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Saturday December 10th, 2022

Sri Lanka anti-Muslim attacks were stoked by organized nationalists: Speaker

ECONOMYNEXT – Sri Lanka’s latest anti-Muslim riots took place three weeks after Easter Sunday suicide bombings showing that it was an organized group was behind hit, Parliamentary speaker Karu Jayasuriya said.

"These incidents did not take place in the first horror of terrorist attacks, when people were hurting and grieving," Jayasuriya said in a statement.

"Instead the fact that they are taking place three weeks after the attacks makes it evident that there is an organized group seeking to fulfil narrow agendas through this unrest.

"All I have to say to them is this. “You are laying the groundwork for your country to burn for a few more generations. I urge all citizens to bear in mind that these are the futures of your children that you are setting ablaze."

At least one person was killed by rampaging nationalists, who destroyed Muslim businesses, homes and mosques.

In the days after the Easter Sunday bombings, nationalists were seen stoking racism on social media, with commentators of at least one television station joining the fray. On facebook.com groups were formed for Nazi-style boycotts of Muslim businesses.

Police have said organized groups were behind the attacks. Witnesses have spoken of groups coming in motorcycles to smash Muslim shops, moving from township to township, which was then joined by local nationalists.

Speaker Jayasuriya recalled the 1983 riots when Sinhalese nationalists attacked the Tamil community leaving many dead, helping swell the ranks of Tamil Tigers.

"My own eyes have witnessed the devastation wrought by the fires of racism and youth insurrections that have led to a breakdown of relations between communities of people," Jayasuriya said.

"For 30 years, our country was devoured by those flames. We lost our place in the world.

"The same fires destroyed the futures of innocent children, even the children of those who set the country alight.

"Vengeance and hatred nurtured and nourished terrorism."

The full statement is reproduced below:

I address you today as the Speaker of Parliament and as a responsible elderly person who loves this country, not as a politician.

My own eyes have witnessed the devastation wrought by the fires of racism and youth insurrections that have led to a breakdown of relations between communities of people.

The day the 1983 Black July riots began, I was on my way to the Kelaniya Temple with my wife and children. I was not involved in politics at the time. At the Elphinstone Junction, a crowd of more than 100 people blocked my path and made a request.

“Sir,” they said, “buy us some petrol so we can save the Sinhalese race”. I was shocked by the request. I replied:

“You are not trying to save the race. You are trying to set fire to our future.” I told them it would be future generations that would have to pay for all this.

For 30 years, our country was devoured by those flames. We lost our place in the world. The same fires destroyed the futures of innocent children, even the children of those who set the country alight. Vengeance and hatred nurtured and nourished terrorism.

Following the Easter Sunday attacks, the ordinary people of this country conducted themselves in a far more civilized, intelligent and patient way. As I express these sentiments, I extend my respect and gratitude to all religious leaders who offered guidance to their followers about how to respond to the tragedy.

I believe that you have all understood how much every sector has suffered from paralysis and inefficiency in the three weeks that followed.

It is deeply unfortunate that rather than overcome these challenges and begin to rebuild, incidents that cause hatred to spread have been reported.

These incidents did not take place in the first horror of terrorist attacks, when people were hurting and grieving. Instead the fact that they are taking place three weeks after the attacks makes it evident that there is an organized group seeking to fulfil narrow agendas through this unrest.

All I have to say to them is this. “You are laying the groundwork for your country to burn for a few more generations. I urge all citizens to bear in mind that these are the futures of your children that you are setting ablaze.

The way our people conducted themselves when confronted by terrorism, drew the respect of the world. But that these acts of violence will earn us the disgust of the world at large, and especially those friendly Middle Eastern and Islamic nations is no longer preventable.

It must be emphasized that anyone helping to spread the fires of religious and racial hatred is a stakeholder in the destruction of the lives of our children, to whom the future truly belongs.

If I may recall the words of our Teacher Lord Buddha, who taught that hatred does not cease by hatred, and urge everyone to act with patience and restraint at this time. I humbly request the religious leadership to come forward in this moment to quell these fires. I urge the political leadership to appeal to the people to remain calm.

I reiterate my request to HE the President and the Prime Minister to speak in one voice and communicate with the people. The Defence Secretary, IGP and armed forces chiefs should brief the people daily on the security situation. Only then will the people feel confident. Only then will the rumours that are spreading like wildfire be stopped in their tracks. So far, every rumour that has been spread has been proved to be untrue.

