SRI LANKAN SOVEREIGNTY, NON NEGOTIABLE! – by Tamara Kunanayakam 

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Tamara Kunanayakam, former former Permanent Representative of Sri Lanka to the UN in Geneva

In Sri Lanka, neoliberal think tanks are profoundly influencing the policy changes and far- reaching reforms underway, including drafting of the new Constitution.

I will focus on the two most visible – the Institute for Policy Studies and Advocata Institute – in order to expose the devious and deceitful ways in which MPS is implementing its Agenda in Sri Lanka, and how it has penetrated the centre of Sri Lankan State power and is determining government policy, masquerading under the guise of impartiality. 

( Text of the Public Lecture delivered  at the Panel Discussion On Dynamic Interrelationships among Economic Policy, International Relations And National Sovereignty Organised by Sri Lanka Association for Political Economy (SLAPE) together with the Departments of Economics and International Relations, and the Economics Students Association (ESA) of the University of Colombo. The panel discussion was moderated by Prof. W. D. Lakshman, Vice Chancellor, SANASA Campus and Emeritus Professor of Economics, University of Colombo. 06 June 2018 )

Sri Lankan sovereignty – its supremacy in domestic policy and its independence in foreign policy – is under a two-pronged attack.

At the UN Human Rights Council, the attack is led by US neoconservatives who aggressively promote direct, unilateral, preventive, and pre-emptive intervention, including military, in the internal affairs of sovereign States.

Within Sri Lanka, the attack is on the economic front led by their ideological counterparts, the neoliberals, aimed at the physical takeover of the country’s wealth, natural resources and economic activities, including its public assets, financial as well as non-financial, tangible as well as intangible (such as brand name, customer databases, customer relationships, supplier data bases, supplier relationships, experienced and trained people and the technical know-how of running the business).

The common aim of neoconservatives and neoliberals is maintaining US global hegemony by combatting the reemergence of a potential rival, which the 2018 US National Defense Strategy identified as the reemergence of long-term, strategic competition by China and Russia, not terrorism. State sovereignty – not US sovereignty – is the common enemy of both neoconservatives and neoliberals.

Their methods are complementary.

At the Human Rights Council, the US-led resolution 30/1 co-signed by the Yahapalana partners, provides legitimacy for their actions in Sri Lanka. It also permits the instrumentalisation of the UN Office of the High Commissioner for Human Rights to create the necessary legal framework that will facilitate their takeover and provide a long-term guarantee, including, if necessary, through unilateral US intervention in Sri Lanka.

I will focus on the ongoing assault inside Sri Lanka, which is an attack on the very substance of our sovereignty and independence – i.e., the right of our people to exercise full and permanent sovereignty, including possession, use and disposal, over all its wealth, natural resources and economic activities, in the national interest and for their own development and social wellbeing. Without the enjoyment of permanent sovereignty, there can be no independent domestic policy and no independent foreign policy. Without this, independence, sovereignty, and democracy are but empty shells.

Sri Lanka is fast losing its economic sovereignty. The situation is qualitatively worse than being caught in a debt trap. Under Yahapalana, policy choices and their implementation have been ceded to the US Administration, the IMF/World Bank, Western aid agencies, corporate-backed think tanks, transnational corporations, including financial groups, and a small clique of legal and financial consultancy firms, including accounting firms, which are in the highly lucrative business worth millions of dollars of designing and implementing so-called bail-out programmes and privatisations. Lead corporate players both give advice on privatization and then profit from that advice.

People and nation have become dispensable commodities; their labour, wealth, natural resources, public institutions, State enterprises, public utilities and their currency are on auction with foreign bidders determining their worth.

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Prof. W.D. Lakshman, former Chairman of the IPS moderated the panel discussion.

The Yahapalana partners are letting themselves be led by the nose by Washington down the destructive path of neoliberalism, despite explosion of the myth that the private sector is more efficient than the public sector. The most important study on the efficiency of all European State enterprises privatized between 1980-2009, revealed that privatized companies performed worse than those that remained public. 1 This was true even in the extremely competitive telecommunications sector, where private sector performance was found to be “significantly worse.” 2 In fact, today, the trend in Europe is for cities to reclaim public services from the private sector in areas such as water, transportation, electricity, garbage collection, etc. 3

A 2015 UNDP study found no model of ownership (public, private, or mixed) intrinsically more efficient than the other. The study shows how, in recent decades, attacks against the effective, efficient and equitable public official working for the common good have advanced on seven fronts: ideological, intellectual, commercial, political, financial, institutional, and organisational.4

A telling case is that of British Metronet Rail, a Public Private Partnership (PPP) whose work included maintenance of trains, tracks, stations, signals, etc. Before the 5-year deal ended, Metronet became insolvent and was brought under court administration, costing the public over £400 million. The UK House of Commons Transport Committee, reviewing the PPP in 2008, concluded, “the Metronet contract did nothing more than secure loans, 95% of which were in any case underwritten by the public purse, at an inflated cost … Metronet’s inability to operate efficiently or economically proves that the private sector can fail to deliver on a spectacular scale.”

