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The Biden Presidency is a Point of Inflection
“This country belongs to the people who inhabit it. Whenever they grow weary of the existing government they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it.”
Abraham Lincoln, First Inaugural Address, 1861.
by Kumar David
The term ‘economy’ is constrained and narrow, the phrase ‘material and social conditions of life and the interface between State and citizen’ is clumsy but better conveys my import. I have no choice but to keep switching terminology as this column progresses. True, America is still the “greatest power on earth” (said with rasping tongue on dry palate) but it is also a very troubled nation in a turbulent world. I have a gut sense that the Biden Presidency signals a transition between what is and what may be. Let my mind roam through this maze; without imagination we are dullards.
It’s not that Old Joe is great or god’s gift to America, it is that matters have come to such a pass that it is not possible to run away any longer. America lives on borrowed time and fake money thanks to the world’s greed for the almighty dollar. The US runs up ever more debt and prints ever more dollars and the world chases them in perpetual defiance of financial gravity. This has to give! It will in three ways – (a) domestic instability – drawn out or sudden, (ii) wakeup and change, (iii) withdrawal from global dollar veneration. Or more likely an interweaving of all three in now indeterminate proportions.
My conjecture, for the purposes of today’s essay is that Old Joe, perhaps kicking and screaming, will be a step in the direction of option (ii). Commentators these days are stodgy and dull; instead, let us be bold. In these strange times imagination is more real than prosaic reason. I begin with the proposition that the Biden Administration intends to and will 
be the antithesis of Trump since its domestic and global credibility are predicated thereon. Next it will have to address social problems that were the grounds for the rise of the Trump Base. It will have to address them from premises where it can, in the end, say: “Trump was an aberration, his methods were wrong. We overcame crises from diametrically opposed premises on race, economy, climate, global engagement and moral values at large”. Third, not only this presidency but what becomes of future presidencies will depend on whether the Biden experience stands or falls. In other words I am making the case that we are at an inflexion point in American history. At an inflexion or a saddle point a momentous transition can materialise but it is an uncertain switch which may flip in unexpected directions.
Luck has been on Biden’s side so far and he is cashing in. There has been a 70% reduction in the rate of spread of covid since mid-January. Ninety million vaccine doses have been distributed and three-quarters have found their way into people’s arms. Biden is backed by a scientific team headed by Anthony Fuchi, America’s and perhaps the world’s leading expert on infectious diseases and the team includes Professor (Ms) Rochelle Walenky of Harvard Medical School and current head of the Centre for Disease Control, and health-care businessman Andy Slavitt who signed on as Presidential Covid Advisor. US scientists in tears say “Oh my god what a change”. On other matters too the US has given notice: Return to the Paris Accord, WHO and Iran Nuclear deal. US allies are ecstatic and ungrudgingly make room for the big guy calling it a reassertion of American leadership or a return of the prodigal, depending on whether the speaker is of Anglo-Saxon/Germanic or a Latin-derived tongue. The switch from a Neanderthal to a Homo-sapiens variant of genus Americanus is widely welcome. The icing on the cake was Percy’s arrival on Mars.
Yet things are bad for America though Biden glows in redeemers luck. Some scientists on US TV say the country will lick the pandemic by Christmas even if the fast spreading British and South African mutants prove stubborn, but others reckon that unless tough measures as in S Korea, China, Taiwan and New Zealand are adopted this will not be possible. Americans, unlike people elsewhere, are uncooperative though science has got the virus by the vitals, and if it sets its sights it can subdue it. However, more critically, this is not the case with socio-economic ‘epidemics’ which span all dimensions – class, state, poverty, wealth & income, race and politicos hungering for eternal power. In respect of the last cancer, be it America or Lanka, vermin behaviour is similar.
