Cardinal Malcolm Ranjith’s Recent Rant About Human Rights & His Hypocrisy

By Leonard Jayawardena –OCTOBER 8, 2018

Leonard Jayawardena

Certain controversial statements made by Cardinal Malcolm Ranjith‘s about human rights made during a Sunday sermon at a Catholic church service on the 23rd of last month as reported in the media and the subsequent tweet by Minister Mangala Samaraweera in response to that appear to have stirred up a minor hornet’s nest.

Though some commentators have seen the Cardinal’s statements as belittling or downplaying human rights, from his original statements as reported in a video clip shown on TV (obviously edited) as well as his subsequent “clarification,” it appears that what has actually irked the Cardinal is not human rights per se but the fact they are lectured to us by those whom he considers as being “without a religion” and holding and following a materialistic worldview and lifestyle. He thinks that human rights are enshrined in every religion and so secularists/materialists have no need to preach human rights to him and those who have a “religion” like him. He does not say what religion means to him but presumably it refers to a worldview that looks beyond the physical and material. He asserts that religion in the West is used for the most part much like a “coat” that is put on and put off as convenience dictates. In other words, a sham religion. He deprecates the idea of human rights without the underpinning of religious faith. He goes on to say, “We have practised human rights for centuries. If we follow religion properly the need to talk about human rights doesn’t arise. The religions (plural) we believe in contain human rights.”

I will briefly comment on some of his statements and then share with the readers a personal experience which illustrates, albeit in a minor sort of way relatively, how the Cardinal’s sensitivity to and practice of human rights falls short, despite his bombastic statements.

The Cardinal may resent the West for lecturing to us about human rights and wish they did not do so but, from their perspective, the need to raise the issue of human rights arose because they think that certain human rights have been violated in this country. In particular, the conduct of the Sri Lankan forces during the war with the LTTE which was concluded in 2009 has been questioned by the international community and since 2012 resolutions calling for investigation into alleged war crimes in Sri Lanka have been passed in the UN. The recently concluded Human Rights Council session in Geneva (10 – 28 September 2018) discussed Sri Lanka. The Cardinal’s stance on this issue is no secret with him being on record as having said that presenting a resolution against Sri Lanka by the United States Government at the United Nations Human Right Council (UNHRC) session in Geneva (in 2012) is an undue meddling in the sovereignty and integrity of Sri Lanka. I can recall a certain statement of the Cardinal on one occasion with regard to international calls for a war crimes investigation and his actual words in English translation were “We should not rake up old dirt.” Though the Cardinal made no reference to this issue in his controversial Sunday sermon as reported in the media, it is possible that the foregoing is the proximate cause for his tirade about human rights.

“We have practised human rights for centuries.” This last statement is a blatant falsehood and its refutation needs only a little more than a casual acquaintance with past Sri Lankan history. In his article “‘Human Rights Is Latest Religion Of Western Nations’ – Cardinal Malcolm Ranjith – A Comment” in Colombo Telegraph P. Soma Palan has dealt adequately with this point and I will add only a few more examples to show that the human rights record of our past is not something to crow about. In his An Historical Relation of the Island of Ceylon, Robert Knox reports that infanticide was practised in the Kandyan Kingdom and he says, “And this is reputed no fault, and no Law of the land takes cognizance of it.” Apparently, the rights of infants counted for little in that day and age. He also describes various barbaric exemplary punishments meted out to criminals and those who incurred the displeasure of the tyranical king. (Of course, similar barbaric punishments have been practised in the West in centuries past.) Under article 6 of the Kandyan Convention signed in 1815, the British abolished and prohibited every type of bodily torture and mutilation. When the British expedition to Kandy in 1803 failed and the British soldiers were forced to evacuate from the city they had occupied, the sick left behind at the hospital in Kandy were massacred by the Sinhalese forces. This would now constitute a war crime.

Historically, the Roman Catholic Church, of which the Cardinal is the local head, has been one of the worst violators of human rights the world has ever seen. Pagan Romans persecuted Christians at first, but when “Christianity” became the official religion under the Roman emperor Thedosius in the fourth century A.D, the tables were turned and the persecuted became the persecutors. Professed Christians, who had so long been on the defensive, turned to attacking the pagan religion. Supression of heresy, with coercion and violence where necessary, became an official policy of the Catholic Church and the savage, barbaric forms of torture practised in the enforcement of this policy are unspeakable. Augustine (4th century) and Thomas Aquinas (13th century), regarded as great theologians of the Catholic Church and honored with the title “saint,” supported this policy and even supplied theological defences and justifications for it. In many ways, the atrocities commited by the Catholic church through the centuries in her religious intolerance in collaboration with “Christian” states under her thumb pale into insignificance both in magnitude and duration those committed by, say, the ISIS, the so called Islamic State. When the Catholic Church ceased the violent persecution of heretics a few centuries ago, it was not because of a change of heart and contrition, realizing the inconsistency of this practice with Christ’s teachings, but because the altered political and social conditions of the world were no longer conducive to its continuation.

“If we follow religion properly the need to talk about human rights doesn’t arise. The religions (plural) we believe in contain human rights.” Here the Cardinal appears to be reducing all religions to a common denominator, which results in that naive and uninformed notion, albeit widely held, that “all religions are the same because they all teach you to do good.” While there is for sure an overlapping of moral values between different religions in varying degrees and, of course, between those moral values and human rights, there are also differences. Not all religions are created equal. Apart from differences in matters of doctrine, certain religious injunctions which, if followed strictly, would result in an infringement of modern human rights. For example, freedom of religion, including the right to change one’s religion, is a fundamental right which is also enshrined in the Universal Declaration of Human Rights (Article 18), but in Islam, one of the major religions of this country, the penalty prescribed for apostasy is death, a gross violation of human rights by modern standards. Certain verses of the Koran and the Hadiths sanction war on infidels. The status of women in Islam is lower than men, e.g., the testimony of a woman is worth only half of that of a man. Therefore, if you practise Islam “properly,” the inevitable result would be a violation of human rights.

