to the role of what Robert Nozick called a “Night-watchman”, formulating the rules of the game (the economy) without playing it (intervening in the workings of the economy). These pundits and analysts then point at societies that supposedly prospered under a night-watchman state: the Tiger economies of East Asia, the US, and Western Europe.

Now quite a lot of people believe this. They accept it as patently obvious: a tautology which, if denied, would lead to a contradiction. British philosophers of the 18th century made a distinction between two kinds of statements: “All thieves are criminals” and “Richard is a thief.” The first is self-evident: to deny it would be to defy logic. In other words it exists a priori: you know it’s true even if you don’t try to prove it. The second is not self-evident: you need empirical evidence to test its validity. Such statements of opinion require proof before one can know whether they are true or false. In the social sciences as in the hard sciences, then, critical analysis and logical reasoning are absolutely indispensable.

Unfortunately, much of the hype surrounding advocacy of free market principles and small government is built on a self-evident premise: people believe economic liberalisation will lead to growth, so they think it should be implemented in the country. Import tariffs must be reduced or preferably eliminated, export-orientation must replace import-substitution, let’s not think of local industrialisation or machine-manufacture yet because we’re an island, and let’s reduce the role of the state because, after all, in the US, Britain, and East Asia, it played a minimal role. Ignored in the emphasis on the success of the latter countries is the specificity of their historical experience.

Countries are not all endowed with the same levels or the same kinds of resources. Nor do they magically transit to free markets and small governments. To say economic liberalisation worked there and that owing to it these principles must be applied here is to assume that all it takes for a country to prosper is the implementation of policies to which those countries which are supposedly implementing them now resorted only after they had passed through certain stages. This assumption, quoting the late S. B. D. de Silva, is “a veritable non-sequitur of bourgeois scholarship.” Taking the earlier argument into consideration, such assumptions are paraded as tautologies when in fact they are not. What is missing from the argument, in other words, is the same thing its proponents accuse the other side, i.e. the Big Government protectionist lobby, of lacking: reasoned, analytical judgement.

The US got to where it is largely through its leap to industrialisation in the latter part of the 19th century. Much of the industrialisation which transpired at that time was financed, not by private initiative, but by the government: vast tracts of land running into millions of acres were handed over to railway companies. In Britain, the state played an important role in promoting local industry, smothering the up-and-coming textile mills of India. Discussions about the success of private sector led growth in these countries leave out or ignore the role played by colonial conquest, which happened to be financed by the government. “Is there any greater example of a rampant state than the English state in the world?” asked a friend at an Advocata Night-Watchman seminar years ago. “When you’re talking laissez-faire, they were basically robbing the seas around the world, installing slavery.” True.

In East Asia three distinct case studies can be identified: Japan, Taiwan and South Korea, and Singapore. The foundation for Japan’s economy was laid down long before the war by the Tokugawa shogunate; it broke the stranglehold of petty traders, privileging industrial capital over merchant finance. Taiwan emerged from the war cut off from mainland China after the Communist takeover of 1949, yet American experts and economists who formulated that country’s transition to economic liberalisation didn’t embark on free market reforms right away: at first they oversaw rent reduction in 1949, the sale of public lands in 1951, and the commencement of a land-to-the-tiller program in 1953. Land reform limited ownership of paddy land to around 4.5 hectares, much lower than the 10-25 hectare limit imposed by the Sirimavo Bandaranaike government in 1972. South Korea underwent roughly the same set of reforms before it attained first world status.

Singapore is a different case, not least because unlike other East Asian countries it lacked a rural hinterland in which a transition from agriculture to industry could take place. Yet there too the role of government intervention cannot be denied, economically and also politically. Milton Friedman once referred to Lee Kuan Yew as a “benevolent dictator”, the very same epithet Maithripala Sirisena used on Mahinda Rajapaksa in 2014 after walking out from the then administration. In a 1993 essay, William Gibson described the country as “Disneyland with the Death Penalty”, bringing to mind Jagath Manuwarna’s remark about Sri Lanka at a press conference in late 2014: “kalakanni Disneylanthaya.” Unlike Manuwarna’s statement though, Gibson’s essay was banned by the Singaporean government.

