October 15, 2019
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    Sri Lanka's economic growth expected at 2.7 percent in 2019 is expected to recover in medium term subjected to the country' ability to ensure political stability and a return to normalcy, the World Bank says in its twice-a-year regional economic update on South Asia.The latest edition of the South Asia Economic Focus, Making (De)centralization Work, the global lender says In the medium-term, the economy is expected to recover from the disruptions in 2019, and growth is expected to accelerate towards 4.0 percent, gradually closing the output gap.

     The report said the April terrorist attacks heightened macroeconomic challenges and growth for 2019 is expected at 2.7 percent, as many important economic sectors show relatively weak performance.Reduced tourism receipts will exert pressure on external accounts, despite reduced import demand. Fiscal balances will deteriorate amid contracting revenues. Large refinancing needs, weak fiscal buffers and high debt make the country vulnerable to rollover risks. A slowdown in economic activity will constrain job creation and income growth, and the pace of poverty reduction. The USD 5.50 poverty rate is projected at 36.1 percent in 2019.However, supported by recovering investment and exports, as the security challenges and political uncertainty dissipate, it is projected to reach 3.3 percent in 2020 and 3.7 percent in 2021.

    Key excerpts from the World Bank report:
    The drivers of the recovery are anticipated to be investment and exports, as performance in the tourism sector improves and uncertainty is resolved after the elections are held.The current account deficit is expected to narrow marginally in 2019 compared to 2018, thanks to weak import demand. Significantly large debt creating flows will be required to close the external financing gap when the impact of past one-off FDIs wane.

    Gross official reserves are expected to remain relatively low, as the country faces large debt repayments.Provided that the revenue-led fiscal consolidation continues, primary surpluses will return in 2020, which will help bring debt to a sustainable path. In the absence of currency depreciation, the debt-to-GDP ratio will stabilize in 2019.The successful completion of the IMF supported reform program and the continuation of the reform agenda beyond mid-2020 will be critical for macroeconomic stability and sustainability.The slowdown in economic activities, especially tourism, trade, transport, construction and other SME businesses, is expected to constrain jobs and wage growth in the near-term.The decrease in remittances will also lead to lower contributions to household income. As a result, the pace of poverty reduction is expected to slow down, with poverty measured using the USD 5.50 poverty line projected at 36.1 percent in 2019.

    A challenging political environment will delay or reversal in efforts to strengthen revenues, and a slower than expected recovery of some key economic sectors represent important risks. Mitigating these risks will be key to creating private sector jobs and accelerating poverty reduction.Externally, while Sri Lanka has raised enough foreign currency funds to manage immediate debt repayments, continued large refinancing requirements, weak fiscal buffers and high indebtedness make the economy vulnerable to uncertain global financial conditions.

    Priority reforms include: (a) continuing fiscal consolidation by broadening the tax base and aligning spending with priorities; (b) shifting to a private investment-tradable sector-led growth model by improving trade, investment, innovation and the business environment; (c) improving governance and SOE performance; (d) addressing the impact of an aging workforce by increasing labor force participation, encouraging longer working lives and investing in skills to improve productivity; and (e) mitigating the impact of reforms on the poor and vulnerable with well-targeted social protection spending.

    It is always fascinating to attend a graduate research conference and interact with young and promising students. This not only because graduate conferences often make me nostalgic of my own university days but also because the hope, inspiration and enthusiasm I see in the face of students are critical to social change and the future of our societies.

    When we talk future of our societies, we cannot forget the past and ignore the present. Where we are today is a consequence of what our forefathers went through in the past. Many great changes and transformations have occurred with the humanity in last several thousand years. For sure, human civilisations drastically changed when human beings developed characters and letters some 6000 years ago, leading to the advancement of languages. It made human interactions and exchange of ideas possible.

    Invention of papers some 2000 years ago further accelerated human interactions and communications but in written form. Perhaps that was the beginning of documentation of knowledge in a written form. The invention of the printing press about 600 years ago revolutionised the world in terms of production, documentations and circulation of knowledge. Somewhere in-between came the invention of electricity and automation which further advanced human civilisations. Today, we are in the age of internet and digital technology which typically impacts on the way new knowledge is produced and circulated.