The UK House of Commons Transport Committee also exploded the myth about private sector efficiency: “We are inclined to the view that the model itself was flawed and probably inferior to traditional public-sector management. We can be more confident in this conclusion now that the potential for inefficiency and failure in the private sector has been so clearly demonstrated. In comparison, whatever the potential inefficiencies of the public sector, proper public scrutiny and the opportunity of meaningful control is likely to provide superior value for money. Crucially, it also offers protection from catastrophic failure. It is worth remembering that when private companies fail to deliver on large public projects they can walk away—the taxpayer is inevitably forced to pick up the pieces.” 5

Privatisation itself is a huge industry. Key players in Sri Lanka and abroad are the ‘Big Four’ accountancy firms, Deloitte, PriceWaterhouseCoopers, KPMG, and Ernst & Young. Not only is their ultimate aim limiting sovereignty, but also the very process of policy formulation, decision-making, and implementation undermines sovereignty.

The role played by the Yahapalana partners in this onslaught is not a matter of bad management, bad governance, incompetence, incapacity, or an absence of vision. They have been placed in the positions they occupy precisely because of a shared vision with the neoliberals, their ingenuity in delivering to their foreign masters at a vertiginous speed, selling on their behalf anything and everything that can be sold – and cheaply, and earning profits for their masters and themselves at an equally vertiginous speed.

I. Mont Pelerin Society and the neoliberal project

The neoliberal project has its origins in the Mont Pelerin Society (MPS), a secretive, shadowy organization founded in 1947 by Friedrich von Hayek, from the Austrian School of Economics, along with Milton Friedman, leader of the Chicago School of Economics and then Economic Advisor to US President Reagan, Allan Walters, who became Chief Economic Advisor to British Prime Minister Margaret Thatcher, other neoliberals, members of the US oligarchy, and members of the European aristocracy.

The neoliberal project

Its project is advancing Hayek’s globalist vision outlined in his 1944 book The Road to Serfdom : which is, an end to the constitutional nation-State and expansion of the interests of the primarily US oligarchy beyond national borders, unrestricted by constraints of national sovereignty. The nation State would be replaced by a supra national world government, a vision shared by the Nazis, which Hayek saw as a “benign” feudal system expressed in the International Paneuropean Union (PEU).

In a piece written in 1939,6 Hayek outlined how his multinational federation would undermine State capacity to act. Free cross border movement of “goods, men, and money” would :

(a) deprive the State of the ability to determine the prices (or value) for these goods;

(b) make difficult the implementation of legislation, even those against child labour or restriction of working hours;

(c) hinder resort to taxation, whether direct or indirect; and,

(d) weaken the power of all other state-level economic organisations to control the supply of their services or products. His reference was to professional associations, national enterprises, and trade unions.

The goal of deregulation and liberalization, therefore, is to render impossible any State action on behalf of nation and people, thereby giving free rein over its national economy to global financial and corporate interests. The State will no longer be able to control the value of what the nation produces, of its wealth and natural resources, its economic activities, its workforce, its currency, or even fulfill its international human rights and labour obligations.

However, the State will not disappear. It will be radically transformed from an entity in which popular sovereignty is vested and is duty-bound to protect the interests of people and nation, including defense of territory, into an entity that serves the interests of a small US-led oligarchy. Its role will be to deregulate all legal and administrative controls that interfere with their operations, and then re-regulate to protect their interests from inevitable popular resistance. It will become more not less authoritarian. Government, instead of serving the public will subjugate and dominate them. The terms “rule of law” and “good governance” found in Human Rights Council resolution 30/1 and in IMF/World Bank conditionalities refer precisely to this new system of law and government. In Sri Lanka, it is known as Yahapalanaya.

MPS fiercely opposes the principles of social justice, equality, and sovereignty. Its main preoccupation is how to promote a fundamentally anti-people, anti-social project, and combat it where necessary.

Civilising mission

A devious method is to present liberalism as a civilizing concept, associating Western civilization with progress and development. By legitimising this worldview as “common sense,” it has been able to impose upon others the meaning of terms such as ‘productive,’ ‘progressive,’ ‘scientific’ and ‘modern’ strictly seen from the point of view of the key actors in global markets. What facilitates capitalist reproduction is defined as a ‘social good’; what serves the interest of stockholders and the Western oligarchy is defined as ‘development’; and, ‘international relations’ is presented as the vehicle for building a political, social, and economic infrastructure in the Global South that will advance their concept of development so that it serves their purpose of capital accumulation.