Liberals and classical liberals, and even left-liberals, tend to look up to Singapore and Yew’s reforms without realising that, as Regi Siriwardena observed, their achievements rested on the denial of democratic and human rights. Hence when one columnist, drawing wildly false analogies, argues that Singapore lacked a president, yet accomplished much (implying that Sri Lanka doesn’t need an Executive Presidency to get things done), he fails to acknowledge or chooses to ignore not only that Singapore had just one political party during its transition from third world to first, but also that it curtailed dissent in a way that makes any hounding of dissent in Sri Lanka today look haphazard in comparison; when asked why he refused to tolerate political cartoons, for instance, Yew bluntly told Fergus Bordewich that in Confucian society politicians ought to be seen as deserving of respect. To my mind no parliamentarian in Sri Lanka has ever said the same thing using Buddhism as justification. I suppose that has to do with how free the media here is compared to the media there: the latest World Press Freedom Index, for instance, ranks Sri Lanka at 127, and Singapore at 158.

The absence of a rural hinterland made it all the easier for Singapore’s government to enact capitalist reforms, since it could dispense with the need to abolish the kind of pre-capitalist social relations that existed in Taiwan and South Korea. Despite this, however, government intervention swept across the country; in the words of one economist, Singapore responded to international economic forces “through manipulating the domestic economy.”

Wage adjustments vis-à-vis a National Wages Council, a high savings and investment culture promoted via state enforced and state directed abstinence, the shift towards manufacturing in the latter part of the 1960s, the growth of public enterprises (believed to have accounted for 14% to 16% of manufacturing output), and tight government control of trade unions all played a part in bolstering its prospects. As Hoff (1995) noted, the paradox of Singapore’s economic success was that while investments came from the private sector, savings relied on the public sector. It is true that the contribution by foreign investment was significant, yet had Singapore not had a rigidly regulated economy where, for instance, compensation costs for production workers were one-third that of the US equivalent by 1993, it would not have become the third world to first success story it is touted as today.

The specific conditions under which the East Asian economies transformed from developing to developed, from inward-looking to outward-looking, make their emulation in other parts of the world untenable if not unlikely. At the time the governments of these countries were imposing reforms, Western Europe was struggling to recover from wartime recession and MNCs had not become as active in peripheral countries as they would decades later. Their geopolitical alignment with the US in the Cold War guaranteed the success of the East Asian Tigers. Moreover, these were hardly what one could call classical liberal societies: political authoritarianism cohabited with economic liberalisation. Even that dichotomy comes off as false when we consider that government involvement figured heavily in these economies, something that advocates of free markets don’t seem to be aware of.

There was another significant factor: the absence of a merchant capitalist class in these countries. The Tokugawa reforms extended to Korea and Taiwan after Japan turned them into granaries for its domestic needs. The US experts hired to oversee reforms in Korea and Taiwan facilitated, rather than reversed, these processes. In Sri Lanka and much of the Third World, by contrast, experimentation with free market classical liberalism has resulted in not only political authoritarianism, but also the defenestration of an industrial sector, leading to lopsided growth financed by a Pettah merchant class: rather than manufacturing goods, they are imported and resold. The call for “going local”, then, contrary to what intellectuals, institutions, and Opposition MPs think, say, and write, has to do with more than a hysterical call for a garrison state. COVID-19 has sharpened the contradictions of the global economy. The World Bank and IMF paradigm of outward-oriented development is clearly not the way to go about, if we are to resolve these contradictions.

False analogies, assumptions, and tautologies thus will get us nowhere. It is certainly ironic that think-tanks and institutions that privilege reason over guesswork end up indulging in selective scholarship. Even more ironic are statements uttered by academics from countries which passed through several stages before making the transition from a planned order to a free market advising us to bypass those stages when implementing policy reforms here. It takes not only foresight and hindsight, but also courage, to swerve from and dispute these assumptions, dig deep into history, and understand what drives the wealth of nations and the poverty of others. Free markets alone will not do, as even the history of countries where they flourish today tell us. Something else can, and something else must.

