Don’t exaggerate Lanka’s strategic importance to the Great Powers
by Kumar David
The foreign powers relevant to Sri Lanka’s predicament, in order of involvement are India, China, the United States, and Pakistan to a lesser degree. Japan, Australia and the UK will bestir themselves to the extent that the US compels them. To India the island is so critical that a threat to its security such as setting up a hostile military base will provoke a hard militarised response. US military interest is to backup India and deny China military facilities, but its economic forebodings are deeper and it has vowed to push back China’s economic wallop and in particular to spoke the Belt and Road Initiative (BRI) by which China is taking over the Asian politico-economic landscape. This colkumn last week (Sept 6) titled “America’s New Cold War” was about this.
India is concerned about the tilting Sino-Lanka axis from many perspectives – security, regional economy and Belt-and-Road; see strategic papers: http://www.southasiaanalysis.org/node/2656 and
http://www.southasiaanalysis.org/node/2658. The first paper is written from the perspective, true at one time, that Mahinda is China’s man. It is more complex now with GR-MR manoeuvring between the IMF, China, the US and India to keep the wolf of foreign debt and interest repayment from the door. They have recently even proposed the partial-sale of private banks to multilateral agencies. The Rajapaksas will throw themselves at the mercy of anyone for a debt moratorium, new loans and MCC grants; beggars can’t be choosers. Modi and Indian security folks would like to buy the Rasapaksas off with deals and loans and Lanka cannot afford to pose a strategic threat to anyone. On the other hand, GR and MR are well aware that the big money is with China. It’s a hard world!
Though Sri Lanka’s economic-strategic location is useful to China as a centre point on shipping lanes to the Suez Canal, the Persian Gulf (and its oil), and China dependent East Africa, the island’s military-strategic significance should not be exaggerated. The crucial choke point for China and for all Far Eastern shipping is the Malacca Strait, a narrow strip of water between Peninsular Malaya and Sumatra, two miles (2.8km) wide at its narrowest and 550 miles (890km) long. It carries a quarter of the world’s oil shipments, a quarter of global freight, and 100,000 vessels transit it each year. It is the Malacca Strait, not Sri Lanka, that is a nightmare for China because the US Navy can throttle the Strait and China does not have the clout to respond.
Hence BRI: Five corridors, three operational and two a bit dicey. The Mongolia-Russia railway to the Baltic Sea and the more southerly and more important Eurasia railway are both operational. A branch of the latter through Iran into the Middle East and Turkey maps the Ancient Silk Route – this Central and West Asia Corridor is a third, part-operational arm. The fourth in fitful “progress” is the Pakistan Corridor of roads crossing through contested parts of Kashmir and rail links to the Arabian Gulf port of Gwardar. Fifth the Myanmar-Bangladesh Corridor to the Bay of Bengal port of Chittagong runs through India so it may never get done, but Chittagong is being developed as a transit port. This fifth proposal has a slice on the side, sometimes called a Sixth Corridor, down the spine of Peninsula Malaysia to Singapore. This too is unlikely to get done.
A profoundly important new development is the China-Iran deal signed a few days ago. China will invest $400b in petrochemicals ($280b) and transport ($120b) in exchange for a 32% discount on Iranian oil for the next 25 years. The rail project will connect the Iranian port city of Chabahar to Zahedan near Iran’s Afghan border and presumably go north to join the Eurasia Corridor. Last year India stopped buying Iranian oil to please Washington and Delhi has also reinforced military ties with Israel. Tehran’s attitude changed; in effect the US and India have pushed Iran into China’s welcoming arms and a new strategic partnership is taking shape; perhaps it will include Russia and Turkey in the future. So, as per plan the via-Pakistan route to Gwadar will be paralleled by a via-Iran route to Chabahar, and significantly Chabahar is at the mouth of the Persian Gulf. This complex now becomes a Pakistan-Iran Corridor. What is significant after this gets done is that the Malacca Strait and Lankan ports may, but unlikely, be bypassed for freight, but will certainly dim on the Chinese strategic radar.