The neoconservative and neoliberal ideologies are based on the notion that Africans and Asians are inferior to Europeans, they are the White Man’s Burden, a notion used to justify colonialism and cultural genocide. Hence, the relentless combat led by MPS against the decolonization process and the recognition by the UN of the right of former colonies to permanent sovereignty over all their wealth, natural resources and economic activities. Today, in the human rights language, this civilising mission is translated into the notion of ‘Responsibility to Protect,’ which seeks to legitimise unilateral Western intervention, including military, in the internal affairs of sovereign States.

An oft-used neoliberal weapon against those who support State intervention is intimidation, by equating “big government” with totalitarianism. However, the most discussed solution is the one that provides the best guarantee – the imposition of constitutional limits to popular power. Fernando Schüler, a Brazilian academic connected to MPS’s Atlas Network – of which Sri Lanka’s Advocata Institute is member – called to repeal the law that made voting compulsory and to withdraw funding for trade unions. He argued that organizations were no longer necessary, because people can now “participate” on their own, using low cost technology such as WhatsApp, Facebook, YouTube, etc. Prime Minister Ranil Wickramasinghe’s promise to provide free public Wi-fi facilities in each village by the end of 2018 is coherent with this view.

Method & Funding

MPS plays a leading role in shaping economic policies through infiltration and control of governments. For this purpose, its members have created a powerful elite-led international policy-planning network of more than 500 think tanks around the globe, in addition to business schools, corporate-backed Foundations, media, and the transformation of University economics departments into ideological centres of neoliberal strategy. Their job is to produce and disseminate neoliberal ideas and language under cover of supposedly impartial hubs of expertise, which are then propagated through the mass media; through training business, political and social leaders, economists, journalists, and other professionals; drafting laws for parliamentarians, ministers, and heads of State; publications for conferences and seminars; and, by introducing speakers for meetings and social encounters.

Critically, the sources of massive funding in millions of dollars are mainly North American government bodies and foundations associated with US corporate wealth.

Its influence – shift of power from public institutions to global economic Concentrations

MPS inspired the destructive anti-people, anti-State policies of Reagan in the US, Thatcher in the UK, General Pinochet in Chile – where the first neoliberal experiment took place designed and implemented by Milton Friedman’s Chicago Boys – and the conditionalities imposed by the IMF/World Bank.

Over the past decades, there has been a massive transfer of wealth, resources, and power from public institutions to foreign corporates. Studies have shown that the most significant shift in power has not been from public to private, nor from State to market, but from local and national political agencies to global concentrations of economic power. In 2016, the 10 largest TNCs earned more than all countries in the world; their total worth US 285 billion was equal to the wealth of 180 countries. In the same year, Walmart, Apple and Shell alone earned more than the majority of all countries.7 In 2016, 80% of the value of all companies in the world was controlled by 737 global banks, insurance companies and industrial groups. 8

Corporate influence, especially over countries of the Global South, manifests itself through:

(1) its sheer economic power;

(2) its ability to manipulate transfer prices through intra-company trade, inflating import prices and underpricing export to also avoid taxation or circumvent limits to profit repatriation;

(3) its ability to wield influence in the political affairs of sovereign States – directly or indirectly – by, for instance, employing government officials, participating on important national economic policy making committees, making financial contributions to political parties, and bribery; and,

(4) whenever necessary, obtaining the help of Northern governments to further or protect their interests, including through military force.

As a result, the ability of nation States to protect and promote the public interest has been significantly undermined, and the authority of the citizens usurped. Today, its global influence is such that only recently, in November 2017, the public German TV channel, ZDF, broadcast a special programme, “The Mont Pelerin Society and the network of neoliberal think tanks from 1947 until today,” denouncing the anti-people policies of a cobweb of organisations linked to the Society.

Eminent Sri Lankan, MPS member

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Ranil Wickremesinghe

An eminent Sri Lankan member of MPS is none other than Prime Minister Ranil Wickramasinghe, under whose influence it held a Special Meeting in Kandalama, Sri Lanka in 2004, when he was Prime Minister. 9

But, Sri Lanka, has the privilege – or misfortune – of having more than one MPS member associated with the Yahapalana regime….

II. Neoliberal think-tanks in Sri Lanka

In Sri Lanka, neoliberal think tanks are profoundly influencing the policy changes and far- reaching reforms underway, including drafting of the new Constitution.

I will focus on the two most visible – the Institute for Policy Studies and Advocata Institute – in order to expose the devious and deceitful ways in which MPS is implementing its Agenda in Sri Lanka, and how it has penetrated the centre of Sri Lankan State power and is determining government policy, masquerading under the guise of impartiality.