(The writer can be reached at udakdev1@gmail.com)

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Midweek Review

Growing foreign dependency and India’s USD 4 bn lifeline

Published

5 days ago

2023/03/22

Sahan Weerasooriya

Baglay on an inspection tour of the State Printing Corporation

By Shamindra Ferdinando

The Japanese embassy and UNICEF (United Nations Children’s Fund, previously known as United Nations International Children’s Emergency Fund), on 16 March, 2023, issued a joint statement that dealt with the impact the developing political-economic-social crisis is having on the poor in Sri Lanka.

The statement focused on the suffering of the children and measures taken by UNICEF, in consultation with the Governments of Japan and Sri Lanka, to provide relief to the needy.

However, what really captured public attention was the declaration made by the Japanese Ambassador, in Colombo, Mizukoshi Hideak, that with the latest contribution, amounting to USD 1.8 mn, the total Japanese financial assistance, provided through UNICEF alone, exceeded USD 3.8 mn, since the beginning of last year. That is definitely a significant package provided through a single UN agency, particularly against the backdrop of the unceremonious cancellation of the Japan- funded Light Rail Transit (LRT) project, in late Sept., 2020, by the Gotabaya Rajapaksa Government.

The directive, in this regard, was issued on 21 Sept., 2020, by Dr. P. B. Jayasundera, in his capacity as Secretary to the President, to the then Transport Secretary, Monti Ranatunga. That move ruined Sri Lanka’s relations with Japan.

Whoever advised the then President Gotabaya Rajapaksa to terminate the project, without consulting Japan, as head of the Cabinet-of-Ministers, he couldn’t absolve himself of the responsibility for the ruination of vital relationship with Tokyo. Had it not been the case, Japan, most probably, would have delivered a substantial assistance to Sri Lanka, at the onset of the ongoing unprecedented crisis.

Sri Lanka made a failed bid to secure as much as USD 3.5 bn loan from Japan, during the tenure of Sanjiv Gunasekara as Sri Lanka’s Ambassador in Tokyo. Gunasekara, a close associate of President Gotabaya Rajapaksa, resigned in the wake of the 09 May, 2022, violence, that gave a turbo boost to the campaign against his government.

Unlike Japan, India provided direct aid in various forms to Sri Lanka, struggling to cope up with what became an insurmountable crisis to overcome on our own. India has repeatedly declared that the continuing assistance is in line with Premier Narendra Modi’s much touted ‘Neighbourhood First’ policy. Sri Lanka received concessional credit facility, amounting to USD 1 bn, in March last year. In addition to that, by the second week of March this year, Sri Lanka received other lines of credit, worth over USD 3 bn. Therefore, the total Indian assistance is worth over USD 4 bn, a staggering amount as Sri Lanka’s debt before the Japanese and Indian interventions stood at over USD 53 bn. Indian intervention cannot be compared, under any circumstances, with assistance provided by any other country.

The Indian assistance is of immense importance as the International Monetary Fund (IMF), after much deliberation, promised USD 2.9 bn over a period of four years. The delay on the part of China to provide an assurance as regards debt-restructuring support, hindered the finalization of the tripartite agreement involving Sri Lanka, creditors and IMF. Finally, China gave that assurance, in writing, early this month.

Indrajit Coomaraswamy

The situation was so precarious, Sri Lanka couldn’t have even provided the free text books that have been given, annually, to the student population ,from the time of the JRJ regime. Those who had been at the helm of political power, over the past three decades, to varying degrees, ruined the economy, and, by 2021/2022, Sri Lanka was unable to provide even the basic requirements, like cooking gas, kerosene, petrol, etc., as even remittances from our expatriate workers, which in the past amounted to about seven billion dollars per year, dropped drastically due to the illegal underground banking system, hawala/undiyal, hijacking much of it from the normal banks. The government didn’t have the means to provide school text books for the 2023 academic year. In consultation with India, of the USD 1 bn concessional credit facility, over USD 10 mn was utilized by the State Printing Corporation, and private importers, to procure printing paper and other material from India. India met 45% (four mn students) of the total requirement. Indian High Commissioner Gopal Baglay visited the SPC, on 09 March, 2023, to dispatch a consignment of textbooks to schools. Education Minister Dr. Susil Premjayantha joined Baglay. The Indian High Commission statement, issued two days later,, was aptly titled ‘India’s support for text books investment in Sri Lanka’s future.’

