World credit crunch, our credit scams and our future

by Sarath WIJESINGHE

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World is in economic crisis. Britain is the most affected. Richest nations are shattered and the most hit are the USA, Britain and the European Union/West. For some other unknown reason China, India, Australia, Canada, South Africa and some other countries have still not suffered the ripple effect of world economic crisis. I think it is just a matter of time as everything is global today.

No nation or a State could live in isolation. They have realised the danger and immediate collective steps are being taken to bail out the brethren in danger. When Bush said ‘help me or perish together’, everybody understood the message and took united steps to the “World Push” they say for the recovery. Bush and Japan too took prompt steps by injecting funds and taking preventive measures to recover stock market and banks.

Henry Paulser the Treasury Secretary of the United States initiated U.S. Push by injecting 250 billion US dollars and 25 billion Sterling Pounds each as shares to authentic banks. U.S.A. Banks have collapsed and the property market and market too have dropped to the bottom in the west.

“Fat cat companies”

IMF warns that market could collapse by a further 20 per cent. Analysts say they do not understand the cause of the crisis. Some say injection of funds to bail out too may be disastrous and economy should recover by itself after a real breakdown and a lull. But the finger is aimed by the Prime Minister of the United Kingdom at “Fat Cat International Companies” and directors which he alleges have milked the funds out on a large scale by way of profits and extra payments in billions. In the modern “Global Village” everything is interconnected and interlinked. Nations and bodies invest in the world policeman and richest nation in the planet. Now the leader is collapsed with the colleagues.

Employees lose jobs

There is a question whether it is the end of the American era. Iceland is bankrupt and the Prime Minister is crying in public. USSR is offering help to Iceland, a fully fledged NATO member for which Action USA has reservations. But NATO is pulling Kosovo to their group and there is a lot of international politics playing around. In the United Kingdom hospitals and universities have invested 100 million Sterling Pounds in Iceland. Iceland invested it in USA which is now in trouble. Britain is demanding a guarantee to return the funds and this has aggravated the British economy further. One thing is certain - there is no easy and quick solution to this mismanagement which some say is retribution and natural punishment for sins committed to the people in other parts of the globe. In Britain food prices have doubled.

Daily 500 employees are losing jobs and house market which is the barometer of the economy is fast sliding down. Brown blames Fat Cats and Banks for mismanagement.

But it is Brown who controlled the management of the UK economy under the Labour regime over a decade. In UK and West, banks lavishly offered loans on properties based on exaggerated valuations so that the loans are over and above the real values. In the USA loans were given to fictitious properties. Some say those who controlled the management of the UK economy under the Labour over a decade is directly responsible, and if things have taken place under his sleeves he too must take the responsibility for the disaster. So the scams are not confined to Sri Lanka which some say is the 94th in the list of most corrupt. It spreads worldwide.

Bush managed to approve the billion dollar bail out, from the Senate. Presidential contest was kept aside for a moment by all parties in order to fight the unprecedental economic crisis faced by the American people and the world over. All rallied round Bush for the collective bail out which is exemplary. Politicians forgot bitter politics for the sake of the country and the crisis situation. There is no guarantee of an immediate solution and the message is it will take a long time to recover. It is the most powerful and richest country and the self appointed world policeman who has bitter enemies and a strong opposition worldwide. Afghan and Iraq wars have made them still unpopular and the credibility is diminishing gradually.

Sakwithi model scams

“Sakwithi” has swindled a group of greedy innocent investors and large scale crooks and money launders and bolted away with over 1000 millions of rupees. This is not the first and last of scams of this nature. Sakwithi was swindling the funds of indicant investors in ‘open broad daylight’ with no resistance from the Tax, Vat, Police, Central Bank or any institution.

Press was very kind to him until he bolted as he lavishly invested in advertisements to bait more and more prey.

He has been a conman warned previously who was running the business for over four years with the patronage of politicians, police officers and the underworld. I feel sorry for the innocent investors and angry that they are so foolish to believe the conman who is also a gambler who gambled with their money and lives.

It is a good and difficult lesson to all, including the politicians who are shortsighted. Unfortunately there is a stage today where money can do anything and money always speaks. Sakwithi got away with money swindled from the ordinary man, with the help of the same funds. He will be definitely found, but what is the use- by that time he may have exhausted all the money and will claim bankrupt.

There will be nothing in him to recover as he has planned in such a way from the inception of the business for a run.

He has bought nothing in his name. There will be leading “Fat Cat “lawyers to defend him to the tooth and nail.

Internet is being used by the people in day to day life worldwide. In Sri Lanka E-Com has intruded our life and the scams via the net are rampant.

There are thousands of victims in Sri Lanka who are victims of bogus lotteries wins offered via net.

Not only Sri Lankans, their friends and relations abroad are joint victims of this robbery. Sakwithi made use of the desire of the common man to own a property to attract prey.

There is a large number of Sakwithis, today - mainly in property trade offering same facilities via printed and electronic media in large and small scale of similar scams. Pyramid scheme is still in practice to some scale.

In the United Kingdom long years ago I was approached by a large number inviting me to invest money in Pyramids. I am used to a simple life happy with basics and did not get into the list of victims. I was so sorry when I heard this cancer has spread to Sri Lanka too. The irony is with all warring and bitter experiences, our people tend to believe scam leaders who pause as saints using the names of leading personalities and politicians.

It is unfortunate that there has been no early warning system in Sri Lanka to warn citizens of scams. One institution to take this task is the Consumer Affairs Authority which has power over potential and future consumers. It is time the Central Bank, CAA and security forces even at this late stage adopt an “Early Warning” scheme to warn the prospective victims of scams which are still in operation countrywide in various ways.

The scams are in property trade, insurance, pyramids, casino connected games, Emails and IT related scams, and of course deals and contracts of governmental, statutory and private and public companies. Sakwithi started as an English Teacher and misled the parents by offering employments to investors. When the money was not enough for the lifestyle and gambling he increased the borrowings and advertising campaign.

He threw money to prevent from being detected and caught and those who crossed the path were “handled” or got round. I took Sakwithi as a model at least to learn from mistakes in the future as this is a major blow on the common man.

It is time we learn from mistakes of the world leaders and ourselves in the past. We should be happy that we did not get into the rot, but do not think we are completely free of ripple and side effects as we always depend on foreign aid. It is time for us to put a stop to foreign aid. In the UK in a time like this people suffer most as they are dependent on multinational companies and food chains. In our country villagers are those who are the luckiest.

They have rice, vegetables, jak and things to eat without being starved. Electricity or gas is not essential. Village way of life based on self sufficiency should be promoted, instead of being dependent. It is sad to note in the world 50 per cent of the population tend to be in the urban environment. We must try to be self sufficient in the village level by taking modern necessities to the village. Telecommunication and E-Com introduction to the village will save on transport and increase efficiency.

Best vehicle to promote this concept is to improve the existing computer centres set up by the Presidential secretariat already in force in 600 outlets known as “Nanasalas” which are well equipped computer centres. The banking system too should to be monitored and regularised.

English education should be improved. Banking regulatory powers should be strengthened. In the circumstances there is a good word for our banks being cautious, despite political favouritism to some.

Corruption, bribery and inefficiency are the main enemies of the nation. This writer left the lucrative practice and served in some capacity in a statuary body to witness inefficiency to the last word. President has set an example by working all the time for the people, but not many others.

He needs a good team to help to manage the economy and for good governance.

The “panacea” for our ailing economy and good governance is strict implementation of Mahinda Chintana based on self-help and self sufficiency.

The writer is a senior solicitor, England and Wales.