A. Institute for Policy Studies (IPS) 

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Dushni Weerakoon, Executive Director, IP

IPS, which is Sri Lanka’s main economic policy think-tank, is a classic example of how Western governments and their think-tanks function together to hijack State sovereignty in other countries. It shows how such foreign-funded, foreign-controlled entities not in any way accountable to Sri Lanka’s democratic institutions penetrate Government bodies and work from within – without any impediment – to implement an alien agenda, and in the most deceitful of ways.IPS claims it is “independent,” but it is independent only from the institutions of the Sri Lanka State, but dependent on Western States, their oligarchs, and their capital.

When an Act of Parliament established IPS in 1988, it was located within the Ministry of Finance and Planning, but co-financed by the Dutch Government and run by a Resident Coordinator from the Dutch Institute for Social Studies (ISS), an Institute founded by the Dutch Government to train intellectuals and policy makers, especially from former Dutch colonies.

In 2006, IPS announced it had set up its own Endowment Fund and was moving to full financial independence; at the same time it signed an agreement with the Dutch Government to finance the construction of a new office building outside the Financial and Planning Ministry.

Today, it claims it is autonomous, but has only expanded its list of direct and indirect donors from the West to include, in addition to the Netherlands, Canada, UK and Norway, along with US corporations, banks and equity funds, channelled through the Hewlett Foundation and the Bill & Melinda Gates Foundation. These funds reach IPS for financing its core activities via a project of the Canadian government-owned International Development Research Centre (IDRC) – The Think Tank Initiative – to bring about policy changes in the Third World through promotion of think tanks in those countries.

IPS is among the most direct channels through which MPS works in Sri Lanka. Its Chairman, Sri Lanka born Singapore-based Professor Razeen Sally is a member of MPS. In 2011, he was awarded the Hayek Medal named after its founder. He is also Adjunct Scholar at the Cato Institute – the most prominent neoliberal think tank in the US, also founded by MPS member Ed Crane. In addition, Sally is the Founder and Director of the Cato-related European Centre for International Political Economy (ECIPE), which is also linked to the well-known neoconservative foundation, the Brookings Institution with connections to the CIA.

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Prof. Razeen Sally

Razeen Sally and other Members of the IPS Governing Board simultaneously hold key positions in Government. In July 2017, Finance Minister Mangala Samaraweera appointed Sally as Senior Advisor. Indrajit Coomaraswamy is also Governor of the Central Bank; M.I.M. Rafeek is also Secretary, Ministry of Policy Planning and Economic Affairs; and S.S. Mudalige is also Director General, National Planning Department.

Connected to the apex of State power is IPS Governing Board Member Sarath Rajapathirana, Economic Advisor to President Sirisena. He is Visiting Emeritus Scholar at the neoconservative American Enterprise Institute, which during the George W. Bush Administration was regarded as the “intellectual command post of the neoconservative campaign for regime change in Iraq.” Rajapathirana’s presence beside the President shows the extent to which the State has been penetrated by US neoconservatives and neoliberals.

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Dr. Sarath Rajapatirana

IPS played a key role in facilitating direct external intervention in drafting the government’s economic policy document Vision 2025 that was launched last September. In April 2015, Prime Minister Ranil Wickramasinghe appointed co-Mont Pelerinist Razeen Sally as IPS Chairman, only 3 months after his own appointment.

IPS was directly involved in the organization of the Sri Lanka Economic Forum held in January 2016 under the patronage of President Sirisena and Prime Minister Ranil Wickramasinghe. The Forum brought together – directly or indirectly – the Harvard University’s Centre for International Development, George Soros and his Open Society Foundation, the US Administration and the corporates to draft the Government’s 3-year economic development plan, which manifested itself as Vision 2025.

According to the Prime Minister’s office, the Economic Forum set the stage for an indepth analysis and discussion of the need to develop government policy along areas identified by the Harvard Centre team led by its Director Ricardo Hausmann. 10 Teams from the Prime Minister’s Office and the Finance Ministry were reportedly sent to Harvard for a study course.11 The Harvard Centre works directly with the Prime Minister’s office, the BOI and the Ministry of Development Strategy and International Trade. 12

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Prof. Ricardo Hausmann

The Center itself is funded by the US Federal agency International Trade Commission (USTR), the Soros Open Society Foundation, as well as banks, investment and equity funds, including the Standard Bank Group; the financial services group BBVA; banking and asset management conglomerate Investec Asset Management; and, MasterCard.