The government and the Opposition should be ashamed of their failure to provide for the children’s need.

Perhaps, a Parliamentary Select Committee (PSC) should be appointed to examine the circumstances leading to Sri Lanka’s bankruptcy status. Decades of utterly irresponsible management of the economy, coupled with an explosive mixture of causes – waste, corruption and irregularities – caused the current crisis.

Political parties, represented in Parliament, are responsible for the continuing crisis, to varying degrees.

Controversy over ISBs

The Island discussed some of the issues at hand in last week’s midweek piece, headlined ‘All praise for Lanka’s saviours!

What Dr. Coomaraswamy didn’t say was that as the CB Governor, he was also directly responsible for the Yahapalana government borrowing a record USD 12.5 bn from the international bond market, at high interest rates, from private lenders, primarily in the West. So what did that government achieve with such huge borrowings? All that the Yahapalana regime achieved, with all that money, we cannot see, except to lay the foundation for the current debt crisis?

Our comment on the basis of recent claims that the Governor of the Central Bank, Dr. Coomaraswamy (2016-2019), only told one side of the truth, attracted responses from several parties, including the Central Bank.

Consequently, the writer discussed the borrowing of USD 12.5 bn, and related matters, and was told the following: First, it is important to point out that the Governor, Central Bank, has no authority to approve or undertake any borrowing on behalf of the government. The borrowing limit, in any given year, is set by Parliament. Therefore, the government cannot borrow beyond the limit set by Parliament. In addition, all external borrowing has to be approved by the Finance Minister, and the Cabinet of Ministers. The Governor and the CBSL only have an advisory role. On ISBs, they have marketing and issuance as additional responsibilities once the Cabinet approved the transaction.

It is also important to recognize that ISBs are only one channel for external commercial borrowings. Others include short-term SWAPs, foreign term loans/syndicated loans and external flows into government rupee securities. The article dealt with only one instrument, having ignored the switching that was undertaken during 2015-19 to increase the maturity and reduce the cost of foreign borrowing.

As regards the USD 10 bn increase in ISBs outstanding during 2015-19, USD 5 bn of this increase can be attributed to switching away from shorter term (one year or less) and more expensive SWAPs and highly volatile foreign portfolio investment (hot money) in Government rupee securities to longer term (5 and 10 years) and less costly ISBs. SWAPs were reduced from approximately USD 2.5 bn to USD 500 mn.

Volatile and foreign investment in government rupee securities was reduced from USD 3.5 bn to USD 600 mn. In addition, during the course of 2019, a second ISB of USD 2 bn was issued to create a stronger buffer of external reserves to address the inevitable increase in uncertainty going into elections due shortly thereafter. (The money required for 2019 had been raised through an ISB, issued in March 2019.)

So about USD 7 bn of the USD 10 bn increase in the stock of ISBs outstanding, during 2015-19 may be attributed to increasing the stability and reducing the cost of the ISBs outstanding by switching instruments and raising the buffer provided by external reserves prior to a period of uncertainty, associated with elections.

The remaining increase of USD 3 bn may be partly attributed to the fact that borrowing incurred earlier had not resulted in a sufficient increase and/or saving of foreign exchange. Hence money had to be borrowed to repay debt incurred earlier. In fact, Verite Research found that 89 percent of external debt, repaid during 2015-19, could be accounted for by liabilities incurred prior to 2015.

The adverse debt dynamics were recognized and the Medium Term Debt Management Strategy was published in April 2019 to chart the way to sustainability. In addition, the Active Liability Management Act (2018) was introduced to expand the tools available to the CBSL for managing external debt sustainably. The CBSL, as the economic adviser to the Government, also advocated that there should be a primary surplus in the budget and that non-debt creating inflows (such as exports, remittances, tourism proceeds, FDI, inflows into the CSE and government securities) should be increased to enhance the capacity to service debt while supporting the level of imports necessary to achieve the growth potential of the economy.

