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10th January 1999

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The economy's triple Indianisation

By Dayan Jayatilleka and Tisaranee Gunasekara

"Free trade a free fox among free chickens!"
Ernesto Che Guevara

SLFP led governments have always been bad news for the Lankan economy. This is primarily because of the SLFP's panache for adopting the most extremist version of whichever economic doctrine happens or is thought to be in vogue globally.

Undoubtedly the best known example of the SLFP's predilection for catastrophic economic policies was its drastic limitation of the transportation of rice and the ban on the public consumption of rice two days a week during 1970-77. That was when the SLFP was an adherent of the closed, state capitalist economy.

imageNow the pendulum has swung and this time around the SLFP's notion of Shangri la is an economy that is totally privatised, liberalised and globalized (i.e. foreignized). It is moving towards this goal with all the finesse, circumspection and creativity it displayed in its previous incarnation when it sought to close and state-ize the economy completely. The Indo-Lanka agreement on trade liberalisation is a strategic step in their new economic journey.

Even those of us who welcomed the Indo-Lanka Accord in that concrete situation of the late-ish '80s, as the last best chance for peace and devolution (and because its preamble encoded, for the first time, an acceptance of this society's pluralist character) secretly feared its economic consequences. Would Indian capital and goods penetrate the country, inclusive of its peasant agriculture? Would not the resultant anti-Indianism seep into the social/class struggle? Would this not exacerbate sentiments against the plantation workers of Indian origin and Tamils in general? These were the concerns that figured in behind the scenes (and sometimes 'underground') discussions on the anti-racist radical and even parts of the parliamentary-democratic left circles.

Thanks to Wijeweera, Prabhakaran and Premadasa - that is in that order of sequence, but in reverse order of consequence - the Indian stranglehold was rolled back. It was in the fledgling North-East provincial council though that the economic tie up with India began to be visible, but that process of economic Indianisation was aborted by the NEPC's slow motion hara-kiri.

The Indo-Lanka trade liberalisation agreement is an economic version of the Indo-Lanka Accord, minus its redeeming features. The fast track trade liberalisation pact with India will result in all of the socio-economic negative consequences we feared the Accord would bring in its wake and many more besides.

The extreme poverty and the archaic social practices in India makes for low wages, which in turn means low cost of production and cheaper commodities - while the huge Indian industrial base makes for an enormous volume of products. Thus the danger of Lankan industry being swamped by an Indian wave. The chain reaction that will be set in motion is likely to be:

o Rising unemployment as many local enterprises (particularly small and medium ones), unable to compete with the cheap Indian imports, close down.

o A tendency to depress local wage rates, assault labour legislation and engage in unjust labour practices (such as the increasing tendency to employ child labour; India has the largest child labour force in the world) in the name of removing 'rigidities in the labour market' and becoming more competitive.

o A switch on the part of a segment of Lankan business from the more risky productive activity (i.e. industry) to the more profitable endeavour of trade and commerce, largely as intermediaries for Indian goods.

o A possible shift in strength within the Lankan entrepreneur class to the non-Sinhala (or 'a-Sinhala' as the chauvinist discourse goes) segments - who have closer links (kinship, cultural, linguistic) with Indian business interests and therefore an added advantage based on this inside track.

o A response by Sinhala business to this challenge in the form of increased contributions to ethnically exclusivist business networks, publications and organisations espousing 'bhoomiputhran' ideologies. (An embryonic process is already underway as a response to the 'challenge' from the ethnic minorities).

o The rapid growth of audiences, including TV audiences, for the preachings of populist-fundamentalist native ideologues whose neo-Dharmapalist discourse seem to assuage a sense of spiritual malaise and fin-de-siecle angst, exacerbated by the LTTE's continual hammer blows to Sinhala self esteem.

o A possible collapsing in the Sinhala mind, of the distinction between Indian capitalist interests and Indian origin plantation workers; of Indians and Hindus and Tamils.

o The rise of a wave of mass chauvinism of the street and the bazaar. Mass deprivation caused by the PAs unquestioning adherence to neo-liberal globalisation, the knock-on effects of the deepening and widening global economic crisis, rising unemployment stemming from these sources and from Indianisation, will be the nutrient medium of this plebeian chauvinism which could even have its resonance in the lower/lower-middle ranks of the military.

Economic and Cultural Indianisation

It is important to understand that this trade agreement is not an isolated act but the latest component of a far larger totality - a process of economic and cultural Indianisation. Having been saved, chiefly by Premadasa, from the fate of becoming a prisoner in India's sphere of influence in the politico-military-strategic sense, Sri Lanka is being slowly sucked into India's sphere of influence economically and culturally.