Were the Communist Party less hostile and repressive of every other mass organisation (the Catholic Church, Fulan Gong and now the Uyghur Muslims of Xinjiang who are not prepared to abandon their faith) China could much improve its image among Muslim nations, and critically in this context, among the people of Iran. One-party Stalinism (or semi-Stalinism) suffers from a complex, a deep sense of insecurity, a foreboding of all other big entities.
There are other reasons than sea-lanes and security not to exaggerate the standing of the Chinese connection. Lanka does not export much to China which needs oil, gas, high-tech and masses of electronic chips that we do not have. The PRC exports tons of the same stuff as we do to the whole world and a wider variety and better quality – garments, manufactures. We have not even found niche markets in China for our specialist foods. For training professionals (doctors, engineers, IT types) and post-graduate placements, we are bound hand and foot to the English-speaking world. Investments from China are large but front loaded with a big graft slab for our leaders – all mega projects include a slice. Actually, China does not care as loans are commercial-repayable and unlike Western agencies which are accountable at home, the Chinese public cares tuppence if projects are alabaster-pure white-elephants. Mattala, Hambantota Stadium, highway projects, anything that has the label Rajapaksa in front is likely to be superfluous and a graft opportunity.
The US blacklisting 24 Chinese companies is unlikely to affect Lanka. The giant holding entity China Communication Construction Company (CCCC) has not been named though several of its subsidiaries have. These subs are not involved in the Colombo Port City Project, a different CCCC spin-off, China Harbours – which criminally pumped tens of millions into the 2015 Presidential race – has a stake in the Port City project. This all seemed clear, though last week the Colombo US Embassy muddies the waters with a warning. Separately, the US Secretary of State, Defence Secretary and National Security advisor have been in telephone contact with President Gota not to mention a letter from Trump said to have been handed over to Gota. But all to make sure that Lanka does not get out of line in the new anti-China cold-war. But we are dead broke – the 2020 fiscal deficit will be about 10%, I believe the highest ever in the country’s history and the economy limps from bad to worse. China not India or the US has the money so as beggars who can’t afford to be choosers where are we to beg and what are we to choose? Things will roll on in this style for five, maybe ten more years.
[Both this and last week’s essay have greatly benefitted from information supplied by a Mongolian Comrade]
Whither the rules-based order?
by Andrew Sheng
for Asia News Network
Every day, we are told we must defend the rules-based order. But whose order? What rules? Why should we defend an order if we did not have a say in shaping?
All this is in the realm of politics and geo-politics. The biggest thinker who shaped the current neoliberal order was Austrian philosopher Friedrich Hayek (1899-1992), whose ideas of classical liberalism of freedom, democracy and self-order of markets dominated global relations. Neoliberalism was put into practice in the 1980s, when US President Ronald Reagan and British Prime Minister Margaret Thatcher pushed through the free market philosophy that swept away Keynesian state intervention of the 1950-1970s.
The deeper thinker on the whole question of constitutional law, politics and international order was German jurist Carl Schmitt (1888-1985), whose influence on conservative political circles in almost all the Big Powers has been growing. I only became aware of Schmitt’s work when Noema magazine wrote an editorial on Schmitt’s Nomos of the Earth (1950). Schmitt is controversial, because he essentially wrote the legal basis for Nazism in the 1920s, which accounts for his ostracization (in today’s language “cancelled”) from academic circles for decades.
Schmitt was a brutally realist thinker who explored the legal foundations of European political theory. Schmitt argues that no order can function without a sovereign authority. A state is legally constituted when the politics distinguishes between friend and enemy and when the citizens are willing to fight and die for its identity. The state alone is given the power of violence (and enforcement) by the citizens to enforce the law.
Schmitt is considered an authoritarian supporter, because he saw sovereign power resting ultimately in the Executive (rather than the Legislature or Judiciary) because the sovereign (i.e. the President) decides on the exceptional situation, where he/she must suspend the law because of war or assume emergency powers in order to restore order. Decisions by the Executive are either bound by law or bounded by his or her moral bearings.
