Famine Is a Policy Choice: IMF Talks, Geopolitics and Disaster Capitalism—Part 1

Viewpoint by Darini Rajasingham-Senanayake *

This is the first in a series of two articles.

Them belly full but we hungry
A hungry mob is an angry mob
A rain a-fall but the dirt, it tough
A pot a-cook but the food no ‘nough

A hungry man is an angry man
— Bob Marley and the Wailers

COLOMBO (IDN) — Nobel Prize-winning Economist, Amartya Sen, long ago showed that Famine is a political and policy choice rather than the result of a food production shortage. In his book Poverty and Famines (1981), Sen showed that although adequate food was harvested during periods of famine inadequate distribution and inequality in access to food were the proximate causes of famines in world history.

Sen’s historical studies of famine in Bengal and other Asian contexts challenged the assumption that total food-availability decline (FAD), was the main cause of starvation and famine and showed how political and governance factors affected access to food: Indeed, a slight imbalance in food production can lead to large increases or declines in price, while government policies can also cause entitlement failures.  

Amartya Sen also argued that the availability of food can change for a number of reasons besides production shortfalls—for example, changes in the prices of goods and services, new rationing rules, transport blockages, infestations of farmer’s crops by pests, or the disruption of food-distribution channels by war.

To this list of causes of food insecurity may be added speculation by traders in commodities futures, globally and locally, the weaponization of food though sanctions and trade wars, systematic and coordinated (cyber) disruption of transport and supply chains and food security data bases.[i]  Jomo Sundaram former UN Under Secretary-General recently wrote that the US led sanctions on Russia and war in Ukraine are now the main drivers of increased food insecurity globally.

In short, famine is a political and policy choice in a world where free markets are mythical; especially in the current era of food and fuel supply chain disruption due to trade, cyber and bio-war attacks that facilitate and deepen ‘Datafication’, and digital colonialism.

Conversely, hyped food, fuel, medicine and fertilizer shortages, generate big profits for the global one percent. At this time, global oil companies have never made more profits! So too Big Pharmaceutical companies like Pfizer-Biontech made huge profits during the Covid-19 Lockdowns and ‘window of opportunity’ for Disaster capitalism with hyped injection shortages.

Datafication and Disaster Capitalism

Although the Data on which Sri Lanka’s debt calculation is based are contested as the Government Cloud and other databases have been hacked in the past, Debt Bondage to the Washington Consensus (World Bank-WB and International Monetary Fund-IMF), and OECD Paris Club of “Aid donors” looms large as the country delivered a staged default on payments to US-based International Sovereign Bond (ISB) traders in April this year – for the first time in its history.

However, while the IMF demands ‘transparency’ and that all creditors be treated ‘equally’ in so-called debt re-structuring, the names of the ISB traders whose speculative, even reckless lending is behind Sri Lanka’s odious debt and default are a closely guarded secret! So too, the long-delayed IMF Report on Debt that many concerned economists have called for has not been adequately analyzed and a Technical Report is due.

At this time, the interests of Sri Lanka are represented by foreign law firms that the Government was compelled to hire for so-called IMF negotiations with ISB traders and their law firms. Financial and legal advisers Lazard and Clifford Chance arrived in Sri Lanka to kick off the restructuring of $12 billion debt this week.

However, if Sri Lanka’s ‘Odious debt’ negotiations are so complex and lacking in transparency that national law firms and accountants cannot comprehend or represent the interests of the citizens of the country, question arises regarding transparency and accountability of the very process of so-called IMF negotiations. Moreover, the demand of many Sri Lankans is for debt cancellation not IMF re-structuring given the odious nature of the debt, as well as, de-dollarizing and trading in a basket of currencies enabling the purchase of discounted oil and gas from sanctions-hit Russia.

Has Sri Lanka lost economic and policy sovereignty to the IMF and Paris Club which seem to have a conflict of interest vis-à-vis ISB traders and the Global One Percent that they represent?

Indeed, the current threat narrative of food shortage, riots and famine, liberally promoted to distract from the issue of transparency in IMF Debt negotiations and stoke fear and anxiety to render “food riots” in Sri Lanka a more or less self-full-filling prophesy appear to relate directly to what Canadian author Naomi Klein termed “Disaster Capitalism” in her book titled “The Shock Doctrine”: The term “disaster capitalism” was coined by Klein in 2007 to critique neoliberalism and its policy paradigm which she defined by three landmark demands: privatization, government deregulation and deep cuts to social spending.

Klein argued that global capitalism instrumentalizes natural or man-made disasters like Covid-19, military coups, terrorist incidents, economic crises, wars, earthquakes, tsunamis, hurricanes, for the sake of advancing its own agenda of renewal, reconstruction, and profit. Such disorienting disasters and shocks enable the production of debilitating cultures fear, help to suspend critical thinking, policy analysis and public debate and suppress democratic practices. This allows capitalists to exploit the window of opportunity opened by traumatic shocks (Klein, 2007).

