Features
The United States and social democracy
by Kumar David
The Scandinavian countries are held up as models of social democracy. The distribution of wealth and after-tax income is more egalitarian than elsewhere, freedom of expression, the press and religious rights are not restricted, the people choose their governments at free and fair elections and there is uninhibited licence in sex related frolics. Conversely, purist-leftists point out that the “economic system” throughout Scandinavia is capitalist; big enterprises and the commanding heights of industry and commerce are the property of a shy bourgeoisie. Production, reproduction and appropriation of surplus value conform to textbook definitions of capitalism. Both sides of have their point, but Scandinavia is not my topic today, it is the United States not so much for its intrinsic interest but because change there will inevitably spark global trends.
My friends Marjorie and Geoffrey in Orange County, California, are to all appearances fit, able and charming people. They down their beers, puff on their cigarettes, go for walks, drive two nice big SUVs and run a small business. But they collect social disability cheques of $600 a month each for some invisible frailty and their case is typical of maybe millions of others. Likewise the current labour shortage in the US is in part a constructed malaise. Small businesses cannot attract employees. People find it better to stay at home and collect unemployment benefits while others will only accept part-time jobs. You can get more by filing for part-time unemployment benefits and getting paid for half-day’s work. Small businesses say the problem is acute.
The shopping carts at Walmart, Cusco, Vons and such supermarkets are full to the brim and queues at checkout counters are long and slow. Some of this is thanks to huge Covid-relief monies pumped into personal bank accounts in recent months and therefore atypical. But obesity has been bursting at the seams for three decades. The point is that there is trickle down of material wealth to low-income classes in the US. This of course is not socialism but it keeps the wolf of revolution at bay. Still it’s an odd version of capitalism if you go by the classics. Sure, brash billionaires, coarse captains of giant technology companies and cigar chomping industrialists garner big profits and avoid tax using Pandora’s Box havens. America being what it is, matters soft and genteel in Scandinavia are loud and brash. It would be absurd to say that the same degree of income equity prevails in the US as in Scandinavia. Still the material lives of the four lowest (lower 80%) of the American income quintiles is not pitiable and not too far from Scandinavian averages.
Data for three countries a few years ago (comparative ratios have hardly changed):
In the Pie-chart of US GNP one might for simplicity imagine that federal and state government expenditure (16.6%) is spent mostly on the people (Medicare, social services, education and unemployment benefits) while conversely the 17.7% private domestic investment belongs to the rich (stock-market, new enterprises, grand houses). The big slice (68.5%) is consumption. One can conjecture (a bit risky but let me take the risk) that half of this is spent by the lower two-thirds of society and the other half by the top one-third. How much grand-crux wines can the rich consume and how many first-class air-tickets relish? Unless my guesswork is way out of order this means that 51% (16.6 + half of 68.5) is consumed by the lower two-thirds of society. What I am saying is that despite income inequality, the redistributive outcome of taxation and government support (above all health care) defuses pressure. [To pre-empt nit-pickers I need to admit that sales tax is carried mainly by the yako-classes and income tax is part paid by middle and lower-middle classes. Furthermore, government expenditure includes the likes of defence which hardly benefits the daily life of ordinary people].
Pie-chart
Bar-chart 1 shows household income spread. This is not Scandinavian social democracy but neither is it grotesque inequality which will incite the masses to pour out on the streets pitchfork in hand. American capitalism keeps yakos in line by dishing out a share of the pie while ours do it by intoning hela jathika abimane.
Bar-chart 1
This is not to deny that the filthy rich are getting richer at everyone else’s expense – I have no quarrel with Thomas Piketty. Bar chart 2 shows that the top-5% of income “earners” have hogged the largest part of the gains in the last three decades. Nevertheless this has to be taken in the context of a general upward swing of median US household income in the last half-century, see Graph. This is partly because the global hegemony of the US dollar, abominations like the Vietnam War and stooge Latin American dictators for much of the Twentieth Century. All this allowed imperialist and neo-liberal transfer of value created elsewhere in the world to the US. Nevertheless being rich does contribute to social complacency and cools the ardour of the poorer classes.