The world is today watching on TV whether former President Trump is morally culpable for causing the January 6, 2021 riots, or legally culpable. The Ukraine war is being supported by NATO on a matter of moral principle for a non-member, but if the war escalates to nuclear global destruction that kills all, how do we trade off the individual rights with the collective right of everyone else to survive?
Schmitt dissected the European constitutional laws and international order, dividing them into three phases: pre-1500, 1648 to 1919 (World War I) and thereafter. Before the discovery of America, European powers fought each other under a religious cloak, since the Pope decided on disputes of rights on moral grounds. Indeed, it was the Papal Bulls of 1455 and 1493 that authorized the Portuguese and Spaniards to conquer all lands and seize and enslave Saracens and non-Christians in the Americas, Africa and Asia. The religious rationales comprised the Domination Code whereby Christians can rule over non-Christians and possess their property, as well as the Discovery Code, whereby lands owned by non-believers are treated as terra nullius (empty land), meaning non-Christian indigenous peoples do not have rights.
But when the Dutch and English started fighting with the Portuguese and Spaniards over overseas territories, what was the legal justification? Dutch jurist Grotius (1583-1645) provided the secular rationalisation that discovery alone is not enough, but since there was freedom in the seas, occupation by a sovereign state confirms rights seized through war. Schmitt argued that Jus Publicum Europaeum (European Public Law) emerged after the 1648 Treaty of Westphalia to allow sovereign countries to have the right to go to war based on their own judgement of justice and necessity without interference in each other’s domestic affairs. This changed after the end of the First World War, when the 1919 Treaty of Versailles treated the losing side as criminals, with their rights cancelled or confiscated.
Whilst the Europeans were busily fighting each other, the United States rose in global power and imposed her 1823 Monroe Doctrine that asserted that she has her own sphere of influence, with the right to intervene in Central and South American states. That sphere of influence would spatially cover cultural, economic, military, political and today technology exclusivity beyond legal sovereign borders.
Schmitt was prescient in seeing that where war is fought on the basis of “good versus evil”, in which all rights of the other side are “cancelled” (like the foreign exchange assets of Afghanistan and Russia are frozen or seized), the situation may be an unstable equilibrium. The unstable European security architecture was settled decisively by the United States in two World Wars because of her overwhelming military, economic and industrial power. But in today’s multipolar situation, who decides on the rules of the international order? If both sides accuse the other side as evil and illegitimate, who decides other than the use of arms?
To cut a complex story short, the NATO military alliance, comprising nearly one billion people and 47.3 percent of world GDP (2020), assumes its status quo role as the final arbiter of the “rules-based order”. The problem is that BRICS countries, plus Indonesia have 3.5 billion population with one quarter of world GDP in market terms (25.6%). However, on GDP PPP terms, they are near parity with NATO and therefore may have their own views on the international order. What if the larger non-Western countries want their own version of the Monroe Doctrine?
The moral principle that all of us should live peacefully on one planet should override sovereign nations fighting over power and ego from turf to space, when humanity could be burned by climate warming or nuclear war. For Nomos (or order) of the Planet, rather than the Earth, we should all rationally cooperate. If we truly believe in democracy, can the eight billion people in the world vote on the rules-based order, or do we still leave it to G-7?
No order is stable without true legitimacy. How to achieve that order remains an open question.
