Alternative Development and Manipur's 'War on Drugs': Need for a Broader Framework

Anjali Gupta


In Manipur, the cultivation of illicit crops such as cannabis and opium has remained a major source of income, especially for low-income agrarian groups. After announcing a ‘War on Drugs’,  incumbent Chief Minister, N Biren Singh, proposed cultivation of lemongrass and agar trees as an alternative crop, while outlining an alternative development (AD) plan for the state. The AD plan envisions promoting alternative livelihoods, the strategy for which includes eradication of illicit crop cultivation through crop replacement.

For the AD plan to achieve its objectives, the implementation strategy will need to become more broad-based and include addressing other internal complexities in the state within its ambit.

Prior ConditioningAcross the world, the provision of alternative livelihoods (including via crop replacement) is a form of incentives offered to farmers to encourage switching from cultivating illicit crops to licit crops. The broader objective of providing alternative livelihoods is to address the structural and institutional factors that inform the choices of farmers cultivating illicit crops. Within this framework, crop replacement is a strategy aimed at reducing the farmer's reliance on illicit crops to earn a living. In this regard, there has been widespread criticism of strategies involving a de-coupling of the destruction of illicit crops and provision of alternative crops/livelihoods by making the latter conditional on the former due to the practical inadequacies it brings about. 

To illustrate, the 2015 World Drug Report argued that illicit crop cultivation is interwoven with other issues that go “well beyond the microeconomics and agronomy of coca, opium poppy and cannabis cultivation.”  Given the complexities of the ground reality in Manipur, conditioning the provision of alternative livelihood options on prior eradication of the illicit crops, might hinder the core objective of Singh’s ‘War on Drugs’.

Beyond Agronomics In Manipur, an average farmer whose relies on low-effort, high-yield crops like cannabis and opium cultivation for his/her livelihood earns approximately INR 700/- and INR 25,000/- per kilogram respectively. This figure is slightly more or equal to the sum a farmer can earn by cultivating coffee or rubber. In a 2014 “approach paper” towards the implementation of the New Land Use Policy, the Manipur government’s Planning Department proposed coffee and rubber (conventionally recommended alternative crops also often referred to as “peace products” by the UN Office on Drugs and Crime), among others, as crop alternatives.

There is evidence that suggests that though farmers in Manipur have been willing switch to cultivating licit crops, they tend to continue cultivating illicit crops even in the face of associated problems such as price fluctuations, violence by traffickers, and the expenses involved in crop protection and corruption. This state-of-affairs can be attributed to infrastructural under-development in the state. If this aspect is left unaddressed, shortcomings in essential infrastructure and markets to cultivate and trade in such “peace products” might continue to afflict the fates of other alternatives as well, including lemongrass and agar trees that Singh has proposed.

Moreover, regions where illicit crops are cultivated often experience a ‘ballooning effect’, wherein the demand for illicit crops from a region is met by the supply of illicit crops cultivated elsewhere. This takes place in areas where alternative livelihood plans are conditioned and development is fragmented.

The focus of Singh's AD plan, especially the alternative livelihoods component is restricted to farmers affected by eradication of illicit crops and does not encompass all the farmers in the state. Manipur’s farmers require an organised agricultural framework complete with provision of subsidised seeds, pesticides, storage facilities, credit, and transportation, as well as markets to export their produce. To avoid a repeat of past failures, AD programmes should focus on the overall development of the entire state, not just sections affected by eradication of illicit crop cultivation.

Internal ComplexitiesIn Manipur, prevalent conflict and corruption complicate initiatives aimed at providing alternative livelihood. Moreover, the nexus between ethnic rebel groups and drug mafias across the India-Myanmar border has been deepening in recent times. Reports suggest that the National Socialist Council of Nagaland-Khaplang (NSCN-K), the United Liberation Front of Assam (ULFA) and the Kamatapur Liberation Organization (KLO) have been “carrying out opium cultivation and trade in Kachin Province of Myanmar.” According to Subir Bhaumik, though some insurgent groups operating in Manipur resist drug traffickers, others like NSCN-Isak Muivah (which too once “abhorred” drug trade and threatened smugglers with dire consequences) are encouraging farmers to cultivate poppy by offering economic incentives and in other cases, through force. Additionally, tentacles of the narco-economy in Manipur also extend deep into the state’s bureaucracy. In 2018 alone, several public officials in the state were arrested after large caches of narcotics were found in their possession during raids.

Looking AheadFor any AD model to be successful in such a complex environment, the enforcement strategy should employ a comprehensive approach. Relevant initiatives should not be limited by pursuits such as destruction of illicit crops as pre-conditions to crop replacement activities. Instead, they should focus on a holistic development of the state, by factoring in aspects like infrastructure, good governance, and law and order. Siloised development, which ignores Manipur’s internal complexities, could hinder the AD plan’s progress.

The focus on encouraging alternative livelihoods should be part of a broad-based AD plan that envisions the development of the entire state. Economic factors do play a key role in defining AD plans. However, on the issue of addressing illicit crop cultivation, the plan and its corresponding implementation strategy will also need to consider factors that go beyond agronomics. Efforts to eradicate illicit crop cultivation and provision of alternative livelihood options, including through crop replacements, pursued simultaneously. The objectives of Manipur’s AD plan can be comprehensively achieved only if it takes a holistic approach, and its implementation strategy takes the state’s internal complexities into account.

Iraq: Why the ‘Intra-Shia Civil War’ Narrative is Flawed

Pieter-Jan Dockx


Since the parliamentary election in May 2018, deep divisions among Iraq’s various Shia factions have come to the surface. This has led numerous analysts to deduct or predict the beginning of a new intra-Shia civil war in the country. The narrative that has emerged alongside these claims describes two competing blocs. The first group mainly consists of the previous Prime Minister, Haider al-Abadi, and cleric, Moqtada al-Sadr. The other bloc is comprised of the various factions of the Popular Mobilisation Forces (PMF) led by Hadi al-Amiri, and former Prime Minister, Nouri al-Maliki. While these two factions did indeed form in the parliament to influence the government formation process, the different components of the prevailing narrative are vast oversimplifications of a complex reality. More specifically, the overemphasis on external players, inter-bloc pertinacity and intra-bloc cohesion draws away from the significance of local figures’ interests and agency.

