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Town Hall/ White House

Original post from the SAES blog. I’m blogging and tweeting from the South Asian Economic Summit along with a few others, hastag #saes2013.

This morning Pakistani economist Akmal Hussein talked about how mainstream economics/capitalism teaches that inequality is essentially an un-avoidable by product of growth. He said that equity is not only a measure of social justice but can also be a powerful driver of growth. You just have to open the lower and middle classes to opportunities to grow, giving you a much bigger base.

Great sentiments, I agree 100%. But how easy is it to talk about equitable growth while many countries in South East Asia are facing a ‘neoliberalize or die’ situation? And indeed, are enthusiastically jumping in the very same capitalist bandwagon that facilitates this systematic inequality. India for example is notorious for facilitating corporate expansion. It is, in fact, one of the most characteristic features of its growth. I think the tendency is to hope that equity will come after wealth is achieved, but if the West is any example, a semblance of equity within one’s borders is only achievable by impoverishing peoples beyond it.

Earlier still Ahsal Iqbal Chowdhry, Federal Minister For Planning in Pakistan, spoke bold words about the ‘failure’ of the Washington consensus, and even mentioned discarding it for a Colombo consensus, whatever that may mean, hopefully achievable starting today. But seeing as the most powerful economy in the region got its early nineties boost by the very same Washington Consensus, has it really ‘failed’ in that sense? What would India have been if it wasn’t bailed out? If it wasn’t invested in heavily by Western corporations?

I’m not defending the Washington Consensus, far from it. It has indeed created a lot of harm by seemingly creating growth, but it is ironic that it is this very growth that we celebrate, and hope to convert into something that is fundamentally against its nature. The Washington consensus ‘worked’ because it was essentially hegemonistic. It is the patronage of the powerful to the weak, and beggars cannot choose luxuries like equity.

Will Choudhry’s imagined Colombo Consensus incorporate some similar form of hegemony? Assuming it can even shrug of its Western counterpart as easily as he makes it sound. Indeed can South Asia with all its deep running conflicts, ever form a collective without some entity dominating?

Perhaps the fear of outside interference can enlighten the region to the benefits of mutual cooperation. But it has already incorporated many elements of Chowdhry’s ‘Washington Consensus’, perhaps too many to think of turning back without completely destroying and remaking itself. Perhaps in retrospect, it is telling that both speakers were Pakistani?

Indonesian_Sampan

Do you know what it means?

Most pejoratives have origins in completely acceptable descriptive words. ‘Negro’ comes from the Latin ‘Niger which means black, ‘Paki’ is shortened from ‘Pakistani’. Terms like Chinaman, Coolie are also derived from relatively innocent descriptive origins. They get their pejorative connotations after being repeatedly used in an insulting manner.  Other names originate directly from a desire to put down and insult, but the word ‘Hambaya’ belongs to the former category.

‘Hambaya’ is derived from the Malay ‘Sampan’. The word for a somewhat flat bottomed boat, also used by the Chinese. Pictured above is an Indonesian sampan, coming back from a fishing expedition. Sampans were frequently seen in Sri Lanka’s South Eastern coast when Javanese people stopped en route while migrating to countries like Yemen and MadagascarMany of them stayed back here as well. The term was eventually associated with South Indian traders who were also Muslims like the Javan people, and who adopted the same style of boat. And eventually, as ‘Sampan’ became ‘Samman’ in Tamil and ‘Hamban’ to the Sinhala people, a collective term ‘Hambankaraya’ was used to describe them as a whole.

According to ethnologist Asiff Hussein, author of Sarandib: an Ethnological Study of Muslims in Sri Lanka, the word did not acquire its derogatory connotations until the beginning of the 1915 riots, the first ever incident of tension between Sinhalese and Muslims. According to Asiff, the riots were sparked by ‘coastal moors’ of Indian residence temporarily ensconced in the center of the country (the riots started at Gampola) for trading purposes. They were not as accommodating as Sri Lankan moors (the term used for resident moors in the country) and objected to the procession of the perehara (Buddhist festival) near their mosque (contrarily, resident moors were long known to have facilitated and supported perahara activity).