    What is also remarkable is that as a result of the advent of internet, learning process is being de-institutionalised. This means people now can learn new things without necessarily attending the traditional sites of knowledge production, such as schools and universities. Circulation of knowledge has been unregulated and de-territorialised. Whether it is about a health issue and medicine or learning about new industrial products, or be it about booking a flight or making new friends, information is readily available on people’s finger tips.

    Digital domination

    All these inventions and innovations look fascinating; they have revolutionised our knowledge-based society. But in my view, many are not perhaps aware that it also comes with an enormous social cost. When the social cost of the digital domination is concerned, one might immediately think about mental health issues and societal breakdowns arising from people’s addiction to social media. Others might perhaps think about cybercrime and still others would think about threat to national security. But today, I would like to share my thoughts about how the digital world, increasingly reliant on internet technology and complemented by exploding of social media usage, has already taken us to a new world, a ‘post-truth world’.

    Yes, today we live in different and highly turbulent world, characterised by post-truth discourse. How does the post-truth discourse look like? Let me explain.

    One may hardly disagree that truth and knowledge are fundamental foundations of society, our civilisations so far and of course our everyday life. When modern state system was invented many years ago, it was driven by a search for truth and knowledge about human life, the idea that we should be governed by able leaders, who are inspired and aided by knowledgeable people called the bureaucrats. Even our ancestors in the ancient times lived in a knowledge-based society where kings were supported by wise men. Then there was institutionalisation of knowledge through setting up schools and universities, the esteem centres where knowledge is produced and re-produced and facts are checked and re-checked for public consumption.

    This is all changing slowly in the post-truth discourse. In a post-truth discourse, expert views and evidence-based knowledge are dismissed, ignored and sidelined. Expertise on any social, economic and political matter is no more respected and valued. Instead, our social life, everyday social and political interactions, communication, and even political behaviours are influenced by fake news, strategic narratives, rumours, propagandas, lies and targeted false information. Alternative knowledge and counter-narratives have often no place in a society in the post-truth discourse. Societies simply tend to accept and operate with the kind of knowledge which is fake, unsubstantiated and false. In a nutshell, knowledge and truth in a post-truth world are distorted, hegemonic, and are monopolised by few powerful people who have access to certain modern technologies. I call is knowledge-less knowledge and truth-less truth. This is the face of the post-truth world. The face is ugly and violent as I will elaborate later.

    But let me first ask a question, how did the post-truth world emerge in the first place? The answer is it would be almost impossible without the invention of internet which spread rapidly all around the world in a very short span of time. We have more than 70 years of the history of poverty eradication; however, according to the World Bank report, about 10 % of the world population lives under US 1.9 a day. By contrast, since the computer scientist Tim Berners-Lee invented the World Wide Web (www) in 1990, more than half of the world’s population already has an access to the internet. In 2019, for instance, 4.3 billion people had an access to the internet and 52 % of Asia’s population has an access to internet in the same year. A total of 3.4 billion people are users of social media.

    The point I want to make here is that despite internet’s noble contribution to economic development and innovations, unfortunately it is also the primary source of the post-truth discourse. My intention here is not to discredit the great benefits and advantages of the internet we have had, but I am principally concerned with the moral and ethical questions that come with the use of internet and social media in today’s world. In fact, the post-truth discourse is an unintended outcome of the rise of internet and digital world and it is now high time we must be aware of it and think what we can do as a community of researchers. But before talking about what we can done, I just want to give few examples of who is benefiting in the post-truth discourse and how.