External ActorsThe narrative tends to frame the division as part of the conflict between the US and Iran, the two most important external players in Iraq. In this line of thought, Abadi, but also to some extent Sadr, is considered to represent American interests. Amiri and Maliki are seen as doing Iran’s bidding. However, in reality, these ties are not as robust and static as portrayed. Furthermore, the overemphasis on the principal–agent model to characterise these relationships also underestimates the considerations of domestic actors.

Although Washington’s and Sadr’s interests do overlap to a certain extent, this is coincidental and not premeditated. A decade ago, Sadr was still considered as Washington’s foremost enemy due to his violently staunch resistance to the US’s presence in Iraq. To this day, Sadrists continue to call for the withdrawal of US forces from the country. Furthermore, while Abadi does indeed enjoy a good relationship with the US, until recently, the same could be said about his rapport with Tehran. His skilful balancing act only came to a standstill after he declared his intention to abide by the renewed US sanctions on Iran, making Tehran turn further towards alternative actors.

However, despite their well-known affiliation with Iran, these alternative actors, Amiri and Maliki, have not refrained from engaging with Washington either. During the recent war against the so-called Islamic State (IS), the US and Amiri’s PMF tacitly coordinated their efforts under a joint-command. In the subsequent run-up to the May 2018 parliamentary election, both sides openly courted each other, expressing their mutual desire for future collaboration. Even the Asa’ib Ahl al-Haq, a more radical PMF faction, issued an unexpected public apology for the killing of US soldiers. Moreover, for years Maliki was considered Washington’s main man in Iraq. It took until the emergence of the IS for the US to decisively turn away from Maliki and seek regime change.

Inter-bloc EngagementThe narrative framework also portrays both blocs as being almost mutually exclusive and their differences as irreconcilable. Yet, an inquiry into the recent past points to the existence of cross-cutting cleavages. Prior to the May 2018 election, Abadi did not align himself with Sadr, and instead attempted to form a coalition with Amiri and his PMF. It was only after this partnership failed that collaboration between Abadi and Sadr seemed almost inevitable. Thus, the prevailing structures of coalitions are in part a consequence of a failed attempt at alliance-building across the divide, one which is now being perceived as insurmountable.

Also in the aftermath of the May 2018 polls, players from the opposing factions either found common ground or attempted to work towards that goal. In September 2018, the de facto leaders of the respective blocs, Sadr and Amiri, jointly agreed to install Abdul-Mahdi as the country’s new prime minister. Before that, both leaders had even been on the verge of uniting their own factions, which would have led to a breakup of the two blocs. In a similar fashion, Abadi and Maliki, who hail from the same party but contested elections on separate electoral lists, tried to bridge their differences and reunite the party. As the split was turning out to be too severe, the former prime ministers remained in their respective blocs and the status-quo prevailed.

Intra-bloc DiscordThese negotiations and agreements between figures from opposing blocs also expose their internal rivalries and mistrust, contradicting the notion of intra-bloc unity. Although Sadr’s and Abadi’s policy objectives already converged during the latter’s tenure as prime minister, the pair’s competition over the symbolic leadership of the reformist movement came in the way of their mutual support. Sadr’s above mentioned agreement with Amiri on the prime ministership also ended Abadi’s ambitions for a second term in office. Even at this very moment, contention over the vacant governor position is again impairing bloc harmony.

The short-lived electoral alliance between Abadi and Amiri illustrated the existence of similar disagreements in the Amiri-led bloc. Immediately after the agreement was announced, rifts began to emerge between the various factions that make up the PMF. When those who most vehemently rejected the agreement threatened to withdraw from the PMF’s political alliance, the deal with Abadi was abandoned to protect internal unity.

In summary, an inquiry into the past behaviour of the various actors lays bare a reality more intricate than the prevailing narrative presumes. Friction between allies and engagement—among blocs and with external powers—contradicts the reductionism inherent in the narrative. Moreover, because this narrative does not take local dynamics into account, its framework is ill-suited to serve as a basis for any analysis of contemporary Shia politics in Iraq.

Xi’s Disquieting Dream of National Rejuvenation

Vijay Shankar

In the run up to the First World War, Germany pursued a combination of overbearing diplomacy and brinkmanship to achieve policy goals, despite the risk of war. Demanding a review of the international order that would confer on it a dominant political position in keeping with its self-perceived economic and military prevalence, Germany saw little issue in war being a natural corollary to its creating crises and then maneuvering through them. In the event, the security tolerance of rival powers was persistently stretched. And, when war did break out, it was fought with military ineptitude and an inability to match military design with political purpose. An observer of contemporary geopolitics cannot fail to notice similarities in the circumstances of China’s dazzling economic growth, military build-up, and its 21st century realpolitik instincts.

The world, from an era of multipolar uncertainty, has moved to what may be termed'penumbric competition' - conflicts that lack definition, the nature of which is rivalry between major powers over mercantile domination. Today’s realist international relations theory holds that in an anarchic world with no sovereign to provide law and order, states will tend to find security in as much relative power as they can amass at the expense of competitors. Instruments of influence may be financial inveiglement, military coercion, or provoking and exploiting instabilities. Revisionist China is today an avowed devotee of just such strategic logic where a global economic order governed by rules not of its bidding is repugnant.  

China has announced sweeping claims to sovereignty over the South China Sea (SCS) in flagrant defiance of existing international laws and conventions. A network of Chinese naval bases, port infrastructural developments and atypical shipping control centres has been secured from SCS to the East African Coast. Historically and in terms of contemporary significance to the existing maritime flow of trade, these facilities are of no weighty consequence. However, from a geo-strategic standpoint, they suggest springboards to challenge unwelcome maritime control presence rather than mercantile ascendancy. Chinese investments in the Indo-Pacific have thus far resulted in either generating equities or enmeshing the victim states in a debt trap that force them to surrender sovereignty over assets being created. Learning from the colonial experiences of the eighteenth and nineteenth centuries, China has put in place a strategy that emphasises superior organisation, technology and unscrupulous financial mobilisation to exploit the weaknesses of the host state, regardless of friction that may erupt.

