Reflections on the Sri Lankan Economic Crisis

SO much has been written on the Sri Lankan economic crisis that the facts are by now quite well-known (see for instance C P Chandrasekhar, Frontline April 22): the massive build-up of external debt; the huge Value Added Tax concessions that pushed up the fiscal deficit and made the government borrow abroad even to spend domestically; the decline in foreign exchange earnings because of the pandemic that particularly hit tourist inflows; the downward pressure on the exchange rate which made many Sri Lankan workers choose the unofficial route to send their earnings home rather than th

The Hike in Petrol Prices

IN the five days ending March 26, petrol and diesel prices in the country had been hiked four times, with more such daily hikes in the offing.

The Irony of Sanctions against Russia

THE juggling which US imperialism has to do to maintain its hegemony becomes more bizarre by the day. First, it kept needling Russia (“provoking the bear”) “on behalf of the western alliance” by expanding NATO to its very borders, knowing full well that Ukraine’s joining NATO would be totally unacceptable to Russia.

Globalisation and the Relocation of Capital and Labour

THE relocation of capital from the advanced capitalist countries of the north to low- wage countries of the south in the current era of globalisation has received much attention; but there is another kind of relocation that has not received as much attention, and that is of labour from comparatively lower-wage countries of Eastern Europe to the advanced capitalist countries. In fact since within the European Union there is generally free mobility of labour, this has become a powerful inducement for these Eastern European countries to join the European Union.

Sanctions within a Regime of Neo-Liberalism

BEFORE joining the neo-liberal order, India used to have “rupee payment arrangements” with the Soviet Union and Eastern European socialist countries under which the main international reserve currency, the US dollar, was used neither for settling transactions nor even as the unit of account in terms of which the trade-related transactions were denominated. The dollar in short was used neither as the means of circulation, nor even as the unit of account under these “rupee payment arrangements”.

The IMF Connection with the Ukraine Crisis

THE security concerns of Russia arising from Ukraine’s intentions of joining NATO have been widely discussed in the media. But the IMF’s link with Ukraine which is a parallel issue has scarcely received much attention.

Imperialism as an Abiding Phenomenon

THERE is a common misconception that while the immediate aftermath of political decolonisation was marked by attempts by metropolitan powers to retain control over the resources of the erstwhile colonies, for which they used all kinds of instruments from coups to armed interventions against the newly independent governments, that period got over after a time.

An Unimaginable Contrast

MUCH has been written about the immense increase in economic inequality that has occurred of late and various startling figures have been provided by bodies like Oxfam, which has just come out with a report titled Inequality Kills. This shows that the wealth of the 10 richest men has doubled since the pandemic began while the incomes of 99 per cent of the population of the world are lower today than before the pandemic.

Why Capitalist Governments Worry More about Inflation than Unemployment?

CAPITALIST governments invariably seek to control inflation by enlarging unemployment. This has nothing to do with any belief in a stable “trade-off” between the two, namely in a stable curve that links the two. Even those who attribute inflation to other causes, such as excessive money supply (“too much money chasing too few goods”) and find the solution to it in monetary stringency, are in effect seeking to control it through larger unemployment, since monetary stringency causes larger unemployment.This raises many questions. The first question is: why is this so?

A Budget Whose Silences are Ominous

NO budget in recent memory has been presented at a time when the economy is in such dire straits: unemployment is so bad that there are job riots in Bihar and UP; wealth and income inequalities are among the worst in the world; millions more have been pushed into poverty because of the pandemic and the lockdown; and inflation is accelerating even in the midst of massive unemployment. There is an urgent need for a strategy that promotes economic revival, while providing relief to the poor, and contributing to an abatement of inflation.

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Peoples Democracy

ECONOMIC NOTES