Some sorta China day, Horton Place, September, 2010
The US voted to ban aid to Sri Lanka unless the government ‘shows accountability’ for the war. So, they effectively ban aid. I could get into how the US is hypocritical (HRW recently recommended that Bush and Cheney be investigate for war crimes) or unfair (aid to Afghanistan, Bahrain, etc) but besides the point. The point is that US aid to Sri Lanka is paltry and will be replaced by money from China. The net effect is bad for the interests the US professes, bad for the Sri Lankan people, and generally dumb.
This will make people that want vengeance or want to see Mahinda and family punished happy. Which is whatever, but it’s not good policy. Let’s say good policy is A) to give the US leverage and B) to use that leverage to promote human rights, democracy, etc.
No Leverage
The US has given 2.2 billion to Sri Lanka in aid since 1948. This sounds great till you divide it 63 years. The US has given an average of 35 million dollars a year, and I’m assuming this includes tsunami. USAID requested $13 million for 2010.
Banning this amount carries no serious implications, it’s just an insult to the government. Essentially, the US is speaking loudly and carrying a toothpick.
Counterproductive Results
By contrast, China just gave 9 million USD to Mahinda as a personal grant. The Sunday Leader just ran something on ‘Chinese Economic Hitmen‘:
According to the External Resources Department by 2009, 54% of a total USD 2.2 billion that Sri Lanka received in the form of loans and credit came from China. In 2010, disbursement from China amounted to about 40%, its nearest rival were the Asian Development Bank and Japan at 15% each. In the same year, loan/credit commitments from China were even higher. Since November 2010, the Chinese loans (being discussed/finalized have increased by nearly USD 3.4 billion.
China’s investments have been mostly in the form of loans at an interest rate which is far higher than from other countries and multilateral agencies.
Hence, the affect of the US cutting Sri Lanka off is not Sri Lanka adapting to US demands (which I think are not the optimal ones) but Sri Lanka going somewhere else entirely. That is, if this ban’s goal is to push Sri Lanka towards accountability and democracy, its effect is to shove the country in the exact opposite direction.
So, what’s going on here? Basically, Mahinda gets political crack money while the Sri Lankan people are… uh, Mahinda gets short-term money which benefits him politically while the Sri Lankan people get a hefty delayed bill.
This is a lose-lose for everybody except China, and a classic piece of policy which mistakes making a statement with actually making a difference. This ban has no serious impact anywhere but in the media, but since the US Congress Continues Debate Over Whether Or Not Nation Should Be Economically Ruined I fear that reasoning may besides the point.
“Banning this amount carries no serious implications, it’s just an insult to the government. ”
You hit it on the head there.
This is just a message that they want to send.
I wonder if anybody will be considering giving up their Green cards or citizenships?
This is just a case of Congress sending a signal to some of the SL appeasers in State – read Bob Blake – that they want a tougher stance on SL. The US’s leverage comes not from their control of Sri Lanka’s aid, but their unparalleled ability to influence votes at the HRC and the UNSC while convincing China and Russia to sit it out at important votes.
Don’t forget that the sum doesn’t appear to be index-linked, so it’s going to be much more than an average of $35M per year (though, ironically that’s exactly the amount pledged for 2010). Look at the stats for the recent years on the same USDOS link:
“At the June 2003 Tokyo Donors’ Conference on Sri Lanka, the United States pledged $54 million, including $40.4 million of USAID funding. Following the 2004 tsunami, the United States provided $135 million in relief and reconstruction assistance. The United States provided over $51.4 million in humanitarian assistance in 2009, and pledged at least $34.5 million for 2010.”
Spending tax payers’ money on foreign aid is a tricky thing, just look at the flak that David Cameron’s receiving for protecting the UK’s foreign aid budget. What’s of most concern is how the money is spent (for example, why give £300M a year to India when they spend over £20B on defence?). However, have a quick look at the USAID website and consider the sort of programs that will be cut. China doesn’t give money, it lends it at high interest and it has a big say on what projects it funds. Who will step in to make up the difference?
“Banning this amount carries no serious implications” – not so sure about that if one is interested in the poorest in the country:
“As we work towards a more peaceful and prosperous Sri Lanka for all citizens, USAID will support stabilization of returnee communities by implementing community-prioritized recovery projects; creating livelihood improvement opportunities; improving access to information, education, and vocational training; and strengthening institutional capacities of local governments and community-based organizations. To support our longer-term development objectives, we will provide training to improve the employability of the youth; establish partnerships with the private sector to create jobs and stimulate the local economy; enhance economic opportunities for micro-, small-, and midsized-enterprises; support civil society and government institutions to improve human security and rule of law; strengthen conflict mitigation and resolution mechanisms; and assist local, regional, and national government institutions to address the civic needs, including conflict-drivers. Through these programs, we believe that conflict-affected populations in the East and North will have the chance to rebuild their communities, resulting in safer, more prosperous places to live, study, and work.”
