Main conditions for progressive alternative

Sri Lanka is experiencing its worst economic crisis since Independence. This crisis has spilled over into the political sphere, causing splinters among the major political parties and creating a major leadership vacuum. Today, we have an unelected President enacting policies imposed by the IMF. Despite popular anger at the deteriorating conditions in the country, no single party is likely to win a majority in any upcoming election. Therefore, political realignments and coalitions are likely in the near future.

However, as long as such coalitions are formed based on desperate and short-term goals to win elections, they shall not be able to find a solution to any of the pressing issues brought about by the current crisis. In such unusual times, politics as usual cannot and will not work. In previous economic crises, politicians have sought to deflect from deteriorating economic conditions by stoking ethnic conflict, creating even more instability in the process. Judging by the level of discourse in the mainstream media, among politicians and even among our academics, it is clear that there is still a lack of understanding about the root causes of the current economic crisis and the way forward.

Any future coalition that claims to be some combination of progressive, patriotic, or left of centre, must come to terms with the root causes of Sri Lanka’s economic crisis, as well as the opportunities presented in the geopolitical movement. For the CPSL, the following are two principal positions necessary to consider forming a common minimum program:

1.    Anti-neoliberal, Pro-industrialization

A progressive coalition that seeks to govern Sri Lanka must first understand our current economic situation. The crisis we are in is not simply due to corruption, or a so-called “Chinese debt trap”, or even “printing money”. The root cause is that the economic structure of Sri Lanka has scarcely changed since the days of colonialism, when Sri Lanka was a plantation economy and a playground for foreigners. Unlike the economies of East Asia, we have failed to industrialize, leaving us technologically backward. Lack of technological dynamism slows and inhibits our ability to produce. We import more than we export because we do not produce anything of high value. The resulting trade deficit leaves us extremely vulnerable to periods of global economic crisis, such as the COVID-19 pandemic or rising prices of food and energy. The only way forward to provide jobs, income, stability, and a better quality of life for all is through industrialization.

The neoliberal economic path that various leaders have tried to implement since 1977 is not conducive to industrialisation and a production-based economy. Therefore, the first condition for a progressive coalition is to be against neoliberalism and for industrialisation. It should be clear from the development history of the capitalist West (UK, Germany, France, USA, and Japan) and the socialist East (the former USSR, China, and Vietnam) that industrial development is a crucial element for overall poverty alleviation regardless of the specific economic system used to achieve this goal.

Sri Lanka’s experiments with industrial development were short-lived and aborted too recklessly in 1977. While some of Sri Lanka’s leaders and think tanks blindly repeat the mantras of neoliberalism, nearly all major economies have shifted towards a more interventionist strategy to steer their economies during this crisis. Policies of industrialidation and re-industrialisation have come to dominate discussion in the supposedly free-trade loving US and EU. Therefore, industrialisation and industrial policy have to be at the heart of all policies designed to help the country recover from this crisis, and to prevent future crises.

2.    Non-Aligned and Multipolar

Developing countries across Asia, Africa and Latin America, long starved of productive investment and throttled by Western monopoly capital, are slowly turning East. “Dedollarisation” and “multipolarity” are now words not just uttered by radical academics but ones found in reports from big banks such as Morgan Stanley. The world is changing, and any progressive coalition that seeks to rule Sri Lanka must reckon with these changes, and position the country in the most favourable position possible.

Historically, Sri Lanka was an outsized player in the Non-Aligned Movement, garnering support and admiration from countries across the decolonising world. Unfortunately, recent developments have reduced Sri Lanka into the position of a mere geopolitical pawn. The Multipolar moment is, in a way, a successor to and a realization of the Non-Aligned Movement. It opens the possibility for an alternative developmental path and a way to conduct business on a more equal footing. The African Union is already negotiating their own common settlement currency. West Asia is banding together for trade and other purposes. The Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, was signed with 15 countries in our region, making it the world’s largest trade agreement. However, our political leadership has so-far failed to use these opportunities to advance the interests of Sri Lankan workers.

Towards a new independence struggle, and a new economic policy

In many ways Sri Lanka is still a colony whose economy has been built for the benefit of a few. The basic structure of the plantation economy that was imposed at great cost to workers and farmers continues to sap the vitality of the nation. Our civil war may have ended in 2009, but Sri Lanka has been enthralled in a much longer economic war for over 500 years, since colonialism first arrived in this country. The economic war is fundamentally a war for technology, markets, and profit. The struggle for industrialisation should therefore rally a broad coalition of forces, and should be seen as a continuation of the national liberation struggle.

The path of industrialisation is not necessarily an easy or rosy one. It is one that requires steadfast leadership and resolve, and most importantly, the support and confidence of the people. There will likely be many obstacles along the way, from lack of capital to conspiracies and machination by Western monopoly capital. While the task may have seemed impossible during the unipolar moment of the Washington consensus, the emerging multipolar world order provides countries like Sri Lanka with much more flexibility. The money, technology, and knowhow we seek are now more objectively to be found in the East rather than the West. Therefore, Sri Lanka’s industrial, trade, finance and foreign policies all are inextricably linked. The country’s sovereign debt crisis, and the global economic crisis have made it so.

Communist Party of Sri Lanka (Education Department)