From ‘Donor Darling’ to Outcaste: Sri Lanka’s Aid dependency amid Climate Hypocrisy and Cold War

Sri Lanka

Sri Lanka continues to swing wildly between being a ‘Donor Darling’ flooded with foreign ‘aid’ and ‘advisors’ on the one hand, to a ‘bankrupt’ pariah or outcast on the other.

Last year the strategic Indian Ocean island went from being South Asia’s wealthiest nation with the best social and human development indicators to a beggar–humiliated and shunned by the ‘international community’. This was after staging its first ever Sovereign Default due to a Eurobond debt trap and purported lack of US dollars.

The Default triggered rapid rupee depreciation and instantly beggared citizens amid a distracting transnationally networked, remote controlled ‘Aragalaya’ protest operation led by social media influencers. There was also a blockade on fuel shipments to the country, ironically, amid the United States’ Marine’s ‘Sea Vision’ training program for the Sri Lanka Navy.

Only India the South Asian regional hegemon and good neighbor, was willing and able to help at the time. The narrative in the local and global corporate media echo chamber was that there was no fuel, food, fertilizer, medicines, or tourists to generate exorbitantly privileged and copiously printed US dollars to buy necessities. As the Rupee plummeted, Famine and 15-hour power-cuts were promised by newly appointed US-backed President Ranil Rajapakse promoting fear, out-migration and brain drain from the country seemingly in preparation for an IMF Firesale of assets and another round of Eurobond debt colonialism.

Yet, miraculously, like the Phoenix risen from the ashes a year later Sri Lanka is back having taken mana from heaven in the form of an International Monetary Fund (IMF), loan of just $2.9 million to be disbursed over 4 years, that enabled the magical US dollars to flow again!

Last week the island hosted the Indo-Pacific Environmental Security Forum (IPESF), at Colombo’s Shangri La Hotel that faces South Asia’s busiest Port. More than 140 senior officers from foreign defense forces and top-level environmentalists from 28 countries in the Indo-Pacific took part’ at the confab overlooking Galle Face, the Aragalaya protest site. The 4-day Environmental Security conference was hosted by the US Indo- Pacific Command (INDOPACOM), Sri Lanka Navy (SLN), and Sri Lanka Coast Guard (SLCG).

Although purportedly an ‘environmental security’ conference, the IPESF did not discuss the environmentally devastating impacts and economic costs of the global military business industrial complex, including 750 plus US military bases around the world, their carbon emissions and military exercises.

Environmental impacts of military exercises and war, like the Norde stream pipe line destruction or Stranding and death of Pilot Whales and dolphins due to war games as sonar systems of aircraft carriers disorient large see creatures were NOT on the agenda.

Climate Hypocrisy: Financializing Mother Nature with Blue and Green Bonds and Scams

In fact, the environmental impact of the NATO War machine and ongoing wars in Ukraine and Africa were the elephant in the room at Colombo’s Shangri-La la land Environmental Security Forum. Instead, trendy topics like Debt for Nature Swaps (DFNS), also called Environment, Social and Governance (ESG) bonds based on opaque carbon credit calculations, urbanization, ocean plastics, partnerships for climate resilience, data science in climate risk management, etc. were agenda items.

Two weeks before the IPESF, on July 28 French President Emmanuel Macron had paid a midnight visit to Sri Lanka as Czar of the OECD’s colonial Club de Paris that represents predatory Eurobond holders who were primarily responsible for the strategic island’s default and economic crisis given ongoing IMF debt restructuring Numbers Game to deepen Sri Lanka’s debt bondage.

Although predatory bond traders debt trapped over 55 countries in the Global South during Covid-19 lockdowns, Macron’s new Global Financing Pact recently launched in Paris used the Anthropocene climate catastrophe narrative to Greenwash the most corrupt, opaque and crime-ridden sector of the Western global financial system- Bond trading.