The ensuing tensions spread the  use of the word ‘Hambaya’, shortened from the rather more respectful ‘Hambankaraya’, as a wide derog to describe all Muslims even the ones that hadn’t migrated on a boat. But then again, everyone in Sri Lanka, except maybe for the aadivasi, migrated on a boat, and a lot of us still continue the proud tradition, but I digress. The word ‘Thambiya‘ probably acquired its seedier usage around about that time as well. Just like in ‘hambaya’ the problem is the suffix ‘ya’ which basically turns an endearing term that refers to a younger brother into a racial slur.

Signs that ‘Hamban’ was once a respectable term are everywhere. Take Hambantota for instance, what will probably soon be Sri Lanka’s on-paper capital. The whole place is named after the Hambankarayas or at least, their boats.. Hambantota basically means ‘Port of Hambans’. Further to the East, ‘Sammanthurai’ means exactly the same thing. ‘Samman’ is the Tamil version of ‘Hamban’ and ‘Thurai’ means port.

Many Malays still live in the Hambantota area. My uncle was married to a Malay there. Almost his whole family (and wife’s extended family as well) and nearly the entire neighborhood were wiped out in the tsunami. Malays have more than a passing influence on Sri Lankan culture, language and history. But this is often overlooked because of the small size of the Malay community in the country today. They are usually cast in the same cultural bucket as Sri Lankan Moors, who are themselves a pretty diverse lot to begin with.

Not all of the Hambankarayas were Muslim. Chandrabhanu was a Javanese king who spent some 30 years of his reign trying to invade Sri Lanka. He probably used many sampan in his invasionary forays. He was a Buddhist.

Last week global markets rallied on stimulus hopes and better than expected corporate earnings, while geopolitical tensions drove up crude oil. On that note, speculation on what will happen to Sri Lanka should it discover commercially viable oil reserves has already begun.

(Frontier Research does this nifty summary as a part of its overall range of news products, usually for private clients. They scour through the myriad goings on in the global economy so you don’t have to, and bring out what’s relevant from a Sri Lankan non-expert’s perspective. Pretty useful if you’re generally into economics, or just want to get a feel of current hot topics. Here I’ve syndicated their Weekly News Summary with permission.) 

The Week in Global Markets

Asian stocks rose last week amidst speculation that China and the US would boost growth in their economies, European and US markets also rose with the S&P 500 index gaining 0.4% its first back to back gain since June on better than expected corporate earnings supplemented by expectations of stimulus in the US. Escalating geopolitical tensions contributed to the rise of crude oil, which reached its highest level since May with Brent Crude gaining 7.7% and WTI gaining 6.3% during the week.

The Week in Economic Views

India’s current account problems are largely similar to Sri Lanka’s, with the critical difference of India having slightly better options that SL to work towards solving them. Any real solution however is still rendered academic by India’s policy logjam and government inactivity. SL on the other hand, has the will but can do little more than use tariff-based methods to fight the deficit.

State intervention and ‘status-quo preservation’ in East Asian economies might have actually contributed to Tiger Economy growth. Relevant to Sri Lanka as it too faces accusations of sub-standard governance relative to international best practices, should it still be able to grow despite this?

What if Sri Lanka hits Big Oil next year? We at Frontier are starting to focus on a possible game changer if Sri Lankan oil proves commercially viable, and stories from other Frontier nations such as Mongolia that have hit resource riches and high GDP growth can be illuminating both in terms of the good news and the bad.

A related piece highlights the process of energy policy formulation in Nigeria, giving an indication of the level of influence big oil companies have in policy oriented decisions.

The Economist looks at structural gaps in the LIBOR market’s pricing mechanism. The LIBOR manipulation scandal made waves after Barclays Bank was caught rigging the benchmark interest rate.

An interesting proposal from India highlights the need for an alternate inflation index in India, this is relevant to Sri Lanka as the CCPI has consistently come under fire of being inadequate to measure the country’s real inflation.

The IMF has expressed skepticism with regard to the recovery of European markets, a negative factor for regional economies.