Both India and China in their quest for growth with security must find ways and means to avoid threatening each other's interests (as is happening) and advance the nous for security even if that implies establishing a ‘restraining balance’. In the past, leadership coped with the challenge more by knee-jerk rather than policy responses. In the changed circumstances of India’s ‘Act East’ and ‘Neighbourhood First’ policies, a more sophisticated response is necessary. A scrutiny of the problem from two distinct levels of strategic policy and military force will precipitate several questions, answers to which hold the key to the future. First, from the strategic viewpoint, is India focusing on the centre of gravity of China’s power and mercantile ‘putsch’? Second, from the military perspective, would India’s forces, either singularly or in alliance, be able to balance Chinese military activities prejudicial to its interests? Clearly the answer to the first is that China’s compulsion is for unremitting growth, while to the second, the answer lies in developing a ‘China restraining strategy’ best tempered by an appropriate alliance.

The slowdown of China’s growth (some estimates puts it as low as 5.6 per cent), trade war with the US, and ASEAN countries eyeing markets and resources elsewhere as demand in China falters suggest an adverse impact on China’s current military modernisation and strategic infrastructure plans. The other problem that may hobble China’s ambitions is the amount of debt in the economy - by some estimates, close to 300 per cent of GDP. Two options present themselves to China’s planners as they attempt to manage these predicaments: retard pace of projects, cut back on military modernisation and strategic infrastructure-building, and accept a moderation of Xi’s “dream of national rejuvenation, securing expanding interests overseas and developing capabilities to degrade core operational and technological advantage that influence the region.” Or, having long characterised the initial two decades of the 21st century as a period of strategic opportunity, China may opt to chase down its strategic objectives with greater vigour even at the cost of international friction and disruption of internal conditions.

In either of the two options, the development of the Quadrilateral Security Dialogue (Quad); a security organisation including the US, Japan, India and Australia, must be viewed as a timely ‘China restraining alliance’ to counter its unrelenting surge for an exceptionable proprietary mercantile empire stretching across the Indo-Pacific. The charter of the Quad is yet to be fleshed out, but conceivably, it will have three objectives. First, to reinforce a rule-based regional order. Second, to promote a liberal trading regime and freedom of navigation for passage of close to 60 per cent of global trade through the Indo-Pacific, and third, to provide security assurances.

However, just as machinations from Beijing splintered the Quad at inception, the entente faces similar fragmenting stresses that threaten the whole. India is locked in a long-standing border dispute with China. Similarly, Japan has maritime disputes in the South and East China Seas while China’s new Air Defence Identification Zone (ADIZ) provides the recipe for mutual interference. The US is engaged in a self-destructive move to renege on its larger strategic responsibilities; Australia, on the other hand, depends on China for approximately 22 per cent of trade. And there are China’s assignees, the maverick, nuclear-armed states of North Korea and Pakistan, whose disruptive influence cannot be set aside. And yet the opportunity that the current state of China’s economy presents must be grasped if the Quad is to have ready impact.

The question is, does the leadership recognise that Chinese realpolitik is at play and that only a determined system based on pragmatic rather than ideological considerations can confront it? The current moves by Japan, US and India to develop Trincomalee in Sri Lanka to stave off China’s aggressive push in Hambantota will suggest that the entente has not been altogether unsighted to events in the region.  

What is This New Uganda?

Jörg Wiegratz, Elisa Greco & Giuliano Martiniello

For the last three decades, Uganda has been one of the fastest growing economies in Africa. Globally praised as an “African success story” and heavily backed by international financial institutions, development agencies and bilateral donors, the country has become an exemplar of economic and political reform for those who espouse a neoliberal model of development. The neoliberal policies and the resulting restructuring of the country have been accompanied by narratives of progress, prosperity and modernization, and justified in the name of development. But this self-celebratory narrative, which is critiqued by many in Uganda, masks the disruptive social impact of these reforms, and silences the complex and persistent crises resulting from neoliberal transformation.

Those who want to better understand the dynamics of contemporary Uganda thus face a bifurcated scenario: two different narratives persist at global and local levels that seem, taken together, hard to reconcile. One is of a Uganda emerging from years-long civil war in the late 1980s, and then within a few years becoming an international success story. This “Uganda as a success” narrative praises the post-1986 policy reforms that have stimulated economic growth, with sustained GDP growth and foreign direct investment (FDI) attraction matched by steady progress in poverty reduction and gender empowerment.

Central to this narrative is the leadership of a president who is a progressive modernizer, acting with the interest of the nation at heart. In short, Uganda has never been better. Such accounts parade all manner of positive achievements in social, political and economic spheres. Very powerful actors promote this narrative, year in, year out: from the World Bank, International Monetary Fund and various international and bilateral donors of the country, to influential international and domestic scholars and analysts, not to mention the Ugandan government and establishment. The same actors have produced a plethora of official statistics and econometric studies that supposedly provide evidence of this stated steady progress. A prime example of this celebratory narrative about the new Uganda is the Kampala speech of the IMF Managing Director, Christine Lagarde, in January 2017, “Becoming the Champion: Uganda’s Development Challenge.”

Lagarde states: “This gathering provides an opportunity to congratulate Uganda for its impressive economic achievements… I do not normally begin my speeches with statistics, but today will be an exception. That is because the numbers tell us a great deal.” After reciting the country’s official figures concerning GDP growth and poverty reduction, she concludes: “This is an African success story.” Another exemplar is a recent speech by the UN Resident Coordinator and UNDP Resident Representative in Uganda, Rosa Malango, who boasted thus: “Uganda is widely recognized for producing a wide range of excellent policies on social, economic and development issues.”