Bar-chart 2
I have inflicted quite enough statistical injury and economic boredom on you for one Sunday. I move on by asserting that American democracy, battered though it has been in recent years by the far-right and by Trump’s antics, is durable. The power of the anti-vaccination lobby, though cerebrally retarded in the eyes of outsiders is grassroots, albeit cretin, populism in the terrain of America’s anything-goes democracy. Another example is that Black Rights Matter mobilisation in response to racist police brutality, actually consists of a majority of white marchers. The jealous independence of the judiciary is legendary. Determination to exert constitutional rights, despite grotesque displays like the freedom to run amok with guns, the right to infect others with Covid and such manifestations thought crazy elsewhere, are muscular exertions of spirited populism which would have had regimes reach for the machine gun in third world countries. For better for worse American populism is loud, brash and vibrant; it is not staid Scandinavia.
Graph
Lest you imagine I am composing a panegyric I must recount the grotesque underside of America, the hundreds of thousands of homeless street sleepers. Los Angeles has over 25,000 and New York even more; every big city has hundreds, some thousands. It is something you will not see in any European city or China, Korea or Hong Kong – perhaps a few psychologically disturbed people but not on a mass scale. Those who know Bombay or Calcutta are familiar with what I am saying on a much larger scale. But America is super rich so why you will ask aren’t a few thousand housing blocks being constructed, why is the state not funding a social welfare department? Honestly, I don’t know the answer. And the huge prison population – that’s a sign of social sickness.
I also have a grouse which is personal. The spread of political correctness in priggish sections of society and in main-stream media is tiresome. I suggest that red-blooded persons ignore it and speak and act like normal humans. Some persons we are reminded are lesbian, homo, bi, auto or omnisexual, but what’s the need to insert sympathetic references to this at every turn of dialogue? Don’t retch but the latest 007 has become a pansy. And if you want to give the American accent a slip, welcome to the club.
But come on, this is all trivial stuff.
The unschooled and the intellectually handicapped imagine that socialism is only about rescuing the poor from material hardship, to hell with political and democratic rights. This twist gained currency because the great revolutions of the Twentieth Century were in dirt poor countries and the revolutionary state was compelled to prioritise “bread, land and peace” and to repel foreign aggressors. Fair enough, but states so conceived unavoidably turned out to be caricatures of socialism – say the USSR, China and Cuba. True they fed the masses but that’s only half the game, and indeed some capitalist ones have done well too – Japan, South Korea, Singapore and the Chinese province of Taiwan. You don’t need to consult the classics to be familiar with the axiom that socialism asserts it is a higher form of civilisation. Readers I am sure are familiar with “The freedom of each ensures the freedom of all”; “Necessity is blind until it becomes conscious”; “The human being is in the most literal sense a political animal”, and such aphorisms. Socialism sans democracy is an oxymoron.
You will appreciate where I am going. Socialism is not about bread alone but also about cognizance and liberty. But first I have more to say about bread in the United States. The Biden Administration, driven by the left-wing of the Democratic Party, is pushing the$3.5 trillion Build Back Better Act spending plan. Add to this the $1 trillion infrastructure bill already approved and it becomes a humongous $4.5 trillion programme. To give you an idea, of scale, the US spent $13 billion (about $ 160 billion in today’s money) on the Marshal Plan, an economic recovery programmes for Western Europe after World War II. The proposals American progressives are pushing is an order of magnitude larger in substance and in trickle down money. Republicans, big business and about 1,500 paid Congressional lobbyists are fighting it tooth and nail.
My conclusion is straightforward. It is easier for the United Sates to move towards socialism than for any other country including China. Regimes with a bogus ‘Democratic Socialist’ tag on their brand name are a hoax. America and China are the only countries which can serve as global prototypes. But since it is a truism that Socialism can only flourish on a world scale that means, right now, it’s Hobson’s choice. I am no starry-eyed dreamer unaware of the pernicious extension of the by no means forever bygone Cold War, nor the menace of another conceivable Hot War. The world is replete with dangerous neo-fascists; Trump has plenty of company. My purpose in this essay, nevertheless, is to remind readers of dimensions of this story other than the trite. I am confident that democracy will not die in the US short of civil war. It’s impossible to reverse history against mighty odds and proto-fascism will be destroyed in such a civil war. Hence, I have no option but to differ from my carousing buddy Vijaya Chandrasoma – “How Democracies Die”, Sunday Island 17 October – about the impending death of democracy in America. VC is familiar with Mark Twain’s quip re exaggerated announcements of his demise.
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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