In the run up to elections President Ranil Wickramasinghe has portrayed his government’s Debt Sustainability Agreement (DSA) with the International Monetary Fund as a panacea for Sri Lanka’s globally networked ‘polycrisis’.
Minister of Finance, Shehan Semasinghe, meanwhile, claimed that ‘there is no alternative’ (TINA) to the lender of last resorts, the IMF. Amending the agreement as called for by some opposition parties would cause heavy losses to the country and amount to ‘suicide’ he noted.
The warning that Sri Lanka must stay the course on the ‘IMF’s ‘bitter medicine’ of borrowing from predatory International Sovereign or Eurobond (ISB) creditors, ironically, in order to pay them off– regardless of who wins the election has been echoed by a host of ambassadors from Paris Club creditor countries, including a visiting Japanese Minister.
Other IMF ‘solutions’ in lieu of ISB Odious Debt Cancellation that debt justice activists and international and local academics have sought, entail austerity measures and privatization of public assets to shrink the economy. These IMF measures are set to deepen the debt trap and impoverish citizens in the not too distant future.
Pivot to the BRICS, Escape the Eurobond Debt trap
There are clearly no economic solutions to Sri Lanka’s fundamentally Geopolitical problems: However, the election manifestos of US-backed and unelected President Wickramasinghe and the post-Marist opposition National Peoples’ Power (PPP) party, alike, are silent on the need for the new government to pivot to the BRICS, in order to bailout Eurobond debt trapped citizens in the ‘Asian 21st century’.
The BRICS block are the growth hub in a Multipolar currency world now where several world currencies dominate different regions – for instance the Indian Rupee and RMD in Asia. Re-orienting the Sri Lankan economy east ward and to the Global South, would also enable transfer of technology and access to new markets for a growth led escape from the Paris Club’s USD-Eurobond debt neocolonialism that is encrypted in the IMF Extended Fund Facility (EFF) agreement.
It is now quite evident that International Sovereign Eurobond (ISB) scams at the Central Bank of Sri Lanka (CBSL), were the root cause for the odious debt pile up and staged default two years ago– in 2022. At the time China was blamed for Sri Lanka’s debt trap in a concerted global and local corporate media propaganda campaign as America’s economic proxy war on the Belt and Road Initiative (BRI) escalated.
Green Bonds and Scams in the Faux Anthropocene
With the wisdom of hindsight, Sri Lanka must look beyond the IMF’s pseudo solution of borrowing from predatory creditors in order to pay them off come 2028: Only this time around the bonds and scams would be flavored, sweetened and multi-coloured to make them more palatable to the Gaslighted natives of a tropical Paradise Lost!
Under the IMF and ISB ‘advisors’ tutelage, vanilla bonds would be issued to pay off predatory ISB creditors and loan sharks, the largest being BlackRock that debt trapped Sri Lanka in collusion with corrupt local politicians and their business cronies. Strawberry pink macro-linked governance bonds are being designed with Verite Research to monitor local corruption sans mention of ISB corruption or the fact that the names of bondholders are kept secret. Meanwhile, Green and blue debt bondage (or Debt for Nature Swaps), are being designed to save Mother Nature in the faux Anthropocene — in violation of core principles of both Debt Justice and Climate Justice.
In the midst of elections fog, just last week for the first time in Sri Lanka a green bond was issued by the DFCC Bank. In a nut shell, green and blue bonds are designed by financializing, dollarizing and privatizing Mother Nature; tropical forests, marine areas, ocean resources, and the air we breathe with Artificial Intelligence generated science fiction carbon credit calculations amid the faux Anthropocene climate catastrophe narrative.
