Sri Lanka Debt Cancellation: Responsibility of Global South

 Sri Lanka’s situation has to be widely publicized; there are other countries too – less prominent globally, smaller – who have unpayability problems, but none with the tortured contemporary history that your country is now living

INTERVIEW

It is time for the nations of the global South to build their own way, to self-organize, Gary Dymski, a well-known economist and Professor of Applied Economics at the Leeds University Business School in UK, said in an interview with Sri Lanka Guardian.

Who will lead them? Not Modi, nor Jinping. Who is the Kwame Nkrumah or Julius Nyerere or Sekou Toure of today;” he asked.

Post Keynesian Economist Prof. Gary Dymski is addressing a seminar orgainsed by Economists for Peace and Security [File Photo Credit: Economists for Peace and Security]

Gary Dymski is an excerpt on monetary economics; macroeconomic theory and policy; banking and financial institutions; economic development; political economy; urban economics; inequality; stratification economics. He has been a visiting scholar in universities and research centers in Australia, Brazil, Bangladesh, Colombia, Greece, India, Italy, Japan, Korea, and Mexico.

“Sri Lanka’s situation has to be widely publicized; there are other countries too – less prominent globally, smaller – who have unpayability problems, but none with the tortured contemporary history that your country is now living,” he observed.  

“We need a repurposed set of development banks, controlled by progressive forces willing to move past the capitalist system. This does not yet exist,” he suggested.

Being a member of the council of the Post Keynesian Economic Society (UK), Prof Dymski also is an advisor to the Debt and Development division of the United Nations Conference on Trade and Development (UNCTAD) in Geneva.

Excerpts of the interview;

Question: Are we passing through a period of the worse global recession that could lead to an unprecedented catastrophe? If yes, what is the way out?

Answer: We are in a global recession that could develop in an alarming way. There is already an emerging debt crisis that is catastrophic in many developing countries, and will likely get worse. The slowdown of economic activity as such is unlikely to degenerate into a collapse. But the stagnation will most likely continue. So it is more like strangulation of the economies of countries that are lower in the currency hierarchy. Businesses will fail; financing arrangements will either be sustained on a pretend-and-extend basis or will lead to default. India and China have somehow managed to sustain positive growth rates, but this is offset by the damage that Russia’s Ukrainian war is doing to supply chains and agricultural exports.

Q: Collective action and collective responsibilities are two sides of the same coin which will help us to overcome present challenges. But, I wonder, how we can advocate for all countries to come together in a deeply polarized global society. Give us some food for thought, please.

A: Only when an acute crisis emerges, with the mechanisms for leading out of that crisis prove to be broken, will we see a global consensus for a new global framework toward cooperation emerge. The success of right-wing nationalist movements looking backward to conditions for economic reproduction that no longer exists is a huge barrier now; as those seeking softer ways forward look like naïve idealists, and those wanting to put up barriers to the outside world look like defenders of national honour.

The hope I can give you is this: we must see a renewal of impetus – the broad participation in – the ‘global social forum’ movement when it first began. A global generational mobilization, I think, which is pro-equality and pro-sustainability, critical of capitalism, and esp of financial globalization in the way its developed to now – feeding hyper inequality. I think it’s possible. But this bottom-up, across-the-globe aspect has to be there, I think.

Q: You are one of the signatories who called for Sri Lanka debt cancellation. Do you think it is a realistic approach where all stakeholders shall come to a common platform to execute your demand?

A: The stakeholders have diverse interests; they must be forced to the table. Sri Lanka’s situation has to be widely publicized; there are other countries too – less prominent globally, smaller – who have unpayability problems, but none with the tortured contemporary history that your country is now living. I think it has to be framed in terms of the ‘harm and loss’ debate that is now linking climate-change damage to legacies of colonialism and imperialism, not to mention the greater energy/non-renewable consumption of the elite global-North nations. This can be the basis of a common cause for debt forgiveness, I think. But the nations of the global South have to build their own way, to self-organize. Who will lead them? Not Modi, nor Jinping. Who is the Kwame Nkrumah or Julius Nyerere or Sekou Toure of today?

Q: Why do you think the case of Sri Lanka is essential to rethinking and reshaping the global economic order?

A: As answered earlier – the unique conjuncture of colonial-era imperialism, debt crisis, political instability and ethnic violence are a unique toxic mix, leading to unparalleled challenges.

Q: You have raised a vital point by alleging that International Financial Institutions of not living up to their responsibilities at a time when they are most urgently needed. Do we have an alternative?

A: There is no alternative now. We need a repurposed set of development banks, controlled by progressive forces willing to move past the capitalist system. This does not yet exist. The alternative can be imagined in a post-capitalist framework, in which nation-states are led by progressive leaders – enough of them – to force a global transfer mechanism for supporting the financing of the SDGs and climate sustainability on a world scale. I wish I had a different answer. For now, we must attempt to understand the scale of changes in systems of provision, supply chains, in localized production and consumption, required around the world.

The entities that have the capacity to support this are either too tied to capitalist priorities or they are not seeing the need to think holistically. It is not – it is never – too late. But we have to think beyond the limits that have prevented us from being strong enough to see the required planning framework clearly.

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