Conversely, what some may consider a human right may be regarded as immoral and impermissible in religion. Abortion (“reproductive rights”) is a case in point. It is hard to deny that abortion, for whatever reason it is practised, results in the violation of the unborn child’s right to live and amounts to murder.

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Archbishop, Mangala and HR in Buddhis

Why Improper Remarks: ‘Neo-liberal HR Mania’ and ‘Cardinal Trying to be a Populist’ 

 2018-10-08

very citizen has a role to play in supporting and promoting social justice. In
They can form a peaceful, just, and harmonious culture and  civilization universally if effectively employed and practised. What the  leader of the Sri Lankan Catholic Church, His Eminence Cardinal Malcolm Ranjith said in Sinhala, at a morning service at the Ekala Church  could be generally translated as, “If we practise religion properly,  there is no need to talk about human rights. The newest religion in the  West is called human rights. It was discovered very recently. Our people  began practising religions centuries ago. They regard it as an amazing  new finding which is being held up and we are being persistently spoken to about it. Human life is not just eating and drinking and the search for  comfort. Western societies regard religion as a superficial outfit. If  we adhere to religious teachings, we don’t require human rights. He  added,  “A Society which attempts to make Human Rights a Religion could safeguard Human Rights effectively through Buddhist teachings.”Those  who have no religion are dependent on human rights. We must not be  hoodwinked by these ‘illusions and fantasies’., but should act  prudently. We must look at this sharply.”   

Sigalowada Sutta  the Buddha enlightens us very clearly on the roles as reciprocal  obligations existing between Monarch [ruler] and Subjects, husband and  wife; parents and children; teachers and pupils; employer and employee;  friends, relatives and neighbours; clergy and laity, without leaving out  anybody. The writer is no authority on Buddhism, but the greatness in  these values here is, they are considered as sacred duties and are  reciprocal. If observed - they cover the entire UN Declaration of Human Rights 1948,  pronounced in the charter [Fundamental contributory events in history  were condensed into a single cause in drafting the Human Rights  Charter]. 

Cardinal on value of Buddhist Teachings

The Cardinal’s statement on “value of Buddhist teachings’  has provoked anger in some religious fanatics. One of them wrote, ‘…the  Catholics are becoming defenders of the Buddhist Politicians.’ Minister  of Finance and Mass Media, [perhaps a scientific allocation of jobs]  has condemned the comments made by Cardinal Malcolm Ranjith. Mangala Samaraweera’s  impolite vocabulary and offensive thought he twittered, “The need for  human rights was an outcome of the marauding religious zealots of the  inquisition and the crusades where non-believers were massacred en bloc.  Pity the Cardinal always seems to get things wrong in trying to be a  populist.” The human rights lawyers also have criticized the sentiments  strongly, accusing the Cardinal of devaluing the importance of HR and  being uninformed of its idea.      
Are all men born equal? In some respects, yes. In several  other respects, no one is born equal to any other. Our wrong attitude  towards this concept has given rise to all sorts of problems, at social  level to the spiritual. Buddha’s numerous preaching on the denial of the  caste of the ancient Indian societies, and his stress on the parity of  people of all classes before the rule of Karma and, in the end, under the rules of the Dharma support the above.   

Buddhism, Hinduism and Harijans

Buddhist assertions of human rights was practiced in India five decades ago when famous Hindu scholar B. R. Ambedkar,  after years of struggle for the basic human rights of his clan, was compelled to recognize that there was no purpose in continuing his  efforts before he decided to convert some four million Harijans [community traditionally considered so called [“Untouchable”] to Buddhism. Ambedkar had well thought-out switching to Sikhism, but had to admit the fact that only Buddhism and Christianity are free of such discriminatory tenets or practices.   
Freedom is certainly the spirit of Buddhism, as will be  seen. Buddhism cannot be presented as another alternative …ism or a  complement to other schools of thought, like – Socialism, democracy,  Marxism, communism, neo-liberalism, liberal democracy, or any another  political notion or idea that are engaged in the basic struggle for  establishment of democracy and human rights. As with the human heart,  the concept of human rights demands rinsing out of all the narrow and  tribal prejudices out of the mind so as to be able to stop to do evil  and to attempt to do good - Buddhism is concerned with this basic  problem. Buddha Dhamma says, all men are equal and that they are all subject to the law of nature with no discrimination. The law of Karma is  applicable on everyone. To attain perfection, man has to develop  himself morally, physically, and intellectually. By this law, it  requires that person should be let free.   
Dharma resolves not just ‘what one is due to do’ but also ‘what is due to one.’ Through X’s performance of his Dharmic duty Y receives that which is his ‘due’. Since Dharma decides  the duties of husband and the duties of wife. If the husband has an  obligation to support his wife, the wife has a ‘right’ to support from  husband. It is the duty of a king (ruler) to bestow justice without  bias, then citizens may be said to have a ‘right’ to just and  unprejudiced treatment before justice.   
In conclusion it should be that the notion of rights which is contained in Buddha Dhamma  is based on understanding of what is ‘due’ among and between  individuals. Kings and subjects, husbands and wives, teachers and  students, all have mutual obligations under Dhamma, which can be evaluated into duties and rights. We must emphasize that this conclusion, that the necessities of Dharma  are spoken in the form of duties and not as rights. Buddhism is far  from unique in the above respect, and a similar observation could be  made on other religions as well. It does not in any way mean that the  concept of rights is ‘alien’ to Buddha or that Buddhism rejects that individuals have ‘rights.’   
There are Buddhists who are hesitant to see the dhamma under human rights because the exact comparable to the phrase ‘HR’ in  the Western sense is not found in Buddhist literature. The Western  notion of human rights confines to humans. In contrast, in Buddhism a human being is a much broader trans-homocentric: In Buddhism human  beings are considered as a part of all conscious beings and as a part of  entirety, because both human and animal beings are similarly subject to  temporariness or impermanence.   