Perhaps most of the concern at this time is the fact that the IMF and Paris Club do not differentiate between “illiquidity’ and ‘insolvency”! This enables highly politicized strategic asset stripping of debt-trapped countries under the rubric of ‘debt restructuring’.

A Manchurian Candidate and Cultures of fear

During two weeks of talks between the Central Bank of Sri Lanka and the IMF, May 9-24, the strategic island’s long-suffering citizens were hit by unprecedented and clearly coordinated food, fuel, energy, fertilizer and medicine shortages—purportedly due to an absence of exorbitantly privileged and increasingly weaponized US dollars. This had led the strategic island at the center of the Indian Ocean country to default on its debt payments to US-based Sovereign Bond (ISB) traders for the first time in its history.

While everyone was distracted queuing for food or fuel, with protests spiraling into violent confrontations as IMF talks commenced, Washington’s Manchurian Candidate for Prime Minister of Sri Lanka, Ranil Wickramasinghe, was sworn in on May 12 during an island-wide curfew with the military on the streets.

PM Wickramasinghe made many remarkable statements during his first week in office: He threated that ‘worse was to come’ with likely starvation and famine in the island– before things got better!  The ‘next couple of months will be the most difficult ones of our lives’ he warned, with an IMF “Firesale” of strategic national assets pending to appease the ISB holders?! The country faced its worst economic crisis in more than 70 years, and was down to its last day of petrol on Monday, he claimed.

The newly appointed Wickramasinghe however used contested data and numbers to base his debt calculations. He also misled citizens by claiming that there would be 15-hour electricity outages, although the hydro-power reservoirs had ample monsoon rain to keep hydro-power generation and electricity supply going. He painted a grim picture which seemed like a veiled threat.[ii] Would fear enable rule by fiat, and never mind that he had lost his seat in the last General Elections and lacks legitimacy?

A chorus of worse to come amid promises of starvation and food riots clearly intended to stoke fear, anxiety and anger reached a crescendo when talks between the Central Bank of Sri Lanka and the IMF ended on May 24.

With the outcome of the talks far from transparent, it was as if the IMF’s infamous Shock treatment which include austerity measures, sale of State-Owned Enterprises (SOE), debt restructuring etc. were already upon Sri Lanka’s hapless citizens, to simultaneously distract from and ease the proposed ‘firesale’ of strategic assets like Sri Lankan Airlines. But would not such a course of action inevitably deepen the National economic and Security crisis—as has been the case in debt-trapped Greece and Argentina and numerous other counties.

Wither National Food and Energy Security?

While the shortages were blamed on the absence of the Petro dollar, there appeared to be systematic disruption and deliberate hacking of domestic supply chains and internal trade networks as non-dollar denominated domestic food, fuel, energy and medicine supply and trade were also disrupted.

The fuel shortages translated into increased bus fares and train fares, and public transport but most of all disabled transport of farm produce to cities and stores from wholesale markets contributing to food shortages.

So too fishermen were unable to go to sea due to fuel shortages to operate their boats and fish prices hit the roof in this island which imports canned fish despite having extensive fisheries resources that are looted by the Distant Water Fishing States.

A host of reasons to explain internal fuel shortages, such as a private fuel bowser company tanker driver being on Strike, other labour disputes, bad weather preventing the unloading of fuel in the Colombo Port, fuel trains derailing, the Vesak holidays and transport glitches all seemed to have aligned to manufacture a perfectly coordinated storm of food, fuel, energy, medicine, fertilizer, cooking gas etc. crisis!

The end result was that farmers were unable to get their produce to wholesale and retail markets, and watched their harvest perish, as had happened during the previous 2 years of infamous Covid-19 panicdemic lockdowns. Staged fuel and hence food supply chain breakdowns left shops in cities with empty shelves.

Yet, Prime Minister Wickremasinghe asked Government Officials to stay at home rather than report to work to urgently sort out the transport, supply chain, trade, and agriculture and fisheries sector extension service disruptions that were preventing food reaching wholesale and retail markets.

Rather than prioritize restoring Government extension Services in the Agriculture and Fisheries sectors to enable tractors to operate and boats and trawlers to go to sea in order to restore food supply, PM Wickremesinghe asked government officials to stay home citing transport difficulties! Thus, as farmer produce rotted in the countryside, shops in cities had empty shelves.  Was this a dry run for the famine and food riots yet to be staged?!

Rather than prioritize the issuing of fuel to the Agriculture and Fisheries sectors to restore food production and security, and prioritizing issuing fuel to the public transport sector to enable workers, and small and medium enterprises and services like small restaurants whose livelihoods are the most affected by the economic crisis, Wickremasinghe asked government employees to stay home citing fuel shortage.