The Harvard operation, which was kept secret until the last minute was funded by the multi-billion dollar hedge-fund crook George Soros,13whose “spiritual mentor” was Karl Popper, a founder of MPS. Soros became known as the premier currency speculator in the world after demolishing the British monetary system in 1992 in a single day and pocketing more than 1 billion US dollars at the expense of the British taxpayer. The Open Society Foundation of Soros is notorious for funding so-called colour revolutions and regime change around the world.

IPS is in the business of aggressively promoting the sale of public assets and privatization of all State owned Enterprises, including public utilities. In an interview published by Advocata Institute, which I will speak about later, Razeen Sally declared that the “first best solution to the running of SOEs in Sri Lanka is to have a timetable to privatize.” He proposed an insidious strategy of deceit to combat democratic opposition: begin with partial privatization by putting into a holding company all public enterprises that operate in a commercial sphere, including SriLankan Airlines, Mihin Air, Sri Lanka Transport Board (SLTB), telecommunications, among others, and then, as the next step, “gradually” increase private sector stakes until “the time is right politically” to move into majority private ownership.

With regard to public utilities such as water, electricity, petroleum, and others, Sally recommended replacing Board members of the Public Utilities Commission with socalled “independent directors.” By “independent,” Sally meant foreign because, in his own words, “having independent anybody in Sri Lanka is very difficult at the moment.”14

B. Advocata Institute

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Another influential Colombo-based neoliberal think-tank actively identifying key areas for reform, promoting free market, challenging the efficacy of State-owned enterprises, and aggressively engaged in their dismantling, is Advocata Institute, also known as Advocata. Like IPS, it is connected to MPS and the US Administration.

Advocata was launched in May 2016 at the Lakshman Kadirgamar Institute with, as Chief Guest, the then Deputy Minister of Public Enterprise Development Eran Wickramaratne, today State Minister of Finance. Its inaugural report, The State of State Enterprises, which was launched at the event, claimed there were 55 strategically important State-owned Enterprises that had made enormous losses between 2006 and 2015. It argued reform should not be limited to loss-making SOEs, and called on the Government to conduct a comprehensive productivity study so that it can determine which to shut down, which to privatise and which to hold under a government holding company.

It is noteworthy that Advocata’s report and recommendations were drafted even before the institution existed!

In August that year, only 3 months after the still “unknown” Advocata was launched, the Minister of Development Strategies and Trade, Malik Samarawickrama, quoted Advocata and announced “far-reaching privatisation plans” to maximize profits for the private sector, meaning the corporates.

Atlas Network, to which Advocata belongs and which was also founded by an MPS member Anthony Fisher, interpreted the statement as Government commitment “to go the whole hog” in privatizing strategic as well as non-strategic SOEs despite “the immense political risk.” As you know, “to go the whole hog” means “to do a thing thoroughly or completely, to commit one’s self to anything unreservedly.” That is what the Yahapalana partners already did in Geneva, “go the whole hog!” 15

Atlas claimed that privatization was a move “spurred” by its partner Advocata, which, it said, “has been widely influential in this ongoing reform process,” and is “helping to change things.”16 Sri Lanka was listed among 10 countries where Atlas claimed it had “invested successfully” and won. On the decision to privatize SriLankan Airlines, it claimed that the Advocata report was the Government’s “go-to reference on the topic,” which had given “the final push needed to get the government to put the struggling business up for sale.” 17

A month after the far-reaching privatisation plans were announced, Cabinet approved the Prime Minister’s proposal to hire the US firm McKinsey and Company for 2,3 million US$ to establish a Central Program Management Unit in his Office for “accelerated economic transformation” to monitor projects fast-tracked under a wide ranging new Development (Special Provisions) Bill that will give sweeping powers to restructure and transform the economy. The Prime Minister proposed that Nika Gilauri, a former Prime Minister of Georgia under the pro-Washington, neoliberal regime, be among senior experts on the project.

In November 2016, Advocata submitted its recommendations for Budget 2017 to the Ministry of Finance and Planning, which included ‘reactivation’ of so-called ‘Dead Capital,’ meaning the some 987,000 acres vested in the Land Reform Commission. It made special reference to “prime real estate blocks” in major cities like Colombo occupied by schools, government ministries, and other facilities, which, according to it, “greatly outweighs their economic value.”

Machiavellically, its plans for foreign takeover also included fixed assets such as land and buildings occupied by the military, a measure, it says, must be achieved through a national plan to downsize the military.

As an initial step, Advocata recommended accounting property rents at market values to get an accurate sense of the value of the “dead capital” occupied by the State. It also recommended a Land Asset Sales Programme “to dispose of surplus or underutilised land,” which must, it insisted, be run by “an independent body free of political influence to minimise corruption.”