Lagarde made her visit just months after the highly controversial 2016 political elections that were accompanied by repression against sections of the opposition and critics of the government, as well as accusations of substantial and outright vote rigging. The outcomes of the 2016 elections further deepened the government’s legitimacy crisis. This leads us to discuss the second narrative about contemporary Uganda: here, there is talk of OR the focus is on, a patrimonial mode of rule supported by the president’s ruling group. This formation uses state power to advance private economic interests and functions through a far-reaching business and political network, which includes the president’s extended family, political allegiances and foreign investors. To denounce the self-seeking attitude prevalent in the ruling party, the National Resistance Movement (NRM), Ugandan street politics dubs it the “National Robbery Movement.”

The state has come to be associated with increasing political repression, a decline in public services and generalized economic insecurity. Public debates refer to mafias, and a mafia/vampire state, a country occupied, controlled and exploited by a tiny clique of powerful domestic actors and their foreign allies. There is reference to issues such as recurring food shortages and chronic indebtedness, and a social crisis characterized by increased inequality, widespread violence and increased criminality, high levels of suicide (especially among the youth), poverty-driven deaths, preventable illnesses and generalized destitution. This second narrative of “Uganda in crisis” is articulated by the people on the street, sections of the political opposition, the media, NGOs, the religious community and a range of critical national commentators. One can listen to it on TV news and debates, in churches and mosques and read about it in media articles and on social media platforms, or in academic research and NGO reports about state violence and repression, corruption and land disputes.

Our recently published edited collection, titled: Uganda: The Dynamics of Neoliberal Transformation (ZED 2018; see for free introduction here) intervenes in this crucial debate about the character and trajectory of change in contemporary Uganda, about what constitutes the New Uganda. It confronts the often sanitized and largely depoliticized accounts of the Museveni government and its proponents. It questions mainstream narratives of a highly successful (and socially beneficial) post-1986 transformation, and contrasts these with empirical evidence of a prolonged and multifaceted situation of crisis generated by a particular version of severe capitalist restructuring, or neoliberal reforms. This analytical approach has, to date, occupied little space in the context of neoliberal academia. We thereby also sought to challenge the decades-long ideational and discursive hegemony of powerful international and national reform designers, implementers and supporters. We critique and challenge what Ngugi wa Thiong’o calls, with reference to the European colonialism in Africa, “mental domination”—a domination that is so characteristic of neoliberal social order across the contemporary “free world”: “Economic and political control can never be complete or effective without mental control.” As thinkers from Luxemburg to Orwell noted, contesting the truth of the ruling classes, pronouncing what is going on and offering alternatives to establishment accounts of reality (and thereby history), is a crucial political act.

As a collective of 25 scholars, we wanted to map, understand and explain the key features of both the making and operation of neoliberal-capitalist Uganda, against the political-economic and socio-cultural context of this particular society. A major question we wanted to address was: by whom, why, how and to what effect was Uganda transformed in all the different societal realms? Moreover: What does 30 years of neoliberal reform and transformation do to a particular society? What is the New Uganda, the new neoliberal-capitalist market society, all about? What are its characteristics? What does the data and analysis in the altogether 19 chapters enable us to see, argue and for now conclude about this march towards a more fully-fledged, specifically institutionalized capitalism, in this particular site of the global political economy?

When we began this work, as editors we felt that there was little scholarship available on Uganda that gave neoliberalism the analytical seriousness and treatment that an empirical phenomenon of this size and relevance deserves. Social sciences scholarship on Uganda, for reasons explained in the book, has to date not sufficiently analyzed the many characteristics of the all-encompassing process of change triggered by neoliberal reforms. And yet of course, Uganda is a special site for such an analytical undertaking: the country is a hotspot of capitalist restructuring, transformation, contradiction and crisis, past and present. And, it has a peculiar mix of capitalist political-economic specifics. It is a peripheral, donor-dependent country, subject to imperialist dynamics. Inequality and poverty are rampant, society is dominated by violence and conflict, to which militarism adds its weight.

Indeed, Uganda is a prime example of neoliberal restructuring in Africa where the neoliberal project does not seem to have been significantly challenged so far. The key processes and practices underpinning social transformations in the country are not unique to Uganda. Several African countries have in many ways undertaken similar paths of political, social, economic and cultural transformation. Yet the spectacular transformations that have occurred in the country in the last 30 years reveal the potential trajectories of transformation upon which other African countries could embark in the near future, or that are already underway there. The prevalence of extractive and enclave economies, the hegemony of a state-donors-capital block, and the expanding marketization of society, represent the common denominator for many African countries.

The version of neoliberalism observed in Uganda is in key aspects arguably more extreme, crass and unequal than some of the neoliberal societies elsewhere. Analytically crucial: the exclusion, inequality, violence, precarity and crises that large sections of the subaltern face are thus, the book shows, not caused by a malfunctioning market, or a deviated capitalist trajectory. Rather the opposite is true: it is precisely the functioning of neoliberal restructuring and institutions that causes widespread social, political, and economic crises. Mainstream narratives claiming that more private sector development will produce a future that is, as Museveni put it in a recent twitter tweet, “easy to handle,” are a fallacy. Current in-crisis countries, such as Mexico, once celebrated success stories of neoliberal restructuring, are telling cases of its regressive outcomes. Uganda, as other neoliberalized countries in Africa and elsewhere, could go down a similar path, breeding a future of permanent social crisis.

Now that the book is out, we actually feel that there is the necessity to expand such a handbook-length treatment of neoliberalism to other African countries to get a more adequate data overview and analytical grip of the phenomenon. In other words, the specific declination of contemporary capitalism, which is neoliberal capitalism, is actually understudied when it comes to African countries. Other frames dominate the social sciences, also because of the political economy of research funding in the country, for instance the role of donors from the capitalist North. Given the heft of the analysis that this collective of scholars has offered in our collection, we believe that a much more collective and focused, as well as continuously critical and innovative analysis is needed in future to cage, look at, touch and make sense of the “beast” (capitalist social reality) and to resist and counter hegemonic forces and their account of reality.

