On Wednesday, the Sri Lankan Parliament elected Ranil Wickremesinghe as the republic’s interim president. Mr Wickremesinghe, who on Friday appointed Dinesh Gunawardena as prime minister, is a career politician whose legislative career, going back to 1977, spans the making of the country’s current economic crisis. As an economic depression now takes hold, the same policies that he is likely to impose will further undermine the economy. Indeed, policies of austerity are making an unprecedented collapse even worse. Alternative approaches of relief, public distribution and self-sufficiency are sorely needed to cushion people from the devastation. Such alternatives may also provide clues to other developing countries in line to default on their sovereign debt, and which are facing potential crisis dynamics like those in Sri Lanka.
Sri Lanka was the first country in South Asia to pursue economic liberalisation in the late 1970s. This meant devaluing the rupee, curtailing food subsidy and social welfare more broadly, and generally opening the country to trade and financial liberalisation. With the onset of the global debt crisis in the early 1980s, other developing countries followed with structural adjustment programmes. The International Monetary Fund (IMF) and World Bank experimented with Sri Lanka as the front runner. They facilitated a massive infusion of donor aid. But as its current account and fiscal deficits ballooned with unrestrained imports and state expenditure on infrastructure projects, international agencies began demanding austerity. This created a political and economic crisis in the early 1980s.
With the breakout of civil war in 1983, successive governments pursued further market reforms including privatisation, but with some caution. They did not want to undermine their political base for wartime mobilisation. After the government’s victory against Tamil separatists in 2009, it accelerated the process of liberalisation. It drew in greater inflows of global finance for mega infrastructure projects and speculative investment in urban real estate. This process culminated in the accumulation of tremendous debt stock in the form sovereign bonds – and eventually the default on its sovereign debt in April this year.
The mainstream policymaking consensus within Sri Lanka now argues that the government must pursue an agreement with the IMF to support restructuring its debt and set it back on the path of growth. The IMF has offered recommendations such as floating the rupee, raising interest rates, freezing state expenditure on projects and increasing energy prices. The government has already implemented many of these policies. Experts hold on to the belief that if Sri Lanka can pass a debt sustainability analysis by demonstrating a commitment to fiscal reform, it will receive a seal of approval from the IMF. This would allow the country to negotiate with creditors, including private bondholders, to restructure its significant external debt. The green light from the IMF and solvency through debt restructuring would supposedly enable Sri Lanka to access temporary financing from regional powers such as China, Japan and India, and eventually access new loans from international capital markets.
Sri Lanka’s economy could contract by one tenth this year alone
This rosy analysis of the way forward recommended by mainstream analysis over the past six months, however, is now coming under critical scrutiny. The reality of global economic headwinds and tremendous disruptions within the country signal a much longer crisis. The global rise in interest rates, led by the US Federal Reserve, will undermine the inflow of capital and raise the cost of capital for developing countries. Meanwhile, rising global prices for food, fuel and other essential inputs are aggravating the ongoing breakdown of the market in Sri Lanka.
In this context, an austerity-driven policy approach that is supposedly designed to lower inflation is, in fact, making the crisis worse. The policy reset in Sri Lanka this year is raising prices to prohibitive levels and undermining people’s income and livelihoods through further reductions in spending. Private capital is withdrawing from the economy while public expenditure is frozen, resulting in a sharp overall reduction in national production. Sri Lanka’s economy could contract by one tenth this year alone. The mainstream approach of macroeconomic stability for the country through an IMF agreement, which entails austerity to address the country’s twin deficits, will accelerate the downward economic spiral.
The reality is that Sri Lanka’s economy will take a very long time to recover. As with the fall-out of the last great global crisis, during the Great Depression of the 1930s, alternative forms of development rooted in a more egalitarian vision of society could eventually take hold. But right now, the immediate priority is the food system. Sri Lanka is already facing food shortages and could possibly experience famine without immediate relief.
The government must pursue immediate stimulus in food production, particularly as farmers are abandoning their fields due to the ill-advised fertiliser ban last year and the shortages of fuel and inputs this year. Addressing this crisis requires spending for agriculture combined with public distribution. The latter needs strengthening, after the decades-long dominance of market-oriented policies led to its neglect.