The doctrine of Dead Capital was first articulated by Peruvian economist Hernando de Soto, MPS member who is closely associated with Advocata partner, Property Rights Alliance (PRA). By Dead Capital, Soto meant assets that cannot be easily bought, sold, valued or used as investment, especially land occupied by shanty dwellers without a title. The Government’s Vision 2025 launched in September 2017 outlines a programme of legal reform on the lines proposed by Soto, to free up land for economic activities, and the establishment of a land bank for this purpose.

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Minister Champika Ranawaka

Yahapalana’s decision, announced by Minister Champika Ranawaka to remove at least half of some 50,000 slums within the Colombo City limits by year 2020 is consistent with this doctrine. According to a government official, the plan is to go for a 99-year lease with an investment of at least Rs.1.92 billion per acre. To influence the 2018 Budget and accelerate the programme, Advocata organized a forum in October 2017, in partnership with Atlas Network and Canada’s Fraser Institute – another think tank founded by MPS member Anthony Fisher – to identify a series of areas for reform. The forum coincided with the release of the Fraser Institute’s annual Economic Freedom of the World Report in which Sri Lanka is given a low ranking, the main reason given, “weaknesses in the legal system and property rights.”

A month later, the Central Bank Governor outlined the laws and institutional reforms underway, including legislation to establish a land bank, which he said would help identify pre-cleared land that will be available for private investment projects. He said land titling was also being addressed. Other issues being considered were the removal of so-called “archaic” laws and the need for a comprehensive review of land use/crop mix.” 18

A few weeks ago, on 16 May, it was Advocata’s turn to invite the Director of the Harvard Centre Prof. Hausmann, joined by the US McKinsey & Company, to speak about Accessing knowhow for development, which he believes is the only way to diversify export. In the arrogance characteristic of the neoliberal view, Haussman decided what is best for the people of Sri Lanka: “Sri Lanka may have the talent and the people for the current economy, but does it have the talent and the people for the economy it wants to have?” In the same pretentious vein, he argued that know-how must from outside, because “it is often easier to move brains to new countries than to move new know-how into brains,” and advised that Sri Lanka reform its immigration laws.19

Hausamann’s success stories were the Big Three US automakers Ford, GM and Chrysler, and, of course Silicon Valley.

But, what the professor doesn’t tell us is that during the 2008 -2010 economic crisis, the US government had to bailout out the Big Three auto companies for 80.7 billion US $, effectively nationalising GM and Chrysler, lending money and providing incentives to spur new car purchases. After a 7-year growth, car sales are again down. A few days ago President Trump declared there were too many German cars on Fifth Avenue in NY and announced he would ban sales of Mercedes-Benz, Audi, other German cars. He’s pushing for as much as 25% tariffs on car imports!

Nor did the professor tell us about the Silicon Valley dot.com 1992-2002 bubble that led to NASDAQ composite index hitting a 5-year low by the end of 2002, down by 77% from its peak in 2000. The tech bubble today is said to be larger than March of 2000 with venture capital-funded start-ups in some cases overvalued by as much as 50%. According to Jay Ritter, Cordell Professor of Finance at the University of Florida’s Warrington College of Business, 76% of the companies that went public in 2017 were unprofitable, compared to 81% in 2000 at the peak of the dot.com boom. Only three out of 15 technology companies that have gone public so far in 2018 had positive earnings per share in the preceding year.20

Yahapalana’s 2018 Budget responds to the preoccupation of the backers of the neoliberal think tanks. It has several proposals to integrate ocean-related activities, liberalise land and shipping, including removal of restrictions on foreign ownership of land, shipping and freight forwarding businesses, and the establishment of a onestop Public Private Partnership (PPP) unit for designing and implementing PPPs.

In February 2018, a delegation from the US-based financial advisory and asset management firm Lazard visited Sri Lanka to discuss how it could help divest and attract foreign investments. According to William Cohan, a former Lazard banker, public sector advisory services is “a very high-margin business… All their expenses are paid, and they have no capital at risk. This is as sweet as it gets.”21 When contracted as privatization advisor, Lazard not only involves its advisory services branch, but also its asset management branch. On a number of occasions, Lazard has undervalued the price of a company, so that its asset management branch can buy up the stock at low prices and sell it for a considerable profit, as it did with Royal Mail in the UK and Airports and Air Traffic Management in Spain.

Advocata’s connections to the US Administration and the Mont Pelerin Society are direct as well as indirect.

Number One on its Board is Franklin Lavin, who served as Reagan’s Political Directorand Deputy Executive Secretary on his National Security Council Staff under National Security Advisers Carlucci, a former Deputy Director of the CIA, and Colin Powell.