Scarcity, prices, hoarding and queuing
We live in a scarcity economy and will do so well into 2024, past the next Presidential elections if it comes then; it may not. (The new minister may open bets.) All economies are scarcity economies; otherwise, there would be no prices. We also live in plentiful economies; look at the streets of Tokyo, Shanghai, Singapore, Paris or San Francisco during day or night. Scarcity is a relative term, as most terms are. A scarcity economy is one where prices rise relentlessly, where cigarettes are more expensive in the evening than they were the same morning. Scarcity economies will have two or more sets of prices: one official, others in markets in varying shades of grey until black. Scarcity economies are where everyone (producers, traders, households) hoards commodities, hoards everything that can be hoarded, at reasonable cost. Scarcity economy is one where productivity is lower than it was earlier, where both labour and capital idle. Scarcity itself may push down productivity. Observe thousands of people standing in queues to buy all kinds of things whilst producing nothing. That is labour idling. Others hang on to dear life in crowded trains arriving in office late to leave early, to get to ill lit homes where to cook each evening they repeat what their ancestors did millions of years ago to light a fire. Money is one commodity that can be hoarded at little cost, if there was no inflation. The million rupees you had in your savings account in 2019 is now worth a mere 500,000, because prices have risen. That is how a government taxes you outside the law: debase the currency. In an inflation afflicted economy, hoarding money is a fool’s game.
The smart game to play is to borrow to the limit, a kind of dishoarding (- negative hoarding) money. You borrow ten million now and five years later you pay 500 million because the value of money has fallen. US dollars are scarce in this economy. It is hoarded where it can wait until its price in Sri Lanka rises. Some politicians who seem to have been schooled in corruption to perfection have them stored elsewhere, as we have learnt from revelations in the international press. Electricity is not hoarded in large quantities because it is expensive to hoard. Petrol is not hoarded very much in households because it evaporates fast and is highly flammable. That does not prevent vehicle owners from keeping their tanks full in contrast to the earlier practice when they had kept tanks half empty (full). Consequently, drivers now hoard twice as much fuel in their tanks as earlier. Until drivers feel relaxed as to when they get the next fill, there will be queues. That should also answer the conundrum of the minister for energy who daily sent out more bowser loads out than earlier, but queues did not shorten.
As an aside, it is necessary to note that the scarcity economy, which has been brought about by stupid policies 2019-2022, and massive thieving from 2005 is partly a consequence of the fall in total output (GDP) in the economy. Workers in queues do not produce. The capital they normally use in production (e.g. motor cars, machines that they would otherwise would have worked at) lie idle. Both capital and labour idle and deny their usual contribution to GDP. Agriculture, industries, wholesale and retail trade, public administration, manufacturing and construction all of which have been adversely affected in various ways contribute more than 75% of total GDP. Maha (winter crop) 2021-22, Yala (spring crop) 2022 and Maha 2022-23 and fishing are all likely to have yielded (and yield) poor harvests. Manufacturing including construction are victims of severe shortages in energy and imported inputs. Wholesale and retail trade which depend directly on imports of commodities have been hit by the sharp drop in imports. Tourism, which is more significant in providing employment and foreign exchange, collapsed dreadfully since late 2019 and has not recovered yet. About 16 percent of our labour force work in the public sector. They have failed to contribute to GDP because they did not engage in productive work due to variegated reasons. Teachers were on strike for two months in 2021. In 2022, so far government employees have worked off and on. Wages of government employees are counted as contributions to GDP, by those that make GDP estimates. However, here is an instance where labour was paid but there was no output equal to the value of those wages. Such payments are rightly counted as transfers and do not count to GDP. For these reasons estimates of GDP for 2021 must be well below the 2020 level. The 3.6 growth in official estimates is unlikely. The likely drop in 2022 will be roughly of the same magnitude as in 2021. These declines are not dissonant with misery one sees in towns and the countryside: empty supermarket shelves, scant supplies of produce in country fares, scarce fish supplies, buses idling in parks and roads empty of traffic. There have been warnings from our paediatricians as well as from international organisations of wasting and probable higher rates of child mortality. It is this sort of sharp fall in wellbeing that engenders the desperation driving young and ambitious people to obtain passports to seek a living overseas. You can see those from mezzo-America amassed on the southern border of US. Will our young men and women end up beyond the wall of China?