Can people live by religions alone?

According to His Eminence Cardinal Malcolm Ranjith,  human rights is a new western religion that came recently, which is  meant for those without a religion. Those who believe in religion don’t  need to talk about human rights. Cardinal draws the attention of people  to the decline of individual qualities in Western nations where atheism   replaces religion. He is right that religion is more important for  human progress than human rights. But laws are a must to restrain people  doing deceitful anti-religious actions or deeds to hurt fellow  citizens. Can people live by religions alone?  

Human Rights is the latest Religion?

The head of the Sri Lanka’s Catholic church says that Human  Rights are the latest Religion introduced by the West, some people  believe ‘Human Rights, is a Secular Concept’. Human Rights like in  religion are about Human beings. Human Rights and Religion are two sides of the same coin, they are very closely related although they seem  different.
He says, “if we practise religion properly, there is no need to talk about Human rights.” But the Human Rights Law of UN and its Charter of Fundamental Rights and ICJ have  provided an efficient and useful service to the human kind, especially  by curbing undemocratic actions of rulers and individuals who are not so  religious and who wield power on powerless.   
What is imperative here is to ensure that the western  domineering forces are kept at bay from abusing such charters, like HR  for their own benefit by attempting to enforce neo-colonial strategies  on third world.  
Religious leaders on the other hand should focus on  enlightening their followers and political authority on the importance  of respecting the rights of fellow citizens based on respective  religious values.   

Rupee depreciation, mismanagement and Government’s indecisive nature

By Our Special Political Correspondent- Saturday, 6 October 2018

On Tuesday, the Cabinet heated up once again over the rupee depreciation and the mismanagement of the currency. Despite the eloquent economic analysis by the Governor of the Central Bank and the Finance Ministry Advisers praising each other over their astute economic interventions, the value of the rupee against the US Dollar fell to a new low of Rs. 171 for the first time in its history yesterday.

According to the exchange rates issued yesterday by the Central Bank the selling price of a US Dollar was Rs. 171.42 and the buying rate was Rs. 167.55. The Finance Minister on Tuesday had even taken a firm stand that he would not allow the Chief Minister (CM) of the north to import a new vehicle for his official use.

The CM is running in a battered vehicle when the Colombo-based Ministers including the Finance Minister run around in S Class Mercedes Benz, top end SUVs or BMW 7 Series. The Opposition was quick to produce a copy of how the Ministers had sold their duty free permits, including Minister Samaraweera.  The Finance Minister had rightly also objected to Minister Ranawaka’s proposal for a mega city development. The other controversy that went viral on social media was the high speed light rail project. It is alleged controversial businessman now turned politician Samarawickrama had demanded a fee from the investor. The Minister was quick to refute the allegations.

Now a complaint has been lodged with the Bribery Commission according to media reports to investigate the allegations. The Minister is a close ally of the Prime Minister. The Prime Minister can ill-afford to have allegations against his confidants given that the presidential elections are 15 months away.

The maritime and logistics industry was also up in arms with the Government after State Minister of Finance Eran Wickramaratne had urged the shipping industry to embrace liberalisation, saying it benefitted all and aided the country’s push to become a maritime and logistics hub. 

While there is general agreement that Sri Lanka’s greatest resource is its strategic location within the Indian Ocean, the country captured only a small amount of transhipment containers while the full potential remained unfulfilled. The indecent hurry to liberalise the industry is baffling the industry. The industry now allege that a jobless consultant is misleading the Minister and Government into it to help an international operator he is consulting with, to expand in Sri Lanka.

On Wednesday, the National Economic Council (NEC) with the Finance Ministry and the Central Bank met with the private sector captains to discuss short-term measures to improve foreign exchange inflow in dealing with the current foreign exchange crisis. The President and the Prime Minister had been at the meeting. Heated exchanges had taken place between the Prime Minister and Hayley’s Chairman Pandithage over the liberalisation of the shipping industry.

Ports and Shipping Minister Samarasinghe had been livid that he had not been invited for the liberalisation discussion co-organised by the Finance Ministry and the EU. He had said: “How can you take decisions for the industry when the line Minister is not present?”

Business tycoon Harry Jayawardane had outlined how the Government could increase revenue and had urged the President to engage the security forces to improve the revenue collection in the Ports and Customs. He had said Rs. 50-60 billion is lost every year due to mismanagement by the Finance Ministry. He had urged the President to appoint competent and practical people with experience to run the government.

The PM’s top Economic Advisers Paskaralingam and Ratwatte and International Strategies Minister Samarawickrama had not been invited by the President for the business meeting. A SLFP Minister had pointed out in private that the duo of Ratwatte and Paskaralingam were largely responsible for the loss of confidence of the private sector. It was they who had led the PM’s Economic Affairs Committee and taken all the controversial decisions relating to the economy.