    The post-truth discourse does not spare anyone: some participate in it as a producer of fake knowledge while others are consumers of the fake knowledge. Some others simply function as an intermediary, one who involves, often voluntarily, in transmission of fake knowledge, rumours, propaganda and lies. As such, everyone is affected by the post-truth discourse, but ironically not all benefit in the same way. Only handful of political elites, business elites and social and religious leaders benefit by producing and transmitting unfounded knowledge and truth through internet and social media. Donald Trump benefitted the most from the propaganda, rumours and fake news in the presidential election in the US. In Myanmar, military leaders and ultra-Buddhist nationalists benefitted the most from the rumours between 2016 and 2017, that led to heavy prosecution of the Rohingya Muslims. The list may go on and on, but the key point to note is that the benefits of the post-truth discourse come with massive social, political and economic impacts.

    Violent extremists

    In terms of the social impact, a remarkable example is how extremism including violent extremism has become prevalent in the post-truth discourse. Violent extremists use online platform and social media to propagate rumours, fake news and inappropriate facts with cynical intention to radicalise people into violent extremism and terrorism. With the rise of internet, social media and modern communication system, the traditional centralised structure of terrorism has now become de-centralised and is found all over the world. In a similar vein, anyone who has good knowledge of using the social media can use fake news and rumours to bring people on the street.

    The Arab Spring is an example of how internet and social media have altered the conventional methods of social and political mobilisation and how modern revolutions are facilitated by the virtual rather than physical domains.

    In other words, the post-truth discourse is radically changing modes and styles of social and political mobilisations. One should also note that when propagandas and rumours dominate our everyday life, our healthy social interactions break down and social and religious groups begin to function in social isolations. Today, isolation of social groups is a major threat to peace and social cohesion in our societies.

    If there is any domain which has been affected heavily by the post-truth discourse, it is politics. Fake news, rumours, lies and propagandas have altered political outcomes all around the world. The rise of populism and right-wing extremism even in mature democracies in the West is strongly associated with the post-truth discourse. In developing countries where democratic consolidation is pending, such as Bangladesh, Cambodia, Thailand, among others, the post-truth discourse is culminated into a ‘competitive authoritarianism’. It is a form of politics in which political elites undermine election freedom and use election to squash political opposition so that powerful elites emerge as an authoritarian ruler. In the past, authoritarian regimes would emerge through military coups and political assassinations, but in the post-truth world, they emerge through elections.

    The impact on the economic front is rather onerous. It does not spare anyone. The startling basic fact of the economics across the countries is that we know nothing about it. Unlike in the traditional agrarian economics, goods in the modern capitalist economies are created in one part of the world, marketed by others from the other parts of the world and consumed by the rest from around the world. This is globalisation. But the process of globalisation is rather complex and it is often hard to track who benefits from the globalised economic transactions; no one knows who are the winners and who are the losers. We do not know how or whether the profits are redistributed and if so who is distributing and who are benefiting. This complexity also applies to private companies at the national scale.

    What is most worrying in this whole saga is that private companies which dictate the global economy and thereby our everyday life, appoint their heads through non-transparent, undemocratic process. And we do not talk about democracy in the private spheres. More importantly, private companies are mightier than governments in economic terms. For instance, in 2018, Sri Lanka’s GDP was 88.9 billion whereas in the same year Google earned a revenue of 136 billion. If money brings power, these figures are indicative of how power is distributed is today’s globalised world.

    However, ironically, neither our governments nor we question democratic leadership in the private companies which impact on our everyday life. This is one of few areas where democracy is going wrong. And these realities are hardly circulated in social media and news which is effectively controlled not by governments but by the private companies. A precarious effect is that the world is more unequal today than in the past. In 2018, according to Forbes, just top 10 rich people in the world have a net worth of 743.8 billion. In 2019, the world’s richest 1 %, those with more than $1 million, own 45 % of the world’s wealth. As the Oxfam report revealed, in 2018, 26 richest people owned the same as 3.8 billion people who make up the poorest half of the humanity. This global character of extreme inequities also replicates nationally and locally. Poverty in the world today, I argue, is man-made, a direct consequence of growing inequalities within and between societies. It is not poverty that fails us, it is inequality that makes poverty and ultimately fails us and our political leaders.