The United Nations Secretary General, Antonio Guterrez has been talking up “climate boiling” and generating fear psychosis that may enable sale of green and blue bonds and scams. The faux Anthropocene is of course mainly caused by environmental pollution generated by the US-led NATO war machine, its 800 plus military bases around the world, endless wars, and war games, not to mention Directed Energy Weapons (DEW) and HAARP. The latter enable staging climate disasters such as earthquakes, tsunamis, heat domes, flash floods, forest fires etc. But there are no United Nations conferences on these or the need to ensure shutdown of environment polluting global NATO military bases,
Back in Sri Lanka, borrowing from predatory ISB creditors via green-washed bonds simply to pay them off would inflate the debt numbers. With the usual IMF austerity measures, fire sale and privatization of national assets to shrink the economy, this is a recipe for double disaster– a second Default in very short order!
Simultaneously, the question also arises: are ongoing attempts at the US dollar-based financialization of Mother Nature in the form of Green and Blue bonds and scams meant to prolong its life as global reserve currency in an increasingly multipolar currency system—as the world de-dollarizes?
A Debt Numbers Game or an IMF-ISB-CBSL Corruption Racket?
Sri Lanka’s first ever sovereign default was staged due to a purported lack of exorbitantly privileged US dollars after the Hamilton Reserve Bank filed a court case in New York in 2022. The HRB court action in coordination with rating agencies triggered rapid rupee depreciation amid a distracting faux democracy protests funded by the National Endowment for Democracy (NED), and coordinated food and fuel supply chain disruption.
Since the Default the county’s debt has grown exponentially under IMF tutelage.
With the Extended Fund Facility (EFF), the IMF has worked assiduously with US-backed President Ranil Rajapakse who came to power on the back of a regime change putsch amid faux democracy protests (Aragalaya), and his team of foreign and local advisors, also at the Central Bank (CBSL) famous for bond scams, in order to deepen the country’s debt trap. Was the IMF’s and Washington-backed Ranil Rajapakse’s DSA a marriage made in heaven or hell?
Under IMF tutelage Sri Lanka’s US dollar denominated debt has increased from the $26 billion listed by the External Resources Department of the Ministry of Finance at the time of default just two years ago, to a staggering $ 100 billion – if a recent statement by the Governor of the CBSL, Nandalal Weerasinghe is to be believed.[i]
The phenomenal increase of USD denominated external debt has been achieved through the IMF’s mission and mandate creep into Sri Lanka’s domestic, rupee denominated debt restructuring (DDR). This has enabled conflating internal and external debt and inflating the debt numbers to deepen Sri Lanka’s debt numbers and the IMF’s ISB bailout business. Additionally, exchange rate manipulation and debt data gaming have also contributed to the phenomenal increase.
Debt data manipulation given lack of data security of the Sri Lanka government Cloud storage system remains a significant problem. Previously there was a cybersecurity breach and data wipe of the National Medicines Regulatory Authority (NMRA) during a Pfizer injection purchasing spree in 2020 during the Covid-19 panicdemic, which effectively bankrupted the Ministry of Health.
Simultaneously, debt for Nature Swaps or Green and Blue debt bondage through private local banks, such as the DFCC, are being pushed to deepen Sri Lanka’s debt at this time. Amid elections fog, the scene is being set for (future) green bond scams, heedless of calls for debt cancellation, especially since bond scams were the root cause of Sri Lanka’s Odious Debt pile up at the CBSL famous for bond scams with successive Ranil Rajapakse regimes.
Is debt a numbers game with Artificial Intelligence augmented reality ongoing curtsey the Gates Foundation which has set up an office in Sri Lanka’s US-backed unelected President’s office, ongoing in collusion with the recently reformed and autonomous CBSL, now subservient to the IMF to Gaslight the people of Sri Lanka?
The CBSL was made autonomous from corrupt politicians and un-accountable to the Parliament and people of Sri Lanka under the rubric of good governance reforms following the IMF’s Governance assessment of Sri Lanka. Thus, a Bill was passed in Parliament last year. The result has been the dramatic rise in the country’s debt, now conflated and inflated to $100 billion from $26 billion two years ago at the time of the staged default!