There is a growing Indianisation of the entire economy thanks to the PA's policy of rampant privatisation. The commanding heights of the economy, the plantations, are penetrated by Indian capital as a result of the PA government's privatisation of plantation ownership (replacing Premadasa's excellent practice of short term management leases to the local private sector companies - a practice which is now being praised by the World Bank which opposed it earlier). The invasion of commodities which is likely to result from the trade agreement is the second stage of this process. These twin processes of economic Indianisation will be accompanied by a third, namely the long term leasing of Lankan peasant lands under the Regional Councils by Indian companies, if the PA's Union of Regions package is pushed through, as the President has promised to do if she secures a mandate in the NWP.

Side by side with this process of economic Indianisation runs the process of cultural Indianisation. The country is being swamped by a veritable avalanche of Indian movies, TV soap operas (which are often dubbed in Sinhala), song and dance routines, as well as a continual influx of Indian film stars and singers, minor and major. Hindi movies, which are being shown on every TV channel, have become the staple cultural diet of a very large segment (if not the majority) of our young people.

We are cultural internationalists and are very far from being advocates either of economic autarky or cultural exclusivism. But openness (be it political, economic or cultural) must take forms which do not damage the vital national interests and essential identity of this country. It is necessary to make sure that openness does not lead to an insidious economic or cultural colonisation. The danger is all the greater when one is a small country, only a few miles away from a global or regional super power- as it is in the case of the USA and Cuba or Sri Lanka and India.

All our relations, be they political, economic or cultural, with our giant neighbour (whose hegemonic practices we have experienced and whose sub-imperial aspirations are no secret) must be viewed through this prism.

Special to The Sunday Times

Palestinian state a legitimate right

By Latheef Farook

Former Higher Education Minister of the Palestine Authority Dr. Hanan Ashrawi says the declaration of the Palestinian state is a legitimate right of the Palestinians and this issue shouldn't be subject to any bargaining.

Known as the intellectual face of the Palestinian revolution Dr. Ashrawi feels the recent visit of President Bill Clinton should have been an open, clear and unequivocal acceptance of the Palestinian right to establish their own state as it would have been a clear message to demonstrate that the US could be an impartial broker in the peace process.

In an interview dealing with some of the most sensitive issues of the Palestine issue Dr. Ashrawi said during her visit to Bahrain such an attitude should have shown that the US is capable of forging a strategy which is responsible to the region. The US responsibility to the region cannot be based on a peace process that is based on injustice and the victimizing of the victims of aggression.

Dr. Ashrawi who came to prominence on the eve on the Madrid Peace Conference and subsequently played a crucial role in pushing the Palestine issue to centre stage feels that the peace process cannot be a domestic issue. It should be based on international legality and on the interests and rights of the region and not placing Israeli interest as a priority.

"Under the current circumstance the peace process has lost its credibility and support as it victimizes the Palestinians. The peace process has been used as a means of consolidating power politics rather than serving the requirements of peace. It has created a further imbalance and deep and pervasive sense of grievance and victimization among the Palestinians. And thus laying the foundation for future conflicts," pointed out Dr. Ashrawi who resigned her portfolio and distanced herself from the corruption riddled Palestinian Authority.

"We cannot always be defensive. We have to have a strategy and link the peace process to unilateral issues of Israel such as land confiscation, expanding settlement activities, annexation and Judaisation of Jerusalem. Issues such as land grabbing, Jerusalem and human sufferings should be directly linked to the peace process. Using human suffering as a means to extract concessions are not only immoral and illegal but also bound to backfire as this is one issue which the people would not accept", said Dr. Ashrawi. Therefore, the whole peace process needs assessment. The Arabs need to revise their strategies to have a coordinated attitude and put an end to attempts at normalization with Israel before Israel commits itself to peace.

Dr. Ashrawi said, "I do not believe that we can have any substantial progress in the peace process with this Israeli government. It is an extremist, right-wing and racist government in terms of its own ideology and expansionist policies. It is bent on undermining and avoiding the implementation of agreements entered into. Its attitude towards the Wye River Agreement is yet another demonstration that it does not respect its own commitments. It has now called for early elections only to avoid the implementation of the Wye River Agreement. But unfortunately the US which brokered this agreement is powerless to stand up to Israel. Therefore any assumption that this Israeli government is a government for peace is an erroneous assumption." She added that the Israeli government has been manoeuvring the peace process to maintain the appearance of the peace.

"The present Israeli government is out of step with the time. It is an aggressive government that revives the attitude of occupation and cold war. It had created an environment of distrust and instability not only to the Palestinians but one which also undermining the stability of the entire region.," Dr. Ashrawi said.

Special to The Sunday Times

India's defence set-up needs internal redressal machinery

By Our India Correspondent

The unceremonious sacking of India's navy chief, Adm. Vishu Bhagwat on New Year's eve was unprecedented in the annals of India's military history. But interestingly, the sacking as such, did not invite much ire. The breast-beating was all about the supposed reasons for the drastic action. If the Vajpayee government charged Adm. Bhagwat of compromising national security and gross insubordination, his opponents in the navy accused him of communalism and high-handedness. He, in turn, accused them of having secret dealings with shady, blacklisted international arms dealers.