With a depreciating rupee, exports being taxed heavily, and FDI not taking off, our so-called economic experts will have to stop talking about how well they have performed in keeping inflation below 5% when half the population in the country has seen a 20% drop in their disposable income and take a cue from Dr. P.B. Jayasundera and stimulate the economy to come out of this rut.

The CSE that used to provide livelihoods to over 600,000 retail investors is now like a ghost town. The Central Bank-managed EPF and other State funds have done next to nothing for three years to prop up the market. The market is now in a free fall with foreign investors pulling out.

A big investor forum is set to begin next week in London. Let us hope the Government before that event at least shows that it has some confidence in its own stock market by investing in it to give a message to the world that the Sri Lankan stock market is a good place to invest.

Unfortunately for the Government, many of its political appointees in key places have forgotten how they got into their positions in the first place and are clearly not towing the Government line and instead taking the high road. That in effect portrays the sad indecisive nature of the current Government. Some one really needs to take control and deliver! ‘Will they?’ is the big question.

Dollar — Rupee Conundrum and the Need for a Balanced Economic Policy

While it is true that Sri Lanka should promote exports to the maximum and open up as much as possible, that should not be done at the expense of local industries and agriculture; and the people and their livelihood, to suit a theory or satisfy certain sections of the international community.

by Laksiri Fernando-Oct 7, 2018

( October 7, 2018, Sydney, Sri Lanka Guardian) During the last nine months of the present year (January-September 2018), the rupee depreciation had been nearly 10%, and that is what has prompted the government and the Central Bank to take some measures (at the last moment). The situation has also sparked a heated debate on the pros and cons of liberalization and government’s economic policies. To underscore the gravity of the situation, the rupee depreciation during the same period last year did not exceed 5%.

The value of the rupee, which amounts to the exchange rate, not only affects the country’s or the people’s economic conditions, but also the economic and business confidence. A country’s currency, in this case the rupee, is also the pride of the people. It’s fall may be an insignificant event to some economic theorists, but not to the people. There can be panicky conditions, if the situation is not ameliorated properly, with immediate measures as well as long term wise policies.
Rupee Depreciation to US $ Since Independence (1948)

First 30 Years Second 30 Years Last 10 Years Last 9 Months

By Rs. 5.58
By Rs. 94.60
By Rs. 44.55
By Rs. 16.23

Appreciation of the Dollar

The rupee has been depreciating throughout years since independence and it was perhaps unavoidable to an extent given Sri Lanka’s weaker or vulnerable position compared to other countries and currencies, particularly of the West and now countries like India and China. At independence in 1948, a dollar could be bought at Rs. 3.32 and it was relatively stable for 30 years. Now it is around Rs. 170 and still depreciating. The general trend however has been a reflection of Sri Lanka’s low pace of development due to both unavoidable conditions (civil war, intermittent natural disasters, intense international competition etc.) and avoidable factors (excessive political expenditure, corruption, mismanagement, low enterprising culture etc.).

The central question therefore is whether Sri Lanka ever had a proper economic policy/plans (except ‘chinthana’ and visions) to develop the country including to manage the rupee or the external sector of the economy, preferably on a bipartisan basis as much as possible. Conflictual policies on ‘liberalization and protectionism’ between different governments have rendered more harm than good.

Primarily as a result of the US President’s protectionist policies, the dollar value has been appreciating against, for example the gold prize, during the last 1-1/2 years. This was almost 12%. However, this has reversed slightly since April (‘Gold climb higher as US dollar eases,’ CNBC, 5 September) and the new trends are yet to be seen.

Internal Reasons?

As the rupee’s sharp down turn has come exactly after this ease period (April-September), it is questionable whether the reasons are solely external. On 9 April, the dollar was Rs. 154.95, but on 4 October it rose to 170.06. As we are in largely a liberalized ‘free market,’ speculation must have played a role. It was reported that the export earners were holding their dollars without releasing them during this period given the downturn, although exact figures are not available. This has rendered the rupee to slide further during the last six months.

Another factor has been the capital outflows from the bond market, treasury bills and other financial markets. During this year there had been nearly $ 1 billion outflows, with very little new inflows. No measures were taken to boost the investor confidence. The outflow has been a pressure on the reserves and the rupee. The reason could not only be the low economic growth, hence low confidence in the economy, but also the political instability.

Although the Indian rupee has faced a similar depreciation, the repercussions could be less, given the country’s strong economy with a growth rate around 7 percent and political stability. The growth rate in Sri Lanka in 2017 was all time low at 3.1%. It was 4.5% in 2016. Although the government predicted 5% growth for this year, the IMF or other agencies have not been that optimistic, predicting below 4 percent, probably settling to around 3.5.

Trade Deficit

The most pertinent to the rupee depreciation has been the country’s deteriorating trade deficit, without proactive action on the part of the government. If we get a comparative picture for the six months of 2018 with that of 2017, based on the available Central Bank data, the following is the picture.
Trade Deficit (US $ m)
Jan-June 2017 Jan-June 2018 Change %
Exports 5,398 5,732 6.2
Imports 10,149 11,441 12.7
Trade Deficit -4,751 -5,709 20.2

It is very clear that although the exports increased by 6.2% during this two years, the import bill increased two times of that value or by 12.7%. In actual terms, there was a trade deficit of $ 4.7 billion in 2017 and billion 5.7 this year during the first six months. It is true that the worker’s remittances and earnings from tourism could cover a major part of the deficit, however a more balance external trade policy could have saved those incomes for better development purposes.
It should be noted that it was the workers, working abroad, who gave Sri Lanka around $ 7 to 8 billion every year to combat the increasing import bills including super luxury cars, duty free for certain sections.

