Executive socio-economic and financial outline with special reference to Sri Lanka
`equipment suppliers,’ `transport’ and other contractors. Free-booting `constructors’ creamed off profit overheads while the actual construction was done by overseas firms. In contrast to this, so as to reduce heavy foreign and local costs, the UN engineering design team had envisaged construction during a 25-year period.
To let Friedman’s `engine of progress’ run at full throttle, the time span was shrunk to 9 years. Besides the enormous increase of cost to tax-payers, the rush provoked environmental damage against which design engineers safeguarded by creating the original 25-year plan.
RAIDS BY DEBT SALESMEN
During the decades from 1977 when Friedman’s model was implemented with a vengeance, we have seen the poisoning of the common well become intense. During the same period Singapore (which sent in children for education in Colombo in the 1950s), achieved classification as a developed country.
In August 1998, Milton Friedman had this to say in a CNN interview about the agenda which his own students practice at their desks at the IMF:
“We speak about the IMF bailing out … Thailand; the IMF isn’t bailing out Thailand. It isn’t bailing out the poor people in Thailand now suffering from the recession they’re in. It’s bailing out the bankers in New York and in London, and Berlin who made loans to Thailand.”
With every crisis and every induced increase in the country’s debt, Friedman’s Chicago Boy debt salesmen at the World Bank and IMF gain still more license to arm-twist the Sri Lankan economy. From 4% interest in 1950, business firms now have to pay above 20% for money from banks. It feels is as if the pawnbroker, by the intention of Friedman’s salesmen, has broken through the roof and confounds the growth of business in Sri Lanka in contrast to Singapore.
A calm has just returned to the island after two decades of civil war. The war was preceded and accompanied throughout by the fanfare of economic reform hoax.
In year 2002, in the lull of fighting and before peace talks are completed, Chicago Boys of the World Bank and IMF were out with their brasswinds again, mechanically trumpeting Friedman’s reform scam. Will not they wait for peace talks to be concluded before they exact their next pound of flesh from the population?
In the scam, “privatisation” is a boomerang that rebounds on the private sector as higher payroll costs for medical and transport outlays, which cannot be financed through bank borrowing at 20% upwards. In addition, morale in the individual firm is harmed by incitement to spit in the company’s own well.
Friction and jealousies affect cooperation and productivity at work and therefore – customer service. As end result we find that for the past quarter century the Chicago School has been promoting through its macabre salesmanship, the dependency of both public and private sector on borrowings from outsize banks. The formula makes small David depend on Goliath. Yet, there is more. Since the IMF serves as proxy for outsize banks – in Friedman’s own estimation these mammoth banks gain every opportunity to access information inside the IMF on forthcoming interventions. In that way Goliath gains an unfair opportunity to raid country currency markets. In Brazil, money was being syphoned overseas at the rate of
$ 300 million a day.
To take Japan and Singapore, to settle import bills the natural resource sparse countries pay their way through exporting goods and services.
In Sri Lanka the privatisation scam serves still one more purpose. The incitement to poison the well dissipates the energy of business and government. It removes the opportunity for focus by Sri Lanka’s 18 million population on a group of goods or services that can be competitively exported by a population of its size.
The limits of reinforcement of stupor are being reached. So as to renegotiate debts induced by 25 years of poison-the-well prescriptions, a heavily dosed Sri Lanka must awaken and stand sentient on both feet. Millennia of history must remind the island to safeguard its domain from more of the lethal calamities it has experienced.