Frontier Research does this nifty summary as a part of its overall range of news products, usually for private clients. They scour through the myriad goings on in the global economy so you don’t have to, and bring out what’s relevant from a Sri Lankan non-expert’s perspective. Pretty useful if you’re generally into economics, or just want to get a feel of current hot topics. Here I’ve syndicated their Weekly News Summary with permission. The Indian economy is drawing quite a few uncanny parallels with Sri Lanka’s and global markets primarily reacted to goings on in China.   

The Week in Global Markets

Markets in Asia fell as economic slowdown in China, Korea and Australia sparked fears of lower corporate profits. Meanwhile US markets rose on hopes of policy easing in China, as the latter saw its slowest economic expansion in three years. Euro markets also advanced on similar hopes while Italy’s falling borrowing costs also contributed to optimism. Oil rose on speculation of Chinese stimulus and on the back of tightening US sanctions on Iran.

The Week in Economic Views

India’s emerging fiscal and BOP problems are uncannily similar to Sri Lanka as the latter battles an expansion of its Current Account and doubts as to whether it can keep its budget deficit under control.

The US presidential race draws near and ‘outsourcing’ is increasingly becoming a dirty word as candidates seek to distance themselves from it, something regional outsourcing firms should keep an eye on.

An interesting article in this week’s summary discusses the Indian people and their tolerance of government censorship; a topic currently under hot discussion in Sri Lanka.

In Mid 2013, Sri Lanka will have an announcement on how much oil it possesses; a possible game changer for the country. It is worth keeping an eye on new oil rich nations such as Kenya to get an understanding how the impact of oil discovery will flow through to the rest of the economy.

With the emergence of South East Asia as a growth hotspot, global powers are falling over each other to woo the region’s governments and to secure a portion of the pie. South East Asia’s rise poses emerging threats as well as opportunities for Sri Lanka.

In China, while official headline Macro data continues to be reasonable, other news and data has turned much worse; perhaps indicating a need to find alternate data on the Economy for Sri Lanka that could provide similar tracking to assess the latter’s performance as well?

India and Sri Lanka have both suffered large depreciations of their currencies in recent times. Non resident Indians are however inadvertently rallying to their currency’s cause, by investing their dollars in the India to take advantage of the cheaper rupee.

Indian students get flak for being Indian

A lot of Sri Lankans proudly profess their hatred for India. Why? i ask. ‘Cause they’re arrogant’ comes back the answer. Pfft like Sri Lankans aren’t? Please. There has to be something else behind this mysterious hatred for our neighbors. Is it the bad English accent? The hot movie stars? The sledging in the cricket field? The economic success?

Wait hold on, you say, economic success? you scoff. Half the population is below the poverty line! you triumphantly espouse. Yes but a lot of them are now above it thanks to their economic policies, i say. India’s corporations are taking over the world. Educated Indians are enjoying better living standards. They are beginning to get some actual respect out there.

Their leadership is not something to envy. But at least their top rung have got their ducks in a row and seem to be leading the country in a direction. It doesnt matter here or now what direction, let it suffice that they have a direction, something that we seem to be lacking.

And Indian people, arrogant? I’m not sure about you but most Indians i have met have turned out to be quite nice. Sure they’re determined, somewhat materialistic and egoistic. But hello, we aren’t much different. We’re determined, mayhaps for the wrong reasons and terribly uptight about our identities. And besides, are the qualities to be hated?

Also isn’t blind hate what brought about the ethnic conflict in the first place? we hate without rhyme or reason, sense or sensibility, pride or prejudice (i had to throw that one in, sorry Jane) its like we’re shifting our angry eyes from the North to something further North. The big hulking neighbor we all fear, and so we all hate. Are we afraid of colonization? that claptrap the JVP sold us as propaganda to spark an ill thought out insurgency in the South?

Think of cricket. A lot of people want India to lose cause the simply ‘don’t like em’. They don’t know why or how. Their dislike is not a dislike that can be articulated. They just hate em. Well, haters gon hate. India is a strong team and if they win against us, I will still respect their win. This is a big moment for cricket in these parts of the world, and if Sanga and his boys pull through, all well and good i will whoop along with the rest of you. But if India wins then it’ll do a world of good to the confidence of a billion people. And that would be something i’d be happy to watch regardless.

