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Harsh realities of Non-Alignment and Foreign aid

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Our leaders say we are non-aligned and certainly do their best to stay that way, though the reality may be somewhat different. We are being forced to part with whatever little we have to one or the other of the world powers, in the name of development. It seems as if we have to give something to everybody to appear to be non-aligned. To make matters worse, our economy is in dire straits and our strength to resist these almost hostile takeovers, at this moment, is not very good. Our foreign debt component is huge and we are dependent on foreign assistance, either in the form of loans or debt/equity swaps, to settle these debts and stay afloat. And this assistance comes from countries which are interested in getting hold of pieces of our “valuable real estate”.

Third world countries, whether they call themselves non-aligned or not, are heavily dependent on rich countries for development. Unless they maintain a growth rate above 5%, creation of employment opportunities and essential infrastructure development is not possible. This, for most of the poor countries, is not possible without foreign aid. In the case of Sri Lanka, which had a GDP less than 5% during the period 2015 to 2020, and has to pay about Rs.3 billion per year to service its loans, it is a gigantic task to recover; and unless a rich country comes to its aid, it may slide down further and be more vulnerable to external interference and encroachment into its independence, sovereignty and territorial integrity. However, there is nothing called a free lunch and Sri Lanka will have to carefully manage its policy on foreign aid. The often quoted epithet “beggars can’t be choosers” may not be applicable, as we may be capable of making correct choices.

One option is the IMF and the World Bank, but their aid is not without unfavourable conditions, which are designed to help the neo-liberal policies of the Western powers who seem to have those institutions under their thumb. Joseph Stiglitz, one time Chief Economist of the World Bank, had written about the ugly face of these Bretton Woods Twins (2000). Sri Lanka may not want to get too much into the IMF debt and expose its weak economy to the international market forces. Neoliberal policies include free-market policy, less government involvement, privatisation, austerity, low public expenditure, less welfarism, and commodification . These policies help the rich to accumulate wealth, while the incomes of the poor stagnate, or decline.

Then there are the big aid donors, but some of them would want their pound of flesh. These donors are in two rival camps, and are vying for “favours,” from little Sri Lanka, in return for whatever aid they may give. Surely Sri Lanka cannot afford to please everybody, like the good hearted lady who is always pregnant. If little Sri Lanka tries to please everybody, nothing will be left of the land and its natural resources for its inhabitants. Moreover, the interested parties are ganged up into two camps and are engaged in cold war rhetoric and there is no love lost among them. This would mean if one party receives favours the other party would be hurt and angry, unless they are also given something. However, one group resorts to arm twisting while the other refrains from interfering too much in our internal affairs. Shamelessly, the Western powers resort to fabricated allegations like human rights violations, to force Sri Lanka to yield on matters like MCC, ACSA, etc. They sponsor resolutions at the UNHRC in order to get a grip on Sri Lanka and force it to obey their dictate. China on the other hand, who is our major aid giver, does not resort to such unfriendly tactics; it has not forced Sri Lanka to join their Road and Belt Initiative.

We need foreign aid to get over this economic crisis which is complicated by Covid. We have to see who could give us aid with the least strings. We know that the US and Europe did not give much during the “Yahapalana” days, though the government was pro-West. In this regard it will be interesting to look at some of the research done on aid given by the US and China in the past, and the implications for the recipients.

It is often claimed that Chinese aid is “rogue aid” guided by selfish interests with the aim of entrapping the recipient country to “cough out” its assets. One cited example is the Hambantota harbour, and several such projects in Africa and Asia are also mentioned. However, Dreher and Fuchs (2015) empirically tested to what extent self interests shape Chinese aid allocation, based on the data in Chinese project aid, food aid, and medical staff and total aid money to developing countries from 1956 to 2006. The evidence suggested China’s aid allocation does not depend on the recipient’s endowment with natural resources. Therefore, it is unjustified to condemn Chinese aid as “rogue aid” . These findings are also supported by other researchers (Brautigam, 2009).

Further evidence could be found in a two-volume publication titled “China’s Foreign Aid and Investment Diplomacy” by John F Copper (2016). These research findings show that though China has geopolitical ambitions it does not interfere in the internal affairs of recipient countries. Instead it wins over countries to its side by giving aid for mutually beneficial projects, in terms of bilateral trade and soft diplomacy. In contrast, the US aid is linked to a more aggressive foreign policy and expectations of loyalty in regard to US hegemonic agendas. For instance US would expect recipients of its aid to fall in line and lend support at the UN on controversial issues favourable to the US. Sri Lanka has been at the receiving end in the recent past at the UNHRC, on account of this attitude of the US and other Western powers. A true friend like China would not have done such treachery.