The green and blue bonds promoted by President Wickramasinghe’s Gates Foundation advisors and ex-UNEP head Eric Solheim, are also set to deepen the debt trap. Meanwhile, a host of USAID, NED and EU-funded local environmental NGOs and CBOs have been mobilized to cheer lead the financialization, dollarization and privatization of Mother Nature via obtuse and unscientific carbon credit calculations generated by the Artificial Intelligence God-Fetish. So too, the UNDP’s Sri Lanka Diaspora member Kanni Wignaraja, has been enlisted to market future odious debt bondage in violation of core principles of Climate Justice and Debt Justice for the Global South.
Meanwhile, the access of local farmers and fishers to forests, fields marine areas and ocean seabed resources and their traditional livelihoods jeopardized under the guise of environmental conservation. Simultaneously, BlackRock, Sri Lanka’s biggest private creditor and the world’s largest hedge fund which got huge Covid-19 bailout funds from the US Government under the CARES Act to asset strip around the world during economically devastating Lockdowns, has been green-washing itself with partner Adani, also through green energy wind power projects.
Indeed, the solution for Sri Lanka at this time is integrating in to a multipolar currency system where several currencies dominate the world economy with each holding significant sway in their respective regions, alongside calibrated de-dollarizing.
An Empirical Reality Check: South Asia’s Richest Country Bankrupt by what metric?
Sri Lanka is the wealthiest country in South Asia with the best social, human development, and PQLI indicators. The country has the highest per capita GDP– aside from tiny Maldives. It was listed as an Upper Middle Income country by the World Bank in 2019 and has an abundance of agricultural, marine and mineral resources. The country has two monsoons adequate for at least two annual crop rotations to feed itself and for green hydropower.
The geostrategic tropical Indian Ocean island moreover sits on some of the most important energy, trade and submarine data cables in the world, and has hence often been deemed ‘valuable real estate”. However, citizens were subject US-backed President Wickramasinghe’s gaslighting back in 2022 when he took power in the Aragalaya putsch, that the country would soon face famine, starvation and 15-hour power to spread fear, claim ‘bankruptcy’ and stage Default enabling the IMF usurp economic sovereignty and policy autonomy.
Retrospectively, it seems that the economic pundits of the IMF gravy train were not able to distinguish between an ‘illiquidity’ problem and ‘insolvency’—the former a short term problem and the latter a structural issue — in their rush to declare Sri Lanka ‘bankrupt’ and stage a default. Perhaps this explains the IMF mandate creep and ISB rush into domestic debt restructuring (DDR), to inflate the debt numbers and justify the staged default ex-poste, while appropriating national pensions funds the EPF to pay off BlackRock and impoverish retired folk.
Anyone who has visited other South Asian countries would realize that there is a misfit between empirical ground realities and the narrative that Sri Lank is insolvent and bankrupt– from in a comparative regional context. Indeed, the geostrategic island’s abundance of natural and human resources negates the IMF and ISB claim the country is ‘bankrupt’ and ‘insolvent’ – simply because it lacks exorbitantly privileged US dollars fiat currency, and must hence sell off strategic assets to pay of predatory private lenders.
Pumping and Dumping Countries? Default with Lawfare and Gaslighting
This begs the question: by what metric was Sri Lanka deemed bankrupt and in need of default into the waiting arms of Washington and its Consensus? Was an ‘illiquidity’ problem constructed as ‘insolvency’ through a propaganda and psychological operation to spread fear amid Law fare in the New York Courts?
Sri Lanka’s rapid currency depreciation against the exorbitantly privileged US dollar in 2022 was triggered after the shadowy off-shore Hamilton Reserve Bank of St. Kitts in Nevis filed a court case New York against Sri Lanka for non-payment of a small amount of interest. This was in league with various Rating Agencies, at a time that the Colombo was distracted with the faux democracy Aragalay protests amid coordinated fuel and food supply chain disruption to stage the geostrategic island’s first ever default. This was also in the wake of various exogenous economic shocks like ISIS terror attacks, Covid-19 lockdowns, and supply chain disruption in order to enable the IMF to usurp Sri Lanka’s economic sovereignty and policy autonomy?