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Prof. Suri Ratnapala

An influential Board member, Prof Suri Ratnapala, is also member of MPS and was on its Board of Directors from 2008 to 2010 . He is also on the panel of intellectuals appointed by the Prime Minister to advise the Steering Committee drafting the new Constitution, and its sub-committees. Chairing the Steering Committee is the Prime Minister, also MPS member.

Others in Advocata with links to MPS are Chris Lingle, a senior Visiting Professor of Economics at Advocata, and Fredrik Erixon, founder of the European Centre for International Political Economy (ECIPE). The Co-founder and Director of ECIPE is none other than IPS Chairman, Razeen Sally.

Advocata is part of Washington-based Atlas Network, a neoliberal network of nearly 500 organizations in 93 countries, founded by MPS member Anthony Fisher with the support of Milton Friedman and British Prime Minister Margaret Thatcher. Fisher also founded the first MPS think tank, the Institute of Economic Affairs (IEA) in London, which drafted Thatcher’s speeches and policy papers.

The Atlas Network functions as an extension of US foreign policy and has been involved in regime change and destabilisation in Latin America, and elsewhere. In Honduras, it played an important role in the military coup against Manuel Zelaya, who promoted pro-poor and nationalisation programmes; in Argentina, it helped topple Cristina Kirchner who was indicted for corruption and helped bring a realestate baron to power; In Venezuela, it supported the short-lived military coup against President Chavez in 2002 and the protests against his successor, Nicholás Maduro. In Brazil, its think tanks, which had grown from 3 to almost 30 between 2007 and 2017, succeeded in diverting public anger against leading politicians of all major political parties involved in a bribery scandal known as Operation Car Wash, to focus on President Dilma Roussef and the social welfare policies of her Workers’ Party, leading to her impeachment in 2016.

The US State Department and National Endowment for Democracy (NED) discretely finance think tanks associated with Atlas Network. Judy Shelton, a senior fellow at Atlas Network and an adviser to the Trump Presidential campaign, chairs the NED. The corporate world is an important source of Atlas funding.

III. Millenium Challenge Corporation (MCC): US Government in the Prime Minister’s Office

The US Government and US capital do not only rely on their think tanks to create a favourable climate for ownership and control over Sri Lanka’s territory. The Millennium Challenge Corporation (MCC), which claims to be “independent,” but is a US government body chaired by the US Secretary of State, has a Project Unit physically located inside the Prime Minister’s Office within its strategic Policy Development Unit, approved by the Cabinet of Ministers in March 2017. 22

Given its strategic location in the Prime Minister’s Office, it is a legitimate question whether and to what extent the Corporation is involved in shaping the country’s economic and trade policy, and also in drafting the Prime Minister’s “Vision 2025,” the strategy of re-orienting Sri Lanka’s economy to an export and FDI based model, which was unveiled in September of that same year, only a few months after MCC set up office.

The so-called “partnerships” practised by MCC are based on coercion and prior implementation of political conditionality. The difference between traditional foreign aid conditionality and MCC funding is that while traditional aid is based on actual “good governance” results, MCC funding depends on the demonstration that it has already been achieved. By Good Governance (or Yahapalana, in the Sinhala) is meant reforms considered necessary by the US agency to protect private foreign investors, meaning US capital – not Chinese or Russian, especially laws governing Public Private Partnerships.

Unlike traditional foreign aid, MCC assistance involves an annual re-selection process, which permits coercion on a permanent basis, depriving the State of space for sovereign decisions.

Additionally, the indicators used by MCC to measure performance are highly political themselves. Data on trade policy is provided by the neoconservative neoliberal think tank, Heritage Foundation with links to the CIA. Evaluating whether a State is “ruling justly” is done by Freedom House, which receives 80% of its income from the US Government and has carried out destabilization missions under the CIA against legitimately elected governments. Evaluating control of corruption, Government effectiveness, rule of law, and regulatory quality is conducted by the World Bank and the neoconservative think tank Brookings Institution, which has links to the CIA and supports Washington’s unilateral military interventions.

CONCLUSION

Sri Lanka is fast losing its economic sovereignty. Yahapalana’s positions at the Human Rights Council and declarations reveal that we no longer enjoy political independence. The planned foreign takeover of fixed assets occupied by the armed forces will ensure that we will no longer be able to defend our territory. Today, Sri Lanka is being turned into an aircraft carrier for Washington’s undeclared war against China, and our people foot soldiers in the battlefront.

Yahapalana’s utter submission to US hegemony is reflected in its constant citation of acclamation from Washington as example of success. Only recently, President Sirisena told BBC that the new Ministers appointed must be acceptable to the international community, as well.

Under the circumstances, it is vital that we return to the principles upon which our sovereignty and independence is based. There is wide recognition in international law and policy that political independence of States can only be assured through economic independence, which in turn is only possible if people are able to exercise their inalienable right to own, control and develop – on a permanent basis – all their wealth, natural resources, and economic activities.