Removal of Para Tariffs ?

There is no question that Sri Lanka’s tariffs are high compared to similar countries (Singapore, Malaysia, Thailand etc.), particularly in the case of imports. Still the average rate is around 22%. This is quite low compared to what the US has imposed on other countries recently. There are certain imported investment items even with 0% tariffs and the highest for luxury items does not exceed 37%. As we all know, super luxury cars were even given completely duty free to certain categories of people, as if the government policy is to promote other-countries’ exports to Sri Lanka.

It is true that para-tariffs in the form of PAL (Ports and Airports Development Levy), CESS, VAT and NBT (Nation Building Tax) are cumbersome and complicates and discourages trade and those should have been simplified and regularized. However, the import taxes are necessary for a country like Sri Lanka to protect the local industries and agriculture while promoting exports. Leading up to the last budget, the government had started a process of removing and exempting these para-tariffs and it is still not clear how far these ‘liberalization’ has caused the present rupee’s predicament, in addition to the appreciation of the US dollar.

Ironically, in quite a panicky reaction on the part of the Ministry of Finance, during August and September, there have been nearly 20 notifications issued to the customs and others, regarding the re-imposition of some of these para-tariffs again, including for sanitary pads and tampons. It is not clear where the government’s economic and trade policies are heading today.

Disregard for Local Business Opinion

There have been several business leaders expressing their views against the government’s unmanaged and unmitigated liberalization policies, right or wrong. However, those should have been listened into and at least a dialogue should have been initiated. When the Managing Director of the DSI Group, Kulatunga Rajapaksa, was expressing concerns about the removal of para-tariffs for over 250 items (Sunday Observer, 10 December 2017) he was not only talking about the footwear industry, but also others. He asked why tariffs are removed for ‘salt, yoghurt and butter’ for example.

He also questioned the rationale of granting approval for an Indian company (VKS) to produce footwear in Sri Lanka by importing all raw material while jeopardising the local small and medium scale enterprises that employees over 300,000 people. The FDI expected is only $ 250,000 in his argument. Now we have a rail investor from Germany asking duty free helicopters, ships, luxury vehicles, subsidized electricity and 4,000 acres of land for a mere 488 euro investment! (economynext, 6 October).

Similar views were expressed by Planter’s Association Chairman, Sunil Poholiyadde, and many others. It may be possible that some local industrialists and planters are asking too much protection not suitable for competitive market conditions. The local natural rubber producers are obviously catering to low value-added local industries and for natural rubber exports, while the high value added industries in the BOI sector are importing natural rubber ($ 288 million) from other countries.
From purely a theoretical point of view one can argue that it is the way the markets operate. However, here we are talking about human beings and their livelihoods, and therefore there should be a possibility of bridging the mismatch between natural rubber production in the country and the emerging value-added rubber product industries for exports.

This is why we have democracy and elected governments and responsible state officials with necessary research baking. There is no much point in exporting natural rubber overseas. While the already formulated ‘Sri Lanka Rubber Industry Master Plan (2017-2026)’ should be acclaimed, the bridging the above gap should take a major policy priority. This is only an example.
Conclusion

Obviously, there are other factors that have affected the rupee depreciation. Increasing budget deficits, primarily because of high defence and political expenditure, and associated foreign borrowings, in addition to meeting the trade deficits, have triggered and aggravated the situation. All have not been discussed here. While the foreign borrowings remained at a high level by 2015, since then over $ 20 billion have been borrowed to pay interests, pay back debt and offset foreign exchange deficits. That is why and how around $ 9 billion reserves are kept.

Therefore, the Central Bank (or the government) is in a dilemma whether to release the reserves to save the rupee, or keep primarily aloof, allowing the rupee to fall further hoping it might naturally promote exports and discourage imports. The fiscal (tax) measures so far taken by the Ministry of Finance are only minimal. There is this liberal economic theory that a more ‘natural price’ for the rupee (meaning much more devalued rupee) is the best for free trade. These theorists too much believe in the nature of markets, while markets are manipulated by ‘others’ for different purposes and interests. This is in a context where the IMF has warned that the world must be at the brink of another financial meltdown or even a great economic depression.

Sri Lanka would be lucky if it can escape the NOMURA warning that the country is not only in a critical situation, like South Africa, Argentina, Pakistan, Egypt etc., but at a stage where a ‘crisis could erupt at any time.’ This can be an exaggeration, but what the situation highlights is the lack of responsible handling of the country’s economy with a balanced economic policy.

While it is true that Sri Lanka should promote exports to the maximum and open up as much as possible, that should not be done at the expense of local industries and agriculture; and the people and their livelihood, to suit a theory or satisfy certain sections of the international community. Sri Lanka is not a robot-land suddenly converted into a mere component in the global supply chain, but an ancient country with nearly 22 million people, with traditions, lifestyles and livelihood patterns.