Kashmiris are a pissed off bunch of ppl. When Pakistan split with India they were ruled by a prince, who was a Hindu, so he in 1948 decided to side with the Indians.

But Kashmir, being an almost 99% Muslim state. Protested in ernest. At first to be shifted to be under the banner of Pakistan and then for autonomy. Even though Pakistan is accused of egging on militarism and supplying Kashmir with weapons, a Kashmiri fellow trainee tells me that ‘those boys’ who went to fight did not do so for Pakistan.

The interesting thing is that most militants started off as non voilent protests. Rasheed, a journalist and a passionate Kashmiri, once did a series on the children of militants, who had initiated non violent means of activism against what they see as forced indian imperialism.

The scene is this, Kashmir is the only Muslim majoritarian state in the whole of India. An India in which there is still shadow racist sentiments in certain quarters asking Muslims to move to Pakistan if they cant handle things here.

So Kasmiris dont want to be a part of an India that doesn’t really want them. Although india seems hardly likely to let it go, it has vetoed several UN resolutions on the matter already.

Neither do the Kashmiris want to be a part of Pakistan; preferring independence instead. At least that is the sentiment of the
overwhelming majority.

Most people accuse the instability in regional coorporation being caused by the Indian-Pakistani conflict. And a lot of them believe that a strong SAARC will not be possible as long as this rift lies between its two biggest members. This conflict will remain as long as the autonomy of Kashmir remains an issue.

Freedom is good. And not only for the general public. It is also great for the lining of politicians’ pockets. Sadly though, it seems to me that our leaders are too myopic and short termist even in that age old art they seemed to have perfected; corruption. Just imagine the opportunities for bribes, commissions and other various nefarious under the counter transactional opportunities that would pop up if Sri lanka became a mini commercial hub like Hong Kong!

Liberalization has worked in almost every example of a fast developing country we can lay our eyes on. China started the process in 1979 and their GDP has grown over an average annual rate of 9.4% ever since. India started much later, in the early 1990s. And the reforms they inacted led to the booming economy that is India today.

They went about this with a mixed strategy of increasing competitive advantages by specializing in trade areas, squeezing the public sector and encouraging more private investment, reducing tariffs and encouraging foreign investment, providing for a more versatile and dynamic work force and importantly, installing a culture of industrialism and ambition in their people.

Although there were significant differences in their individual approaches one critical factor stands out like a black man at a kkk reunion; consistency. Both these nations consistently followed the same initial drive and strategy with little or no directional change ever since they were implemented. In the case of China, it was centrally administered and controlled by the unchallenged authority of the Communist Party. But India notably, went through several years with little or no change in economic policies since their implementation, despite several changes in rulers.

This has hardly happened in Sri Lanka, one minute we’re opening up the sluice gates of imports and the next we are all about ‘ganna apey de’ (buy our own goods). Subsequent governments have always tried to prove their superiority by completely changing the economic playing field. Such destruction sadly evidences their complete lack of regard to established knowledge. One just has to look at successful nations to realize that the one thing that made them successful was consistent public policy over the course of many years. the US for instance, is an amazing political entity. Their single minded focus and vision based on the ideals of the founding fathers have continued over almost three centuries and look where they are today.

Unfortunately or otherwise, the drive for economic growth lies in the hands of the key that turns the ignition; and that key is the government or the leadership of this country. So far i must say things are looking a bit positive with investment flowing in and confidence on the up (Calamander has just started an exclusive Sri Lankan private equity fund see video below – thanks Thinu!) but only time will tell if this improvement in our fortunes is due to the propeller effect of the war being over or the actual financial competency of our authorities.

The Chamber of Commerce, Jaffna is upset; they are unhappy because the government is going about most of the development in the North East through state administered funds and entities. Large industries like chemicals, cement, fisheries, infrastructure etc have tremendous potential to improve the lot of the North Eastern general public.

The Chamber is of the opinion that carrying out these projects should be put in the hands of the savvier and more efficient private sector. They have the understanding of the locality, they definitely have the money and heaps of incentive to boot. In my opinion, handing over the reconstruction of the North East to private local business interests would be an awesome point for the government to kick start the process of liberalization. Lesser government in business is better business for everyone.

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