    The essence of the figures I presented is that the problem is global but we are trying to find solution locally. When development is failing and inequality is growing, the political class is in fear of losing control over the people. As a result, increasingly worrying political class relies on fake news, rumours and propagandas in order to stoke political loyalty and remain in power. This is the reality of politics and economy in the post-truth world.

    Social interactions

    Now let me return to the question of what can be done by us as a community of researches, academics and students to mitigate the impacts of the post-truth discourse on our daily life and most importantly on our social interactions. This is perhaps a big question and I admit my limitation to find a complete answer to it. Nonetheless, I dare to highlight few points where we can make some positive effects, albeit in a pretty modest way.

    First and foremost, we need to change our habit. We should stop readily consuming any news or even fake news, rumours and propagandas when it appears in the digital domain and social media. As a member of an academic community, it is our social and moral responsibility to assess and interrogate the news and information to ascertain its reliability and viability. In universities, we are better resourced to check and verify the information circulating freely.

    My second point relates to the first one. In our academic institutions, we may need to start enhancing and strengthening a research culture – a culture in which we build arguments, counter-arguments and narratives and counter-narratives based on facts and evidences. This may sometimes require to transcend one’s ideological boundary; nonetheless, the beauty of being in academia is that ‘we agree to disagree’ in peaceful and constructive way.

    Finally, I have great trust and faith in university students and graduates. It is our natural expectation that when our students graduate, one thing they will take along is the skill of critical thinking. That is the art of looking at ideas, facts and arguments from multiple angles and viewpoints. Whether in work places, families and communities, it is your responsibility to question rumours, propagandas and destructive narratives and instead offer alternative perspectives. I will caution you, you will be uncritical if you see an issue from a parochial lens of race, ethnicity, religion, caste and nationalism. But if you look at any issue from a global humanistic perspective and the perspective of social change, it is possible to find alternative ideas and facts. If we do not overcome parochialism, we may be used and misused by powerful people in the post-truth discourse.

    I believe the research skill and critical thinking that our students learn in the university are a powerful weapon to fight destructive elements of the post-truth discourse. More importantly, I would think, it is high time that we be careful, self-responsible and think about our moral and ethical responsibility when using internet and social media through which the post-truth discourse is creeping into our world. Using knowledge in ethical ways would be a small but powerful first step to counter the discourse in the post-truth world.

    Sri Lanka's trade deficit contracted in August 2019 after widening significantly in the previous month as the imports continued to decline and the exports recovered from its dip in the previous month, the Central Bank reported Monday in its External Sector Performance review for the month.Import expenditure recorded a decline of 16.6 percent (year-on-year) and export earnings declined fractionally by 0.4 percent (year-on-year) in August 2019.The trade deficit fell to US$ 540 million in August 2019 compared to the deficit of US$ 717 million recorded in August 2019.

    Earnings from merchandise exports declined 0.4 percent in August 2019 to US$ 1.033 billion compared with US$ 1.037 b million in August 2018 mainly due to decline in agricultural exports while industrial exports grew supported by higher earnings from textiles and garments.Expenditure on imports declined in August 2019 for the tenth consecutive month by 16.6 percent to US$ 1.574 billion from US$ 1.887 billion a year ago.

    Cumulatively in the first eight months of the year YOY export earnings increased by 2.4 percent to US$ 8.031 billion from US$ 7.842 billion while import expenditure declined by 14.6 percent to US$ 12.286 billion from US$ 15.083 billion in 2018.During the first eight months of 2019, the cumulative deficit in the trade account contracted to US$ 4.854 billion from US$ 7.24 billion recorded in the corresponding period of 2018.