Appendix

The 1% the 99% and Global Debt

Finance Capital is miring the world in debt

Finance Capital wants you, citizen, corporation and government(https://themoscowtimes.com/articles/russias-debt-collectors-bring-back-brutality-of-the-1990s-51793)

Kumar David-October 6, 2018, 5:46 pm 

Keynes is best known for his advocacy of government intervention in the economy at times of protracted decline in output and enduring unemployment. He held that during major recessions or a depression, which is a chronic and prolonged recession, the government should intervene as capitalism is incapable of pulling itself out of the rut. Government should spend on public works infrastructure and expand credit to industry, agriculture and services to initiate a forced march. Print money if you must, but once the economy takes-off the state must withdraw. Keynes was a classicist, no populist. He was confident and events proved him right that properly managed intervention would spur growth and not be inflationary.

Keynesianism ruled from the 1930s to the late 1970s then collapsed because of ‘stagflation’ – stagnation and inflation at the same time, impossible in classical or Keynesian theory. It gave way to Milton Friedman’s monetarism and Chicago School economics, Friedrich Hayek and IMF neoliberal ideology and Pinochet-CIA football fields of corpses. Friedman was shallow and the Chicago School were ideologues of Chilean capitalism’s raids on public property. In Yeltsin’s Russia, idiot savants from MIT’s economics department crafted a theory to aid apparatchiks to loot (privatise) and abetted in laundering over $100 billion into Western banks.

Friedman got himself a Nobel Prize for instrumental contributions. Inflation he proclaimed was because too much money was in circulation (pseudo anti-Keynesianism, pseudo because he never digested Keynes). Cut welfare, slash wages, break up unions (Thatcher and Hayek), shoot workers and leftists (Pinochet, IMF and Chicago School) and impose austerity. Kick the state out of the economy, end deficit budgets and hey presto money supply can be brought under control, inflation tamed, capitalism will plough the fallow fields and growth will resume. This did happen under Regan, Thatcher, JR and their neoliberal ilk for a while. If class opposition is crushed it drives down the share of income accruing to the lower orders; if an open-door policy is enforced on weaker nations in the name of free-markets, metropolitan economies prosper. The Soviets then went belly up and kept US and European toast buttered.

Then something unexpected happened in the late 1980s coming into full view in the 1990s. Western, mainly American industries shifted abroad on a big scale, mainly to China. Globalisation spun round and mauled its trainer. Second, the power hub of capitalism shifted from production (industry, agriculture and services like transportation) to finance (banks, investment banks, mortgage funds, monopolies, real-estate and aggregators of bonds and equities). The dominance of finance capital over production capital, the heartland of classical analysts Smith, Ricardo, Malthus, Mill, Marx and Marshal, was established. And with this inequity became a norm; never in modern history has wealth been so polarised.

A third thing that happened is even odder and buried Friedman, monetarism and the Chicago School. This is best seen after the 2008 crash. A truly gigantic amount of money (a cumulative $4.4 trillion to date in the US and not much less in Europe – ECB and Bank of England) has been pumped into finance; for a decade interest rates have been held to near zero and at times real rates even pushed negative. But where’s the inflation!? Oft times the big economise have experienced de facto deflation! And simultaneously global debt (government, corporate and household) has ballooned to well above a staggering $150 trillion - reliable estimates are unavailable. What the hell is going on?

In a nutshell

Last week I closed my column with a one-paragraph summary of the astounding scale and provenance of the global debt crisis. Here it is:

"The (debt) crisis is global; governments, enterprises and households all over the world are in the same trap. The post-2008 global economy has been restructured, intentionally or otherwise, to transfer wealth created in the productive economy to finance capital as bonds and funds, or through asset-price inflation (real-estate, bonds and equities) and a surge in unpayable compound-interest. More indebtedness of institutions and individuals is the same thing on the other side of the coin. I often use the rhetoric of 1% and 99%; but the truth is easier to remember. The richest 8.6% owns 86% of global wealth. It’s time to invert this pyramid and enforce global debt cancellation".

I will spell out how finance capital, inequity and debt have come to define early twenty-first century capitalism. Rentiers or ‘rent collectors’ is a term I use following Michael Hudson, Steve Keen and the Modern Monetary Theory school at University of Missouri, Kansas City – see their blogs and books. Ever compounding interest, real-estate rental, foreclosing on property and assets of defaulters and most important since 2008, transfer of part of the surplus generated in the productive economy to finance capital, are the ways of rentiers. A significant source of wealth transfer is through what is called asset price inflation – bonds proliferate (the corporate bond market is huge), property prices (mainly commercial property) soar and stock-markets have hit the roof. This is asset-price inflation.

The asset-price inflation story solves two riddles. First, why despite billions (say TARP) spent bailing out banks, insurance houses and mortgage lenders (deemed too big to fail) and trillions in QE injections, is there no consumer price inflation? Why, because nothing went to the everyday economy or was spent on plant, wages and state infrastructure. No that would be Keynesian; this time money was released to purchase bonds from banks and investors. Therefore bail-out and quantitative easing (QE) money went to those who used it to enhance the activities of finance capital such as leveraging purchase of stocks, real estate and bond market activities. "Too much money was not chasing too few goods"; no, money was chasing financial instruments. Ten million households facing foreclosure were allowed to go to the wall by the Obama Administration. Consumer prices did not inflate but prices of finance capital’s assets like stocks, bonds and commercial property rose; the rich became richer, the 99% remained marooned and the production side of the economy stayed in the dumps.

A simple picture looks like this. A Central Bank offers $250 billion of QE. Big banks put up bits of paper called bonds to borrow at knockdown interest rates. The CB hopes that producers will borrow from banks and spend on economic activities, but in a gloomy scenario few come forward. Instead an investment bank syndicates (combines) financiers to relend large sums to broke states like Greece and Lanka at high interest rates since they are "taking a risk".