They also pointed out that only one of the ISBs, issued during 2015-19, has been settled to date. This amounted to USD 500mn. They expressed the view that it is not possible to sustain the argument that servicing ISBs, incurred during 2015-19 ,led to the standstill in debt repayments in April 2023.

Treasury bond scams and tax cuts

The US embassy released this picture of
Ambassador Chung at an event in
Colombo where the second shipment of
36,000 metric tons of Triple Super
Phosphate (TSP) was handed over to Sri
Lanka. It brings the total of USAID-supported
TSP and urea fertiliser to more than
45,000MT, over the last year.

Sweeping tax concessions to the rich and reduction of VAT, that had been introduced by President Gotabaya Rajapaksa’s government to encourage business in 2019/2020, escalated the financial crisis, leading to the declaration of the state of bankruptcy, two years later. No one in the Gotabaya Rajapaksa’s cabinet dared to challenge such far reaching tax concessions and VAT reduction.

How the loss of as much as Rs 600 bn in revenue, as alleged by the Opposition ,due to tax concessions and reduction of VAT, contributed to the current crisis, should be examined, also taking into consideration (1) Treasury bond scams perpetrated in Feb, 2015 and March 2016 at a time the CBSL has been under the then Prime Minister Ranil Wickremesinghe, in his capacity as Minister of Policy Planning and Economic Affairs (2) Enactment of new Foreign Exchange Act in 2017 in the wake of Treasury bond scams. Critics say the repealing of time-tested exchange control law that has been in place for decades paved the way for exporters to ‘park’ export proceeds overseas. Of the 225 MPs, 94 voted for the new law whereas 18 voted against. In spite of Justice Minister, Dr. Wijeyadasa Rajapakse, PC, taking up this issue, both in and outside Parliament, remedial measures hasn’t been taken, to date. The Finance Ministry owed an explanation as to how it intended to compel the exporters to bring back export proceeds (3) Continuing public-private sector partnership in corrupt practices, particularly mis-invoicing (under invoicing and over invoicing of imports/exports) (4) Pivithuru Hela Urumaya leader Udaya Gammanpila, MP, has moved the Supreme Court against the Central Bank Bill. The Attorney-at-Law alleged that the new law violated Article 3 and 4 of the Constitution hence needing the approval of the people at a referendum. In addition to Gammanpila, Dr. Gunadasa Amarasekera and Jathika Nidahas Peramuna leader Wimal Weerawansa, too, moved the Supreme Court in terms of the Article 121 against the Bill titled ‘Central Bank of Sri Lanka.’ Former JVP MP Wasantha Samarasinghe, on behalf of the Jathika Jana Balavegaya (JJB), too, moved the Supreme Court in this regard.

A warning from Hanke

The country is in a bind. In spite of the execution of the agreement with the IMF later this month, the situation remains dicey. The absence of economic recovery plan continues to cause further instability.

Therefore, the government and the Opposition should seek a consensus on a national action plan, even if Local Government polls cannot be conducted in late April, regardless of the Supreme Court intervention.

Steve Hanke, Professor of Applied Economics, at Johns Hopkins University, in the USA, recently issued a dire warning to Sri Lanka. Appearing on CNBC’s ‘Squawk Box Asia,’ Prof. Hanke declared Sri Lanka needs institutional reforms in order to achieve long-term debt sustainability.

Referring to Sri Lanka and what was described as emerging markets (Argentina and Montenegro), where he played a key role in establishing new currency regime, former economic advisor to US President Ronald Reagan warned “Unless you change the institutions and the rules of the game, governing these countries, they’re always going to remain in the same … situation that they’ve been in for a long time.”

Prof. Hanke added: “In fact, most of the personalities, involved in Sri Lanka ,at the high level, are exactly the same as they’ve been for years. So nothing has changed.”

In other words, those who have ruined Sri Lanka are spearheading the economic recovery process. The American is spot on. Sri Lanka is in a pathetic situation. Those who had systematically brought Sri Lanka to its knees, by pursuing ill-fated policies, emerged as its saviours. That is the bitter truth. The role of the executive, legislature, and judiciary, needs to be examined. Those who have moved the Supreme Court against the Bill, titled ‘Central Bank of Sri Lanka,’ have quite conveniently forgotten how the Yahapalana government, and Central Bank, twice perpetrated Treasury bond scams. What would have Prof. Hanke said if CNBC raised Treasury bonds scams during ‘Squawk Box Asia.’