It is now abundantly clear that since the staged default in 2022 due to a purported lack of exorbitantly privileged dollars, Sri Lankan citizens have effectively lost economic sovereignty and policy autonomy to the lender of last resorts- the IMF, ISB collusion with corrupt political leaders and financial networks that work for the Global One percent. Thus too has the geostrategic island nation has seen its US dollar debt trap grow exponentially in the past two years under IMF tutelage.
Arguably, ISBs constitute the supply-side of corruption to match and partner with corrupt politicians and their business cronies. This is because, bi-lateral and multilateral loans, which constituted the other half of Sri Lanka’s 26 billion USD debt at the time of Default in 2022, tend to be tied to specific development project financing, and are hence more easily tracked and monitored. ISB funds however disappear into the treasury and the pockets of politician also to fund election campaigns.
At this time the question arises: is a purported lack of exorbitantly privileged US dollars sufficient to declare an otherwise solvant country bankrupt and force default? Moreover, is the US dollar an adequate measure of the wealth of nations especially given America’s 35 trillion debt and counting as the world de-dollarizes”
The NPP’s New Beginning? Denying BRICS and the Asian 21st Century
The post-Naxel NPP opposition party which has run a Diaspora-funded, pink tinted, high-gloss election campaign to market itself as a ‘new beginning’ has ignored the need for Sri Lanka to re-orient its economy toward the BRICS and pivot away from the West and debt neocolonialism.
The BRICS literally constitute a New beginning, hope, and an alternative development path for Global South countries caught in Covid-19 lockdown induced Eurobond debt traps at this time. The BRICS are also the economic growth hub of a multipolar world and Sri Lanka clearly needs to leverage them in order to grow its economy. The country also requires a comprehensive long-term exit-strategy from US dollar Eurobond debt neocolonialism.
The NPP’s election manifesto however, seems bereft of alternatives to the IMF’s EFF aside from some tinkering around the edges. There is no mention of the need for strategic and calibrated de-dollarization with increased trade in BRICS currencies, also given ongoing global trends and the fact that the quantum of American debt raising questions about the dollars global reserve currency status.
Nor is there mention of applying to join BRICS in the NPP manifesto. As there are 56 other countries in ISB debt traps, partnership with other Global South countries to counter the neocolonial Paris Club of creditor countries and their failed development model that is impoverishing the Global South are necessary.
Sri Lanka also needs to find sustainable long-term economic solutions in partnership with the BRICS, including technology transfers and new markets in order to leverage the island’s valuable mineral and marine resources for export-led growth in order to escape the IMF- ISB green bond debt trap.
The failure of all major opposition parties to address the geopolitical dimensions of the poly crisis and prioritize economic alternatives to endless talks with IMF, ISBs and a gravy train of legal and financial consultants, including Lazard, Clifford and Chance, raises serious questions about their external funders and policy agendas. This is particularly true of the NPP’s Anura Kumara Dissanayake who had portrayed his party as a break from the past and a new beginning for the country!
In the final analysis, the recently fashionable concept of the ‘poly crisis’, speaks to a rapid, out of control spiral of events and a compounding of problems so that causality and agency are blurred, spatially and temporally, ex-ante and ex-poste, enabling conflating and telegraphing. We are left without a baseline to evaluate, track and map events and establish causality in a complex system gone awry through remote over the horizon operations for Full Spectrum Dominance (FSD) by external actors and networks. This was the case with the 2022 Aragalaya faux democracy protests that also mobilized genuine grievances, amid coordinated fuel and food supply chain disruption and lengthy queues, while the US-backed regime change putsch and the staged Default unfolded to deliver Sri Lanka to the IMF.
The recently fashionable concept of “polycrisis’, whether global or local, is itself part of Gaslighting. It masks the hidden hands pulling the strings via remote servers in cyber and disinformation operations behind the puppet show of diverse and competing candidates fronting identity politics but bereft of real alternatives to the main narrative — during election season or faux democracy protests, alike. Election hacking by external actors to perpetuate faux democracy remains a real possibility and a clear and present danger at this time.
TO BE CONTINUED
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”
[i][i] https://www.adaderana.lk/news.php?nid=100329