As the Speaker of Parliament, my appeal to all citizens is that we do not allow the country to be plunged into darkness once more, the way it was in 1983.

Reflecting on yesterday’s incidents creates a deep sense of sadness for me. The attacks on mosques, the burning of houses and shops, the attacks on innocent people cannot be condoned in any way.

These actions push Sri Lanka further into the abyss. I do not believe that any person who has a semblance of feeling about this country, could resort to such actions.

We must act intelligently now. The Muslim Affairs Minister is striving to resolve these issues patiently, with the full blessings of the Muslim community. The Ministers of Justice, Education and Higher Education are involved in consultations with relevant sectors to draft new laws and regulations.

Agreements have been reached on several controversial areas, including traditional Muslim women’s dress, madrasas and higher education institutes.

I myself participated in some of these discussions. In the next few weeks, some of these issues that have given rise to debate and controversy will be resolved I believe. The majority of Muslims have no desire to turn this country into a fundamentalist nation.

Let us not be cursed for our actions by future generations. I urge all Sri Lankans to awaken the collective strength of our peace-loving people against these acts of racial and religious hatred.

May the triple gem bless you. God bless you.

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Sri Lanka opposition MP sees racist agenda behind behind pro-China demonstration

TNA MP Shanakiya Rasamanickam – Image credit: Facebook

ECONOMYNEXT – A protest held outside the Chinese embassy in Colombo against opposition legislator Shanakiyan Rasamanickam was likely the work of a paid group with little knowledge of Sri Lanka’s crisis and pushing someone else’s racist agenda, the MP said.

Rasamanickam told EconomyNext on Saturday December 10 that the protestors were peddling a familiar narrative of racism.

“These people are clearly on a racist agenda. We know how this agenda plays out and we know who is behind it from before, so it’s not anything new. People can connect the dots and figure out who might be behind this protest,” he said.

The hurriedly put together demonstration seemed to be against Rasamanickam’s controversial warnings of anti-China protests in Sri Lanka over Beijing’s purported reluctance to restructure the crisis-hit island nation’s debt.

A small group of protestors including a number of Buddhist monks had gathered outside the embassy premises on Friday December 09 condemning Rasamanickam’s statement in parliament that people will take to the streets against China in a “go home, China” wave of protests similar to the “go home, Gota” protests that unseated Sri Lanka’s powerful former president Gotabaya Rajapaksa.

“I was actually very happy to see a protest happening against me in Colombo. This is the first time there was a protest held against me,” said Rasamanickam.

I”f you look at the group that were protesting, they are quite unaware of the current economic situation in the island,” he added.

One banner displayed by the pro-China protestors contained the words “let us strongly condemn the ‘Go home China’ statement by separatist Rasamanickam” in Sinhala, though the organisers had been careful to omit the word ‘separatist’ in the English translation of the slogan.

It is unclear at present who was behind the protest, but a placard carried by one of the protestors read “is this going from anti-Gota to anti-China”, indicating the possible involvement of pro-Rajapaksa elements.

“It looked like a paid  group of people who came with no knowledge of the country’s situation and was completely under the agenda of somebody else,” said the MP.

The Batticaloa district lawmaker claimed that some people had offered to organise a counter-protest against the pro-China demonstrators but he declined the offer.

“I refused it because the citizens aren’t silly. They are aware of their surroundings and what is going on, so we need not protest in that way,” he said.

A commotion also ensued at the demonstration when a woman started recording it on her mobile phone, prompting some of the protestors to demand that she leave. Words were exchanged, with the visibly agitated woman yelling at the protestors that they were conspiring to sell Sri Lanka to China.

What triggered the protest was an explosive remark by MP Rasamanickam on December 02 that if China were a true friend of Sri Lanka’s, it would agree to either write off the island nation’s 7.4 billion dollar debt or at least help restructure it.

Nearly a fifth of Sri Lanka’s public external debt is held by China, according to one calculation.

“If China, who has nearly 20,000 billion dollars, is truly Sri Lanka’s friend… offering 9 million litres of diesel or half a million kilos of rice isn’t real help,” said Rasamanickam, speaking in Sinhala.