If not for Deepa Seneviratne, the then head of Public Debt Department, Governor Arjuna Mahendran’s role couldn’t have been proved. Former Auditor General Gamini Wijesinghe said so at an event organized by the Colombo Municipal Council years ago.

Sri Lanka cannot forget Prof. Hanke’s remark in the CNBC programme. “You have to remember that we have a country that since 1965 has had 16 IMF programmes and they’ve all failed. You get temporary relief in anticipation of a bailout. But in the long run … none of these IMF programmes work.”

It would be pertinent to briefly examine how interested parties brazenly protected perpetrators of the Treasury bond scams.

Having named Mahendran as the Governor, regardless of the opposition from President Maithripala Sirisena, those planning to commit the first daylight robbery of the Central Bank moved Deepa Seneviratne to the Public Debt Department as its head, in spite of her not having had any previous experience in the particular division. It seems they had obviously felt comfortable in having a lady officer there they thought they could manipulate her to suit their need. But Seneviratne turned tables on the bond thieves by putting up a note to register her strong opposition to Mahendran’s move. She should have been rewarded for her fearless stand with at least a national honour if not an international one, even from bodies like the UN, the Transparency International, Amnesty International, etc. But it seems that even these international busy bodies have their own political angles.

It would be of pivotal importance to keep in mind that President Sirisena appointed a Commission of Inquiry (CoI) in January 2017, about 10 months after the second robbery, and two years after the first.

The Commission comprised Justice K.T. Chitrasiri, the late Justice P S Jayawardena and retired Deputy Auditor General V. Kandasamy. Sumathipala Udugamsuriya functioned as its Secretary. CoI issued a devastating report that implicated Perpetual Treasuries Limited (PTL) in the Treasury bond scams.

President Sirisena went to the extent of dissolving Parliament, in June 2015, to prevent the Committee on Public Enterprises (COPE) tabling its report on the first bond scam. SLFP leader Sirisena owes an explanation. Justice Chitrasiri’s CoI didn’t inquire into that aspect. Sri Lanka’s response to waste, corruption, irregularities and mismanagement is baffling. Let me end this piece reminding how the Bar Association of Sri Lanka (BASL) secured a substantial sponsorship from Perpetual Treasuries Limited (PTL) deeply mired in a bond scam, in 2016, for the Law Asia Conference during the tenure of its then President Geoffrey Alagaratnam, PC. The BASL never explained why it obtained PTL sponsorship even after the exposure of Treasury bond scams. That partnership also escaped the CoI. The rest is history.

Knowing what is now happening to the US economy with a string of bank failures and unprecedented bailouts, especially due to hoodoo economics it introduced in recent decades, like repeated quantitative easing (blindly printing trillions of dollars leading many to say the dollar is now only good as toilet paper) that has been practiced to ensure its world hegemony, the whole world might be hit with bank failures and even by a depression worse than the one that befell with the stock market crash of 1929. Already the contagion has spread to Europe with some leading banks there also requiring help.

Washington’s debt now stands at USD 31 trillion and climbing, but our own debt burden is still under USD 55 billion. So if we can get our exporters, who have stashed export earnings abroad, to bring them back, the picture here will not be as scary as it is made out to be. Even Minister Wijeyadasa Rajapakse has said that our export proceeds that have been parked overseas is in the region of USD 55 billion.

Soonwe will start receiving the IMF bailout, but our economic whiz kids have not done anything to plug the massive foreign exchange leak that has been freely draining foreign currency from the country, since the nineties, by way of private foreign exchange dealers who have been allowed to sell foreign exchange to any Tom, Dick and Harry, including drug dealers, to take their sales proceeds out of the country!

We would also like to ask the relevant authorities what they have done to recover monies stashed abroad by Lankans illegally that were exposed in great detail by the likes of Panama Papers and Pandora Papers.