IMF to resume Sri Lankan loan program discussions

Saman Gunadasa

The International Monetary Fund (IMF) will send a team to Colombo in mid-February to discuss resuming a postponed loan program to Sri Lanka, whose government faces a ballooning foreign debt and severe debt-servicing problems.

IMF managing director Christine Lagarde made the statement on January 15, following discussions in the US with a Sri Lankan delegation headed by Finance Minister Mangala Samaraweera. The deputation included Central Bank governor Indrajit Coomaraswamy, Finance Ministry Secretary RHS Samaratunga and Economic Reforms Minister Harsha de Silva.

The IMF stalled a scheduled discussion last year and withheld the release of $US500 million—the last two installments of a $1.5 billion loan approved in 2016—following an attempted political coup by President Maithripala Sirisena. The bank said it postponed the payments in response to “political uncertainty” in Sri Lanka.

On October 26, Sirisena dismissed Ranil Wickremesinghe as prime minister and replaced him with former President Mahinda Rajapakse. When Rajapakse was unable to win majority parliamentary support, Sirisena dissolved parliament.

The president’s coup failed after intense pressure from Washington for the reinstatement of Wickremesinghe and the Sri Lankan Supreme Court ruled that Sirisena’s actions were unconstitutional.

Washington, which has intensified its military, geo-strategic and trade measures against China, was hostile to any return to power by Rajapakse whose previous administration developed close relations with Beijing.

Postponement of the IMF installments led to Sri Lanka being downgraded by major international rating agencies—Moody’s, Fitch and Standard and Poor’s—and weakened its ability to borrow on the money markets. After Wickremesinghe was reinstated, the government appealed to the IMF to resume its funding facility.

Lagarde told the media on January 15 that Sri Lankan authorities had assured the IMF of Colombo’s “continued commitment” to the bank’s “economic reform agenda” and the necessity for “a strong policy mix.” This means a ruthless intensification of the bank’s austerity program.

The IMF’s “reforms” include slashing subsidies to small farmers and the poor, eliminating jobs through the privatisation and commercialisation of state-owned enterprises, and expanding the tax net to include all working people. Increased tax concessions will be handed to big business and the value of the country’s currency more directly determined by market forces.

Before the Sri Lankan delegation’s meeting with the IMF chief, Wickremesinghe outlined the country’s debt problems in a special statement to parliament. He spoke of paying $5.9 billion in debt servicing this year, when the Central Bank has just $6.9 billion in foreign currency reserves.

The treasury paid $1.5 billion due on January 15 by drawing $1 billion from the Central Bank’s foreign currency reserves and borrowing from the Indian and Chinese central banks.

Addressing a recent Ceylon Chamber of Commerce conference, Central Bank governor Indrajit Coomaraswamy said he wanted $5 billion raised in the first quarter of 2019 to boost reserves in order to repay foreign debts. This was necessary in case of “any political uncertainty that may pop up later in the year.”

Coomaraswamy said: “The job of Central Banks is to prepare for the worst and we learnt this lesson on 26 October 2018. We don’t know what political tsunami might come next, so we have to plan and get the money in as fast as possible.”

As part of this push, the cabinet early this month approved a $2 billion loan via international sovereign bonds. The Central Bank also told the government it intends to raise more funds this year from sovereign bonds in dollars, yen, renminbi and euros.

Much of the government’s loan portfolio consists of commercial short-term loans at high interest rates. According to a recent study by Verite Research, a think tank, most of these loans, including international sovereign bonds, have a 6 percent interest rate and must be settled within seven years.

Sri Lanka’s reliance on commercial loans increased dramatically during the past decade, rising from 11 percent of its debt in 2008 to a staggering 54 percent in 2017.

Much of this was to pay for the cost of Colombo’s long war against the separatist Liberation Tigers of Tamil Elam and rising trade deficits. Loans were obtained through international sovereign bond markets, which expanded after the 2008 global financial crisis when the US Federal Reserve made available trillions of dollars after bailing out the banks and finance houses.

These investments are now being withdrawn due to rising interest rates in the US. According to reports, during the first ten months of last year, $640 million was withdrawn from Sri Lankan government securities. These withdrawals intensified following the political turmoil that erupted in Colombo last October.

Foreign currency outflows have directly affected Sri Lanka’s rupee, depreciating it by about 20 percent against the US dollar last year and driving up the price of essentials.

The Central Bank governor said the economy faced “problems of fiscal and current account deficit while exports, which were 33 percent of the GDP [gross domestic product] in 2000, have now declined to 12.6 percent.”

The rising cost of imports and stagnating exports have continuously expanded the country’s trade deficit, which cannot be overcome by increased foreign investment or remittances by overseas Sri Lankan workers.

A January 27 comment in the Colombo-based Sunday Times noted that although loans being sought by the Central Bank and other Sri Lankan banks would “replenish the reserves and boost international confidence,” they would increase the country’s foreign debt liability.

“The repayment of debt obligations has been by further foreign borrowing, [because] foreign reserves were inadequate. This reveals the external financial vulnerability of the economy,” the newspaper warned.

The deepening economic crisis and planned mid-February discussions with the IMF will see the Sirisena-Wickremesinghe government unleash even more brutal measures on the working class and the poor.

Sudan’s anti-government protests enter sixth week

Jean Shaoul 

Hundreds of thousands of Sudanese workers and peasants have staged nationwide protests since December 19 that are the biggest threat to the rule of President Omar al-Bashir since he came to power in a 1989 coup.

They were initially called in opposition to the tripling of the price of bread and fuel shortages in the northeastern city of Atbara, where protesters torched the ruling National Congress Party’s offices. They spread rapidly across Sudan’s impoverished rural areas and then to the major towns and cities, including the Riverain region—reputedly the Islamist regime’s stronghold—and the capital Khartoum, with demonstrators torching the party’s offices in Dongola.

Within 24 hours, the demonstrations escalated into a generalized expression of opposition to years of austerity, economic hardship and suppression of basic democratic rights that make life intolerable for most people, particularly the youth.