On closer reading….
As the ‘ban’ doesn’t cover “humanitarian aid, demining and activities to promote democracy and governance”, perhaps USAID should just rephrase some projects and the funding won’t really change much at all?
I wonder what the US right thinks about the situations here. Our latest bond issue was mostly subscribed to by american & europeans.
Really? To me it smacks of tokenism. As Carasek has noted, it’s really rather toothless. And It’s not like it’s even become law. This is being tacked on a spending bill which faces a long and tortuous passage ahead of it, and its final 1000+ page iteration will no doubt contain a multitude of ‘signals’ to just about anyone or anything that’s caught the eye of a member of the US Congress.
I could be wrong, but somehow I doubt that the best minds at the State Department are gathered around burning the midnight oil, hatching elaborate plans to trap Sri Lanka at the HRC and UNSC. I think that while there are elements in the US establishment who have humanitarian interests in SL, I suspect the main preoccupation is to check China’s rising influence in this part of the world – and to try and get India to do something about it.
I never said it had teeth nor that it was law. I think it is driven by Congress-State Dep. relations on the SL question than any intention to directly affect Colombo’s behaviour. Also, checking China’s influence and pressing for accountability have never appeared to the US to be incompatible aims. In fact, accountability perhaps provides their only leverage to press for reforms within the SL state that will wean SL off China in the long run.
Um, besides humanitarian aid what other things does the US fund in Sri Lanka exactly?
If this means cutting funds to organisations like the CPA and Groundviews, I’m all for it :)
It would be interesting to see how long SL lasted without any foreign aid at all. At the end of the day, (long-term) foreign aid amounts to welfare. It just gives the dictator more opportunity to cut deals with crooked corporations, and reap the commissions, thereby keeping prices artificially high. Otherwise, how do you explain astronomically high petrol prices in SL, when the price of a barrel of oil hits an all time low?
The aid given by the US to Sri Lanka in 1990, when President Ranasinghe Premadasa’s government was in the process of killing or disappearing 60,000 youth (including the journalist Richard Zoysa) was US$ 50 million, or 17% of the GDP of Sri Lanka. The aid to Sri Lanka this year, which congress is cutting is US% 13 million or 0.026% of the GDP. The difference was that Premadasa and his equally evil predecessor JR Jayawardene, were US clients.
Are you sure of those statistics?
President angry with The Sunday Leader for exposing monies personally received from China
President Mahinda Rajapaksa is annoyed with The Sunday Leader newspaper for publishing an article last Sunday about a sum of US$ 9 million received by him from the Chinese government to do as he pleased and has asked Minister Mervyn Silva to take some immediate action on the matter, a senior government minister said.
Unconfirmed reports state that the President had even telephoned the Chairman of the newspaper, Lal Wickrematunge after the story was published and threatened him after shouting in filth. Several attempts to contact Lal Wickrematunge to confirm the incident failed.
The senior minister said the President has learnt that the information had been given to the newspaper by a female foreign diplomat who had served in Sri Lanka.
The news report in The Sunday Leader quoting the Foreign Reserves Department in the Treasury states that apart from the US$ 9 million stated above, another US$ 3 million had been given by the Chinese government.
The Chinese government has asked that US$ 1 million of the US$ 3 million be utilized for flood relief and the remaining US$ 2 million for the Bandaranaike Institute for Internal Studies.
Treasury sources state that of the US$ 9 million given to the President, US$ 5 million had been taken by President’s son parliamentarian Namal Rajapaksa.
It has been decided to use the money for an IT programme aimed at the youth in the country to be carried out by the Tharunyata Hetak organization.
The newspaper reports that it was the first time in the country’s history that a state head had been given such monies without specifying a reason.
Attempts by the newspaper to confirm the information from parliamentarian Namal Rajapaksa and Presidential Secretary Lalith Weeratunge have failed.
Director General of the Presidential Media Unit, Bandula Jayaskeera has said that the Presidential Secretary needed one week to respond to questions on the monies received.
taken from http://lankanewsweb.com which is blocked in Sri Lanka
…anything to say about this Indi…or will you go into Sanjana Hatthotuwa mode and block this comment like you have done in the recent past?