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Coming out of the crisis – Geopolitics and IMF – Part I

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Politics of #GotaGoHome protests and arrival of IMF

Present economic chaos is neither “pandemic” made nor “Gota” made crisis per se. It was in the making with the free market economy for decades, was accelerated on top gear during the second presidential tenure of Mahinda Rajapaksa and continued with less noise through “yahapalanaya” of PM Wickramasinghe. The heavily corrupt and looted economy by then got stuck with the Covid-19 pandemic and was shattered into smithereens under President Gotabhaya Rajapaksa, handled by a set of loony amateurs.

Initial collapse of the economy was spoken of in the agricultural sector with the total ban on chemical fertiliser and agri-inputs in end April 2021. By December 2021 there was growing resentment in the urban middleclass over quality of LP gas and its shortage with power cuts and fuel shortages bringing the forex crisis into the open in early January 2022. Towards mid-February, with urban middleclass life going haywire, Gota government was challenged by them at popular city locations. That led to the new middleclass protest culture at Galle face as the #GotaGoHome youth protest in first week of April with heavy campaigning on social media.   

Youth groups that originally flagged the #GotaGoHome protest have now basically settled with unforeseen, unexpected double entry of Wickramasinghe as Executive President, heading a seemingly non-Rajapaksa government. #GotaGoHome campaigners have also gone silent on their initial public calls to reject the 225 Member parliament as corrupt. Recent appointments of 37 State Ministers have also left out 03 of the 04 Rajapaksas in parliament. With a few days pause on “power cuts” followed by a 01 hour plus tolerable cut with fuel queues out of sight, the urban middleclass has gradually gone back to their usual lifestyle, though with some uncertainty.

Political groups in the fringe who picked up on the protests from Galle face green took them out onto the streets as violent street fights inviting heavy repression from Wickramasinghe rule. Their call against arrests of “peaceful protesters” are being isolated from society, with the urban middleclass focussed more on “social stability necessary” and the would-be outcome of the “IMF bailout”. The repression meanwhile continues using the dreadful Prevention of Terrorism Act (PTA) with President Wickramasinghe least concerned about UNHRC Sessions, their Reports and Resolutions over 12 years old and with nothing conclusive. They don’t play adversely anymore on Wickramasinghe in Sri Lankan politics.

Geo-politics of “regime change”

Wickramasinghe first brought in as PM on 12 May with the ouster of PM Rajapaksa, immediately lifted the submerged economic crisis out from its political pit, in very concrete terms. He was obviously expected to lift the economic crisis into the major platform of social concern to revive the shattered open market economy. With a very bleak picture painted on the immediate future of the country he assured, “our friendly nations will come to assist us, but that would take a few months”. The implied message was his presence is what brings in aid from “friendly nations” and he is indispensable. 

This novel “regime change” now firmly established with Wickramasinghe as Executive President. leaves covert geo-political manoeuvrings more conspicuous for political beavers to tunnel through. It’s seriously unthinkable how Sinhala-Buddhist South with its very backward culture, would have coined a slogan in English as #GotaGoHome. History of protests in Sinhala South have never known any slogan or demand coined in English. The slogan “Go Home” is quite common in English-speaking Western bloc, that Wickramasinghe calls “our friendly nations”. Obviously, it was planted in social media through few FB savvy youth. The campaign was being planned elsewhere with youth given a new “peaceful” flavour in protests calling for a “regime change” they did not know. They were not even aware despite their #GotaGoHome campaign, President Gotabhaya Rajapaksa was not the real target. The regime change planned was a “personality change” with PM Mahinda Rajapaksa sent home to install Wickramasinghe as PM.

Wickramasinghe’s ascend was seen by the urban middleclass as positive. Their distancing from Galle face thereafter led to leadership conflicts with numerous youth groups claiming sole ownership for the franchise of #GotaGoHome campaign and protest that was fast declining.

