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Anura Kumara Dissanayake, leader of the National People's Power (NPP) party, gestures after he claimed the victory in the presidential election, in Colombo, Sri Lanka, September 22, 2024.
Sri Lankans reject the Old Guard
Sri Lankan election authorities announced Sunday that Anura Kumara Dissanayake, a Marxist, will become the island’s next president, in a rebuke of the political establishment. Outgoing president Ranil Wickremesinghe congratulated Dissanayake on Sunday and urged him to continue working toward Sri Lanka’s economic recovery after defaulting on its sovereign debts in 2022.
The election was widely seen as a referendum on the austerity measures that Wickresmesinghe imposed as part of a bailout deal with the International Monetary Fund. Although they brought down inflation and stabilized foreign exchange reserves, they also inflicted pain on ordinary Sri Lankans, who were swayed by Dissanayake’s campaign promises to renegotiate terms with the IMF. But Dissanayake will need to tread carefully: roughly $3 billion in IMF support is on the line.
He also must find a way to kickstart a moribund economy, and here’s where geopolitics come into play. In recent years Colombo has looked to China for major infrastructure investments, only to see revenues fall well short of expectations. Despite Sri Lanka losing ownership of a major Chinese-backed port, Dissanayake is expected to continue deepening ties with Beijing, even as the US backs its own Sri Lankan port project.Demonstrators gesture during a march against the government of Argentina’s President Javier Milei on St. Cajetan’s Day, the patron saint of the unemployed, in Buenos Aires, Argentina August 7, 2024.
Inflation inferno: Argentine unions turn up the heat
Argentine university workers plan a 72-hour strike to demand higher wages starting on Monday, Tuesday, and Wednesday. The government is offering an increase of 3% for August and 2% for September, which the unions have deemed unacceptable. Data for the first half of 2024 shows Argentinawith the highest cumulative inflation worldwide at 80% and a peak year-on-year inflation of 271.5%.
The private sector is also feeling the heat, as unions for the country’s soybean workers demand that processing companies approve wage hikes above the country’s inflation rate. Argentina produces a third of the world’s soybean meal and exports much of it to China, which provides a crucial source of Buenos Aires’ foreign reserves. Last Tuesday, Argentine workers began a strike against their employers that shut down processing plants and caused loading delaysfor 36 ships.
These strikes are at the heart of the political debate over President Javier Milei’s promises to improve Argentina’s flailing economy — with some tough love if necessary. Labor unions have conducted two general strikes, including one in May that saw 400 flights canceled and transport lines shut down as trash collectors, teachers, and health workers walked off the job, andbanks, businesses, and state agencies closed for the day.
In an exclusive GZERO interview with Eurasia Group President Ian Bremmer last week, Milei acknowledged that “Life is going to be harder for the average Argentinian citizen” but defended his radical approach to saving Argentina’s struggling economy. We’ll be watching whether this latest round of strikes changes his tune.The Graphic Truth: The age of Modi
India, now the fastest-growing major economy on the planet, is expected to become the world’s third-largest by 2027. But this wasn’t always the case. After independence in 1948, India’s closed markets and notoriously red-taped “License Raj” kept growth and foreign investment at bay until financial reforms were passed in 1991. From thereon, growth has accelerated. Despite a change of hands between the two major parties — the Congress and the BJP — financial and market reforms have continued consistently without any significant rollbacks. Today, PM Narendra Modi continues previously planned policies of privatization and digitization, with an emphasis on export incentives, to keep driving the Indian economy moving forward. The lesson? Consistency is key. We explore the big milestones and hiccups in the last 30 years of Indian economic growth.
Why (and where) Universal Basic Income is becoming more popular
Long before Andrew Yang launched his scrappy 2020 presidential campaign, Universal Basic Income (UBI), the idea that the government provides every adult citizen with a set amount of cash on a regular basis (no strings attached), has been growing in popularity. And it's not just "talk" at this point. A few countries like Kenya, Finland and even Iran have launched nationwide unconditional cash transfer programs, and many others have launched smaller-scale programs. 54% of Americans oppose a UBI program, according to a 2020 PEW study. Unsurprisingly, most Democrats support it and most Republicans oppose it…many saying a UBI would discourage people from looking for jobs. But worldwide, the coronavirus pandemic has only supercharged the UBI movement, as it further widened the chasm of global economic inequality.
Watch the episode of GZERO World with Ian Bremmer: Is modern society broken?