To add to the plethora of charges, the anti-Vajpayee forces jumped into the fray by accusing the government of compromising national security by sacking a competent and forward looking officer. Janata Party leader Dr. Subramanian Swamy said that Adm. Bhagwat was sacked because he had refused to carry out pro-LTTE Defence Minister George Fernandez' order to weaken the surveillance of the Tamil Nadu coast to check the LTTE!

But to date, nobody knows for sure why Adm. Bhagwat had to go the way he was made to. Even more surprisingly, there is no plan to institute a probe into the episode and get to the bottom of it for future reference and edification. Adm. Bhagwat too does not plan to go to court challenging the dismissal. So, the question that is in the mind of every thinking Indian is will the matter be brushed under the carpet or will the backroom boys in North Block work out a system to avoid such ground swells in a sensitive national institution like the armed forces?

Defence Minister Fernandez has announced a plan to restructure the decision making system at the top level to prevent grievances from being made public and taken to court as is the case now. But the cynics would keep their fingers crossed. A perceptive observer of the defence scene said that the need of the hour is an internal grievance redressal machinery for armed forces. But alas, there is no sign of anybody thinking on this line.

Announcing the sacking of the naval chief, Prime Minister Vajpayee said the Adm. Bhagwat had "defied civilian authority on a sustained basis". But he declined to give details saying that the matter had "implications for national security".

One of the charges made against Adm. Bhagwat was that he had directly sent a note of protest to the Pakistan High Commission in Delhi after a Pakistani reconnaissance aircraft tailed an Indian naval vessel last June. Infuriated at the impropriety, the Pakistani mission had sent a stinker to the Indian Foreign Office about the "deviance of diplomatic traditions."

Vice Adm. Harinder Singh had filed a case complaining that he was being denied the Vice Chief's post by Adm. Bhagwat because he was a Sikh. The Cabinet Appointments Committee had cleared his name but Adm. Bhagwat was not allowing him to join. Later, when her husband was sacked, Mrs. Niloufer Bhagwat accused the Hindu nationalist Vajpayee government of communalism. Two days after the sack, Defence Minister, George Fernandez, said that Adm. Bhagwat had been threatening to court- martial Vice Adm. Sushil Kumar (who has since been appointed Chief of Staff or Naval Chief). Vice Adm. Kumar had sent six statutory complaints to the chief about his not being given an appropriate posting though he was the senior most officer in the force. Adm. Bhagwat's response was to pick up the phone and threaten to court- martial him for being cheeky! According to Minister Fernandez, Adm. Bhagwat had lied when he said that he had received no statutory complaints from Vice. Adm. Kumar. Adm. Bhagwat has argued that what he had received were personal letters and not statutory complaints.

On Mrs. Niloufer Bhagwat's charge that her husband was sacked because he exposed the links of certain officers, like Harinder Singh, with shady arms dealers, and that her husband had told her about these pernicious links, Fernandez said it was strange that the naval chief should say all these to his wife but not to him or the Ministry of Defence!

However, The Indian Express (Delhi edition) said that the Naval HQ and the Defence Ministry had discussed at length the links of two arms agents, Crown Corporation and Makalu Engineers, with Vice Adm. Harinder Singh. Crown was being run by Ex Navy chief Adm. S.M Nanda, and Makalu was started by Com. Pradeep Sachdeva. Both firms had been blacklisted. The intriguing part was that these two companies had played host to Vice. Adm. Harinder Singh when he was in Moscow on a private visit in May 1997.

That he partook of the hospitality was entered in Vice Adm. Singh's confidential report. He had pleaded that he has accepted the hospitality as some people involved in the companies were his batch mates. The remarks were later expunged. The firms also denied that they now had any dealings with the navy and said that the charge was frivolous. Vice Adm. Singh also said that with a posting in the Andamans he could never have had any influence over arms procurements.

What is clear is that the naval chief on the one hand and Defence Ministry and the Cabinet on the other, were not seeing eye to eye on a number of matters. Appointments were becoming controversial and officers were going to court. Adm. Bhagwat himself got his Fleet Commander's job after he filed a 400 page court case. Vice Adm. Singh had filed a court case to get his Vice Chief's post.

While most consider the sacking of Adm. Bhagwat as necessary since he had been openly defiant towards his political masters and high handed in his dealings with brother officers, sources in the Indian armed forces say that it was time the government gave some thought to having an internal grievance redressal machinery to avoid officers from going to the court. Since 1990, the number of service matters going to court has gone up alarmingly. The Bhagwat episode has tarnished the image of the Indian armed forces and only India's adversaries could be happy about all the dirty linen being washed in public. As a first step in clean up operations, Defence Minister George Fernandez has announced plans to completely restructure the ministry - forces relations by January end.

inside the glass house

Was inspection team a den of spies?