Of this lowered supply of goods and services, this society is expected to pay a massive accumulated foreign debt. (Remember the reparation payments in the Versailles Treaty). In real terms it will mean that we forego a part of our lower incomes. Do not miss this reality behind veils of jargon woven by financial analysts. It is not something that we have a choice about. That is where international help may kick in. Gotabaya Rajapaksa government after much senseless dilly dallying has started negotiations with the IMF. There is nobody compelling our government to seek support from IMF. They are free go elsewhere as some who recently were in their government still urge. Examine alternatives and hit upon an arrangement not because it permits the family grows richer but because it will make life for the average person a little less unbearable.
If prices are expected to rise people will seek resources to hoard: money to buy commodities, space and facilities to hoard, security services to protect the property and much more. Rice producers cannot hoard their product because animals large as elephants and small as rodents eat them up. Because of the unequal distribution of resources to hoard, the poor cannot hoard. In a scarcity economy, the poor cannot hoard and famines usually victimise the poor, first and most. If prices are expected to fall, stocks are dishoarded to the market and prices fall faster and deeper. In either direction, the rate at which prices change and the height/depth of the rise/fall depends on the speed at which expectations of change in prices take place. A largescale rice miller claims he can control the price of rice at a level that the government cannot. His success/failure will tell us the extent of his monopoly power.
When commodities are scarce, in the absence of a sensible system of coupons to regulate the distribution, consumers will form queues. A queue is rarely a straight here, nor a dog’s tail (queue, in French, is a dog’s tail which most often crooked). Assembled consumers stagnate, make puddles and sometimes spread out like the Ganges, with Meghna, disgorges itself to the Bay of Bengal. They sometimes swirl and make whirlpools and then there is trouble, occasionally serious. There is order in a queue that people make automatically. To break that order is somehow iniquitous in the human mind. That is why breaking the order in a queue is enraging. For a queue to be disobeyed by anyone is infuriating, and for a politician to do so now in this country is dangerously injurious to his physical wellbeing.
The first cause of rising prices, hoarding and queues is the scarcity of goods and services in relation to the income and savings in the hands of the people.
Terror figuring increasingly in Russian invasion of Ukraine
In yet another mind-numbing manifestation of the sheer savagery marking the Russian invasion of Ukraine, a shopping mall in Ukraine’s eastern city of Kremenchuk was razed to the ground recently in a Russian missile strike. Reportedly more than a hundred civilian lives were lost in the chilling attack.
If the unconscionable killing of civilians is a definition of terrorism, then the above attack is unalloyed terrorism and should be forthrightly condemned by all sections that consider themselves civilized. Will these sections condemn this most recent instance of blood-curdling barbarism by the Putin regime in the Ukrainian theatre and thereby provide proof that the collective moral conscience of the world continues to tick? Could progressive opinion be reassured on this score without further delay or prevarication?
These issues need to be addressed with the utmost urgency by the world community. May be, the UN General Assembly could meet in emergency session for the purpose and speak out loud and clear in one voice against such wanton brutality by the Putin regime which seems to be spilling the blood of Ukrainian civilians as a matter of habit. The majority of UNGA members did well to condemn the Russian invasion of Ukraine close on the heels of it occurring a few months back but the Putin regime seems to be continuing the civilian bloodletting in Ukraine with a degree of impunity that signals to the international community that the latter could no longer remain passive in the face of the aggravating tragedy in Ukraine.
The deafening silence, on this question, on the part of those sections the world over that very rightly condemn terror, from whichever quarter it may emanate, is itself most intriguing. There cannot be double standards on this problem. If the claiming of the lives of civilians by militant organizations fighting governments is terror, so are the Putin regime’s targeted actions in Ukraine which result in the wanton spilling of civilian blood. The international community needs to break free of its inner paralysis.
While most Western democracies are bound to decry the Russian-inspired atrocities in Ukraine, more or less unambiguously, the same does not go for the remaining democracies of the South. Increasing economic pressures, stemming from high energy and oil prices in particular, are likely to render them tongue-tied.