When parliament met on 17 May after a long adjournment the TNA Jaffna District MP Sumanthiran presenting his No Confidence Motion (NCM) against President Gotabhaya Rajapaksa in parliament, divulged a totally unknown connection between Wickramasinghe and the #GotaGoHome protest. He said Wickramasinghe vetted the NCM draft on 26 April and sent it to Galle face campaign organisers to obtain their approval before giving his consent to support the NCM. Sumanthiran for sure would not have let that cat out of the bag, had Wickramasinghe stayed with his previous promise to support the NCM in parliament.

That revealed links between Galle face protest, a politically scheming Wickramasinghe and the regime change the US had always wanted with them counting shots in a free market economy. US Ambassadress in Colombo Ms. Julie Chung was seen hurrying to protest against oppressive security intervention at Galle face on 09 May afternoon but had no interest in condemning attacks on public and private property and private residences of government politicians the following day. It took Ambassadress Chung hardly one hour to wish PM Wickramasinghe in a tweet after he was sworn in as PM promising the US would support Sri Lanka with IMF negotiations. PM Wickramasinghe’s decision to work along with IMF, was decided in Washington DC, before Colombo.

Next morning, first to meet PM Wickramasinghe were the Indian High Commissioner and the Ambassador for Japan in Colombo, two of the 04 “Quadrilateral Security Dialogue” (QSD) partners, others being the US and the Aussies. The US and India have always been overly concerned about China in Bay of Bengal and in Indo Pacific region that leave Sri Lanka as everyone’s pet pawn.

Then came the historic event of US Ambassadress Chung meeting with JVP leaders Anura Kumara and Vijitha Herath on 14 May at their party headquarters. While the JVP still pretends indifferent to that crucially timed surprising meet, Ambassadress Chung tweeted the same evening, “I continue to meet with a wide range of political representatives to encourage the Sri Lankan government’s efforts to move toward sustainable, inclusive solutions to the economic crisis,”. She had begun her campaign with no loss of time to ensure Wickramasinghe will not be adversely pressured by Opposition political parties.

Meanwhile new protests began with the Sinhala generic “aragalaya” by the Frontline Socialist Party (FSP) with ferocious outbursts using their politically monopolised Inter University Student Federation (IUSF), their party cadres and affiliates in semi-rural society brought to the streets against President Gotabhaya. This compelled the JVP to keep abreast of the vociferous FSP protests to satisfy their now mellowed party fans. Thus, forcing President Gotabhaya Rajapaksa to vacate his official residence and subsequently the presidency. That in turn gave Wickramasinghe the executive presidential power he was always denied through elections.

US has always been an important political ally for all who wanted the Rajapaksa regime ousted. One should also keep in mind it was the US and its Western lobby that created and funded the anti-Rajapaksa campaign on HR violations with elite Colombo based non-governmental organisations till 2015 January ouster of Rajapaksa government. These HR campaigners were shuttling between Geneva and Colombo twice every year till 2015, though not seen or heard now

Can Wickramasinghe sustain himself?

There is in Colombo middleclass society, more within the traditional and especially the globally exposed bi-lingual urbans, a subconscious feeling Wickramasinghe would be the leader who could muster international support to get Sri Lanka on its feet once again. For most Sri Lankans “International Community” is nothing but the Western power bloc. Within the traditional business community too there are corporate heads who prefer Wickramasinghe to most others. Their need to have a Western looking liberal leader, make them ignore the fact he miserably failed twice before. His reputation as an efficient and an effective political manager was proved a “tailored image” with faulty measurements that went beyond his capabilities. During his second tenure from 2015 January, he also failed to prove he is “Mr. Clean” as projected in urban middleclass circles.

Brought to replace the two top Rajapaksas in power and to work in tandem with the IMF, he is deep in a political crisis, while being tasked with the major responsibility of getting the dismantled economy put together. Interlocked, the two crises also provide him space though uncomfortable, for a political move or two. He has to ensure the SLPP parliamentary group stays with him, loyal or not. He also has to show the world he is in control of State agencies, including police and the defence forces. And then develop trust in urban society and in the private business community, he can negotiate an IMF bailout to revive the local economy. In short, he has to show the local and the international community, he is “not Gotabhaya”.