Following the US-orchestrated secession of South Sudan in 2011, the country lost 80 percent of its oil-based revenues. By the start of 2018, Sudan was all but bankrupt, with petrol and diesel only available on the black market. People could not withdraw cash from the banks or ATMs, and by the summer, there were hours-long queues for bread across the country.

There has hardly been a day without spontaneous demonstrations somewhere in the country, with 15 out of Sudan’s 18 states joining the protests by mid-January. The main independent professional unions have organised regular strikes and marches on the presidential palace and parliament, demanding Bashir’s resignation.

The protests continued even after the government promised not to cut bread subsidies, making it all but impossible for Bashir to tour the country in an attempt to quell rising tensions with people holding banners using the slogans and appeals of the 2011 uprisings in Tunisia, Egypt and other states, “The people want the fall of the regime.”

Bashir has sought to lay the blame for the country’s desperate economic plight on the US, claiming that the demonstrations were the product of meddling by external agents, Darfuri rebels or Israel.

On Sunday, demonstrators held sit-ins in several squares in the capital, Khartoum, and its twin city, Omdurman, in response to a call by the Sudanese Professionals Association (SPA), an umbrella association of doctors, engineers and teachers. The authorities deployed masses of riot police and security agents, who filled the squares with muddy water and fired tear gas forcing the rallies to move to residential areas.

On Thursday, there were protests in 40 areas of the country, making it the largest day of action since the protests began. Angry clashes erupted outside the home of Mahjoub al-Taj Mahjoub, a medical student who was one of three medical personnel killed that day. The Sudanese Doctors’ Committee said that Mahjoub died after being “beaten and tortured” in police custody.

There were similar protests outside Sharifa Ahmed’s home, following the killing of her 25-year-old son, Dr. Babikir Abdul Hamid, by live fire while giving medical assistance to injured protesters in the Burri neighbourhood of Khartoum.

Within days of the protests starting, the government imposed curfews and states of emergencies in several cities and deployed the army and the National Intelligence and Security Service (NISS) in a brutal crackdown on protesters, opposition leaders, activists and journalists. The security forces have used live fire and tear gas, killing at least 51 people, according to opposition groups. According to the African Centre for Peace and Justice Studies, some of those killed died in custody after torture or ill-treatment.

Early in January, the government admitted detaining at least 800 people, including protesters, journalists, doctors, lawyers and opposition party leaders, with the security forces storming nearby homes in pursuit of sheltered protestors. The number is widely assumed to be far higher, with many of those arrested in incommunicado detention, without access to family or lawyer visits.

The government has blocked internet access and social media networks and censored the media, demanding that the newspapers submit their articles for review before printing.

The security forces have targeted young people, subjecting them to violent beatings. Middle East Eye quoted 19-year-old Abul Wahab Ahmed, one of those held by security forces after a protest in southern Khartoum, who explained, “They beat me and many other protesters and then they shaved my head in a really humiliating and barbaric way. They released me after two hours of detention in their vehicles, dropping me off in the main streets of al-Kalakla where I live.”

Bahram Abdul Moniem, a journalist who has been arrested twice since the start of the protests, told Middle East Eye, “I and other journalists were arrested together and beaten together by the security agents. I saw hundreds of young protesters being violently beaten by the security agents.”

There are reports of the security forces arresting and beating female activists, cutting their hair and scattering their braids in the streets of the Burri neighbourhood of Khartoum to humiliate, intimidate and discourage them from joining the protests.

Anwar Alhaj, the chair of the human rights group Sudan Democracy First Group, has called for an independent investigation into the deaths of protesters, following the government’s announcement of its own investigation.

Bashir’s coalition is beginning to break ranks. On Friday, the Umma Federal Party (UFP), led by Ahmed Babikir Nahar, withdrew from the National Consensus Government and called on Bashir to step down, the third main political party to do so. Speaking at a press conference Friday, Nahar said that the party’s representatives in the government would resign immediately—although some members of the UFP reportedly rejected his announcement.

Ghazi Salah Ad-Din, the leader of the Reform Now Party and a former ally and adviser of the president, has reportedly led 22 parties away from Bashir’s coalition government.

Sadig al-Mahdi, an opposition leader and former prime minister, has backed the protests and called for his National Umma Party’s supporters to join the protests, saying he wanted to form a transitional government to replace Bashir. He said he had signed an agreement with the Sudanese Professionals Association. Mahdi had returned to Sudan after a year in exile on the day the protests started.

Bashir can count on the support of the region’s dictators, all of whom hate each other but fear even more their own working class and poor peasants and the threat they pose to their own shaky regimes.

The US and the European Union have long opposed Bashir, to the extent of backing his indictment at the International Criminal Court for war crimes, including genocide in Darfur, and are not openly backing him. However, the last thing they want is instability in Sudan, strategically located in the Horn of Africa, alongside the Red Sea and the entrance to the Suez Canal through which much of the region’s oil passes, and a new wave of refugees heading for Europe.

Last week, Washington, in the first public statement since the start of the protests, called on Sudan to release activists still in detention and to allow peaceful expression, politely cautioning that better relations with the US were in jeopardy.

Bashir went to Qatar and Egypt to elicit practical help. Egypt’s military dictator President Abdel Fattah el-Sisi voiced his support, while Qatar reportedly offered “all that was necessary to help Sudan overcome this ordeal.”

Qatar and the Gulf States, which have been an important source of funding for Sudan since the secession of South Sudan, as well as Turkey, Russia, China and the United Arab Emirates, have been competing for influence in the Horn of Africa. While the UAE offered unspecified help, Russia and Turkey pledged fuel, wheat and other aid, with Russian private contractors training Sudan’s security forces.

Lima sewage disaster exposes infrastructure neglect in Peru

Armando Cruz

On January 13, residents of the Azcarrunz neighborhood of east Lima’s working-class district of San Juan de Lurigancho (SJL) were forced to evacuate their homes as backup from their toilets and internal pipes flooded their houses with up to a foot of wastewater. The internal flooding was caused by a failure of the sewage system triggered by a pipe break. Nearly 2,000 people were affected in the kilometer-square area.