“I say to China and the Chinese embassy that, as 22 million Sri Lankans irrespective of ethnic or religious differences got together to say ‘Go home, Gota’, don’t push us to a place where we will be saying ‘China, go home’,” he said.

Whatever the agenda behind Friday’s protestors, they are not alone in their opposition to Rasamanickam’s strong words against China. Main opposition Samagi Jana Balawegaya (SJB) MP Harsha de Silva was strongly critical of the statement, insisting that Sri Lanka cooperate with all countries.

Rasamanickam told EconomyNext that his words were misrepresented.

“What I said was ex President Gotabaya Rajapaksa didn’t listen to the voices of the people and people ended up saying ‘Gota Go Home’ and if the Chinese fail to address the issues and act in the interest of the Sri Lankan community, naturally people will start opposing them also. If that happens, I simply said that I will support them because for us our country and our people are the priority,” he said, adding that his speech had raised awareness among the public of the situation.

The MP has been raising his voice in parliament and elsewhere in recent days over what he claims is a hesitance on the part of China to assist in Sri Lanka’s debt restructuring efforts. The 2.9 billion dollar extended fund facility (EFF) that the International Monetary Fund (IMF) has offered to extend to the island nation is contingent upon the successful restructure of this outstanding in addition some stringent reforms that experts say are long overdue.

Colombo has been vague at best on the status of ongoing restructure talks with Sri Lanka’s creditors, and opposition lawmakers and others have expressed concern over what seems to be a worrying delay. Rasamanickam and others have claimed that China, Sri Lanka’s largest bilateral creditor, is the reason for the apparent standstill.

Meanwhile, IMF Chief Kristalina Georgieva has called on China to speed up restructuring of debt in Sri Lanka and Zambia following a meeting with the leaders of the country.

“We had a very fruitful exchange, both on the G20 Common Framework and on some specific cases,” she said in a statement after the meeting.

“We need to build on the momentum of the agreement on Chad’s debt treatment and accelerate and finalize the debt treatments for Zambia and Sri Lanka, which would allow for disbursements from the IMF and multilateral development banks,” she said. (Colombo/Dec10/2022)

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IMF chief calls on China to speed up Sri Lanka, Zambia debt overhaul

ECONOMYYNEXT- International Monetary Fund Chief Kristalina Georgieva has called on China to speed up restructuring of debt in Sri Lanka and Zambia following a meeting with the leaders of the country.

“We had a very fruitful exchange, both on the G20 Common Framework and on some specific cases,” she said in a statement after the meeting.

“We need to build on the momentum of the agreement on Chad’s debt treatment and accelerate and finalize the debt treatments for Zambia and Sri Lanka, which would allow for disbursements from the IMF and multilateral development banks.”

Sri Lanka is discussions with the Export Import Bank of China as the lead lender to the island, State Minister Shehan Semasinghe told parliament.

China has informed Sri Lanka that they will also hold bilateral discussions with the IMF and World Bank he said.

China has been asking questions from Sri Lanka and lenders were trying to assess the impact on credits to other countries as well as the domestic economy, he said.

China is a top lender to Sri Lanka along with Japan, the Asian Development Bank and Japan.

Some of China’s infrastructure loans have also been questioned for lack of proper feasibility, though a coal plant is generally acknowledged to be best investment the country has made since the 1980s and is enough to cover many since.

But China gave several so-called ‘cover up loans’ to Sri Lanka which was not linked to infrastructure or economic reforms when the country ran into forex shortages under ‘flexible inflation targeting/output gap targeting’ compounding borrowings from sovereign bond investors.

Sri Lanka calls such monetary instability linked borrowings ‘bridging finance’.

The World Bank and Asian Development Bank or Japan does not give such ‘bridging finance’ or budget support loans without reforms to expand economic activities.

Sri Lanka central government net debt (after deducting foreign reserves) which was 17 billion US dollars after almost 65 years of foreign borrowings shot up to 32 billion US dollars over 7 years of extreme monetary instability. Meanwhile foreign reserves became negative.

Resorting foreign borrowings to meet foreign repayments comes from a Mercantilist fallacy known as the ‘transfer problem’, analysts have said.