The other important consideration is who would have the ability to give aid, the US and Europe has a ruined economy due to mismanagement of the Covid pandemic, which has devastated their societies in an unprecedented manner. They may not be able to give aid for a long time to come. Remember they did not give any aid to their friend the “Yahapalana” government either. Instead they did their utmost to erode our independence and sovereignty. It would be futile to expect anything from them. Japan, Australia, Scandinavia, South Korea and India, which are in the US camp may be able to help a bit, but their domestic needs would be greater on account of Covid. China, on the other hand, has recovered from the pandemic, and according to the IMF their economy has already overtaken that of the US. China has the potential to dominate the economy of the post-Covid world. China is a true friend of Sri Lanka, and may be relied upon to come to the assistance of Sri Lanka if the latter plays its cards correctly.

It may be alright for our leaders to say in public that Sri Lanka is non-aligned, but in reality, in the present context of a global power game, we are not allowed to be non-aligned. We have to be pragmatic and choose the lesser evil if we need aid in these difficult times.

 

N.A.de S. AMARATUNGA



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Opinion

A change of economic policies for Sri Lanka

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Millions of Sri Lankans are anxiously waiting to see what actions will be taken to make life bearable again.If we follow the example of successful countries we see them exploit their opportunities, and use the wealth created, not to import cars and go on luxury trips abroad, but to re-invest the money proceeds in further projects to bring in even more money. They proceed in this way until their citizens have good standard of living. Probably, the best example of that compounding of wealth is Singapore.

Singapore exploited its geographic advantages. It provided cruise ships with bunkering services and repair, later they provided airlines with refueling and expanded that to one night free stop- overs for passengers to buy luxury goods at their glamorous, tax-free shopping malls. The Japanese were making wonderful new gadgets: cameras, music players, portable radio cassette players, binoculars, all available in the malls and sold tax free!! Lee Kuan Yu forbade the ladies to wear denim jeans, and to wear dresses with hem lines coming down two inches below the knee! He even instructed the ladies to smile! No man could have long hair for fear of arrest. Littering was prohibited, so was chewing gum and smoking butts on the roads and pavements. The place was kept clean!

They used the proceeds arising from all this commercial activity to build housing blocks, develop new roads and other beneficial projects. (Individuals were not allowed to walk away with the profits, just to fritter them away.) Sentosa Island had installed a communications dish antenna connecting it with New York and the financial markets. This was an example of intelligent seizing of opportunities. I account for this intelligent development as due to the high educational and knowledge of Singapore’s progressive management. The result is a firm currency, holding its value.

Something similar has happened to Russia. Russia is rich. It is under progressive intelligent management. Stalin had developed the railway network across the full eleven time zones. But many areas remained to be connected. Putin found the finances to develop coal mines, develop oil and gas deposits and build railway bridges and tunnels for better access to markets and their demand for Russian products. Even as you read this, trains of 70 plus trucks, each with 70 tons of coal are grinding their way to China, day and night. Gas is flowing through an extensive network of pipelines, both east to China and west to friendly countries in Southern Europe. Mr. Putin and his men have succeeded in getting Russia fully functional. And the more Russians there are to spend money, so the more demand for goods and services: shops, etc., providing multiplying employment in Russia.

Mr. Putin wants to build a road and rail link south through Iran to India. A design plan is in the works. It is being discussed with Iran and India. Putin is displaying initiative for the benefit of Russia and its citizens. Putin cares for the citizens of Russia and is creating both wealth and jobs too. Architects are designing attractive living spaces and buildings which provide a better environment for Russians and contractors are building it. Education of Russian citizens is playing a big part in Mr. Putin’s thinking, too. Russia needs a talented workforce.

The result is that the currency, the Ruble is strong and does not devalue. It keeps its value.Belarus, Russia’s neighbour, can also be praised for outstanding development. The population in the big towns is cossetted with amenities and facilities which provides a luxurious way of life for townspeople especially those with industrial jobs. However, it must be admitted, the standard of life for the minority 30% population living in the countryside has yet to catch up. The administration is strict and everyone is law abiding. For example, you can leave your hand phone at your seat while you visit the toilet conveniences and it will remain undisturbed until you return.

Belarus, being a mostly agricultural country has a big tractor manufacturing plant, it has a fertiliser mining and producing plant, it has a commercial vehicle plant, DK MAZ which produces industrial trucks such as fire extinguishing trucks and also produces the most comfortable, bright, low step buses and so on, and of course, Belarus makes its own industrial vehicle tyres. The towns are prosperous and clean and Minsk, the capital is a beautifully laid out city. Town apartment blocks are multi-storied living spaces, but are so well designed and fitted as to provide pleasant living spaces for its people. These reduce urban sprawl across the wooded countryside.