The shortages of foreign exchange are likely to continue. In response, the state must take over the external sector and prioritise Sri Lanka’s foreign earnings to purchase essential goods for both production and consumption. With the failure of the market, due to hoarding amidst limited supplies of imports, such goods must be distributed through the public distribution system. This will ensure the continuation of the critical export sector and its foreign earnings, in addition to sustainable local food production to avoid a food crisis and pave the way to self-sufficiency in the food system.
Sri Lanka is caught in the clutches of an economic depression. This is the worst time for policies of austerity. Instead, the government should redistribute wealth, borrow locally and spend in rupees to revive people’s livelihoods and income streams. It must subsidise producers to ensure that production is maintained. With Sri Lanka, like many other developing countries, likely to continue to face tremendous hardship over the next few years, citizens must be adequately prepared for the long road to recovery.
A new global economic crisis is in the making. Ruling in the belief that the market alone will eventually fix these problems would be foolhardy. Now more than ever, the state needs to take responsibility for the future of its citizens. There is no real path to political and economic stability except through the stabilisation of people’s livelihoods and strengthening the food system.
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
British Grand Prix free practice times in the third and final session at Silverstone on Saturday (top five):
1. Lewis Hamilton (GBR/Mercedes) 1:28.063 (18 laps)
2. Sebastian Vettel (GER/Ferrari) 1:28.095 (14)
3. Valtteri Bottas (FIN/Mercedes) 1:28.137 (20)
4. Kimi Raikkonen (FIN/Ferrari) 1:28.732 (15)
5. Nico Hulkenberg (GER/Renault) 1:29.480 (14)
MATCH INFO
Kolkata Knight Riders 245/6 (20 ovs)
Kings XI Punjab 214/8 (20 ovs)
Kolkata won by 31 runs
ASHES SCHEDULE
First Test
November 23-27 (The Gabba, Brisbane)
Second Test
December 2-6 (Adelaide Oval, Adelaide)
Third Test
December 14-18 (Waca Ground, Perth)
Fourth Test
December 26-30 (Melbourne Cricket Ground, Melbourne)
Fifth Test
January 4-8, 2018 (Sydney Cricket Ground, Sydney)
WHEN TO GO:
September to November or March to May; this is when visitors are most likely to see what they’ve come for.
WHERE TO STAY:
Meghauli Serai, A Taj Safari - Chitwan National Park resort (tajhotels.com) is a one-hour drive from Bharatpur Airport with stays costing from Dh1,396 per night, including taxes and breakfast. Return airport transfers cost from Dh661.
HOW TO GET THERE:
Etihad Airways regularly flies from Abu Dhabi to Kathmandu from around Dh1,500 per person return, including taxes. Buddha Air (buddhaair.com) and Yeti Airlines (yetiairlines.com) fly from Kathmandu to Bharatpur several times a day from about Dh660 return and the flight takes just 20 minutes. Driving is possible but the roads are hilly which means it will take you five or six hours to travel 148 kilometres.
FIXTURES
Thursday
Dibba v Al Dhafra, Fujairah Stadium (5pm)
Al Wahda v Hatta, Al Nahyan Stadium (8pm)
Friday
Al Nasr v Ajman, Zabeel Stadium (5pm)
Al Jazria v Al Wasl, Mohammed Bin Zayed Stadium (8pm)
Saturday
Emirates v Al Ain, Emirates Club Stadium (5pm)
Sharjah v Shabab Al Ahli Dubai, Sharjah Stadium (8pm)
Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
Background: Chemical Weapons
How Filipinos in the UAE invest
A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.
Fifty-five percent said they plan to invest in property, according to the poll conducted by the New Perspective Media Group, organiser of the Philippine Property and Investment Exhibition. Acquiring a franchised business or starting up a small business was preferred by 25 per cent and 15 per cent said they will invest in mutual funds. The rest said they are keen to invest in insurance (3 per cent) and gold (2 per cent).
Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.
