From the Rubber-Rice Pact to Oil for land deals

25 January 2025 12:00 am Views - {{hitsCtrl.values.hits}} 8 Bookmark

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A plethora of changes are taking place in our land since the presidential election of September 2024 and general election which followed in November 2024. Yet, some things remain unchanged. Our country’s External Debt reached USD 56.6 billion in September 2024, compared with 55.9 USD billion in the previous quarter. This debt has to be paid off.
The projected repayments in the period 2021 - 2025 is expected to be USD 4.432 billion. In other words we have to find new avenues to repay the debt in a timely fashion or bankruptcy will be staring us in the face as it did in 2022.
Foreign Exchange Reserves in the country decreased to USD 6091 million in December from USD 6451 million in November of 2024. In simple terms, it means our foreign exchange earnings are not sufficient to repay our foreign debt.
This is one of the major challenges facing our recently elected government -most of whose members are first-timers in the seats of power. So how can we keep the country afloat while standing firm on earlier stated principles?
In the past, whenever our country was facing economic challenges it has been mainly India or China who have come to our rescue. It was no surprise therefore when our newly elected president made the first two presidential visits to India and China.
Shortly after independence, in 1952, our country was in danger of being unable to purchase requirements in rice in the international market (due to the sudden drop in prices of natural rubber) -a result of the US flooding the world market with artificial rubber.

The US rejected calls from our then government to help despite there being a possibility of starvation here country-wide. During this time the government of China came to our aid via a barter scheme exchanging rubber for rice. China in fact valued our rubber at above market rates and helped the country avert a famine-like situation.
More recently, when our country declared itself bankrupt it was India which came to our help offering us a USD 4 billion credit line to help us tide over the crisis. Our ‘Western’ friends however mouthed empty phrases of support.
Both our President and his political party the NPP, need to be congratulated for the about turn they made from the political positions they had taken regarding the ‘evil designs’ of India and China they publicly manifested at the time they sat in the Opposition benches in parliament.
Then MP Dissanayake had earlier categorised Chinese investments, loans and whatever else they may have been involved in, as turning Lanka into their pocket borough. He also berated Indian investments in our island nation suggesting it a form of Indian expansionism. Targeted were Indian investments in oil farms at Trincomalee and the wind farms at Mannar. On return from his Indian visit, the government claimed it would ‘review’ this programme.
Realpolitik, especially when one is in power, has an obnoxious method of forcing political mind-change. Unlike Donald Trump in the US, our president cannot threaten to take over third countries, tax goods or even take over parts of other countries -as for example Trumpian threats to the Panama Canal or even distant Greenland- for America’s benefit.
Faced with this dilemma, our President had to go back on his criticisms. Today he is calling for more investments from China in addition to agreeing for Chinese investments to set up an oil refinery in Hambantota together with 500 acres of land for the purpose. Subsequently our Foreign Minister Vijitha Herath confirmed that the Chinese have asked for an extra 250 acres of land for this purpose
Reality has hit the new government smack on its nose. Forgotten are the past demonstrations they supported against providing 700 acres of land for an industrial development zone, in Hambantota. No more talk of Indian expansionism.
Now, facing an existential threat, the president and his party view the problem differently. While we congratulate our president’s realpolitik, we believe it is only fit to remind him and his government that the new deals they have struck are not exchange of goods, but gives every appearance of bartering away parts of the country.

Comments - 8

WEARY Saturday, 25 January 2025 03:56 PM

Yes, the realities of politics. It is this divisive politics that continues to hold back the economy.With foreign reserves around usd7b and at best usd10b much of that eroded following the "bombing" episode. Then came the pandemic, remittances collapsed as did exports, expenses soared, qurrantine centres, evacuation from the ME, massive cost of vaccine and protective gear, forex soon evaporated. It is said that the pandemic cost the UK between £300 and £400billion. Now do the maths and figure out what the pandemic cost SL.

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Dilrukshi de'Silva Sunday, 26 January 2025 01:22 PM

Politics is Politiking Credits to Fahim reasons..???? Lol

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FredSnR Monday, 27 January 2025 03:35 AM

The history of SL if the British did not leave us.Trincomalee would have flourished the British knew its importance English would have been the medium of instruction and our qualifications would have had global recognition our economy would have flourished, we had a budget surplus when they left no racial tension or minimal tension so no need for a huge army we would have had a valued passport which would have enabled us to work and study abroad if we wished it would not have been necessary to send numbers to the ME as unskilled labour if they went they would have gone as valued citizens and we could criticize if we wished there was freedom of expression rule of law. And now we would have grown up as a people and ready for independence.But the reality has been otherwise

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FredSnR Monday, 27 January 2025 05:23 AM

Rubber rice pact was not a disaster, just a sign of a lazy nation not willing to grow its own food.But land for oil in strategic locations, that's something else.AKD has a difficult job, with inherited problems. And people have to appreciate that it is a national problem and support so that he achieves the best outcome for the nation.That is not happening due to divisive politics, no national spirit, exploited by other countries with self-interest in mind and expansionist goals in their agendas

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Deniella Bartholomeus Monday, 27 January 2025 03:33 PM

The recent uprising in Sri Lanka, which called for a "system change," highlights a deeper societal and political challenge. What many initially sought as a transformation of the political system ultimately boiled down to replacing one political party with another. This led to the election of a party with minimal prior governance experience—one that lacked expertise in managing even local governments, failed in coalitions during Chandrika's government, and maintained only marginal representation for decades. The decision to elect this party stemmed from exhaustion with traditional options and a belief that a new choice, however untested, might offer a solution. However, this experiment has already led to widespread disappointment. Citizens now accuse the new leadership of incompetence, pointing fingers at past governments while struggling to address current challenges. This dissatisfaction has left many SrLankans feeling they have no viable political alternatives.

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Deniella. Bartholomeus Monday, 27 January 2025 03:35 PM

The belief that this party will secure even a single local government in upcoming provincial elections is increasingly doubtful. At the heart of this crisis lies a broader cultural pattern. Sri Lankans often seek immediate remedies for deeply entrenched issues, overlooking the complexities and time required for meaningful reform. A recurring cycle of hope and disillusionment follows each election, with citizens expecting quick fixes—economic relief, improved infrastructure, and expanded social benefits. When these demands go unmet, frustration morphs into criticism, often disregarding the structural and systemic difficulties that hinder progress.

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Deniella Bartholomeus Monday, 27 January 2025 03:38 PM

This mindset extends beyond politics. Citizens frequently demand subsidies and welfare programs while neglecting their civic responsibilities, such as paying taxes, adhering to laws, and supporting long-term development strategies. Protests during economic crises underscore this tendency to focus blame on the government without addressing underlying issues like corruption, lack of accountability, and global economic pressures. This narrow lens of blame undermines the potential for collective introspection and sustainable action.

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Deniella Bartholomeus Monday, 27 January 2025 04:48 PM

Breaking free from this destructive cycle requires more than electing new leaders. It demands a cultural shift where accountability, patience, and active participation become the foundation of national progress. Citizens must recognize their role as partners in governance, contributing to long-term solutions rather than short-term demands. Without this collective commitment, Sri Lanka risks perpetuating the same struggles, unable to achieve lasting stability and growth.

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