that does it for me this hour, but stay with us throughout the day as we bring you more news and commentary, this is our to international. glad type with what we've got to do is identify the threats that we have. it's crazy confrontation, let it be an arms race is on, often very dramatic development. only personally, i'm going to resist. i don't see how that strategy will be successful, very difficult, time time to sit down and talk with

hello, welcome to worlds. a part of a conflict in your career may still be dominating international airways, but it's not the only and perhaps not the worst calamity. and the world today tr lanka is currently going through the most dire economic and political prices in its history. and their fear is that more nations may go down the same turbulent path as the global economy continues to pull. how contagious it is. well, to discuss that, i'm now a join from colombo, by a gum, our political economist and senior lecture at the university of jonah, dr. could you come out? it's great to talk to you. thank you very much for your time. thank you for having me. now not fully done with the coven pandemic, but there is another malay supposed to be spreading around the world. i'm talking

about the and social instability and your country shall. i'm going to be the 1st ones effected on a scale of $1.00 to $10.00. how bad it is, this is by far the worst economic and political crisis, sri lanka, it's facing since its independence in 1948 on supplies of all kinds of essential goods from our petrol and b. so cooking gas medicines and even food stamp fi and short supply and the price of many of these goods have doubled or tripled, making it on the affordable for people. so by far it's the worst economic crisis. and this has led to a political crisis of legit you must see in the country. there are widespread cause now for the resignation of the president himself and his brother, the prime minister and the entire cabinet resigned. we've had a new government,

but it continues to be unstable there being purchased out on the streets. and this is perhaps the most formidable protested scene since 1953, a few years after ah ha independence. when she don't go into a balance of payment or crisis and it tries to raise the price of rights from $0.25. and the sense of measure that crisis was so severe that our cabinet had to meet on a british warship. and that the prime minister resign. so it's very similar to that . and so these are very difficult and worry times in sri lanka and certainly things are going to change. you cannot go in the direction that they have been taking them or you mentioned before that there is a very peculiar way in which authoritarianism and, and you liberalism,

combined to push real anchor off the financial and economically. could you elaborate on that? yeah, well the current crisis is partly caused by the global hike since fuel prices and commodity prices. and certainly the pandemic kennedy disruption restaurant has been dependent on tourism has led to a falling our foreign reserves. the real issue is much longer silica was the 1st country in south asia to liberalize its economy back in 1977. when the jai walden, a government at that time, took sri lanka, away from the non aligned movement to the orbit of the united states. and with the support of much rattle organizations, structural adjustment cities under no liberal talk with tread liberalization and financial liberalization,

leading us to become more dependent on international markets. but those reforms could not be sustained because of a long civil war. that was started in 1983 lasting 26 years. so it is really with the end of the civil war in 2009. that what i have characterized as the 2nd wave of new liberalism when the mind the raja bucks the government at that time, which had won the war with a very authoritarian, militarized ford decided to take your liberal policies forward. so they've been in borrowed extensively in the international capital markets in particular and invested in infrastructure and tourism. but there are no returns from those investments. and it is dos foreign debt in the form of sovereign ones. over the last 13 years that has led to a debt crisis and now is full blown economic crisis in sri lanka. now as

you mentioned many, sure lumpkins are putting the blame for the current crisis on the right, fax, a class. but even the multitude of factors that you just mentioned, do you think it's fair to make them the only ones responsible and perhaps a secondary question to that given how many roger packs of family members, they're empowered. do you think, dan, this number to babe? well, for them because they should be, they could be oblivious to how the public would react to so many family members being empowered. why do you think the president found the needs a point or has so many of his relatives in the positions of power? in the way it is, the arrogance of power. they have been in power from 2005 to 2015. and after they won the war, they taught the invincible. and they decided to bring more and more family members in. and they taught with a combination of single,

a buddhist nationalism and militarization. and this kind of financial is ation that they could be in power for a while. now. more recently, when the game came back to power in 2000. 19 soon after that the pandemic shipped us. and it was obvious to many of us that we were headed towards an economic crisis. but they did very little to address it. in fact, they continue with the same policies and try to just keep down a political cronies happy and, and that is why they so much and go against them. even though this is a historic crisis. this is going to be long drawn out. and even if a government changes is going to be very difficult to address this crisis, they did very little and completely mismanaged the economy. so much of the public anger at the moment at least, is against them. it's very interesting to contrast what's happening and sure,

