By: Merril Fernand
Former MP
It is a commentary of the times that the two capitalist formations, the United National Front and the People’s Alliance contending for parliamentary office in the December 5 election have both ignored in their manifestos and statements the effects of the gathering global economic depression on Sri Lanka and countries like Sri Lanka and how to deal with it. The United States economy which is the powerhouse of the world economy was slowing down even at the time of the attack on the Pentagon and the World Trade Centre on September 11.
Japan which was the engine of growth in Asia has been experiencing an economic downturn for several years with no prospect of positive growth. With the war in Afghanistan continuing, the world economy will be thrown into a generalised depression.
Shortly after the attack on New York and Washington President Bush addressing the U.S. Congress stated: "We will use every necessary weapon of war. Americans should not expect one battle, but a lengthy campaign unlike any other we have ever seen"........ This is the world’s fight, this is civilization’s fight, I ask for your patience...... in what will be a long struggle".
The London Economist, Nov. 10-16, 2001 in an article on the U.S. economy titled ‘Lengthening shadows’ states as follows: "Outside agriculture, 415,000 jobs were lost last month..... The unemployment rate jumped from 0.5% to 5.4%, the biggest rise in more than 20 years. The jobless rate for black people rose by 1% to 9.7%. In sum, if anyone still needed proof, the economy is in trouble.
A stark picture emerges of the impact of September 11th (88,000 jobs were lost in the airline and hotel industries, as were 107,000 temporary — help jobs, many in the same industries). But with another 220,000 jobs lost in unrelated businesses, there was evidence of much broader distress".....
Many Wall Street analysts think the unemployment rate may soon reach 6.5% or more as firms continue to cut back.... Manufacturing remains in its 15-month slump.... Economists at Goldman Sachs, now expect America’s GDP to contract at an annual rate of 3.5% in the last quarter of 2001, with a further annual-rate contraction of 1% in the first quarter of 2002".
Brian Green writing on ‘The World Economy: Results and Prospects’ in what next? No. 18 (London publication) states: "For 10 long years Japan has unsuccessfully tried to restructure its economy. Industrial production in 2000 is still below the level of 1990.... From the early 1990s, virtually free credit allowed Japanese banks and companies to invest in the US economy and make substantial gains... With the collapse of investment opportunities in the US, these returns have yielded losses where once there were gains.... It is highly likely that Japan will experience a 1929 style slump".
It is an even more sad that Vickremabahu Karunaratne, the leader of the NSSP speaking on TV recently in connection with the December 5 election emphasised that for the doors to open for development in Sri Lanka there are four requirements: 1. Stoping the subordination of the country’s interests to global capitalism, 2. Ending the north-east war, 3. Making new constitution, 4. Supporting struggle of the working-class for an increase of Rs. 3000 in their wages.
When Vickremabahu was speaking of development he was referring to capitalist development. Is capitalist development possible in the context of the gathering global economic down-turn? Besides that, even in ‘normal’ times when there is growth of the capitalist economy, the main beneficiaries are the capitalist class. The workers have to fight for a wage increase commensurate with the increase in inflation and the rising cost of living. In the present context the working-class will be put on the defensive and will have to fight to maintain existing living standards and to prevent lay-offs of workers from payrolls.
Neither the PA nor the UNF is capable of bringing the north-east war to an end. The first step towards ending the war is to recognise the right of the Tamil people to self-determination, which both reject. The LTTE has rejected the PA’s devolution proposals. Ranil Wickremesinghe’s erstwhile allies, the four Tamil parties that had representatives in parliament have formed the Tamil National Alliance (TNA) which has accepted the LTTE as a paramount factor in the struggle for the rights of the Tamil people and that the government should have meaningful talks only with the LTTE. The TNA has stated that in the next parliament they will not support either the PA or the UNF. How can Ranil form ‘a national government’ without the Tamil parties represented in parliament? On the other hand this will give strength to the LTTE and make things more difficult for the PA.
Having kissed the ugly face of S. B. Dissanayake, Ranil Wickremesinghe in a four-page statement on more than A4-size paper pledges "to salvage the nation: to provide an efficient and accountable government that has a vision, and is totally free of corruption".
Does the up and coming saviour who brought a motion of no-confidence on SBD when he was minister and chastised him severely for his conduct in the last parliamentary election, expect his new-found ally to be laundered in the UNP washing machine, whose 17-year track record was similar to SBD’s performance in the PA government. Besides that, Ranil’s statement is a glorified promise to transform the Sri Lankan economy, which is in dire straits to a prosperous one and to rescue "the country on the brink of a devastating famine... from total annihilation". Is this possible in the context of the gathering global economic down-turn? Even in a period of economic growth of about 5% such as we witnessed from 1990 to 1999 this would not be possible.
Whoever wins the December 5 election will be caught in the vortex of the gathering depression and developing the economy will be a near impossible task for a certain period. How long that period will be no one can predict.
The players on the stage are almost the same as before with some playing opposite roles. There’ll be no significant change in the economy and in society. Experience has shown that neither the PA nor the UNP can eliminate corruption in their own ranks and in the bureaucracy.
The economic mode of production exhausting its potential creates the objective conditions for the working-class of Sri Lanka to re-emerge as an independent force on the political scene. To achieve that the working-class must in the first place destroy the links that it now has with the ruling capitalist formation and with the other capitalist formation that is attempting to control parliament.
The Island - November 29th, 2001