However, anti-corruption activists in Sri Lanka have called for an outright ban on government borrowing from Eurobond markets which caused the country’s first ever Sovereign Default and worst economic crisis. Macron fishing in troubled waters and facing a rout in West Africa was however, marketing ESG green and blue bonds, and promised to set up an office of the French Agency for International Development (AFD) in Colombo.

French fisheries fleets stationed in the Seychelles have been accused of over-fishing and Ocean Grabbing and impoverishing Indian Ocean littoral fisheries communities for decades.[i] Indeed, a Brookings Institution report pointed the finger at French fleets for depriving Somalian Fishers of their livelihoods and forcing them into piracy.

Hot on the heels of departing Macron, a Japanese Government team arrived in Colombo to shower aid on the Ranil Rajapakse regime and restart a rapid rail project. A couple of months before Macron’s visit, CIA chief William Burns, had paid a top secret visit to the country and the United States Ambassador at Large for Cyberspace and Digital Policy, Nathaniel C. Fick, was expected in Colombo from August 17 to 23, 2023, according to the Department of State. The Chinese were in Colombo earlier.

Back as Donor Darling? Aid Dependence and a Corruption Pandemic

Is Sri Lanka which sits on major global trade, energy and Submarine Data Cable routes back again as a ‘donor darling’? The strategic island, long deemed an “unsinkable air craft carrier’ in the middle of the Indian Ocean clearly suffers from a geostrategic ‘Resource Curse’, as well as, aid-induced Dutch Disease and de-industrialization:

The island although rich in valuable marine resources and minerals including Graphite, Zircon, Titanium, etc. now depends on European Union GSP plus handouts to export underwear stitched by women and girls working long hours in Free Trade Zone factories and servicing tourists and to earn foreign exchange.

Pretty much since Independence in 1948 ‘Aid’ dependency has permeated and penetrated the government, military, business elite, policy making, and civil society institutions, impeding industrialization and development, particularly the leveraging of valuable marine and mineral resources including Graphite and Phosphates for fertilizer.

So too, national law and order and investigative agencies and institutions have been penetrated and compromised both due to dependency on foreign aid and experts, as well as, politicization. This has left the country vulnerable to transnationally networked crime, corruption, and being pumped, dumped and de-stabilized to staged exogenous economic shocks sans proper investigations, analysis and research. The policy of promoting brain drain and skilled out-migration has exacerbated dependency on foreign aid, advisors and consultants in a country already reeling from two years of Covid-19 lockdowns that had debilitated institutions and oversight mechanisms enabling a pandemic of corruption.

World Bank’s Middle Income Country Trap to “Make the Economy Scream”

In 2019 the country was also pumped and dumped by World Bank ‘experts’ who trade in dubious data: Sri Lanka was upgraded to an Upper Middle Income Country (MIC). MIC status rendered the debt-trapped county ineligible to access concessionary loans which are available to less developed countries.

Even during 2 years of economically devastating Covid-19 lockdowns successive incompetent and corrupt Ranil Rajapakse regimes related business cronies borrowed from private capital markets and hedge funds like BlackRock that charge predatory interest rates because of the World Bank’s MIC trap — leading to the first ever default in 2022.

Early in its post-colonial history, Ceylon/ Sri Lanka caught in Cold War regional refractions was subject to various exogenous political and economic shocks; the country’s first socialist Prime Minister was assassinated, and his successor faced a coup, insurrections in the shape of ’Jakarta Method’ operations, followed with a thirty-year globally networked ‘ethnic conflict’. Then came the mysterious 2019 Islamic State (IS)-claimed attacks at Easter Sunday on tourist hotels and churches and Chinese investments to make the ‘economy and society scream’ and encourage the obdurately independent natives to accept the Millennium Challenge Corporation (MCC), compact and the Status of Forces Agreement (SOFA), to enable US boots on the ground.