His initial effort was to keep the SLPP group pacified with a “Rajapaksa loyalist” (a Royalist too) appointed as Prime Minister with a small group of 18 more as cabinet ministers, to also impress People he is not wasting public funds on a jumbo cabinet. His attempt to please the People had to be abandoned to please SLPP and SLFP MPs in government. He has to make sure of a stable majority in parliament to push through bills and enactments as required by IMF conditions. He was thus compelled to compromise with the SLPP majority and some in the SLFP to provide 37 more positions as State Ministers.      

Rest is now history with numerous interpretations about the #GotaGoHome Galle face protest, Wickramasinghe’s entry and the “aragalaya” thereafter. Now its IMF and Wickramasinghe who are in control of reviving the SL economy on their own terms. But what of the IMF bailout package itself with conditions not clearly spelt out? Will they lead to a new round of social protests outside everything that was mapped for Galle face? With just 01 vote in parliament and compelled to depend on SLPP vote bloc can Wickramasinghe hang on to the next 02 remaining years in power? IMF bailout package in a way would be the deciding factor of his stay.

– Kusal Perera

21 September 2022

(kusalperera.blogspot.com)

Part II is to follow…

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Jewels linked to Buddha remains go to auction, sparking ethical debate

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The jewels comprise nearly 1,800 pearls, rubies, sapphires, and patterned gold sheets

On Wednesday, a cache of dazzling jewels linked to the Buddha’s mortal remains, which have been hailed as one of the most astonishing archaeological finds of the modern era, will go under the hammer at Sotheby’s in Hong Kong.

For over a century these relics, unearthed from a dusty mound in northern India in 1898, have sat largely unseen, cradled by a private British collection.

Now, as the gems prepare to leave the custody of their keepers, they are stirring not just collectors’ appetites but also some unease.

They come from a glittering hoard of nearly 1,800 pearls, rubies, topaz, sapphires, and patterned gold sheets, first glimpsed deep inside a brick chamber in present-day Uttar Pradesh in India, near the Buddha’s birthplace.

Their discovery – alongside bone fragments identified by an inscribed urn as belonging to the Buddha himself – reverberated through the world of archaeology. Nicolas Chow, chairman of Sotheby’s Asia and worldwide head of Asian Art, believes this is “among the most extraordinary archaeological discoveries of all time”.

Yet as these relics now face the glare of the auction room, experts tell the BBC that a question hangs heavy: can the sale of treasures so intimately woven into India’s sacred past be considered ethical?

William Claxton Peppé, an English estate manager, excavated the stupa and found the jewels

In 1898, William Claxton Peppé, an English estate manager, excavated a stupa at Piprahwa, just south of Lumbini, where the Buddha is believed to have been born. He uncovered relics inscribed and consecrated nearly 2,000 years ago.

Historians agree these relics, intact until then, are the heritage of both the Buddha’s Sakya clan descendants and Buddhists worldwide. The bone relics have since been distributed to countries such as Thailand, Sri Lanka and Myanmar, where they continue to be venerated.

“Are the relics of the Buddha a commodity that can be treated like a work of art to be sold on the market?” wonders Naman Ahuja, a Delhi-based art historian. “And since they aren’t, how is the seller ethically authorised to auction them?

“Since the seller is termed the ‘custodian’, I would like to ask – custodian on whose behalf? Does custodianship permit them now to sell these relics?”

Chris Peppé, great-grandson of William, told the BBC the family looked into donating the relics, but all options presented problems and an auction seemed the “fairest and most transparent way to transfer these relics to Buddhists”.

Julian King, Sotheby’s international specialist and head of sale, Himalayan Art, New York told the BBC the auction house had made a thorough review of the jewels.

“As is the case with any important items and collectibles that are offered for sale at Sotheby’s, we conducted requisite due diligence, including in relation to authenticity and provenance, legality and other considerations in line with our policies and industry standards for artworks and treasures,” King said.

Ashley Thompson, of Soas University of London, and curator Conan Cheong, both experts in Southeast Asian art, have more questions. In a joint statement they told the BBC: “Other ethical questions raised by the sale are: should human remains be traded? And who gets to decide what are human remains or not? For many Buddhist practitioners around the world, the gems on sale are part and parcel of the bones and ash.”

The sale of the relics has also sparked concern among Buddhist leaders.