Killing of Qassem Suleimani
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
KILLING OF QASSEM SULEIMANI
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
Fanney Khan
Producer: T-Series, Anil Kapoor Productions, ROMP, Prerna Arora
Director: Atul Manjrekar
Cast: Anil Kapoor, Aishwarya Rai, Rajkummar Rao, Pihu Sand
Rating: 2/5
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait this month is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
UAE’s fixtures: Fri Apr 20, UAE v Qatar; Sat Apr 21, UAE v Saudi Arabia; Mon Apr 23, UAE v Bahrain; Tue Apr 24, UAE v Maldives; Thu Apr 26, UAE v Kuwait
World T20 2020 Qualifying process:
- Sixteen teams will play at the World T20 in two years’ time.
- Australia have already qualified as hosts
- Nine places are available to the top nine ranked sides in the ICC’s T20i standings, not including Australia, on Dec 31, 2018.
- The final six teams will be decided by a 14-team World T20 Qualifier.
World T20 standings: 1 Pakistan; 2 Australia; 3 India; 4 New Zealand; 5 England; 6 South Africa; 7 West Indies; 8 Sri Lanka; 9 Afghanistan; 10 Bangladesh; 11 Scotland; 12 Zimbabwe; 13 UAE; 14 Netherlands; 15 Hong Kong; 16 Papua New Guinea; 17 Oman; 18 Ireland
The chef's advice
Troy Payne, head chef at Abu Dhabi’s newest healthy eatery Sanderson’s in Al Seef Resort & Spa, says singles need to change their mindset about how they approach the supermarket.
“They feel like they can’t buy one cucumber,” he says. “But I can walk into a shop – I feed two people at home – and I’ll walk into a shop and I buy one cucumber, I’ll buy one onion.”
Mr Payne asks for the sticker to be placed directly on each item, rather than face the temptation of filling one of the two-kilogram capacity plastic bags on offer.
The chef also advises singletons not get too hung up on “organic”, particularly high-priced varieties that have been flown in from far-flung locales. Local produce is often grown sustainably, and far cheaper, he says.
Match info
Uefa Champions League Group B
Tottenham Hotspur 1 (Eriksen 80')
Inter Milan 0
Fifa Club World Cup quarter-final
Kashima Antlers 3 (Nagaki 49’, Serginho 69’, Abe 84’)
Guadalajara 2 (Zaldivar 03’, Pulido 90')
SNAPSHOT
While Huawei did launch the first smartphone with a 50MP image sensor in its P40 series in 2020, Oppo in 2014 introduced the Find 7, which was capable of taking 50MP images: this was done using a combination of a 13MP sensor and software that resulted in shots seemingly taken from a 50MP camera.
WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
%3Cp%3E%E2%80%A2%20Looming%20global%20slowdown%20and%20recession%20in%20key%20economies%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Russia-Ukraine%20war%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Interest%20rate%20hikes%20and%20the%20rising%20cost%20of%20debt%20servicing%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Oil%20price%20volatility%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Persisting%20inflationary%20pressures%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Exchange%20rate%20fluctuations%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shortage%20of%20labour%2Fskills%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20A%20resurgence%20of%20Covid%3F%3C%2Fp%3E%0A
RESULTS
5pm Maiden (PA) Dh80,000 (Turf) 1,600m
Winner Thabet Al Reef, Bernardo Pinheiro (jockey), Abdallah Al Hammadi (trainer)
5.30pm Handicap (PA) Dh80,000 (T) 1,600m
Winner Blue Diamond, Pat Cosgrave, Abdallah Al Hammadi
6pm Arabian Triple Crown Round-1 Listed (PA) Dh230,000 (T) 1,600m
Winner Hameem, Adrie de Vries, Abdallah Al Hammadi
6.30pm Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
Winner Shoja’A Muscat, Szczepan Mazur, Ibrahim Al Hadhrami
7pm Maiden (PA) Dh80,000 (T) 1,200m
Winner Heros De Lagarde, Szczepan Mazur, Ibrahim Al Hadhrami
7.30pm Handicap (TB) Dh100,000 (T) 2,400m
Winner Good Tidings, Antonio Fresu, Musabah Al Muhairi
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