Amid the Aragalaya protest drama, default, and regime change operation last year, there were shades of President Nixon’s instructions to the Central Intelligence Agency (CIA), to make Chile’s ‘economy scream’ as prelude to the overthrow of democratically-elected Leftist President Salvador Allende and the installation of dictator General Pinochet in 1973 during the Cold War.[ii]

The Aragalaya protests, default, rapid rupee devaluation and ensuing inflation and shortages enabled the installation of the current pro-Washington Ranil Rajapakse regime, which has predictably promoted the myth that “there is no alternative to the IMF” and further Eurobond borrowing.

Resilient in the Asian 21st Century?

However, once again the resilient island appears to be back in business and humming along, but this time the pumping and dumping of Sri Lanka as a new hybrid Cold War ramps up in the Indian Ocean with remote Over the Horizon (OTH), cyber and economic war operations for Full Spectrum Dominance (FSD), by a crashing superpower seems different.

During the first Cold War there was still space for the Non-Aligned Movement (NAM), to declare the Indian Ocean as a “Zone of Peace,’ free of nuclear weapons and foreign military bases—led by the World’s first women Prime Minister and a Socialist, Sirimavo Bandaranayke.

However, since the Sovereign Default last year, Sri Lanka has not only lost Economic Independence and Policy autonomy to the Washington Twins and colonial Club de Paris ironically on its 75th year of so-called Independence after being pumped and dumped by the World Bank into an MIC Eurobond debt trap in 2019.

The island has also lost its voice and independent thinking due to an ill-conceived policy of Brain Drain promoted by the foreign ‘Force’ backed Ranil Rajapakse government. This in the wake of Covid-19 lockdowns and hacking of national institutions and oversight mechanisms is promoting (Digital) neo Colonialism also apparent in the debt restructuring Numbers Games being played by the IMF’s experts and consultants including the Lazard, Clifford and Chance.

Simultaneously, Sri Lanka is being carved up for an IMF Firesale of strategic assets (prime coastal and highland lands, energy, transport and telecom infrastructure), to benefit Eurobond traders.

Few among the remaining local intelligentsia have thought to question the adequacy of the exorbitantly privileged and copiously printed US Dollar to measure the ‘wealth of nations’ as the world de-dollarizes. After all, the US has a deficit of $ 32 Trillion and counting and was downgraded by one of its own rating agencies recently.

Perhaps Sri Lanka’s resilience and quick turn around this time also has to do with being flanked by Asian Giants, China and India, in what has been termed the ‘Asian 21st century,’ as the BRICS emerging economies overtake the G7 economies while de-dollarizing fast. This despite the fact that the Ranil Rajapakse regime like the Opposition also controlled over the horizon, has turned a blind eye to calls that Sri Lanka join the BRICS and New Development Bank.

France Fishing in the Indian Ocean: ‘Aid’ Dependency and asset stripping

France’s Macron who recently sought an invite to the BRICS party, while in retreat from former resource-rich colonies Mali, Burkina Faso and Niger in West Africa, seems keen to go fishing in the Indian Ocean, and planning to set up a brand new Office for the French Agency for International Development (AFD), in Colombo!

AFD in Sri Lanka would boost French claims to the ‘Indo-Atlantic’ or western Indian Ocean, and enable among other things the French Fisheries empire and trawler fleet stationed in the Seychelles to continue neo-colonial looting of Indian Ocean Tuna and other ocean resources.

Laughably, France claims to be an Indian Ocean country although it is in the Atlantic Ocean! This fronting colonial possessions like Reunion. France has claimed extensive Indian Ocean sea bed at UNCLOS while in dispute with Mauritius. Having been recently excluded from AUKUS, the Anglo Saxon Nuclear Submarine Club of Australia, UK and US, France is now hoping to build nuclear submarines for India and exploit the Indian Ocean it seems.