    China focus

    October 15, 2019

    The People’s Republic of China is the world’s second largest economy by nominal GDP, and the world’s largest economy by purchasing power parity. China is a global hub for manufacturing, also is the largest economy, in an advanced pace, during the last 300 years. After the Chinese civil war ended in 1949, Chinese Communist party started a path to the cultural revolution. Independent industrial system and own agricultural development works changed Chinese living style. Deng Xiaoping took power and instituted significant economic reforms. This marked China’s transition from a planned economy to a mixed economy.
    There are two international indices that can be used to measure the economic development of China. One is the increase of gross national product. And the other is the national consumption. During 2001 to 2010, the gross national product increased annually by 9.9%. The increase during this 10 years was 158% according to World Bank reports. This is important as when the world economy was experiencing a recession while the Chinese economy boomed continuously.
    President Jinping leadership of economic and social
    President Xi Jinping was elected President of People’s republic of China from 2013. His thoughts on Socialism with Chinese characteristics and the achievements of China is remarkable with history. In his capacity as president, on March 16, 2013 he expressed support for non-interference in China-Sri Lanka relations amid a United Nations Security Council vote to condemn that country over government abuses during the Sri Lankan Civil War. It’s unforgettable for my country. Within hours of his election, Xi discussed cyber security and North Korea with then U.S. President Barack Obama over the phone. Obama announced the visits of Treasury and State Secretaries Jacob Lew and John F. Kerry to China the following week. It delivered a far-reaching foreign policy agenda that changes in both economic and social culture.
    With this leadership of the Third Plenum of the 18th Central Committee, the Communist Party delivered a far-reaching reform agenda about changes in both economic and social policy.
    I followed his maiden speech, as Head of State, Xi Jinping invoked his favourite concept of the “China dream” and laid out a vision of a stronger nation with a higher standard of living. The new government’s top priority would be to maintain stable growth and that his administration was up to the task, a message likely to be applauded by investors and the market. Painting his vision of a great nation, President Xi stressed that the “China dream” could only be realized by seeking “China’s own path,” cultivating patriotism and following the Communist Party’s leadership. The first official mention of the term was at the 19th National Congress of the communist party of China and it has gradually been developed since 2012 after Xi became General Secretary of the Communist Party of China.
    Ideology of the communist party of China
    The 19th Congress affirmed the ideology as a guiding political and military ideology of the communist party of China. The affirmation received unanimous support as every delegate voted to approve by raising hands when Xi asked their opinions on the Congress. The incorporation made Xi the third Chinese leader after Mao Zedong and Deng Xiaoping whose names appeared in the list of fundamental doctrines of the CPC, which raised Xi above his two most recent predecessors, former General Secretary Hu Jintaao and Jiang Zemin. In his report, Xi promised to make China strong, propelling the country into a “new era”.
    President Xi first made mention of the Thought on Socialism with Chinese Characteristics for a New Era in the opening day speech delivered to the 19th Party Congress in October 2017. In their own reviews of Xi’s keynote address at the Congress, his Politburo standing Committee colleagues prepended the name “Xi Jinping” in front of “Thought”.
    Xi himself has described the thought as part of the broad framework created around socialism with Chinese characteristics, a term coined by Deng Xiaoping, which places China in the “primary stage of socialism”. In official party documentation and pronouncements by Xi’s colleagues, the thought is said to be a continuation of Marxism-Leninism. Mao Zedong thought, Deng Xiaoping theory, “the important thought of the three represents” and the scientific development perspective as part of a series of guiding ideologies that embody “Marxism adapted to Chinese conditions” and contemporary considerations.
    At its closing session on October 24, the 19th Party Congress approved the incorporation of Xi Jinping Thought into the Constitution of the Communist party of China.Dozens of Chinese universities have established research institutes for Xi Jinping Thought after the Congress dedicated to advocating the incorporation. Academics such as Jiang shigon have written expositions of Xi Jinping Thought.
    The thought represents the latest achievement in adapting Marxism to the Chinese context and encapsulates the practical experience and collective wisdom of the Communist Party of China (CPC) and the people.The CPC announced the formation of the thought for the first time at its 19th National Congress in October 2017 and wrote the thought into the Party’s Constitution as a new guide to action upon conclusion of the congress.The thought makes eight fundamental issues clear at the theoretical level, and presents the 14-point fundamental principles to guide the endeavours:
    Fundamental principles
    * It makes clear that the overarching goal of upholding and developing socialism with Chinese characteristics is to realize socialist modernization and national rejuvenation. On the basis of finishing the building of a moderately prosperous society in all respects, a two-step approach should be taken to build China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful by the middle of the century.
    * It makes clear that the principal contradiction facing Chinese society in the new era is that between unbalanced and inadequate development and the people’s ever-growing needs for a better life. It stresses the people-centred philosophy of development, and well-rounded human development and common prosperity for everyone.
    * It makes clear that the overall plan for building socialism with Chinese characteristics is the five-sphere integrated plan, and the overall strategy is the four-pronged comprehensive strategy. It highlights the importance of fostering stronger confidence in the path, theory, system, and culture of socialism with Chinese characteristics.
    * It makes clear that the overall goal of deepening reform in every field is to improve and develop the system of socialism with Chinese characteristics and modernize China’s system and capacity for governance.
    * It makes clear that the overall goal of comprehensively advancing law-based governance is to establish a system of socialist rule of law with Chinese characteristics and build a country of socialist rule of law.
    * It makes clear that the Party’s goal of building a strong military in the new era is to build the people’s forces into world-class forces that obey the Party’s command, can fight and win, and maintain excellent conduct.
    * It makes clear that major country diplomacy with Chinese characteristics aims to foster a new type of international relations and build a community with a shared future for mankind.
    * It makes clear that the CPC leadership is the defining feature of socialism with Chinese characteristics and the greatest strength of the system of socialism with Chinese characteristics; the Party is the highest force for political leadership. The thought sets forth the general requirements for Party building in the new era and underlines the importance of political work in Party building.
    The 14-point fundamental principles are as follows:
    * Ensuring Party leadership over all work;
    * Committing to a people-centred approach;
    * Continuing to comprehensively deepen reform;
    * Adopting a new vision for development;
    * Seeing that the people run the country;
    * Ensuring every dimension of governance is law-based;
    * Upholding core socialist values;
    * Ensuring and improving living standards through development;
    * Ensuring harmony between humans and nature;
    * Pursuing a holistic approach to national security;
    * Upholding absolute Party leadership over the people’s forces;
    * Upholding the principle of “one country, two systems” and promoting national reunification;
    * Promoting the building of a community with a shared future for humanity;
    * Exercising full and rigorous governance over the Party.
    Belt and Road Initiative
    The Belt and Road Initiative, proposed by Leadership of the Xi, connects continents and oceans through trade and investment like never before. A total of 136 countries and 30 international organisations have signed cooperation agreements with China on the initiative. Sri Lanka is the first country in the Asia given the full flagship. Former President, current Opposition Leader Mahinda Rajapaksa announced Sri Lanka’s support for the BRI during his visit to Shanghai in May 2014 and the historic visit of President Xi to Sri Lanka. Sri Lanka continued its support for the Belt and Road initiative even after the change of government in 2015, and this policy continues to date, as demonstrated by the participation in the BRI Summit by Prime Minister Wickremesinghe and President Maithripala Sirisena in his visit to Beijing.
    Both SLFP and UNP main political parties had good reasons to support the opportunity for infrastructure development presented by the Silk Road initiative. Pathfinder Foundation as a Think Tank organised workshop and awareness campaign about benefits.BRI is a project that would connect and impact 65 countries, representing more than 60 per cent of the world population and one third of the global GDP.
    According to World Bank, findings indicate that the Belt and Road Initiative would be largely beneficial. First, global income increases by 0.7 percent.This translates into almost half a trillion dollars in 2014 prices and market exchange rates. The Belt and Road Initiative area captures 82 percent of the gain, with the largest percent gains in East Asia.
    Second, globally, the Belt and Road Initiative could contribute to lifting 7.6 million people from extreme poverty and 32 million from moderate poverty.(In order to further strengthen exchanges and cooperation between the Communist Party of China and South Asian countries, the International Department of the Central Committee of the CPC organised a conference in Guangzhou to expand knowledge about China’s socio-economic development and targeted poverty alleviation measures, as well as Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the achievements of the People’s Republic of China in the past 70 years.

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