lanka to you in the recent elections in the philippines where you know, and not just one, but 2 political dynasties remained or return to power. and many experts attribute to the weakness of political parties in the philippines and which gives political families political clans, more authority, more power, sort of, they become a sort of political brands. i wonder, what's the dynamic insure lanka? how does it work there? do what we have seen over the last 56 years is actually a lot of change in political parties. the though what's called the grand own pocket . here the united national party to home, the british handed over power in 1948, has been reduced to just one seat in parliament in the last elections. and in fact, that leader of the party who even lost his seat, has been appointed as prime minister a month ago by this very diligent miced,

president of roger boxes in turn. 4 years ago launched the our own party, the s l p. p. breaking away from another age old party, the silica freedom. ok. this constant changes going on in the, in the particle around. i see that as linked to the economic unraveling. that has also been wrong in the making. of course, the focus on very recent events, but economically and politically, shalanda has been going through change. but all of those have been coming into a major crisis that has erupted. but i also think is going to be a long drawn out crisis, where it's going to take years for us to gain economic and political stability. and in the years ahead, you might see other nationals forces into the realm. so it can be also a very dangerous period going forward. now as a dramatic us,

this situation is in asheville and we are also observing similar trends in many other countries around the world. the prices of food, the process of fuel arising pretty much everywhere, even in the developed countries. i wonder how much that has the state of the global economy influence what's going on in the country wants the share. busy of the globalized influence on the domestic affairs there. historically, you know, an island nation like us. we have always been influenced by historical developments . you know, that the great depression of the 1920s. and i'm actually characterizing the economic crisis in sri lanka now as another depression. and the great depression led to policies in sri lanka, of free education, free health care, from subsidies. and to this day, some of that survived. i teach in a university all university since we like our state universities and we have free education up the university. and so the great depression, even though it was

a global phenomena, ended up creating a welfare state in sri lanka. similarly, the crisis of the 1970s, ma'am, you would know that you know, global oil prices quadrupled winter or pick oil shock in the 19 seventy's. a global downturn and sri lanka was one of the 1st countries maybe after chile under the offer, the military coup and fascist rule of canal sheet that turn to no liberal reforms. so similarly i see the current crisis in sri lanka, as the continuation of the global financial crisis of 2008 is really hasn't been resolved. we have only been trying to financial eyes and, and bubble up high autonomy. and, and what i see as perhaps the crisis of neoliberalism hitting sri lanka 1st. so i don't think the usual solution is going to, we're going to have to drastically change direction the are to come up with this

crisis. and dr. can you remember whenever we talk about the crisis in the global economy, it's always hard to understand where to start and where to finish. some i, economists and blame it on the very nature of capitalism. others can explain it more narrowly and by the consequences of the common pandemic and the disruption in production change. wonder, where do you stand on that as far as the global economic mass is concerned, what are the antecedents there? you know, no, as i mentioned, the 1930 is the 1970s. ok. capitalism periodically goes through these crises because it are on, on the profit motive. and so this is for me, very much a capitalist crisis. but you're also in this latest phase of capitalism called your liberalism. we have seen repeated crises. so we've seen crisis in latin america in

the 1980s that new station crises of 199798. even the crisis in russia and the 1990s. and then of course, hit the western world until it hit the western world. we were told that it's only crony capitalism that leads to crises. but they didn't talk about trauma capitalism that became the global financial crisis of 2008. so it's not about trone capitalism . it is something inherent to capitalism. and this is what i think we are seeing happen now. so this and so that the crises have become more deeper and more frequent. now, but this time i see it as actually a crisis of northern burleson itself, that to be able to continue with accumulation through dispossession. ref, finance, capital has been able to continue to accumulate at the cost of working people all

around the world. and the 3rd world in particular has been really hit hard by it affects people's daily lives as be a scene in sri lanka, and even in sri lanka, since the 19 seventy's inequality has been greatly rising. and part of the anger out on the street is also reflecting those dynamics of neoliberalism. oh, dr. connecticut. mar. we have to take a short break now, but we will be back in just a few moments ancient. ah ah