Midweek Review

A Miscellany of Thought

Published

5 days ago

2023/03/22

Sahan Weerasooriya

N. A. de S. Amaratunga (2022)

A Review by G. H. Peiris

I cannot claim to have the scholarly competence to place under critical scrutiny all items in this collection of writings authored by Professor N. A. de S. Amaratunga, and published in The Island from time to time since the early years of the present century. Accordingly, this ‘review’ is no more than an attempt to convey to a wide readership my gratitude for what I have learnt from Professor Amaratunga’s insights on a series of metaphysical and secular issues that have figured prominently during the recent past in the arena of debate and discussion among our intellectual elite, my appreciation of his rational perceptions and his subtle banter in responding to bizarre elements in our public affairs.

As a brief introduction to the author I should state that Professor Amaratunga’s career record is featured by several decades of distinguished and dedicated service to the University of Peradeniya in teaching, research and clinical work. Acquiring advanced skills in the field of ‘Maxillofacial Surgery’, he has provided physical and psychological relief of life-long impact to thousands of patients. He is also credited to have trained several of his junior colleagues in the Faculty of Dental Science, had has served as its Dean. The offer he received from the Peradeniya University of the Prestigious Award of the ‘Degree of Doctor of Science’ is testimony to his eminence in Sri Lanka’s community of scholars and professionals.

What probably enhances Professor Amaratunga’s status among the intellectual elite of Sri Lanka is the fact that his talents, interests, and concerns have not been confined to professional expertise. He has authored several creative writings in Sinhala which the cognoscenti place at par with the best works of that genre. More relevant than all else to the present ‘commentary’ is his capacity for elucidating the essence of certain complex metaphysical issues – especially those of Buddhist philosophy ‒ with the same clarity of thought seen in his contributions to media forums on current affairs.

In his ‘Introduction’ to the volume Professor Amaratunga makes a categorical statement regarding the paradigmatic guidelines of his ‘thoughts’. They are rendered below in abridged form as follows:

(a) The distinctive elements of our island civilisation are derived from Theravada Buddhism and the Sinhala language.

(b) The leadership of Sri Lanka’s mainstream politics since the termination of British rule in the mid-20th century has continued to be impaired by a cultural duality – on one side of the divide, the ‘alienated’ whose behavioural values and norms bear the imprint of subservience to values prescribed by the ‘West’, and, on the other side, those who treasure our civilisational heritage and understand the needs and aspirations of the majority of our people.

(c) His standpoint is that of an ardent ‘nationalist’, in the sense that he is unequivocally committed to safeguarding and promoting Sri Lanka’s national interests.

On literature, Professor Amaratunga adds that he is inclined towards the need for ‘social relevance’ of the fine arts, and believes that the paradigm of ars gratia artis (‘art for art’s sake’) is inappropriate for Sri Lanka, especially in creative writing.

The ‘miscellany’ of this volume is structured to constitute four ‘Sections’ – titled as: 1. ‘Literature and Culture’; 2. ‘Religion’; 3. ‘Economy’; and 4. ‘Health’. The first two of these ‘Sections’, consist respectively of 25 and 19 essays of unequal length. In these ‘Sections’ the reader could pick out from different points of the temporal sequence in which they are arranged items that constitute a mutually cohesive group from the viewpoint of content. For example, in the first ‘Section’, there are six such items, each serving as a contribution to an ongoing media debate, but when considered as a group would be seen as an invaluable enrichment of understanding on a significant feature of the educational system of the country – such as, say, the impact of the nation-wide ‘Fifth-standard Scholarship Examination’ or ‘The general decline of standards in higher education’. Likewise, in the total of 18 articles in ‘Section’ 2, thirteen items could be considered as a mutually cohesive group of thoughts that illuminates certain vitally significant aspect of Buddha Dhamma and Buddhism as practiced in Sri Lanka.

The forgoing observations do not detract from the intrinsic value of the short contributions referred to. Indeed, in my amateur assessment, in Section 1, the items titled ‘Quality of University Education’, ‘Purpose of the Novel and its Appraisal’, and the twin items titled ‘Darwinian Evolution vs. Intelligent Design’; and in Section 2, ‘Truth in Buddhism and Realism in Literature’, and ‘Mind, Matter and Nirvana in Mahayana and Theravada Buddhism’, are examples of the author’s extraordinary depth of understanding and his skill of disseminating that knowledge in a lucid form.