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Sri Lanka debt crisis trapped in spurious Keynesian ‘transfer problem’ and MMT: Bellwether

Policy makers believe that a current account surplus is magically required to make foreign repayments and not higher interest rates to curtail domestic investments and consumption which make resources available to meet such payments which will in turn reduce the imports and any current account deficit. (Colombo/Dec10/2022)

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Sri Lanka has excess rice amid malnutrition: President

ECONOMYNEXT – Sri Lanka is to harvest a good rice harvest in the upcoming main (Maha) cultivation season but paddy stocks from two previous seasons are still with farmers and collectors, President Ranil Wickremesinghe said.

“I see now that we will get a good harvest in the Maha season,” President Ranil Wickremesinghe told parliament.

“That is also a problem, because we have some leftover rice stocks from the recent Yala (minor) season and the previous Maha season.”

“Now there can be situation of excess rice, we have to protect the farmers. On the other had we will have food to reduce malnutrition.”

Sri Lanka’s rice farmers do not grow and internationally traded grade of rice and bumper harvests do not lead to export booms but calls for trade restrictions on the hungry and helpless to ‘protect’ their incomes.

Rough rice (paddy) prices have fallen to around 80 rupees a kilogram, from over 120 rupees at the height of the crisis earlier in the year when large volumes of money was injected to the banking system to sterilize interventions and pay state workers.

Food Price Crisis

Though supplies are coming back to normal, because soft-pegging macro-economists destroyed the rupee from 200 to 360 to the US dollar by printing money for two years to keep interest rates down, prices are double before from the liquidity injections or ‘stimulus’ started.

The malnutrition is coming from monetary instability involving the collapse of the anchor-conflicting ‘flexible exchange rate and not a problem in the real economy as excess food supplies show.

Related Impoverished Sri Lankans are selling assets, eating less: WFP

Sri Lanka’s chicken farmers are also looking for export opportunities.

Related Sri Lanka chicken farmers eye exports as domestic prices drop

Sri Lanka is now in the worst the worst currency crisis triggered it the history of its intermediate regime (flexible exchange rate) central bank.

With salaries not keeping pace, incomes many sectors, mostly salaried workers including daily wage earners are too low to afford food whether or not they are plentiful, leading to malnutrition especially of the children of poor families.

The phenomenon has a been a recurring problem in the country after the soft-pegged central bank was set up 72 years ago.

Before 1980, when depreciation became fashionable in Washington policy making circles (now called a flexible exchange rate and BBC policy at that time), import controls were the main threat to food supplies, not soaring prices and lagging wages.

Food Trade Controls

In the 2022 currency crisis soft-pegging macro-economist in a mistaken strategy then banned ‘open account imports’ threatening food supplies ranging from lentils to onions and sugar to wheat that usually come from South Asia and Dubai, driving up prices.

But Wickremesinghe then opened account imports, preventing a real food crisis from taking place, allowing money flowing through traditional gross settlement systems (Undiyal/Hawala) to be easily prioritized for food.

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Food imports in Sri Lanka are only around 100 to 150 million dollars a month which is about third of monthly worker remittances and about 10 percent of total exports.

However the central bank under Governor Nandalal Weerasinghe took the required action to liberalize rates allowing credit to slow and stabilize the external sector.

The government also raised energy prices to keep in line with flexible exchange rate collapse (also a recurring phenomenon) and raised taxes to reduce domestic credit (also recurring action).

President Wickremesinghe and his advisors focused their efforts on getting loans from foreign lenders to buy fertilizer for farmers after he took over as Prime Minister and later President.

Fertilizer supplies are important in a currency crisis not just to produce food as normal but the construction sector usually has to be smashed to stop balance of payments deficits and to stop the rupee from falling further.

When rural workers engaged in construction return home to farming areas availability of fertilizer will help them keep in employment.

Open Market Injections

Construction and other sectors undergo an artificial boom when a soft-pegging central bank suppresses rates with its open market operations and sells downs reserves when the currency peg comes under pressure.

Selling reserves and printing money through open market operations to stop rates going up – an action called ‘sterilized intervention’ – effectively injects what classical economists called ‘fictitious capital’ into banks and artificially pushing up credit and imports further by effectively re-financing private sector activities with central bank credit.

The new money to sterilize interventions over-extending a credit cycle and encourages more imports.

In the current crisis Sri Lanka’s Consumer Affairs Authority, by imposing price controls, disrupted sectors like poultry sector and created black markets.

President Wickremesinghe has so far not taken any actions to abolish the CAA or its price controlling powers which goes against his ‘social market economy’ strategy. (Colombo/Dec09/2022)

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