“The Buddha teaches us not to take other people’s possessions without permission,” Amal Abeyawardene of London-based British MahaBodhi Society, told the BBC. “Historical records indicate that the Sakyamuni clan were granted custody of these relics, as the Buddha emanated from their community. Their wish was for these relics to be preserved alongside adornments, such as these gems, so that they may be venerated in perpetuity by the Buddha’s followers.”

The jewels were unearthed from this stupa in Piprahwa, northern India in 1898

Chris Peppé has written that the jewels passed from his great-uncle to his cousin, and in 2013 came to him and two other cousins. That’s when he began researching their discovery by his great-grandfather.

The Los Angeles-based television director and film editor wrote he had found 1898 newspaper reports – from Reuters to the New York Tribune – announcing the find of Buddha’s remains.

“The colonisation of India by the British had been a source of some cultural shame for me [and continues to be] but, amidst the treasure hunters who hauled their finds back to England, there had also been people focused on the pursuit of knowledge,” Chris Peppé writes.

He noted his research revealed a lot about his ancestors who he had dismissed as “prejudiced Victorians from a bygone era”.

“I learned that Willie Peppé’s first wife chose to travel around India for her honeymoon and loved the country and its culture. Sadly, she died from an unspecified illness. I learned that my grandmother was outraged at the land laws that applied to Indian women.

“And I learned that the excavation of the stupa was an attempt by Willie Peppé to provide work for his tenant farmers who had fallen victim to the famine of 1897.”

The jewels are considered among the most extraordinary archaeological finds of all time

He writes his great-grandfather’s “technical diagrams of ramps and pulleys suggest that he was also a trained engineer who couldn’t resist a project”.

William Peppé handed the gems, relics and reliquaries to the colonial Indian government: the bone relics went to the Buddhist King of Siam (Rama V). Five relic urns, a stone chest and most other relics were sent to the Indian Museum in Kolkata – then the Imperial Museum of Calcutta.

Only a small “portion of duplicates”, which he was allowed to keep, remained in the Peppé family, he notes. (Sotheby’s notes say Peppé was allowed to keep approximately one-fifth of the discovery.)

Sources told the BBC the auction house considers the “duplicates” to be original items considered surplus to those donated, which the “Indian government permitted Peppé to retain”.

Over the past six years years, the gems have featured in major exhibitions, including one at The Met in 2023. The Peppé family has also launched a website to “share our research”.

Four containers made of steatite (a type of stone) and one made of rock crystal were found inside a sandstone box at the Piprahwa stupa

Some scholars argue Buddha relics should never be treated as market commodities.

“The Sotheby’s auction transforms these highly sacred materials into saleable objects, in continuation of acts of colonial violence which extracted them from a stupa and called them ‘gems’ and ‘objects of interest to Europeans’, creating a false division with the ash and bone fragments they were consecrated with,” say Thompson and Cheong.

Chris Peppé told the BBC that in all the monasteries he had visited “no Buddhists regard these as corporeal relics”.

“A few Buddhist academics at western universities have recently offered a convoluted, fact-defying logic whereby they may be regarded as such. It’s an academic construct that is not shared by Buddhists in general who are familiar with the details of the find,” he said.

Peppé said the family “looked into donation [of the relics] to temples and museums and they all presented different problems on closer scrutiny”.

“An auction seems the fairest and most transparent way to transfer these relics to Buddhists and we are confident that Sotheby’s will achieve that.”

Some also point to The Koh-i-Noor, seized by the British East India Company and now part of the Crown Jewels, with many Indians viewing it as stolen. Should the Buddha’s jewels be next?

“Repatriation, I believe, is seldom necessary,” says Ahuja. “Such rare and sacred relics that are unique and which define a land’s cultural history, however, deserve the government’s exceptional attention.”

– Soutik Biswas

(India correspondent – BBC News)

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What has Sri Lanka gained from EU GSP “Plus” since 2007?

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Let me say this straight and clear. “Sri Lanka has not gained anything on EU conditions laid down to qualify Sri Lanka for EU GSP+ post-Tsunami special offer”. What does the EU offer us and what have we to comply with? 