It is in the 3rd Section of the volume titled ‘Politics’ that the real ‘miscellany’ of Thought is found, consisting of 78 items, and accounting for well over half the total page-length of the volume. Since they have been presented in a chronological order ‒ with the first item published in 2001, and the last in 2021‒ the list of items, at first glance, looks like a total mess which, indeed, is how our politics look. But a closer scrutiny show that all items in this list could be placed in one or another of 6 ‘Sub-Sections’ titled as ‘Ethnic Relations’, ‘Foreign Affairs’, ‘Electoral Politics’, ‘Development Plans and Projects’, and ‘Constitutional Issues’, with the chronology of the list providing the vicissitudinous background of each contribution which Professor Amaratunga has made, and each discussion or debate in which he has participated.

Once again I should emphasise that foregoing observation does not imply that the ‘Thoughts’ in this section, read individually, are either uninteresting or irrelevant to our present concerns. On the contrary they offer ideal readings both as reminders of the volatile scenarios we have passed though during the past two decades as well as the unshakable faith our politicians appear to have on the widespread dementia among the voter-population and on their own ability to hoodwink the electorate. Professor Amaratunga’s thoughts could re-kindle fading memories, especially on repeated failures to fulfil campaign pledges, the large-scale losses due to financial malpractices, the allegations of ‘war-crimes’ and of ‘violation of human rights’ in the counter-attack by the major powers of the North Atlantic alliance in retaliation to Sri Lanka’s close relations with the People’s Republic of China, the ingredients of success in the US-sponsored ‘regime change’ effort culminating in the establishment in 2015 of a puppet government in Colombo, the betrayal of our national interests by our own self-seeking representatives at the protracted Geneva inquisitions, the constitutional fiasco of August 2018, the euphoric Gotabhaya victory about a year thereafter, and then, the stunning exposure by the pandemic of the fundamental weakness of our dependent economy.

In the 4th Section of the volume titled ‘Health’, most of the items are devoted to diverse experiences witnessed globally and in Sri Lanka during the Covid-19 pandemic, but in an unconventional manner in the sense that they emphasise significant aspects that have not received adequate attention in the analytical writings on the pandemic. In my view the most significant issue highlighted in this section is the need for Sri Lanka to adopt development strategies towards self-reliance, especially in the availability of medicinal drugs and on food-security. Implicit in several items of this section is a forewarning of the risks entailed in the pursuit of development policies that enhance Sri Lanka’s macroeconomic dependence on the major global and regional powers.

Many items in this miscellany of thoughts contain a prominent element of dissent and disagreement with other participants in the media debates and discussion for which The Island has served as a major forum. But that dissent has all along been featured by a laudable sense of “civilised intelligence”. As a professional whose skills have an intense demand, his interests and concerns have not remained confined to his professional expertise – a feature often seen among other ‘specialists’ including those of the university community.

This volume is, first of all, a demonstration of intense and well-informed concern on a wide range of issues of vital importance to Sri Lanka. Had that quality been more widespread it is unlikely that those earning six-figure incomes would threaten collective action to bring the economy to a standstill to express their dissatisfaction on a relatively marginal erosion of monthly emoluments at a time of unprecedented national crisis, attempting to conceal their avarice with a façade of safeguarding democracy, or eliminating public corruption, or on grounds of their capacity to earn higher incomes outside Sri Lanka.

Yet another exemplary feature I discern in this ‘Miscellany of Thoughts’ is that its contents are not angry knee-jerk reactions when provoked by thoughts different to his own. Professor Amaratunga’s dissent is entirely free of the crude clashes often seen in the so-called social media. Nor are his thoughts based on a hurried consumption of internet ‘short-eats’. In his thoughts that extend beyond brief corrective interjections of ‘common sense’, what we see is an extraordinary depth of knowledge acquired through serious reading and a thorough understanding of the issues on which he had focused.