By thalif deen at the united nations

During the height of the Cold War in the 1960s and 1970s, the United Nations was a veritable battleground for the United States and the now-defunct Soviet Union to spy on each other.

The American and Soviet spooks were crawling all over - in committee rooms, in the press gallery, in the Secretariat and even in the UN library which was a drop-off point for sensitive political documents.

The library, it later transpired, was headed by a master Soviet spy, trench-coated no doubt, but still without the elegance of the fictional British super sleuth who wanted his martini stirred but not shaken. And by a strange coincidence, an American diplomat currently attached to the US Mission to the United Nations headed by the Sinhala-speaking Ambassador Peter Burleigh, goes by the name of James Bond.

The extent of Cold War espionage in the United Nations was also laid bare by a US Congressional Committee investigating the Central Intelligence Agency (CIA) in 1975.

The evidence given before the committee revealed that the CIA had planted one of its Russian-speaking lip-reading experts in a press booth overlooking the Security Council chamber so that he could monitor the lip movements of Russian delegates as they consulted each other in low whispers.

Obviously, there was nothing sacred in the corridors of power at the United Nations.

In his 1978 book "A Dangerous Place," Senator Daniel Patrick Moynihan, a former US envoy to the United Nations, describes the cat-and-mouse espionage game that went on.

Inside the bowels of the world body

In April 1978, Under-Secretary-General Arkady Shevchenko of the then USSR had the dubious distinction of being the highest ranking Soviet UN official to defect to the United States - with bag, baggage and a mistress, to boot.

Shevchenko, who was head of Political and Security Council Affairs, was accused of being a double agent working for US intelligence while spying for the Soviets inside the United Nations.

Last week there were new charges of spying - but this time around the Americans were accused of using the UN Special Commission (UNSCOM) in Baghdad to intercept Iraqi security intelligence in an attempt to undermine, and perhaps overthrow, the government of President Saddam Hussein.

The charges, spread across the front pages of the Washington Post and the Boston Globe, only confirmed the longstanding Iraqi accusation that UNSCOM was "a den of spies," mostly American and British.

Established by the Security Council immediately after the 1991 Gulf War, UNSCOM was mandated to eliminate Iraq's weapons of mass destruction and destroy that country's capabilities to produce nuclear, biological and chemical weapons.

The head of UNSCOM, Richard Butler of Australia, however, has vehemently denied charges that his inspection team in Iraq had spied for the United States.

"We have never conducted spying for anyone," Butler told reporters. Asked to respond to newsreports that UNSCOM may have helped Washington collect sensitive Iraqi information to destabilise the Saddam Hussein regime, Butler retorted: "Don't believe everything you read in print." But he never made the distinction between what was believable and what was unbelievable.

Butler, however, did confirm that UNSCOM worked closely with the United States. He said that the UN resolution, calling for the elimination of Iraq's weapons of mass destruction, had also urged the UN's 185 member states to assist UNSCOM in its task.

As a result, he said, more than 40 member states, including the US, Israel and Britain, had assisted UNSCOM in various ways. "In every instance, we used that information only in the pursuit of our disarmament mandate," Butler said.

"Are we spies?. Have we facilitated spying?. Absolutely not," he added. But the jury is apparently still out on that.

Butler also denied reports that the UNSCOM office in Baghdad was plugged in with eavesdropping equipment to monitor secret communications among military units responsible for the safety of the Iraqi President.

The denials also came from Secretary-General Kofi Annan who dismissed charges that UNSCOM was sharing sensitive information with US intelligence. "We not only have no convincing evidence of these allegations; we have no evidence of any kind. We have only rumours," UN spokesman Fred Eckhard told reporters.

At the US State Department, spokesman James Rubin also refuted the charge that Washington had used UNSCOM to pursue its own ends in Iraq, although he confirmed that it had provided intelligence assistance to UNSCOM at the latter's request.

"It is my understanding that at no time did the United States work with anyone at UNSCOM to collect information for the purpose of undermining the Iraqi regime. Write that down," he told reporters.

But despite the strong denials both by UN and US officials, the Washington Post and the Boston Globe stood by their stories.

The next day, the New York Times weighed in with a front-page story quoting US officials as saying that "American spies had worked undercover on teams of UN arms inspectors ferreting out secret Iraqi weapons programmes." The cover, for all intents and purposes, had been blown.

The more than 40 UN arms inspectors include scientists, military officers, diplomats and other professionals. But according to unnamed US officials, the United States also included some intelligence officers, using diplomatic cover, to gather intelligence independently.

The whole episode has not only embarrassed the United Nations but also put its integrity, impartiality and credibility in doubt.

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