well well come back to well, the actual i'm going to come are political economists in senior lecture at the university of john, my doctor, could you come before the break? we were discussing the origin of the landing process as well as of the global economic crisis. and while it's natural, anything logical to blame it on the sitting government. i wonder if there any internationally accepted economic dog mass that various governments feel obliged to comply with. but that simply don't work anymore is the global economy or national economies still function according to the laws and the rules that i taught at the department of economics? no, i think what we're seeing that the dates, economics, departments in my country all in much of the world,

we are unable to either predict all provide viable solutions and ways forward to the economic crises that yeah. seen. in fact, they believe that markets, clear markets themselves will solve these problems. and that ideology is also behind the policies that are recommended and put forward and forced given on many good low countries by banks, national monetary fund and the world bank and you broke institutions. so, but they seem to have a little disregard for real abject human suffering that is caused by those policies. so this is a global phenomena. i think felucca is one of the 1st countries in this wave to even default on its international debt to go to

a severe crisis. the silicon elite i'm looking for the i am asked to solve this problem. sheila guys in a desperate situation now, you know, you have to go around to the big bowl to any country that will give us credit lines or any institution that would give us a credit line to vote. i essentially don't, harrison, i'm sorry for interrupting it's one thing when you turn to your neighbors who may or may not give you some support in the times of need, but if i'm not mistaken as a when today i'm a 16 times over the last 12 or 13 years, you've been boring, a huge amount of money, a very significant interest rate than from what i've seen, even the opposition at this point of time. well, they're calling for the resignation of the current government. they're still insisting on pretty much repeating the same economic policy. so is that going to bring a different result?

i don't think so. and, and, and not in the medium term for sure. because since 1965, as you mentioned, sri lanka has gone to 69 with agreements more recently after the war in 2009. we went into one and then in 2016 after change of gone, every government has used the same approach. and going to the i'm if only allowed us to borrow more and at higher interest rate. so pushing us further into debt. so the only bubbles us up for a few years. ready and in the collapse into the debt trap. so that's obviously not the solution. but this has become the global approach to solve the problems of debt ridden countries around the world. and it's not just re lanka this time. i think a number of other countries are likely to default or get into a similar kind of problem already. the can see pakistan is, is in a crisis and their policy economy in terms of south asia is on shaky ground. so

the need an alternate different direction and during these kinds of global crises, and it can be very painful in terms of how that change happens. there's also a change in the global order. i mentioned the great depression of the 1900 per piece. and out of that of course, now does the rise of fascism a 2nd world war. and huge changes before the global order changed to a kind of a keynesian approach of social welfare states. again, the 19 seventy's, a time of many proxy was around the world. and in a change, a consolidation of a newly bro project with finance capital rising up. so this might again be a time. and the worry is that these kinds of great crises as the,

as the great part of on him, his jaw audiology has mentioned lead to great unraveling. this can also be have serious political and economic consequences. and that can also lead to huge market destruction. and it's, it's a worry for all of us. i think we want a peaceful world speaking the potential alternatives for sri lanka, if i'm not mistaken. india has extended almost $3000000000.00 to your country in credit lines and various other instruments since january this year. that's a huge amount of money. it's more than the united states or china have offered you . could that potentially be in the alternative to the m f route? well, i think india has itself is saying that it has reached its limits of providing a credit line. so she like a needs to get credit from various actors, but also needs to create its own system. in the short term, we have no option,

but we need to prioritize our info. it's been been living well beyond our needs and been importing luxury items. and even today that is continuing in that you know, small ways we need to prioritize our system. we need to create a public distribution system where the state takes responsibility during such a severe crisis. but even now, i really think that the market should address it and the i m f. recommendations also for the market to fix this problem. now some analysts think they're going to die and that would bring about international credibility that she can again, gwen borrow in international markets. i think that's far fetched. they can see global interest rates rising and basically appetite for global capital to coming to a country like she like on, particularly after it has defaulted. so i'm seeing sri lanka sort of muddle along, chug along into a long, drawn out