Meanwhile, at the Indian Ocean Tuna Commission France, Spain, EU and other Distant Water Fishing States’ (DWFS), corporations have been accused of ‘Ocean grabbing’ of Indian Ocean fisheries (See EU accused of Neocolonial plundering of the Indian Ocean in the Guardian). [iii] French and EU trawler fleets based in the Seychelles are the biggest culprits.

In the context, fisheries organizations from impoverished Indian Ocean rim countries have been increasingly calling for a ban on French, EU and other DWFS Corporates from Japan, South Korea, and Taiwan, Republic of China operating in the Indian Ocean. Ironically, these same countries are big “Aid donors” to Sri Lanka’s Fisheries Sector and the National Aquatic Research Agency (NARA), where corruption is endemic

Thus, local fisheries organizations, and NGOs funded for years by Norwegian, Japanese, and French aid have been silent for decades on the looting by the same DWFS countries of local fisheries resources.The practice of so-called ‘Aid donors’ with conflict of interest funding Fisheries Sector projects, particularly, Research and Development, has significantly contributed to sector-wide corruption, de-development and de-industrialization of Sri Lanka’s fisheries industry.

Ironically, while so-called aid donors DWFS corporations of overfish and deplete fish stock in the Indian Ocean region where many littoral countries have high rates of poverty, they often promote the narrative that environmental pollution is a cause of depleted fish stock!

Clearly, a ban on French, EU, Japanese and other DWFS operating in the Indian Ocean under the ‘Free and open Indo-Pacific” theme song would enable the depleted fish stock of the Indian Ocean to recover. It would also enable Sri Lanka and other small countries that engage primarily in ‘artisanal fishery’ to industrialize and leverage their valuable fisheries resources that are currently looted by DWFS for local consumption, as well as, export to earn foreign currency.

Protecting Indian Ocean Fisheries Communities form Predatory DWFS

India, the Indian Ocean World hegemon with Indonesia and ASEAN would need to lead the initiative to ban and end the neocolonial looting of Indian Ocean fisheries resources by Distant Water Fishing State (DWFS) France, Spain, Japan, Taiwan Republic of China, also to ensure food security for impoverished littoral countries and islands.

Simultaneously, Sri Lanka would need to develop a State-led National Action Plan to ensure Technology Transfer to upscale and industrialize its Fisheries sector also for national food security.

Over decades, fisheries communities, livelihoods and the sector have faced high levels of in-securitization and de-developed also due to various exogenous economic shocks. During the war years, fisheries communities in the north faced many restrictions and many from the fisheries castes joined militant groups and/or migrated to work in the Norwegian Fisheries industry, depleting the local fishery industry and its human resources.

More recently, the mysterious ISIS-claimed Easter Sunday 2019 attacks on coastal communities with fisheries harbor lockdowns, followed by 2 years of Covid-19 fisheries habour lockdowns also impacted fisheries communities.

There were also the mysterious hybrid-war episodes of burning of ships the MV Pearl and MT Diamond in the western and eastern Seas of Sri Lanka that polluted the seas and impacted fisheries livelihoods. Coastal fisheries communities have also been targeted by drug traffickers and there are high levels of addiction and alcoholism among coastal communities that have been rendered ‘aid dependent’ as recent spike in crime in Kudawella indicates.

Arguably, the lack of Government and national investment for Research and Development of Sri Lanka’s valuable fisheries sector is perhaps the principle problem which has enable so-called DWFS ‘Aid Donors’ to plunder the Seas of Sri Lanka and the Indian Ocean. Thus, Sri Lanka’s fishers have been islanded, impoverished, and de-developed in recent time due to ‘aid dependency’, while the corporate media echo chamber distracts from the real problem by focusing on minor conflicts with Indian fishers in the north!

Dr. Darini Rajasingham-Senanayake is a social and medical anthropologist with research expertise in international development and political economic analysis. She was a member of the International Steering Group on “Southern Perspectives on Reform of the International Development Architecture”





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