Such is the case with Sri Lanka, today reduced to absolute beggary. These states could be expected ‘to look the other way’, lest they be penalized on the economic front by Russia. One wonders what those quarters in Sri Lanka that have been projecting themselves as ‘progressives’ over the years have to say to the increasing atrocities against civilians in Ukraine. Aren’t these excesses instances of state terror that call for condemnation?
However, ignoring the Putin regime’s terror acts is tantamount to condoning them. Among other things, the failure on the part of the world community to condemn the Putin government’s commissioning of war crimes sends out the message that the international community is gladly accommodative of these violations of International Law. An eventual result from such international complacency could be the further aggravation of world disorder and lawlessness.
The Putin regime’s latest civilian atrocities in Ukraine are being seen by the Western media in particular as the Russian strongman’s answer to the further closing of ranks among the G7 states to the Russian invasion of Ukraine and the issues growing out of it. There is a considerable amount of truth in this position but the brazen unleashing of civilian atrocities by the Russian state also points to mounting impatience on the part of the latter for more positive results from its invasion.
Right now, the invasion could be described as having reached a stalemate for Russia. Having been beaten back by the robust and spirited Ukrainian resistance in Kyiv, the Russian forces are directing their fire power at present on Eastern Ukraine. Their intentions have narrowed down to carving out the Donbas region from the rest of Ukraine; the aim being to establish the region as a Russian sphere of influence and buffer state against perceived NATO encirclement.
On the other hand, having failed to the break the back thus far of the Ukraine resistance the Putin regime seems to be intent on demoralizing the resistance by targeting Ukraine civilians and their cities. Right now, most of Eastern Ukraine has been reduced to rubble. The regime’s broad strategy seems to be to capture the region by bombing it out. This strategy was tried out by Western imperialist powers, such as the US and France, in South East Asia some decades back, quite unsuccessfully.
However, by targeting civilians the Putin regime seems to be also banking on the US and its allies committing what could come to be seen as indiscretions, such as, getting more fully militarily and physically involved in the conflict.
To be sure, Russia’s rulers know quite well that it cannot afford to get into a full-blown armed conflict with the West and it also knows that the West would doing its uttermost to avoid an international armed confrontation of this kind that could lead to a Third World War. Both sides could be banked on to be cautious about creating concrete conditions that could lead to another Europe-wide armed conflict, considering its wide-ranging dire consequences.
However, by grossly violating the norms and laws of war in Ukraine Russia could tempt the West into putting more and more of its financial and material resources into strengthening the military capability of the Ukraine resistance and thereby weaken its economies through excessive military expenditure.
That is, the Western military-industrial complex would be further bolstered at the expense of the relevant civilian publics, who would be deprived of much needed welfare expenditure. This is a prospect no Western government could afford to countenance at the present juncture when the West too is beginning to weaken in economic terms. Discontented publics, growing out of shrinking welfare budgets, could only aggravate the worries of Western governments.
Accordingly, Putin’s game plan could very well be to subject the West to a ‘slow death’ through his merciless onslaught on the Ukraine. At the time of writing US President Joe Biden is emphatic about the need for united and firm ‘Transatlantic’ security in the face of the Russian invasion but it is open to question whether Western military muscle could be consistently bolstered amid rising, wide-ranging economic pressures.
Whither the rules-based order?
Rulers and unionists from hell
M’tivu Magistrate orders arrest of teacher wanted for sexual molestation of female students
‘Dates have the highest sugar content to fight Coronavirus’
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
Sunday Island 27 December – Headlines
News5 days ago
Economic crisis: Govt. MPs slam Cabinet, Finance Ministry
News6 days ago
CEBEU guns for ex-Chairman Ferdinando
Features6 days ago
Who does Sri Lanka’s fuel subsidy really benefit?
News3 days ago
Sajith says ‘super’ PM has failed, SJB ready to take over govt.
News5 days ago
LIOC seeks to expand operations
News24 hours ago
HRCSL: No prisoners were used in 09 May attacks on protesters
Editorial4 days ago
Lanka’s crisis and NATO leaders
Opinion5 days ago