What are Sri Lanka’s strengths? It is a small island thus making communications short and sweet. Its location in the Indian Ocean is a plus, its scenic beauty is a plus allowing a thriving tourist trade for people from colder climates, and its soil and climate allows almost anything to be grown. Therefore its agriculture is a great strength. Its long coastline can provide fish if the fisherised. It has deposits of graphite and phosphates which can be exploited to produce profits for further investment in development projects. It has its illiminite sands which are an extremely valuable asset but need to be controlled and exploitation expanded. It has a whole gem mining industry which need to be managed in way beneficial to the government. It has several government owned businesses which need to be overhauled and modernized to convert losses to profits. The rupee in 1948 was equal to the English pound, now it is around 450 rupees to the Pound. That gives a good description of Sri Lankan past governance.

Profits from projects need to be ploughed back into further projects to bring about a higher standard of living for all its inhabitants. Then the Lankan reputation of being a paradise island with happy people will be restored.

Priyantha Hettige

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Opinion

Sapugaskanda: A huge challenge for RW

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It will be interesting to see if anything fruitful will come of the so-called “investigation” announced by the Minister-in-charge, about what seemed like an outrageous overtime payment to the petroleum refinery workers.While waiting for the outcome of that investigation, I thought of highlighting again the real and central issue that cuts across all loss-making government undertakings in Sri Lanka, such as the CPC, CEB, SriLankan Airlines, etc. that have been mercilessly sucking off tax-payer’s money into them like “blackholes”.

These organisations have been typically sustaining a mutual understanding with corrupt or inept politicians. “Sahana milata sewaya” (service at a concessionary price) was the catchphrase used by them to cover up all their numerous irregularities, wanton wastage, gravy trains, jobs for the boys and massive corruption, mostly with direct and indirect blessings of the politicians.

Here, I’d like to bring out just one example to help readers to get an idea of the enormity of this crisis built up over the past few decades. You’ll only have to look at what seemed like gross over-staffing levels of the CPC’s Sapugaskanda refinery, compared to international standards as shown below:

* Sapugaskanda Refinery – 50,000 Barrels Per Day (BPD); 1,100 employees Superior Refinery, Wisconsin, USA – 40,000 BPD; 180 employees

* Louisiana Refinery (including a fairly complex petrochemicals section), USA – 180,000 BPD; 600 employees

* Hovensa Refinery (now closed) – US Virgin Islands; 500,000 BPD; 2,100 employees.

These are hard facts available on the Internet for anyone to see, but I’m open to being corrected. I doubt if any sensible private investor would even dream of allowing such a level of gross over-staffing in their businesses.

As everyone knows, this is the position in all government business undertakings, as well as in most other government agencies in Sri Lanka. One can say that Sri Lankans have been willingly maintaining a crop of GOWUs (Govt Owned Welfare Undertakings), primarily for the benefit of the “hard-working” employees of these organisations, but at an unconscionably enormous cost to the rest. Obviously, this “party” couldn’t have gone forever!

Will Ranil be up to this challenge? I doubt very much.

UPULl P Auckland

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Opinion

Edward Gunawardena: ‘The IGP the country never had’

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On a seemingly fine Friday afternoon, day two of the England v India second Test of the LV Insurance Series (that turned out to be a day five thriller), oblivious to how his day would tragically pan out, our dad, retired Senior Deputy Inspector General (DIG) of Police, Edward Gunawardena, was glued to his television enjoying the contest between the two cricket giants. As time passed by that afternoon, he felt uncomfortable, weak and had minor discomfort in breathing. Our family doctor, Dr Lakshan Fernando, swiftly visited home and on strict instructions to bed rest, our dad enjoyed his chicken soup for dinner that was prepared by his beloved wife, our mum.

Later that night tragically he took the last breath of his life, and he completed the last heartbeat of his life in the presence of two of his most trusted people, our mum and our family doctor.

This day was that dreaded “Friday the Thirteenth” – in the month of August last year. Our tragedy was upon us.A year has passed, by but the loss is still deep rooted, although it was comforting that his passing was peaceful knowing that he had the assurance of having Dr Lakshan beside him, who in fact rushed him from our home to Central Hospital in Colombo that night in his own vehicle in the midst of the Covid-19 pandemic, ever so determined to save our dad’s life. It was a blessing to know that our dad had our mum and Dr Lakshan beside him as much as it was possible.

