Author: TELO Admin

Pakistan took the crown for Asia’s fastest inflation from Sri Lanka as a weaker currency and rising food and energy costs drove price gains to a record in April.

Consumer prices rose 36.4% in April from a year earlier, the highest since 1964, according to data released by the statistics department Tuesday. That compares with a median estimate for a 37.2% gain in a Bloomberg survey and a 35.4% increase in March.

The data shows Pakistan’s inflation outpaced price gains in Sri Lanka that eased to 35.3% in April and is starting to show signs of recovery from an economic crisis. The Pakistani rupee is one of the worst performing currencies globally so far in 2023, declining 20% to the dollar, and making imported goods more expensive.

Transport prices climbed 56.8% while food inflation quickened 48.1% in April from a year earlier, data showed. Clothing and footwear prices gained 21.6% and housing, water and electricity costs rose 16.9%.

Pakistan’s inflation is expected to rise further after authorities raised taxes and fuel prices to meet the IMF’s conditions for the revival of a $6.5 billion loan program.

The bailout funds would be crucial for helping Pakistan to pay for essential imports like food and fuel and to avoid a default next month. However, the IMF is seeking financing assurances before restarting aid.

To rein in price pressures, the State Bank of Pakistan hiked its benchmark interest rate last month to 21% — the highest since central bank data going back to 1956. Rising inflation could keep borrowing costs elevated for the South Asian nation that struggling with a slow recovery after last year’s floods.

The central bank’s next monetary policy review is due on June 12.

High prices are adding further pressure on Prime Minister Shehbaz Sharif who is also grappling with a political crisis. His rival Imran Khan is seeking early elections and has threatened to return to street protests if his demands are not met.

Source – Bloomberg

Buddhism is an imported product in Sri Lanka, but political Buddhism is native to the soil. Buddhism is a blessing to humanity and was born out of the enlightenment of its founder who shunned political power and palace life. On the contrary, political Buddhism was born out of love for that power and its pomposity. Its sole intention was to claim and own the entire island, which is home to a number of ethnic, religious and linguistic communities, all of whom except the Vedda community are foreigners. Which one of these communities came first is yet to be discovered. However, Gautama would be turning in his grave to see how his sublime teachings, philosophy and way of life had been twisted and tarnished by his so-called followers in a country where he is believed to have visited more than once and left an indelible footprint.

Political Buddhism had its genesis in the 19th century and was part of the cultural awakening ushered in among Sinhala Buddhists, Tamil Hindus and Muslims to counter and arrest the spreading influence of Christianity. Within the Buddhist community that awakening also carried the germs of struggle for political independence from centuries of colonial rule. However, in that anti-colonial and anti-British agitation Buddhist leaders like the celebrated national hero Anagarika Dharmapala and his disciples also included an element of ethnic cleansing, which at that time targeted the Muslim minority. The 1915 Sinhalese-Muslim riots were the product of that inclusion. Although it failed in that objective, colonialism came to an end in 1948, and from then on political Buddhism began to play a deterministic role in almost every branch of the country’s development.

“Political Bhikkhus”, are a hybrid community of preachers who mixed politics with Buddhism and it was introduced by none other than the scholar priest Walpola Rahula in his vision to create forever a Sinhala Buddhist majoritarian rule in this country. That vision saw its first manifestation in 1948 when the Ceylon Citizenship Act was passed, which disenfranchised overnight an entire community of Indian Tamils on whose blood and sweat, Ceylon earned and Sri Lanka still earning most of its foreign exchange. Unlike the father of Singapore Lee Kwan Yew, who having witnessed where ethnonationalism was leading Ceylon, eschewed that evil from day one of his country’s birth in 1965, the father of Independent Ceylon DS Senanayake embraced it and allowed political Buddhism to occupy the driving seat.

Political Buddhism soon fathered counter ethnonationalism among other communities. The birth of the Federal Party in 1949 was a direct response to political Buddhism and its Sinhala ethnonationalism. In the same vein, one could also argue that the formation of Sri Lanka Muslim Congress in 1981 was a direct response to Tamil and Sinhala ethnonationalism. After more than seven decades of unchallenged reign, political Buddhism, is yet to realize the damage it had done not only to the millennial peace and tranquility of this island, but even more disastrously to the economy and wealth creation. Communities remain disconnected and are riven by divisions from inside and out. The collective synergy required to build a strong and vibrant economy in a competitive world is therefore absent. It is a pity that a number of local but respectable economists, political scientists, academists and intellectuals are still ignoring to note the pernicious effect of political Buddhism on the economy of the country.