On January 15, residents were told by state officials to remove everything from their homes that had been touched by the contaminated water. People desperately tried to save their furniture, electrical appliances, beds and other belongings. The Ministry of Health later declared that it had treated nearly double the usual number of people suffering from skin, eye and breathing infections, diarrhea and other conditions as a result of the mass exposure to the flood.

With 1 million inhabitants, SJL is the most populated district in Peru. The majority of its residents belong to the working class and the extremely poor, who work for poverty wages and without benefits for the myriad of small businesses that operate in the district.

Like all districts in the periphery of Lima, SJL’s history as a district began with the massive migration from the Andean regions to the capital. The original squatters settled on unused lands previously claimed by landowners until the state gave its recognition to SJL as a new district in 1967.

Since then SJL, along with the other poor neighborhoods on the periphery region (known as conos) have borne the full burden of government neglect as government after government left protection against natural disasters, such as floods, unfunded and virtually ignored improving the lack of access to public water. Meanwhile, they have denied public housing to thousands of residents living in miserable desert shantytowns known as pueblos jovenes (young towns), who have to pay bigger fees for clean water than their urban counterparts.

SJL for years also suffered the kleptocratic rule of Mayor Luis Burgos, from the People’s Christian Party. Burgos managed to turn SJL into his private fiefdom thanks to his dealings with the multinationals—such as the disgraced Brazilian construction giant Odebrecht—and his private army of thugs who were involved in usurping control of potentially lucrative lands from their real owners. His own son was killed by rival gangs due to his involvement in this type of crime, known as trafico de tierras.

Burgos went into hiding in 2017 after he was brought up on corruption charges, but his mafia-style of government is far from exceptional in Peru. During the regional and local elections of last year, there were many reports of parties being cobbled together to serve as mere political fronts for organized crime outfits that expect state protection once their candidates take office.

“Free-market” proponents rushed in after the flooding to demand the privatization of the public water company, Sedapal, with longtime right-wing figure Jaime de Althaus saying: “Why are we waiting for a private company to manage Sedapal?

“It [a private company] could be asked for goals and objectives and if it does not deliver, goodbye to it. On the other hand, we cannot demand anything from nor sack Sedapal [a public company].”

There is a sinister background regarding the demand for the privatization of Sedapal. It has been claimed by some journalists that for a long time governments have been starving public companies such as Sedapal of funds (under the guise of “austerity”) in order to declare them bankrupt and carry through their privatization to further profit interests. The flooding in SJL now provides a further rationale for executing this scheme.

Sedapal’s trade union (Setupal) responded with a Facebook post in which it clarified that the SJL pipe had been put in place not by Sedapal, but by a consortium established by the Brazilian company Odebrecht and its Peruvian partner Graña y Montero—the biggest Peruvian construction company—which built the nearby metro station “Pirámides del sol.” It said that the pipe was only five years old and that the consortium claimed it would last for 80 years.

The metro itself is being investigated by state attorneys as they think it formed part of the overpriced projects the government of Alan Garcia (2006-2011) arranged in corrupt deals with Odebrecht.

Sedapal, along with the state oil company Petroperu, were the only two public companies that weren’t privatized during the neoliberal “reforms” of the first government of Alberto Fujimori (1990-1995). Given the outrage over the fraudulent and rushed character of the privatizations in the 1990s, turning over an essential service like water to a private business was considered too risky.

However, nowadays Sedapal along with other state agencies have ceded the managing of some of their operations to private contractors in what has been termed “Private-Public Associations” (“Asociaciones Público Privados”).

With the thousands of lives disrupted by the polluted waters escaping the faulty pipes installed by Odebrecht and Graña y Montero, the disaster in SJL is another proof that the working class bears the full consequences of awarding the managing of essential services to profit-driven private companies.

Azcarrunz resident Rocío García said in an interview with Spain’s El País that her family was told to throw away everything from their house that was in contact with the water. Hours later, a state officer arrived to verify how much the state would compensate them, but claimed that he could only take into account what remained inside the house. “Isn’t that a bad move?” she said. “We are very affected and on top of that they do this to us.”

García also claimed that the flooding made them lose everything that had been invested in a small restaurant that they wanted to open on the first floor and that the state didn’t take that into account.

Another resident, Joel Bustíos told El País, “We want them to be honest. They told us that they would be coming today to fumigate, but there was another flooding and we had to clean up.”

While President Martin Vizcarra declared in relation to the flooding that those responsible for it will “have to pay” for the damages—without explaining who exactly they were—the state has announced an individual insurance fund of just 1,000 Sol (approximately US$299) per household.

Venezuela’s oil and the geopolitics of the US-backed coup

Gabriel Black 

The United States has steadily escalated its regime change operation in Venezuela, seeking to remove Venezuelan president Nicolas Maduro by means of a coup d’état driven by crippling economic sanctions tantamount to a state of war and the continuous threat of outright US military intervention.

The aim is to install the US puppet, Juan Guaidó, who in December traveled to the United States to discuss the operation with the Trump Administration.

Guaidó, an operative of Voluntad Popular, a right-wing party funded by the USAID and National Endowment for Democracy (NED) has bipartisan support from Democrats and the Republicans. He been presented in the media as a kind of freedom fighter and champion of democracy against Maduro, a dictator and force of evil. As Secretary of State Mike Pompeo stated in a speech last Saturday, warning other governments at the United Nations, “Either you stand with the forces of freedom, or you’re in league with Maduro and his mayhem.”

Beneath Washington’s tired and hypocritical invocation of “freedom” and “democracy” lies the real motives for a coup that could quickly spiral into civil war and armed intervention.

Venezuela has the largest proven oil reserves of any country in the world—several billion barrels more than Saudi Arabia. This valuable prize is not simply a source of profit, but a critical geopolitical piece in the growing conflict between the US and China—especially in light of growing fears that the oil markets could soon tighten.

On Monday, the Trump Administration tried to stop the flow of oil revenues to the Maduro government by halting all US payments to the state-owned oil company, Petróleos de Venezuela (PDVSA). Venezuela sends 41 percent of its oil exports to the US and is heavily reliant on this trade for its revenue.