Edward Gunawardena had a successful journey starting his early years through St Joseph’s College, Colombo, Peradeniya University, Michigan State University, USA through sheer determination to succeed, despite him and his three brothers losing their mum when he was at a tender age of just four years. He served our country for nearly three decades in the Police Service in various capacities, including as the Director of Intelligence, Director of Presidential Security, DIG Metropolitan and Senior DIG Administration; and continued his services as the Special Advisor to the Chancellor at the University Grants Commission, Chairman of the National Lotteries Board and in the Board of Directors at the Lake House Newspapers Corporation.

Most would consider retirement in the ripe old age of sixties, but our dad was blessed to have joined JF&I Printing and Packaging Company, an international company with the head office close to our home. This enterprise was owned and led by renowned late Dr Neville Fernando and his son Neomal Fernando. Edward Gunawardena found his renewed passion and purpose of working with such a talented and committed group of colleagues, where he thrived in making a significant difference to a spectrum of many individuals with a common goal. There was a family atmosphere with abundance of gratitude whilst professionalism was being maintained. The feelings were mutual, and this was evident at a time when our dad was unwell and required a blood transfusion – seven of the junior colleagues at JF&I showed their willingness and donated their blood with heartfelt love and gratitude towards him. Knowing that such generosity and love existed in a working environment was a sincerely humble attitude. This is a true reflection of our dad’s character and personality of giving where reciprocation was demonstrated.

Patriotism and loyalty were two of his strengths. His dedication and professionalism in the Police Service were commendable. This was once clearly expressed by the late Professor Carlo Fonseka at the launch of our dad’s second novel “.. Edward was the IGP (Inspector General of Police) that the country never had”. A truly inspiring and a remarkable Officer and a Gentleman.

His generosity and care extended way beyond his professional arena. One of his many philanthropic contributions was the resurrection of the village Buddhist temple’s school ‘Daham Pasala’ with the support from the late Deshamanya H K Dharmadasa well known as ‘Nawaloka Mudalali’, the founder of the Nawaloka Group. Our extended family and many thousands of youth in the Battaramulla area have benefited and continue to imbibe the doctrine of Buddhism, thanks to the dedicated committee led by it’s Chief Monk, Jinarathana Himi.

As an enthusiastic writer and a passionate citizen, he wrote many thought provoking and fearless articles to the newspapers, which were very well received by the readers. He was not afraid to speak the truth and to stand up for those who did not have a voice, and he became a respected contributor maintaining honesty and integrity. One of his most poignant articles we recall was days after the tragic Easter Sunday bombings, titled “The Unpardonable Blunder” bravely challenging the chain of command and with deep sorrow on the devastating destruction, loss of lives and many innocent people maimed and scarred for their entire lives.

Today, we are relieved that he didn’t have to witness the dismal state of affairs our country is going through as a consequence of decades of poor leadership, mismanagement, and most of all, unprecedented levels of corruption in the recent era of respective governments.

As our dad, we are immensely proud of who he was, his achievements and most of all for how he has bettered many lives throughout his life, with his generosity, professionalism and willingness to help, advise, guide, nurture and mentor all with a selfless attitude. We believe that his legacy has been passed on through many who he has had close connections with. We are thankful that his writing legacy would also continue through his creations of the two novels “Blood and Cyanide” and “Memorable Tidbits…”.

Even until his last days and hours he was sharing his experience and wisdom with everyone around him, that was the calibre of the gentleman. His humble stories of meeting President Nixon at the Fulbright Scholar Dinner at the White House, meeting the 124th Emperor of Japan, Emperor Hirohito at the Akasaka Palace, and his conversations with the great Arthur C Clarke, will always be fondly remembered by us. One of the famous quotes that our dad hilariously shared was the quote from Benjamin Disraeli, 1st Earl of Beaconsfield, the former Prime Minister of the United Kingdom about his political nemesis, the former and the predecessor Prime Minister, William Ewart Gladstone. “The difference between a misfortune and a calamity is this: if Gladstone fell into the Thames it would be a misfortune, but if someone dragged him out again that would be a calamity.”

Our dad was and will continue to be our hero and mentor. Today, we wish to extend our utmost appreciation to each and every one of you who had a close bond with him and made his life purposeful, joyful and complete. We thank them sincerely.

His last day of life was instrumental to the creation of the Edward Gunawardena Memorial Trust that is being organically grown, currently sponsoring medical students at the Rajarata University who are striving to become medical professionals, and as with Dr Lakshan, who was taking care of our dad, these students will have the opportunity to potentially treat and care for many deserving people and make their lives better, and also save many lives.

Whilst we take this opportunity to once again thank all those who were in his life,we would love to hear and treasure all the memories they shared with him. We welcome your recollections, your thoughts and your appreciations of Edward Gunawardena and please do send them via the email

My sister and I would value and appreciate the stories that you have had the pleasure of experiencing with him and of him.

With gratitude,
ERANGA

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