While Biden has scored some successes his greatest challenge, the one that will decide his fate, is how his Administration addresses the economic conundrum that underlies partisanship, sparks social instability and nurtured the extremism which burst out in terrorist proportions on Capitol Hill on January 6. So much has been written about inequality in the world’s richest country that I can get by with one graph. The top 10% in the US take 50% of national income as in 1929 in the period leading up to the Great Depression. The forty years from the end of WW2 to the mid-1980s spans the four decade dream of American exceptionalism; the shinning city on the hill, the immigrants’ beacon, the apogee of welfare capitalism when income distribution was fairer. But that was then. Wealth inequality now is even worse than income inequality. The top 5% owns nearly 70% of all wealth and the median wealth of the poorest 20% is either zero or negative (indebted). The median wealth of White families exceeds $150,000, Latinos $6500 and Blacks $3500 – 2016 statistics. Wealth-Income inequality is but a single indicator; I do not have the space to enumerate other inequities such as healthcare, education and housing. Inequality and inequity almost completely explain why so many are angry and why nearly 75 million Americans voted for an insolent, uneducated scoundrel.
What can a new administration, even if well-intentioned and willing to go the extra mile do? Inflection is not revolution, nor are Americans ready to countenance structural overturn of property relations. Capitalism has accomplished “wonders surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals”; it has conducted expeditions that have reached the planets of the sun. Still it carries within it the seeds of its own decay. That came to pass in the Great Depression and again in the Great Recession of 2009. The point is how governments and the entrenched global economic order dealt with the downfall this time. No, not by classic cleansing of the Augean Stables as Adam Smith anticipated nor by Schumpeter’s creative destruction. Finance capital was too entrenched to be thus overthrown. This time the tools were different; creation of gigantic debt.
Not only Sri Lanka, though we are among the most foolish at the game, in America, Europe, Japan and everywhere, central banks are issuing electronic paper-money like spillage gushing from a ruptured sewer.
I cannot inundate you in a statistical flood; one bar chart must suffice. The chart makes a point needed for this essay, Bidden’s impasse. The rupture spurted out stimulus packages (grants to bankrupt businesses and to banks deemed “too big to fail” that their bankruptcy would entail a threat to the system itself). Quantitative Easing (QE) poured astronomical quantities of central bank (CB) money into financial houses, banks and insurance companies. CB funds purchased their bonds at low or negative real interest rates and thus found its way into stock-markets and prime property creating an asset boom and the largest flare-up of income and wealth inequality in capitalism’s history. In America alone this injection reached nearly three trillion dollars in 2020 before the December $960 billion ‘Covid Package’. The Fed’s net balance-sheet 
(net because short-term support is recovered at intervals) swelled to $5.3 trillion in March 2020. At one point Bank of America’s Mark Cabana feared that “Unlimited QE and emergency liquidity programs will see the Fed balance sheet double in size (to $10 trillion) over 2020” (CNBC, 27 March, 2020). Biden is now comitted to another $1.9 trilllion to fight the pandemic, provide essential public assistance and rebuild infrastructure. This is unavoidable and has my support. (Wipe that smirk off your face; no I don’t have a vote in the US Senate!)
Forget the plethora of hard to remember stats; the simple point is this, I cannot see how the US, whoever the president can escape from a stranglehold that has become perpetual indebtedness. US National Debt (debt owed by the Federal Government will reach $27 trillion as you read this, and that does not include unfunded future Medicare and Social Security commitments; add such omissions and the US is looking at future Federal indebtedness of about $125 trillion (see ). This leaves out State Governments, Commercial and household debts, which technically are not Biden’s nightmare. With a massive commitment to infrastructure and a targeted push to renew of capitalist entrepreneurship, can the Biden Presidency pull America out of the hole? Not unless it is accompanied by economic restructuring which is doubtful.
Before closing I need to comment on the Bidden Inflection Point from the perspective of human rights, relations with China and Russia and Israel-Palestine conflicts. In my view there will be no big change except the nuclear arms agreement with Russia. The rhetoric all round will be more decent than Trump’s. It is on Palestine that we will see the worst. There are too many pro-Israeli incumbents at the heart of the Presidency and Biden will do no more, and maybe less, than his predecessor to ease the misery of the Palestinians. On human rights, Gota will be disappointed to learn that despite the Core Group watering down the Geneva Resolution, Biden Administration is likely to be more forceful than Putin and Kim embracing Donald Trump.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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