Debt and Shakespeare | Sunday Observer

Debt and Shakespeare

15 January, 2023

Shylock asked for his pound of flesh, but didn’t bargain for Portia. He was told he could have his pound of flesh but woe unto him if he drips one drop of Antonio’s blood.

Good thing that surgical procedures and local anaesthesia and so on were not a reality at that time. Shakespeare was able to realistically make a fictional portrayal of a money lender who didn’t have surgical procedures at his disposal to extract a pound of flesh without making the patient bleed.

The private creditors are unwilling it is said, to enter into debt restructuring agreements with Sri Lanka. The British Guardian said that this may mean that the debt-restructuring plans may not go ahead, which means there would be further problems getting Sri Lanka’s economy back on track after last year’s meltdown.

To call the private creditors Shylocks would be unconscionable. They bought high-risk instruments so that Sri Lanka would have the funds when it wanted.

Now when paying back is difficult can anybody say these Shylocks cannot be appeased? That they are keeping the Sri Lankan citizenry at ransom — causing more than one tear to be shed from among the long suffering masses, to extract their ‘pound of flesh?’.


It wouldn’t do to be so argumentative. They are private creditors and not Shylocks. But yet Shylock was a private creditor too, but never mind that. But yet, also, they entered into high-risk arrangements. The Guardian article points that out too.

If it was high-risk shouldn’t they shoulder part of that risk burden and try to write off some of that debt in a debt restructuring arrangement? Not doing that could make them Shylocks?

The problem is that this is all very double-edged. The private creditor cannot be called names because we depended on private credit. Often it was at a crucial time. However, the country has had to default now and those who took high risks are saying because we took high risks we need to be paid.

The experts are saying because you took high risks you should be prepared to enter into a restructuring plan because that’s the nature of high-risk; it works sometimes, but sometimes it does not.

But let’s look at the ‘drop of blood’ aspect. It’s certainly not a pound of flesh that the creditors are asking for. They want their money back with interest. Pound for pound you could say, if the transaction was done in sterling.

If Sri Lankans pay — if they can — there could be a crisis that goes onto becoming a further calamity. The poor man here would have to shoulder much of that burden, with his blood, sweat and tears, but as if that wasn’t enough, there would also be a suspension of democracy for instance.

Already, the merits of holding a local Government election when the country is buried in debt is being argued about. It’s a terribly difficult dilemma, that. Elections have to be held, and that’s the nature of democracy, and democracy was at the root of the struggle that the people of the country launched last year.

But where is the money for polls when we don’t have cash to import bare essentials? On the other hand defaulting on debt is one thing but ‘defaulting’ on elections does all kinds of harm to the social fabric. Let the higher authorities and other elites in society weigh things on the balance and decide if it’s feasible to hold local Government elections or not. But at least arguing about holding democracy in suspension is not as bad as punching a hole in the framework and letting democracy spill through, as the Opposition is doing in Brazil.

What legitimacy does the Opposition in Brazil — in the form of diehard Bolsanaro supporters — have to overrun public spaces, including the Supreme Court building soon after an election has been concluded, just because their candidate lost?

Not just that, the gentleman they are supporting didn’t do anything to justify this kind of insurgency on his behalf. Bolsanaro laid the country waste and laid the Amazon waste in the bargain. The economy was in shambles. Tens of thousands died because he mishandled the pandemic and called it a little flu.

Unemployment soared. The poorest of the poor suffered. In these circumstances there are people who say it’s not democracy, we want our leader back?

It’s good that the U.S, Canada and major powers and other democracies all over the world including in Asia along with civil society activists and defenders of democracy are united as far as the Brazilian coup is concerned. The assault on democracy in Brazil is rotten.

It’s a fiasco that cannot even remotely seek a justification. Not so the uprisings that took place in Sri Lanka last year. Those were genuine struggles by a beleaguered people, for the most part. Now those people who struggled here and won a victory of sorts at least, are being told that they still may have to pay up. Private creditors are not relenting.

It’s not as if these are issues on which a deal could be struck. We cannot say ‘we will hold local Government elections but only if you restructure our debt because that’s the only way we could afford it.’

Private creditors are not bothered about democracy in the country, and you could call that Shylock-like as much as you like but that’s the way it is. Democracy and good governance may be cited when negotiating with nations that have lent to us, but never with private creditors because they don’t care if tears are spilled and democracy is in tatters.

Why should they because its us that got into these high-risk credit arrangements. But high-risk being the operative word, it is hoped that they would relent. Without our debt being comprehensively restructured there would not be an infusion of IMF funds because the lending agency cannot possibly do it with our debt still ballooning out of proportion.

Debt-justice demands that the people’s plight be looked into, particularly when the people didn’t have any idea of how dangerous the debt is that their Governments got them into.

In any event, poor creditors don’t give loans. By some measure even the smallest creditor is in a position to write off some proportion of the debt we have incurred offering high-risk bonds. But still under no circumstances can we call them Shylocks.

It’s our problem because we have walked into this minefield knowing fully well that it was high-risk terrain for us too. Fortunately for us expert economists — hundreds of them — have appealed to Sri Lanka’s private creditors to relent. An organisation called Debt Justice is involved.

Asking that debt be written off is an act of supplication too, and it certainly isn’t fun. The effects of being debt-ridden are felt mostly by the people of the country that never voted for debt or asked that huge amounts of debt be incurred. But they have to pay ever rising taxes and hope that the creditors wouldn’t be too Shylock like.

Good tidings

Perhaps one or two good tidings spring from all of this. Other countries would learn lessons from this situation and avoid future problems with creditors. More importantly for us here in Sri Lanka, we’d learn that it’s easy to burn our fingers. So far there is no plan however to ensure that the masses are kept informed about excessive debt.

Given that the people would have to bear the brunt of all this, it’s what they should be agitating for — that there would be more debt accountability.

The people can’t make friends with the creditors or negotiate with them. They are in the place of their own, and someone may say have been told their place, which is to shut up and put up?

That’s where real debt-justice would begin. That the people would have a say not just in paying up debt but in matters of taking on future debt too. It can’t be left to their ‘representatives.’