a crisis. but that clarity is in there with id to our, our policy makers. ultimately, she'll arkansas to make a decision on what kind of an economy the want to build. and do we want to continue to be dependent on certain international actors? or do we want to chalk pot? and i also want to mention it maybe later presumptuous as me, but i think russia provides a good example of being able to when it's out of the, i'm a financing at the time when it was really, really desperate. after the collapse of the soviet union, we had huge that we were paying huge interest rates, but over time we've been able to become more self sufficient. which leads me to my next question. and one of the features of the current crisis is they shortage elsewhere. foreign exchange occur occurrences that last you are unable to import. and i'm talking not only about luxury items that you mentioned, but also madison. i know the trunk has been experiencing difficulties with

electricity as painful as this experience may be. don't you think that's also a good argument for self sufficiency, actually building up industry enough economy to, to live within your own means? absolutely, in fact i, last year a colleague of mine and i published a paper in the international quantity of asian studies that they were looking at the long $960.00 is in many asian countries. now emphasis was on self sufficiency. we were headed into that kind of an experiment in the 1970 bill before we switched to a sort of a neo liberal direction and so sufficiency, industrial policy, these all became bad tons of bad concepts for a new live, ultra. but i think you need to think about self sufficiency and you need to think about our own sort of a gradient question and hold it when you become self sufficient food. in particular, you're going through a food crisis and to story start on manufacturing. so that has to be

a long term direction. now, of course, feedback also has its limitations. you mentioned russia 19, nineties, even militia, during the 1997 crisis did not go from i'm as agreement. but i think malaysia, russia have much more natural resources than a country like sri lanka. we don't have wild resist as for example. so b, b, v are dependent in the international a global economy. but we have to set it on our own terms. and we really have to think about our own social structure, the importance of equality and freedom within our country, the to be able to chat that i think i'm to let you chose our visionary leaders. maybe in a different age, 19 forties, fifties and sixties, talk in that direction. but now we have, what i would characterize as a comparable elite will become very much more dependent on the west. and don't think in those terms now are changing years a little bit. i want to bring some of my professional experience i,

in the past i covered a lot of spring uprisings. and when i look at what's happening on the feature film kind of right now, i feel it this feeling of deja hello. people taking to the streets, demanding more dignity, demanding more freedom, demanding more accountability from their governments. and when i saw that happening in cairo in damascus and tripling it, it had a good feeling to and people on those streets always thought that you know, things could possibly get worse. and we have history unfortunately proved down the road that it could get for us. now i know the tr lanka had a very painful experience of civil strife. you went through the kids long, civil war, aren't you afraid of its return? because it all starts with the rallies and some i think some of the rallies inter longer have already been militarized. aren't you afraid of a disintegrating into something far more precarious and dangerous?

yeah, she lanka, you know, vince was to the wrong, mainly in the northeast in, in, in jeff now that i peach that was the, the stronghold of the tamil tigers in the civil war started. but there were also 2 large insurrections in the south by singly, so we have that history. but at the same time, the current protests, even though on, on one day when peaceful protest is attacked by government boons, it didn't turn violent in reprisals. for the most part, it has been peaceful. and you don't have any kind of a movement taking it in a violent direction. but my worry is that right now, even these protests have been much more inclusive of minorities and so on. but if there isn't a solution provided, if i'm, if conditionality is lead to further suffering, maybe 2 years down the line,

there's a danger that another, a nationalist, fascist type of ridging could try to capture people's grievances. and that could again terror part of society. so not maybe immediately, but if you don't address this problems now, she like a, has a history of the pendulum swinging politically from one direction to the other. so if you really have to use this moment, very carefully to put sri lanka on a sustainable park route 1st to address the food crisis and immediate needs of the people and then the unemployment, the loss of likelihood so that people feel those begin to have confidence in the economy and for all of that, you need a new leadership, benita, new leadership from the ground up. and it's going to be, it's gonna take time in greece last almost a decade with its economic crisis. i think there were something like 7 prime minister changes that happened in that decade in the 20 tense be might be also looking at something like back and she like over the next few years. well,

just like i did them or as you mentioned, sure i'm has to be, i am only be pioneers in contracting the crises. i certainly hope that you will also be a little bit versed in finding the solution. wish you all the best to you and your people. thank you for having me and thank you for i'm concerned about street and thank you for watching hope this year again, was apart with mm with ah,

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