Washington’s aims were nakedly expressed by National Security Adviser John Bolton who told Fox News on Monday that, with a successful coup, “It will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela.”

For that to happen would require the reversal of Venezuela’s nationalization of its oil industry, which took place more than four decades ago—long before the advent of Maduro or his predecessor, Hugo Chávez—and the transformation of the country into an open semi-colony of US imperialism and Big Oil.

The latest US bid to strangle the flow of Venezuelan oil revenue—described by some economic analysts as the “nuclear option”—follows several years of collapse in the Venezuelan oil industry. Crude production fell from almost 3 million barrels per day (mb/d) to 1.5 mb/d late last year—with some predicting it will plummet to 800,000 b/d this year.

Venezuela’s extra-heavy crude oil, located in the Orinoco Belt, while voluminous, is extremely expensive to produce. Similar to Canada’s tar sands, it can only be profitably produced at a relatively low rate of extraction. In order to turn extra heavy oil, or tar sands, into usable crude, Venezuela must import a large volume of light oil from the United States to blend with its crude in an energy-intensive refining process.

These underlying geophysical realities complicate and intensify the economic crisis facing the national-bourgeois regime of Maduro. Like Chavez before him, Maduro relies on these oil revenues for the limited social-programs that has allowed his regime to falsely posture as the proponent of “Bolivarian Socialism,” while guaranteeing the property and profits of both domestic and foreign capital.

Venezuela, like many other oil-producing countries suffers from over reliance on the commodity. When a country relies heavily on a valuable export-oriented resource, the influx of foreign currency can lead to general inflation and prioritize investment in that extractive resource over all other sections of the economy. This inevitably leads to the slowing down of other sections of the economy, especially industry and manufacturing, unless radical measures are taken to halt the process.

Venezuela has experienced several spiraling economic crises due to this process, as far back as the 1920’s. This time, the insufficient capital of the Venezuelan regime and the volatile price of oil has prevented the government from making the necessary and costly investments in its heavy-oil fields to keep production stable.

The prospect of a protracted regime-change operation leading to the temporary withdrawal of Venezuelan crude from global oil markets does not bother the United States and its allies because US crude oil production, along with the steady growth of tight-oil and shale gas, will make up for any shortfall. However, Venezuela’s reserves are still seen as critical for the long-term economic and geopolitical stability of the United States for two reasons.

The first is that Venezuela has recently undertaken plans to intensify its collaboration with the Chinese state and Chinese oil companies. Venezuela owes around $20 billion to China—making the country one of its largest creditors—and it has already paid $40 billion of another loan back to China using oil exports as the method of payment. Chinese petroleum companies have taken large shares in various ventures in Venezuela as well with the intention of halting the downward spiral of the industry and sending oil back to China.

China’s oil production amounts to 3.5 mb/d and does not begin to meet its nearly 15 mb/d in consumption of petroleum. Unlike the United States, China has no significant shale formations. This lack of oil has pressured the Chinese ruling class to desperately seek oil abroad. On the other side, the United States understands that strategically holding—either through alliance or direct ownership—the world’s major oil fields would cripple the Chinese economy in the event of conflict. Thus, oil rich countries like Venezuela and Gadaffi’s Libya, both of which entertained Chinese and Russian oil investment, are seen by the US as major targets.

A second reason why Venezuela’s oil is of particular importance is that, though it is expensive, it could help meet an expected supply-demand gap that will emerge later this decade. The International Energy Agency believes that the world needs to spend at least $640 billion every year to keep production at adequate levels; however, spending in the industry is well below that, at $430 billion.

Currently, hydraulic fracturing, or fracking, in the United States has been able to supply markets —however, even if there is a significant economic recession in the coming years, new oil, like Venezuela’s, needs heavy investments to fill the gap. Should the US-backed coup succeed, companies like Exxon, which have historically controlled Venezuela’s oil, would be brought back in to invest and control the resource.

There is nothing new about the United States’ desire to control the flow of Venezuelan oil. Prior to nationalization in the 1970s, various Western companies dominated Venezuela’s oil wealth. Beginning with Royal Dutch Shell (an Anglo-Dutch venture) in the early part of the 20th century and ending with the antecedents of modern-day Exxon Mobil (Standard Oil, Exxon, and Mobil) prior to nationalization, Venezuela’s oil has long been dominated by foreign capital.

In the early 1970’s, Venezuela was a close ally of the United States in Latin America. In 1976, under the presidency of Carlos Andrés Pérez, the country’s oil was officially nationalized and Petróleos de Venezuela (PDVSA) was created as the state oil company. Venezuela’s oil nationalization gave much more generous terms to Western oil relative to other OPEC members.

In the late 1980s and early 1990s, a second major economic downturn occurred, again bound up with the economy’s over-reliance on oil and the resultant economic woes. It was out of this economic crisis, and the mass popular revolt against austerity measures known as the Caracazo, that former Venezuelan president Hugo Chavez first emerged as a national figure, leading an abortive coup in 1992 and being elected as president in 1998.

Chavez pursued social reforms that improved the standard of living, at first, of a section of the working class—largely funded by oil revenues. However, Chavez, a bourgeois nationalist, did not in any way represent the working class or advance its struggle for control over production and society. On the contrary, he spoke for a layer of businessmen who thought their situation could be improved by achieving greater independence from foreign capital while using oil revenues to ease class tensions.

In the end, as in the economic crisis of the 1990s, the global forces of capital acting on a national economy dependent on an extractive resource disturbed a very temporary equilibrium. In the years leading to Chavez’s death in 2013, the economic situation deteriorated, and the Venezuelan regime found itself confronting an increasingly hostile and disillusioned working class.

US imperialism is now seeking to exploit this crisis for its own purposes. Under the phony banners of “freedom” and “democracy” it is seeking to carry through a naked imperialist intervention that would install a dictatorship dedicated to suppressing the working class and assuring the unfettered control of the Venezuelan economy by Big Oil and Wall Street.