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Sri Lanka Back as Donor Darling Ignores the BRICS

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Photo: Newly formed Sri Lankan Marine Corps gets 241 years of experience in under a week. Credit: U.S. Marine Corps photo by Petty Officer 2nd Class Jacob L. IDN is the flagship agency of the Non-profit .

France’s Macron and the US Fish in the Indian Ocean

By Darini Rajasingham-Senanayake

COLOMBO. 23 August 2023 (IDN) —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 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 trans-nationally networked, remote-controlled ‘Aragalaya’ protest operation led by social media influencers. Ironically, there was a blockade on fuel shipments to the country 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, newly appointed US-backed President Ranil Wickremesinghe promised famine and 15-hour power cuts by promoting fear, out-migration, and brain drain from the country.

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 billion to be disbursed over four 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, which 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 four-day Environmental Security conference was hosted by the US Indo-Pacific Command (INDOPACOM), Sri Lanka Navy (SLN), and Sri Lanka Coast Guard (SLCG).

Although described as 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 worldwide, their carbon emissions, and military exercises.

Environmental impacts of military exercises and war, like the Nordstream pipeline destruction or stranding and death of Pilot Whales and Dolphins due to war games as sonar systems of aircraft carriers disorient large sea creatures, were NOT on the agenda.

Climate Hypocrisy

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 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 paid a midnight visit to Sri Lanka, where the OECD’s Club de Paris, represents Eurobond holders who were primarily responsible for the default, was involved in ongoing IMF debt restructuring negotiations and Numbers Game that are set to deepen the country’s debt bondage.

Macron, attempting to Greenwash Odious Debt and the most corrupt, opaque, and crime-ridden sector of the Western global financial system—Bond trading and derivatives—had been promoting the ‘New Global Financing Pact,’ launched last month in Paris. Based on opaque Carbon Credit calculations, the ‘Anthropocene’ climate catastrophe narrative was used to market DFNS, or Green and Blue Bonds.

Predatory bond traders, principal among them BlackRock, have debt trapped over 55 countries in the Global South during COVID-19 lockdowns. Hence, anti-corruption activists in Sri Lanka had called for an outright ban on government borrowing on private bond markets, which caused the Sovereign Default worst economic crisis, and for the country to seek membership in BRICS and the New Development Bank.

Macron, facing a rout in West Africa, was fishing in Sri Lanka’s troubled waters 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. 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-Rajapaksa 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 17 to 23 August 2023, according to the Department of State. The Chinese were in the country earlier.

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 aircraft 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, who are working long hours in Free Trade Zone factories and servicing tourists to earn foreign exchange.

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 due to dependency on foreign aid and experts and politicization. This has left the country vulnerable to trans-nationally networked crime, corruption, and being pumped, dumped, and de-stabilized during staged exogenous economic shocks sans proper investigations, analysis, and research.

Policies of promoting brain drain and skilled out-migration have 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 and enabled Digital Colonialism also visible in the IMF and World Bank debt numbers games.

Middle-Income Country Trap to “Make the Economy Scream”

In 2019, the country was also pumped and dumped by World Bank ‘experts’ when Sri Lanka was upgraded to an Upper Middle-Income Country (MIC). MIC status rendered the island ineligible to access concessionary loans available to less developed countries.

During two years of economically devastating COVID-19 lockdowns, successive incompetent and corrupt Ranil-Rajapaksa 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, who set about nationalizing ports, airports, and plantations, was assassinated, and his successor faced a coup. Insurrections in the shape of ’Jakarta Method’ operations, followed by a 30-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 a prelude to the overthrow of democratically-elected Leftist President Salvador Allende and the installation of dictator General Pinochet in 1973 during the Cold War.

As protests unfolded, the newly installed pro-Washington Ranil-Rajapaksa regime predictably promoted the myth that “there is no alternative to the IMF” and further Eurobond borrowing and debt colonialism –seemingly in preparation for an IMF Firesale of assets (prime coastal and highland lands, energy, transport, and telecom infrastructure) to benefit Eurobond traders.

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 female Prime Minister and a Socialist, Sirimavo Bandaranaike.

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.

Sri Lanka has lost its voice and independent thinking due to an ill-conceived policy of Brain Drain promoted by the foreign ‘Force’ backed by the Ranil-Rajapaksa 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 Lazard, Clifford, and Chance.

While Sri Lanka is being carved up for an IMF Firesale of strategic assets, by IMF’s chosen accounting and legal firms, 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 the quick turnaround 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 traditional G7 economic heavyweights while de-dollarizing fast.

Ironically, while France’s Macron sought an invite to the BRICS party in Johannesburg, South Africa, this week, Colombo’s Ranil Wickremesinghe has turned a blind eye to calls that Sri Lanka join the BRICS and New Development Bank.

*The writer is a social and medical anthropologist with international development and political-economic analysis expertise.

[IDN-InDepthNews]


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