| by Tisaranee Gunasekara

“We used to live in the cashew plantation in ‘Aaru Bokka’. First they came from the Port and measured our land…. Then they sent letters. Our land has been valued at very low levels… 2 lakhs, 3 lakhs…. There were about 70 families…. We all owned plots of about 2.5 acres…. (After we protested) they increased it to 5 lakhs, 6 lakhs… And we moved into these plots of 20 perches….. Around this time of the year, the cashew would have brought us the most income… The…reservoirs…had been filled up…. We had brick-making huts. We never got compensation for any of those structures….. Before we left, they told us that one member from each family would be given a job… We didn’t get that either…. No one was given a job…. We are now totally helpless”.
A villager displaced by the Hambantota Port (Mega Development Project in Hambantota: In Whose Interest? – Law and Society Trust)1

( October 13, 2013, Colombo, Sri Lanka Guardian) Nine new deputy ministers were sworn in on the 10th. Bus and train fares went up on the 12th.

The UPFA has 161 parliamentarians; of these 105 – i.e. two-thirds - are ministers, project ministers or deputy ministers. Installing powerless ministers/deputy ministers is a standard Rajapaksa antidote to one of most potent potential challenges to familial rule – dissent/rebellion within the SLFP.

New deputy ministers mean more unproductive expenditure on salaries and perks, offices and vehicles. This translates into higher indirect taxes and increased prices, often of essential goods/services.

The more the Rajapaksas spend on maximising their power and their glory, the greater the burden imposed on ordinary people, including Sinhalese and Buddhists.

The Hambantota Port is funded with a loan from the Exim Bank of China. Recently the interest on this loan was increased by a massive 5%, from 1.3% to 6.3%. According to Minister of Ports and Highways Rohitha Abeygunawardena, “In all, we have received US$306.7 million from China for the harbour project. Though we had earlier decided to pay 1.3% interest, consequent to negotiations between the two parties, the government has agreed to pay 6.3% interest per annum.”2

This means Sri Lanka will have to pay Rs. 2528 million per annum (Rs. 210 million per month) just to service this one loan.

That is a fraction of the cost to the nation of the Rajapaksa port. What are the benefits?

In 2009, the Sri Lanka Ports Authority claimed that “with the setting up of the Hambantota Port, nearly 56,000 job opportunities will be created in the Southern region”3.

Three years later the Hambantota Port is yet to generate a single new job: “All the personnel employed at the Hambantota Port are seconded from the Colombo Port while no employees have been recruited to work only for the Magampura Mahinda Rajapaksa Port, the parliament was told today”4.

This is no fluke. Mattala Rajapaksa Airport too uses employees from the Katunayake Air Port. So far the employment-generation capacity of both projects has been near-zero/zero. .

Infrastructure development and employment generation normally go hand in hand. For instance, fighting unemployment through government-funded infrastructure projects was one of the main components of FDR’s New Deal.

Under Rajapaksa Rule, this standard economic tenet is being stood on its head. Rajapaksa infrastructure projects provide hardly any jobs for locals, during construction or after completion.

The Rajapaksas are thus creating a new economic category – Jobless Infrastructure Development.

Familial economics is the inevitable corollary of familial politics. The real purpose of the Rajapaksa infrastructural projects is personal/familial aggrandizement. Hambantota is the Rajapaksa fiefdom. So it must surpass Colombo, not in the wellbeing of the people, but in exhibitionist and glitzy ventures. Plus every important national installation must be named after the Rajapaksas. Since Lanka’s main international airport and premiere conference hall bear the name of the founder of a rival dynasty, it accords with the logic of familial economics to build a new airport and a new conference hall (dwarfing the existing ones in size and magnificence) and name them after the Rajapaksas.

The convention centre in Hambantota is said to be the largest in South Asia. A mammoth road leads up to it. But Hambantota is still, at the base, an economic and infrastructural backwater. It lacks the minimum facilities needed to sustain a mini-local confab, let alone a mega-international conference like the Commonwealth. It has no hotels or restaurants for the delegates to use, no resting places, or even adequate toilet facilities. For the Summit to be held in Hambantota, the delegates will have to be air-lifted from their Colombo hotels to Hambantota, and back, every day.

The inability to hold the Commonwealth in Hambantota does not seem to have taught the Rajapaksas a lesson in sense and sensibility. They seem even more set on transforming their fiefdom into a super-polis. The enormous funds needed to realise this megalomanic dream cannot be generated internally (government revenue is declining; Lankan banking sector is in the ‘highest risk’ category, according to S&P5). Even externally, no single country/institution will be willing to lend money at a rate/on a scale sufficient to satisfy Rajapaksa whims and fancies.

Except the Chinese….

China, which made possible Rajapaksa Port and Airport, is to fund the artificial island off Hambantota and Asia tallest tower in Colombo. These new projects too will create very few forward or backward linkages, due to loan-conditionalities (which include using Chinese contractors and Chinese labour). In consequence, these infrastructure projects too will come into being and exist in glitzy-isolation, unconnected either to the larger economy or to the lives of the people.

China’s position, at the beginning of the 21st century, is roughly analogous to that of the US at the beginning of the 20th Century – ‘Super Power-in-waiting’. Thanks to Rajapaksa rule, Sri Lanka may end up as a client-state of this emerging super power. That is not a happy fate, as the searing experiences of Central and South American nations with America demonstrate.

Losing Sovereignty

Noam Chomsky argues that “….Sovereignty, hence ability to control internal economic development and to enter international market systems on one’s own terms is a crucial prerequisite to economic development”6. When an economically weak country becomes dependent for its financial survival on a powerful nation/an institution, loss of sovereignty cannot but ensue.

Beijing is no more altruistic in its dealings with Colombo than Washington was with its Tricontinental World clients - as the sudden and massive interest-hike in the Hambantota Port loan – beneficial to China and ruinous to Sri Lanka - demonstrates, As the Rajapaksas turn to the Chinese for more loans to build unproductive/unprofitable mega-structures, Beijing’s ability to impose damaging political, socio-economic and financial conditionalities on us will increase. The costs of this path can range from becoming a proxy-battleground for the politico-economic contestation between China and India (perhaps even China and US) to selling our natural resources to China on extremely disadvantageous terms.

The final outcome of this process is the loss of sovereignty, political and economic. Forget the harm done by the Rajapaksas to Tamils and Muslims. Their rule will beggar the Sinhalese – up to umpteenth generations – and turn Sri Lanka into a political pawn and an economic neo-colony of the emerging Super Power.

1 The full documentary is available here - http://www.youtube.com/watch?v=sk5hRKts0so

2 http://www.ceylontoday.lk/27-44687-news-detail-costly-renegotiation.html - emphasis mine.

3 http://firstlanka.com/english/news/port-of-hambantota-to-provide-56000-jobs/

4 http://www.sundaytimes.lk/latest/38412-htota-port-employees-all-from-colport.html

5 http://www.dailymirror.lk/business/economy/34128-lankan-banks-in-highest-risk-category-sap-.html

6 Hopes and Prospects