EU offers “zero duty” exports for over 700 listed Sri Lankan products including apparels, rubber and fish products, bicycles, toys, tea and spices, electrical parts and few others to the EU market. That means, though our present basket is limited, over 700 Sri Lankan products can be sold in the EU market at subsidised “zero duty” prices, hopefully gaining increasing volumes. But who gains on increased value on sales?

With heavy corruption across geographical borders including money laundering, this is one major question that is not being asked and answered in detail by the government nor by the manufacturers. What is manufactured here for exports are exclusive “orders” from “Brands” received by product manufacturing companies through “Suppliers” on quoted and agreed prices. They not only have agreed prices, but agreed deadlines in handing over the finished product with pre-defined quality standards. What it means is, a “supplier” brings an order from a global “brand” and a manufacturing company with BOI-SL approval located in Sri Lanka that accepts the order is paid for its manufacture. That product is sold in a consumer market including the EU by its “brand” at a price fixed by the “brand”.

Once the supplier takes over the product from the Sri Lankan manufacturer, we don’t have anything to do with its sales in any consumer market. In simpler language, we don’t have anything to do with the product, once it leaves Colombo port. This too is important. The “zero duty” export concession is provided to listed Sri Lankan products and not to Sri Lanka. It is therefore enjoyed by the “brand” that owns the “product label”, perhaps with a share to the “supplier” on pre-agreed terms. May be, the SL manufacturer too gets “something” through the “supplier”, but that is wholly unofficial and out of public gaze. But for sure, that does not reach Sri Lanka and is not Sri Lanka’s gain.

What are we as a country expected to comply with, to continue with this GSP+ that brings us no economic benefits? First qualification is, Sri Lanka has to remain below the “Upper Middle Income” (UMI) category of countries. Thereafter, Sri Lankan government has to ensure implementation of 27 International Conventions that cover human rights, labour standards and rights, environmental protection and good governance. This does not mean ratification of “conventions” that SL has done in most instances, but also effectively implementing them with new laws and legal amendments where necessary.

Beyond economics, this requirement in effectively and sustainably democratising the Sri Lankan society is definitely worth complying with. Yet, all through past years when EU GSP+ was effective and in operation, neither SL governments nor the EU were serious about any of the 27 international conventions the EU imposed on SL to implement. The EU has sent 03 or 04 GSP+ Review Missions to Sri Lanka during these 17 or 18 years, that met numerous agencies, groups and individuals including the Head of State, relevant ministers, Opposition Leader and politicians, private sector trade unions and funded civil society activists in Colombo. All such review missions left Sri Lanka with a nod for an extension of GSP+ though with reservations at times on delays in implementation, except in 2010 when the EU was under pressure from Tamil Diaspora groups after the civil war was declared over in 2009 May.

This suspension was effective till 2017 for 07 whole years. The new government elected in January 2015 thereafter re-applied for GSP+ in 2016 June. What is important to note is that, during the 07 years SL was denied the “comfort” of “zero tariff” exports to Europe, Sri Lanka’s exports did not drop. According to the “Brief on International Trade” published by the Department of Commerce in October 2021, during the 02 years after the withdrawal of GSP+ the value of Sri Lankan products sold in European markets totalled 01.8 billion Euro. A little more than what it was in 2016, the year before the GSP+ suspension. Surprisingly, the value of merchandise from Sri Lanka sold in European markets during the next few years increased to around 02 billion Euros, before SL regained GSP+ in 2017. It only means, with or without EU GSP+, Sri Lankan products would be there in the EU market.

What needs to be stressed is, 10 plus years of EU GSP+ in full operation (that excludes the suspension), private sector labour that manufacture all Sri Lankan products in the EU markets, have not gained even the basic right to association and therefore not even collective bargaining, except in 01 factory out of over 1,600 factories. Repeal of the notorious repressive law, the PTA that was promised to be repealed way back in 2017 by the then government, is now said to take few more months if it does happen under the present regime and the EU Review Mission seems “okay” with it too. Environmental safety is under an axe with continued deforestation no matter who the government is. Breakdown in law, organised crime and mega corruption that involves the State hierarchy as well, would speak volumes about what “good governance” goes through despite EU monitoring of EU GSP+ with regular extensions.   