One intermediary that links political Buddhism with economic decline is the evil of corruption. The subversive influence of corruption on national economies has been widely studied and well documented. The general conclusion is that corruption is a silent killer of resourceful economies. It is like cancer which, if left undetected early, will soon kill the patient. Corruption leads to inefficiency and waste, uneven distribution of wealth, transfer of funds to foreign banks and tax havens, overburdens the cost of running legitimate businesses, fall in profitability and increase in prices. Ultimately, it would be the poor consumers who would have to bear the full brunt of uncontrolled corruption.

The cancer of corruption has a long history in post-independence Sri Lanka. Political Buddhism, in order to achieve its primary objective of Sinhala-Buddhist hegemony, was prepared to turn a blind eye towards corruption and perhaps considered it as a necessary evil. Thus, it became almost an unwritten convention that as long as the political leaders and public servants commit to protect and promote the interests of Buddhism and Sinhala-Buddhists they were free to do whatever they like. Accountability virtually disappeared from the country’s political and administrative dictionaries. Even the constitution is found to be lax on this vital issue. Incidents of corruption in the name of economic development proliferated. Even if someone were to be charged for corruption, the country’s judiciary is so politicized that any culprit with right connections could get away free. While RW is talking about introducing legislation to eradicate corruption it has come to light that a sum of $250 million had been transferred to the foreign account of an individual called Chamara for him to sabotage any effort to file litigation against X-Press Pearl in Singapore courts.

Now, having vowed to rebuild a bankrupt and corrupt economy to which he himself had contributed as Prime Minister in the Yahapalana Government (remember the Central Bank bond scam), President Ranil Wickremesinghe, obviously under pressure from IMF, is trying to cleanse the country of corruption and at least mellow down the corrosive influence of political Buddhism. The tragedy is that the corrupt ones and those championing the cause of political Buddhism are in government already and that was why the aragalaya youth demanded system change and shouted “No 225”. Would RW dare to investigate his corrupt colleagues before aiming at a clean future? Likewise, on political Buddhism, his attempt to find solution to the so-called national question by implementing the 13th Amendment has already provoked the ire of political Buddhists, and few of the demagogues inside the parliament are threatening to provoke the most unprecedented riot in history if RW were to implement that amendment.

As if to reassure its commitment to political Buddhism, Rajapaksa’s SLPP has elected a scholar Bhikkhu as leader of the party, while the JJB of political Bhikkhus has also sent warnings to RW not to compromise on Buddhist supremacy. Even the tri-forces are imbued with the ideology of political Buddhism. Systematic land encroachments in Tamil and Muslim density areas, the so-called archaeological excavation task force to dig for Buddhist ruins in the north and east of the country, stealthily erected Buddha statues in the dead of night and in the precincts of Hindu temples and mosques, and more daringly the outright confiscation of a mosque in Mahara and turning it into a recreation centre for the prison police are the handy work of political Buddhism.

In the meantime, RW-IMF’s economic repair plan has not been released in full, but the parliament has approved it with only 120 of the 225 voting in favour. The opposition parties had accused the President for not releasing the entire plan for them to make an informed choice. As they say, devil is in the detail. At the same time, the CBSL chief has indicated that there would be “near term challenges” to the financial sector as a result of debt restructuring. This is the biggest unknown factor and the cost of debt restructuring would spread beyond just the finance sector. The other unknown is the state of the economies of Sri Lanka’s trading partners. IMF and WB prognosis about future prospects of growth in those economies is far from reassuring, because of rising interest rates to counter increasing inflation. That would mean fall in consumer and investment demand, which is not good news for Sri Lanka’s exports. If so, would the domestic market be able to compensate for this loss and be an efficient substitute to promote growth? IMF reforms do not promise that.

All this boil down to that one single issue, i.e., system change. NPP at least is insisting on this. But it has to explain to the voting public what it means by that and what are some of the salient features of the new system to be introduced. The most sensitive issue would be the place of political Buddhism. Sinhala Buddhist masses need to be educated of the un-Buddhist character of political Buddhism, and why it should be given up as the guiding ideology of politics in this country. The new system requires a new constitution based on secular democratic principles, which should promote a new political culture. It is on that foundation a new economic model needs to be introduced.

* Dr. Ameer Ali, Murdoch Business School, Murdoch University, W. Australia