Permanent sovereignty is crucial for the preservation of Sri Lanka as a fully independent State in which its people can exercise their inalienable right to selfdetermination. All States are duty bound to respect this right and to remove all international obstacles to its realization.

The 1986 UN Declaration on the Right to Development recognises the widespread failure of the Western, neoliberal free-market, export-led, growth-centred model, based on foreign debt, to achieve social progress and wellbeing for all. It rejects the notion that Western civilization defines progress and development and calls for a development strategy in which the people are the central subjects of development not objects. They are not just workers and consumers, but the driving force and architects of their destiny. There is no single model; it cannot be imposed from the outside. The Declaration calls for a development that is based on social justice and equality and not on markets, profits, or growth; development in which social progress is achieved not through competition, but through solidarity and cooperation.

There is an undeclared, covert war against Sri Lanka taking place. It is conducted by a Holy Alliance between Yahapalana, the US Administration, and the corporate world.

The result will be more deadly than the almost 30-year-war against LTTE terror and separatism. If we fail to resist now, we will lose total control over our territory, wealth, natural resources and economic activity. Our national identity and culture will be dismantled, our ability to determine domestic policy and foreign policy will be lost, and along with it, our independence and sovereignty.

Many things can be negotiated, but principles, never ! Sovereignty, independence, and territorial integrity are non-negotiable!

Notes

1 PSIRU, Public and private sector efficiency, May 2014, nin.tl/PSIRU-efficiency

2 https://impact.vice.com/en_us/article/bjx543/european-cities-are-taking-back-public-services-fromprivate-companies

3 https://impact.vice.com/en_us/article/bjx543/european-cities-are-taking-back-public-services-fromprivate-companies

4 UNDP, Is the private sector more efficient? A cautionary tale, The Global Centre for Public Service Excellence, UNDP, 2015. http://www.undp.org/content/dam/undp/library/capacitydevelopment/English/Singapore%20Centre/GCPSE_Efficiency.pdf

5 Report of the UK House of Commons Transport Committee, January 2008, HMSO.

6 Friedrich von Hayek, The economic conditions of interstate federalism, 1939.

7 Sputnik news, 13 Sept 2016.

8 Federal Institute of Technology, Zurich.

9 Eamonn Butler, A short history of the Mont Pelerin Society, Based on A History of the Mont Pelerin Society by Max Hartwell. Butler is a British economist, co-founder and Director of the Adam Smith Institute. He served as the Secretary of the Mont Pelerin Society on its 2012–2014 Board of Directors. See also Mont Pelerin Society website https://www.montpelerin.org/past-meetings-2/

10 Sri Lanka PM, Soros, Harvard CID to debate sound money, growth, economynext, 6 January 2016. See also

11 Soros-funded, 3-year economic development plan for Sri Lanka, The Sunday Times, 17 January 2016; and, Harvard magic in SL take-off, The Sunday Times, 24 January 2016.

12 Sri Lanka PM, Soros, Harvard CID to debate sound money, growth, economynext, 6 January 2016. See also ‘Vision 2025ʹ development programme gets going, Sunday Times, 26 November 2017.

13 Soros-funded, 3-year economic development plan for Sri Lanka, The Sunday Times, 17 January 2016; and, Harvard magic in SL take-off, The Sunday Times, 24 January 2016.

14 [Note that the term “independent” is also used by the West to refer to foreign participation in a hybrid court.]

15 https://www.atlasnetwork.org/news/article/reforming-and-privatizing-state-owned-enterprises-insri-lanka

16 https://www.atlasnetwork.org/news/article/reforming-and-privatizing-state-owned-enterprises-insri-lanka

17 See https://www.atlasnetwork.org/partners/global-directory/libertad-y-progreso ; and, https://www.atlasnetwork.org/news/article/ten-wins-in-ten-countries-how-atlas-networksinvestments-in-economic-freedo

18 ‘Vision 2025ʹ development programme gets going, Sunday Times, November 26, 2017.

19 http://www.advocata.org/media-archives/

20 The Entire Economy Is MoviePass Now. Enjoy It While You Can, The New York Times, 16 May 2018.

21 How financial advisory firm Lazard is making lucrative business out of broke governments’ woes, Bloomberg, Feb 07, 2015. //economictimes.indiatimes.com/articleshow/46151714.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

22 Cabinet approves establishment of Millennium Challenge Corporation Project Unit in SL by Keshala Dias, Newsfirst, 15 March 2017. https://www.newsfirst.lk/2017/03/cabinet-approves-establishmentmillennium-challenge-corporation-project-unit-sl/

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