End of the day, if the EU is not serious about having their conditions implemented, and if Sri Lankan governments can go on dragging their promises for democratisation over decades with no economic gains either, we are only wasting our tariff and tax incomes in billions doled out as annual incentives topping up free infrastructure provided to foreign direct investors, expecting them to provide us with much wanted forex. We need something more than a forensic audit to see how much we have lost as incentives given to export manufacture, a seriously corrupt sector most do not speak about.

That’s a wee bit about EU GSP+ and we Sri Lankans for now.

– Kusal Perera
2025 May 02                

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Apple says most US-bound iPhones no longer made in China

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Apple says it is shifting production of most iPhones and other devices to be sold in the US away from China, which has been the focus of President Donald Trump’s tariffs.

The majority of the iPhones bound for the US market in the coming months will be made in India, while Vietnam will be a major production hub for items like iPads and Apple Watches, chief executive Tim Cook says.

It comes as the technology giant estimated that US import taxes could add about $900m (£677.5m) to its costs in the current quarter, despite Trump’s decision to spare key electronics from the new tariffs.

The Trump administration has repeatedly said it wants Apple to move production to America.

The estimate comes as firms around the world are scrambling to respond to the huge shifts in global trade triggered by Washington’s trade policies.

On a call with investors on Thursday to discuss the firm’s financial performance, the Apple boss seemed keen to draw attention to its investments in the US.

Mr Cook opened the discussion with a reminder of the company’s plans to invest $500bn across several US states over the next four years.

He also said Apple is shifting its supply chain for US-bound products away from China, but it is India and Vietnam that are poised to be major beneficiaries of that move.

“We do expect the majority of iPhones sold in US will have India as their country of origin,” Mr Cook said.

Meanwhile, Vietnam will be the chief manufacturing hub “for almost all iPad, Mac, Apple Watch and AirPods product sold in the US.”

China will remain the country of origin for the vast majority of total products sold outside the US, he added.

Apple shares had plummeted after Trump announced his administration would levy “reciprocal tariffs” on products imported to the United States, with the aim of persuading companies to manufacture more in the US.

But his administration faced significant pressure to moderate its plans. Shortly after the tariffs went into effect, it announced that certain electronics, including phones and computers, would be exempted.

For now, trade turmoil has left Apple’s sales unscathed.

The company said revenues for the first three months of the year rose 5% from the same period last year, to $95.4bn.

Designed in US, made in China: Why Apple is stuck

Trump tells business chiefs he needs ‘little bit of time’ as US economy shrinks

Trump calls Bezos as Amazon says no plan to show tariff price rises

Amazon, another tech giant whose results were being closely watched for signs of tariff damage, likewise said sales were holding up, rising 8% year-on-year in its North America e-commerce business in the most recent quarter.

It forecast similar growth in the months ahead.

“Obviously no one of us knows exactly where tariffs will settle or when,” said Amazon boss Andy Jassy, while noting that the firm has emerged from periods of disruption – like the pandemic – stronger than before.

“We’re often able to weather challenging conditions better than others,” he said. “I’m optimistic this could happen again.”

The shift of the iPhone supply chain to India was “impressive” according to Patrick Moorhead, chief executive of Moor Insights & Strategy.

“This is a marked change from what [Cook] said a few years back when he said that only China can build iPhones,” Mr Moorhead said.

“There is lots of progress that Apple must show here but it’s a pretty good start,” he said.

Amazon is also repositioning itself to increase resilience in the face of the tariffs.

The company said it working to make sure it had a diversity of sellers and Mr Jassy said he felt the firm was well-positioned for the months ahead, pointing to the firm’s scale and its role supplying everyday essentials.

For now, it said sales had not been hurt by the tariff turmoil. If anything, executives said the business may have benefited from some customers starting to stockpile.

Overall sales jumped 9% to $155.7bn in the first three months of 2025, compared with the same period last year, while profits surged more than 60% year-on-year to roughly $17bn.

Lily Jamali – North America Technology Correspondent

Natalie Sherman- Business reporter

(BBC News)

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