The broke party cannot service instalment or interest so borrows more (debt is leveraged) and sinks deeper. Not only broke ones but governments and corporations in big countries are in the same boat. QE has bloated finance capital.

How does asset-price inflation transfer wealth created in the productive economy, the social surplus, into the clutches of finance capital? It’s easy to explain with a simple but artificial example. Forget workers, the middle-classes, the government and foreign trade for simplicity. Let’s postulate a world in which only the owners of the means of production (Adam Smith and Karl Marx’s capitalists) and the modern breed of finance capitalists (rentiers) exist. Say in a year the ordinary capitalists make a profit of $1 trillion (surplus value) globally, but in the same year the Fed, ECB, BoJ and BoE release $1 trillion into the financial economy. Money is money, once printed (electronically these days) the two $1 trillions are indistinguishable. The real surplus, net of "inflation", of the owner of production capital is only half what it would have been in the absence of this game. Asset-price inflation, crucial post-2008, supplements the explosion in compound-interest leveraged ‘rent’, and profiteering from monopoly privileges. It consolidates the dominance of finance capital in modern capitalism.

I need to say a word about monopolies. One thinks of private monopolies as mines and public goods (the spectrum, services like electricity, water, railways, highways and waterways). However, gigantic communication, social-media and software industries are also near-monopolies with limited competition exploiting public spaces like spectrum, roads and networks. A further point is that they are not simply service providers but participants in the financial industry because their huge stock valuations (Apple is now a trillion-dollar company) and their hefty balances are used by banks for direct (hard-core) financial transactions.

Finally, one must not underestimate the importance of direct interest collection in aiding the coffers of finance capital. Governments, not just Sri Lanka but mighty America too are irredeemably in hoc. Unable to pay interest or pay down debt most governments are sinking deeper. There is no way out (except debt cancellation) and America’s Congressional Budget Office only debates whether the US National Debt (government debt) will reach 150% of GDP in 15 years or 20 years. The Central Bank of Sri Lanka is politely and blissfully utopian. There is no possibility of a sustained amelioration of Lanka’s foreign debt and every possibility that it will swell. Last week I discussed the terrorism of compound-interest; ISIS, LTTE and Boko Haram cannot match its monumental destructive power.

Investment does not equal Savings

In a first course in macroeconomics (fortunately I was not miseducated) some guru will instruct you that I = S. This is not an equation in the common sense of two different things tending to equality but an identity – the same thing by two different names like rainfall and precipitation. Forget government tax and expenditure, forget foreign trade and inflows, then:

National income = disposal income + savings (S)

National income = consumption + investment (I).

Since disposable income is the same thing as consumption, we end up with the identity S = I.

This is why China, and South Korea at one time, that had high savings were much praised. They saved a lot (tightened their belts), invested in development, flourished and pulled millions out of poverty. But now in the realm of finance capital the meaning of investment has gone crazy.

We have to forget the ordinary (intelligent) meaning of the word investment as a reward for frugality and all that whisky not drunk. No more is the abstinence story true. All of I is not invested; it has to be replaced by the sum I(1) and I(2). In symbols S = I(1) + I(2), where I(1) is investment in production as commonly understood, while I(2) is the part sucked into the domain of finance capital as I have been at pains to explain. A part of the surplus passes from owners of means of production to finance capital. The naive view that society’s savings are all invested in the ordinary sense of the term is no longer true (it was always so in a smaller way). The part peeled off by finance capital reinforces the bounty it receives from asset-price inflation. The uninvested surpluses of software, social-media, on-line retail, search-engine and pharmaceutical giants all belong to category I(2). It’s all a new ball game and they don’t want to teach you about in Econimics-101.

Impeccable Character & Economic Wisdom Of Naganada Kodituwakku

By Hema Senanayake –OCTOBER 6, 2018

Hema Senanayake

Mr. Nagananda Kodituwakku has announced his candidacy for 2020 presidential election. He claims that he has an impeccable character. At least this means that he will not lie to the people of Sri Lanka. I like it the most. In other words which are familiar to him, he will tell the truth, the whole truth and nothing but the truth. This is the very reason that he must be careful in submitting his election manifesto. What is troubling me right now is that he unknowingly, assuming that he doesn’t lie, has declared some of his economic views which would be found false when come to actual governance of the country.    

However, certain reforms he proposes have well resonated with me and I guess so should be with many. This parliament with having 225 parliamentarians are too big for the country. Nagananda proposes to reduce it to 125 members that is 100 parliamentarians less than now. It reduces the chances of fielding and getting elected politicians with lack of integrity. I like it. If he really proposes to stipulate to have certain education qualifications for those who are allowed to contest in parliamentary elections, that would be a bonus benefit. The country needs politicians with high integrity. Also, he proposes to establish the supremacy of law, I would say over corrupt politicians of all kind. If elected, he has the vision and vigor to do it and he would do it better than any other prospective candidates. I like it too. But I have a problem with his economic wisdom or how he approaches the issue of economic governance. 

When come to the subject of handing the economy, he seems to be in the same fantasy world in which many UNP leaders had been living in prior to the presidential election of 2015. By profession Nagananda is a lawyer and might have no knowledge of economics specially as to how extremely complex system of economy works in Sri Lanka and elsewhere. Therefore, I think he should not suggest any conclusive propositions at this time, in regard to economics other than expressing his commonsense economic vision. But I noticed that he made some mistakes which would be tantamount to political lying. Let me be specific.