Although the PUBLIC TRANSPORT and small and medium-term enterprises should be prioritized for gas and fuel deliveries the Minister of Energy has come up with a plan to ration petrol using Digitalized permits without any priority basis! Arguably it is the fuel-guzzling luxury cars and SUVs that politicians and privileged professionals who receive duty free car permits that should be given the least priority in the issuing of fuel, in order to get the economy back on track and ensure that relief is targeted to sectors of economy and society that most need assistance.

Fisheries and Agriculture extension and transport linkages to markets are vital sectors to restore FOOD SECURITY and supply chains. However, PM Wikremasinghe is delaying purchasing fuel at discounted rates from Russia as India is doing, and rather waiting for the IMF ‘Bailout” and closing down the Lankan economy. Increasingly, it seems that only Mac Donalds, fast food chains and big corporates processed food will be available in the country as small and medium enterprises have been decimated with 2 years of Covid-19 lockdowns and now fuel shortages.

From Russia with Love and US Lawfare in Lanka?

Remarkably, during the 2 weeks of IMF talks and the worst ever fuel shortages, there were ships docked in the Colombo port with Russian fuel, but there were no dollars to pay to download it! This despite the fact that World Bank was said to have given 160 million grant to ease the pain of the IMF’s shock treatment that had sent the Lankan rupee crashing. The much hyped USD 160 million from the World Bank at the outset of IMF talks it emerged could not be used for urgently need albeit Russian oil! 

Are Sri Lanka’s fuel and food shortages all about energy geopolitics?! Or, was this a graphic demonstration of Petrodollar hegemony; and never mind that sanctions hit Russia and Mr. Putin have dumped the dollar (and Euro), and would rather trade in Rubles or any other currency?  As the Sri Lankan economy ground to a halt the global corporate media spin was that it is Russia and the Ukraine proxy war that was the cause of shortages. Confusion confounded?

The week after the IMF talks petrol queues reduced radically and it was announced that Sri Lanka will pay $US72.6 million to buy a 90,000-tonne shipment of Russian oil docked at Colombo’s port for weeks, to restart its only refinery and address a crippling energy crisis. That means Sri Lanka pays only $34 per barrel (US) when the market price is around $110 per barrel (based on 1 ton reg = 23.75 barrels (US).

Was it hence that in on June 2 in a little remarked by highly significant Proxy “Lawfare” Scenario evident as the Colombo Commercial High Court on June 2 issued an enjoining order preventing a Russian Aeroflot flight from leaving Sri Lanka?  Colombo Commercial High Court Judge Harsha Sethunga issued the injunction on the Russian airline after hearing a complaint filed by Celestial Aviation Trading Limited in Ireland!

The incident was clearly meant to significantly damaged diplomatic relations between Sri Lanka and Russia a friendly country that is facing sanctions from the United States and its EU friends. It is noteworthy that the USAID had been busy digitalizing and “strengthening” the courts system and justice sector in Sri Lanka for some years while extending its influence in the sector and the Bar Association of Sri Lanka. Was this a scenario of LAWFARE as happened in Brazil to former leftist President Lula Ignaciao Da Silva by the Central Intelligence Agency?

At this time, it has also emerged that Sri Lanka can’t use $1.5 billion China swap due to IMF concerns!  “There is a condition in relation to the months of import cover that we need to have in order to be able to draw on that money,” said Dr. Indrajit Coomaraswamy, who is advising the Sri Lankan government, at an event organized by the Central Bank last week. [iii]

China has always resisted joining the Western ‘Aid donors” of the OECD Paris Club that restructure debt, and would rather negotiate directly, bi-laterally with its Belt and Road (BRI) development partner countries. After all, the BRI’s infrastructure drive presents a formidable development challenge to the OECD countries more or less a colonial model of debt trap development. Is Sri Lanka once again in the cross hairs of conflict between Washington and its allies and their Cold War on China and Asia Rising?

Would famine be staged in Sri Lanka, increasingly a proxy war site for the Cold War between the US and its Quad partners and China?  Has Sri Lanka already lost policy sovereignty and autonomy to the IMF. Is Dr Octopus (Doc. Oct), the cyborg of Spiderman fame squeezing and strangling this strategic Indian Ocean Island that is writhing in an ISB Debt trap? [IDN-InDepthNews – 17 June 2022]

* Dr Darini Rajasingham-Senanayake is a social and medical anthropologist with expertise in international development and political-economic analysis. She was a member of the International Steering Group of the North-South Institute project: “Southern Perspectives on Reform of the International Aid Architecture”.

Photo: Millions of people globally are on the brink of famine. Credit: WFP/Marwa Awad

IDN is the flagship agency of the Non-profit International Press Syndicate.

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[i] Sanctions Are Weapons of Mass Starvation ANIS CHOWDHURY & JOMO KWAME SUNDARAM
Jun 1, 2022

[ii] https://www.firstpost.com/world/fifteen-hour-long-power-outages-to-starvation-what-awaits-sri-lanka-as-it-runs-out-of-petrol-10683241.html

[iii] http://www.lankapage.com/NewsFiles22/Jun02_1654177747.php

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