Nagananda proposes to declare one-month amnesty for corrupt politicians and high-level government officials if they agree to pay all monies earned from corruptions. This is one method of finding money to pay huge government debt. Just one week prior to the 2015 presidential election, UNP’s best team had similar illusions in regard to economic governance which is one of the most important subjects, then and now. For an example, at the historic debate held on December 31st night of 2014 at the Independence Square, when the incumbent President Mahinda’s team questioned as to how they (UNP) proposed to find money to finance the proposed salary increment of Rs. 10,000 for each government employee and for other projects, Ravi Karunanayake and others have insisted that they can find money just by stopping corruptions. They have presented nice calculations to prove not only that they would have enough money but also they would save a considerable amount of money by stopping corruption. By that night I realized that they would make a big mess in regard to economic governance but as I openly said in my prior articles, I casted my vote to the common candidate in January 2015.

However, the next day after the said debate, that is on January 01st, 2015, I wrote an article explaining how the economic system works. On that day I wrote that, “…you may win an election on corruption charges, but you can’t run an economic system by just being not corrupt. This means stopping corruption would not give you any new money to finance the salary increases etc. This truth will be found out soon by the new government… Stopping corruptions might reduce the cost of doing government business. But systemic arrangement of the economy is such that it does not necessarily bring in new money to increase welfare payments. Unfortunately, sometimes corruptions bring in new money into the system… I am writing this not to absolve the government from the culpability of corruption. But I want to enlighten the general public and the civil society organization activists who happened to be the vanguard of the current movement of the opposition in order to make them intellectually ready in economic governance. Then they can be a true force acting outside the new government. They need to be mindful that powerful anti-corruption charges/allegations would have limited and minute impact once the new government sworn in. Perhaps subsequent litigations against corrupt politicians or officials might help to recover and bring in a few millions to government coffers. It cannot be huge, I guess.” (Another Dimension of Corruption, Jan. 01, 2015, Colombo Telegraph).

Mr. Nagananda, I request you to read the above said article again and again because as I pointed, I never know any large physical system than ECONOMY that truly depends upon a hypothetical system created by human imagination –And that hypothetical system is being the monetary system. The monetary system is not real or physical phenomenon. 

Then the other method of reliving debt burden is to request debt forgiveness from foreign debtors and Nagananda pointed out that Russia did cancel debt for many African countries. Those countries might be lucky. But any prospective presidential candidate should not keep hopes on foreign debt forgiveness. The country must be ready to honor their debt obligations, especially foreign debt, if the country has a slightest hope of maintaining a reasonably stable currency. Without a reasonably stable currency our all economic hopes will be shattered as is happening now due to inefficient monetary policy management.

Thirdly, Nagananda, rejected to deal or negotiate with the World Bank and International Monetary Fund (IMF). This is sheer ignorance. The UNP had and still has the totally opposing view to Nagananda’s; they totally rely on IMF’s policy interventions. This is sheer ignorance too. Any country that uses some other country’s credit based domestic currency as its reserve currency, has to negotiate with IMF, period. Sri Lanka is one such country. Not only those countries, even the powerful European Union had to seek IMF intervention during the Great Recession of 2008-09, as the European Central Bank could not create money as easily as the Federal Reserve of the United States for the use novel policy tool call “Quantitative Easing.” 

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October 1st World Elders’ day: Inhumanity in Human but Humanity in Animals 

2018-10-08

As stated by Rev. Fr. Augustine Fernando in his lengthy details in a local newspaper of Sept. 21, 2018, some human beings in the process of getting civilized and cultured through education, get enlightened and in addition to being lawful in public conduct, also become urbane, empathetic, refined and courteously formal, gracious, cordial, suave, sober and self denying for the safe of others. 

I, myself, being a retired public servant for 30 years and 84 years of age at present, my fundamental rights infringed, violated the Universal Declaration of Human Rights, Protection of Elders’ Rights, International Code of conduct for Public Officials and Parliamentary Commissioner for Administration Act No. 17 of 1981, Section 20 and Establishment Code and treated as “Oxen” who is outlive the period of usefulness by public servants of the Ministry of Health, Human Rights Commission and Public Service Commission from 1984. 

My bitter experience from these public servants mentioned above made miserable who undervalue the life of the people, abuse their position, twist the truth of many a situation to create problems. They try every casuistry to be on the safe side, even contravening the law, who in the elevated authority resort to bring the law or stretch the law to the extreme to suit their ends and pretend to be socially and legally correct (the Ombudsman, the Late Justice Ranaraja stated that public servants are reluctant to admit their mistakes knowing very well of their mistakes (August 9, 2003). It is a sorry plight that there is no provision that violators of such protections are brought to book and inflict punishment on them for their violations and infringements. 

Humanity in Animal

During summer in the Chicago, a small boy went to the Brook Field Zoo, jumped over the wall and had accidentally fallen into the cave where the gorillas were kept.No one thought this boy would do so. The crowd was watching the situation in tense. The Security Officer Craig pulled the Alarm Signal 13 and all officers came rushing to the scene preparing  to flush water towards the gorillas. But there was no necessity whatsoever. The Gorilla, named Binti Jua, slowly approached the boy who was lying unconscious after the fall. All were seen shocked, Binti Jua chased away the fellow animals who were rushing to the scene on hearing the alarm to harm the boy, carried him like its own child, signalled Craig who was at the gate. Craig went near and Binti Jua handed over the boy to him and took all the gorillas back to the cave. The unconscious boy was given first aid and was saved. 
This was written by Jenifer Holandu in his book “Unlikely Heroes” which is one of his surprising incidents out of 37. The writer says that animals always respect human beings but human beings do not respect them.