Remembering Gamani Corea:

by Leelananda De Silva

I refer to Amali Wedagedera’s article on Gamani Corea, which appears in the Midweek Review of The Island of Nov. 13. Gamani Corea was the most internationally renowned Sri Lankan economist. He played a leading role in the North-South affairs in the 1970s and early 1980s. However, the North -South negotiations were not successful.

In my view, Gamani’s more important role was in Sri Lanka, between 1956 and 1970, when he developed the machinery of economic planning in the country. He was Permanent Secretary to the Ministry of Planning and Economic Affairs in the period 1965 to 1970 when Dudley Senanayake was the Prime Minister. During that period.  Sri Lanka achieved an average growth rate of 5% of GDP. Gamani Corea is primarily responsible for this significant achievement.

Now, we come to North-South issues of the 1970s. UNCTAD proposed the Integrated Programme for Commodities (IPC). That was based on the premise that OPEC had obtained a better price for their oil which was also a primary commodity. OPEC increased its price from US$3.00 to US$12.00 a barrel, creating acute hardship to developing countries. But the point is, oil is not just another commodity.

OPEC countries were busy, headed by Algeria, to support other developing countries to improve their economic circumstances, through various proposals. At the Non-Aligned Summit, held in Algiers, in 1973, Algeria initiated and later followed-up at the United Nations in New York, a proposal for a New International Economic Order (NIEO). The IPC of UNCTAD and the NIEO of the United Nations in New York were both being discussed at the same time in a North-South context. My contention is that OPEC countries made use of the Third World to achieve their own ends.

The end result of the North-South negotiations was that nothing changed. What changed the prospects of the developing countries are some other factors outside the UN and North- South systems. In China, under Deng Xiaoping, the country moved towards a more market and export-oriented economy. We now see the results.

Then, in India, about the 1990s, there was a complete change of direction towards market-oriented policies. Curiously, those changes in India were initiated by Prime Minister, Manmohan Singh. A few years before, Manmohan Singh, as Secretary General of the South Commission, based in Geneva, had argued for the old type of Third World policies. We see the result of India’s policy changes today resulting in high economic growth rates and almost becoming a developed country.

I wish to refer to another related issue in this context. The UN in New York and Geneva through its International Development Strategies focused more on social, rather than economic development. At that time, Sri Lanka was held up as a model of development due to its advances in health and education indicators, and also for the advancement of women. In contrast, the Washington-based institutions, the IMF and the World Bank, focused more on economic growth. They pointed to the advances made in East Asia, by South Korea and Singapore (the Asian Tigers).

In Sri Lanka, the market-oriented economy came a bit too late and that was after 1977. However, communal tensions, civil war, massive corruption and nepotism and maladministration, at all levels, drastically hindered the market economy to perform efficiently as in places like Singapore. As Dr. Wedagedera’s article suggests, should we go back to build another Southern Order?

My view is that it is most unnecessary. Most of the countries in the world now follow market-oriented policies. China, which was never part of the South, is now a developed country. India is expanding fast. The East Asian countries are doing well. Rather than pursue Southern Order policies, Sri Lanka should pursue more pragmatic policies and link up with any and every expanding economic region in the world – North America, European Union and the UK, Australia, China, India, the Middle East and East Asia.

We have significant interests in some of these countries. We have large Sri Lankan settlements in them, which we can make use of. Even in a country like Switzerland, we have a significant Sri Lankan presence. We should focus more on pragmatic economic policies. The Third World is a slogan very popular in UN circles in New York and Geneva. It is not so popular in the IMF and World Bank in Washington. In my view, this new interest in BRICS is a kind of harping back on non-aligned and third world policies.

These observations of mine are based on my personal experiences of the 1970s and 1980s. I was Director of Economic Affairs in the Ministry of Planning and Economic Affairs between 1970 and 1977. I handled most matters related to UNCTAD. I attended the Non-Aligned Summit in 1973, held in Algiers, and UNCTAD-IV in Nairobi in 1974. I was Secretary of the Economic Committee of the Non-Aligned Summit held in Colombo in 1976. I was Executive Secretary of the Third World Forum in Geneva from 1978 to 1980, dealing largely with North South issues. I was a consultant to Gamani Corea, and to UNCTAD in Geneva between 1980 and 1984. I am probably one of the last surviving persons to have been involved in North South issues.

Let me end with a relevant extract from my memoirs – The Long Littleness of Life – which was published in 2016:

“I had a continuing concern in the management of North-South issues for the government. I handled most work relating to UNCTAD. At this time, Gamani Corea was Secretary General of UNCTAD and I had a direct link to him. UNCTAD was the leading UN agency on North South relationships, and it had put forward a major initiative in the form of the Integrated Programme for Commodities of which the central element was the establishment of a Common Fund for financing commodity stocks. Of the ten commodities included, two were tea and rubber and therefore Sri Lanka had an interest in this proposal.

“I attended several meetings on Common Fund issues in Geneva, and ultimately what was achieved was very little. The Common Fund was established, but in a highly truncated form. I had my doubts from the start on this Fund and said so privately. Being an initiative of Gamani Corea, we could not express our doubts loudly. However, in a briefing paper I wrote for Trocaire, the Irish development institute in Dublin in the early 1980s. I voiced my doubts and that was published.”

UNCTAD celebrating its 60th Anniversay

By Shiran Illanperuma

The NPP has scored a decisive victory in Sri Lanka’s first general election since defaulting on its external debt.

With 61.56 percent of the popular vote, the NPP won 159 seats in Parliament. This gave President Anura Kumara Dissanayake (AKD) a supermajority in parliament and the power to make constitutional amendments.

The NPP won a majority of the popular vote in 21 out of 22 electoral districts in the country. In the southern district of Hambantota, a traditionally left-wing Sinhala nationalist constituency that was the stronghold of the Rajapaksa family, the NPP secured 66.38 percent of the vote.

In the central Nuwara Eliya district, where many of the voters are Tamil-speaking workers in tea estates, the NPP secured a plurality of 41.57 percent of the vote. In the northern Jaffna district, a stronghold of conservative Tamil nationalist parties, the NPP secured a plurality, with 24.85 percent of the popular vote.

This is a significant turnaround for the NPP, as during the presidential election, AKD polled poorly in both the north and in the central tea plantation

regions.

These developments may indicate that traditional identity-based parties are undergoing a significant crisis of legitimacy, as economic grievances and bitterness toward the established political elite take center stage.

They also indicate the success of the NPP in driving a grassroots campaign that emphasised national unity, or in their words, “a national renaissance.”

Several parliamentarians who were a mainstay in electoral politics for decades lost their seats entirely. The disintegration of the two great poles of Sri Lankan electoral politics—the center-right United National Party (UNP) and its breakaway Samagi Jana Balawegaya (SJB), and the center-left Sri Lanka Freedom Party (SLFP) and its breakaway Sri Lanka Podujana Peramuna (SLPP)—continued.

Sajith Premadasa’s SJB, with just 17.66 percent of the vote, will sit in opposition. Namal Rajapaksa’s SLPP secured just 3.14 percent of the vote. Ranil Wickremesinghe’s new alliance, the New Democratic Front, secured just 4.49 percent of the vote.

Importantly, voter turnout declined from 79.46 percent in the September presidential election to 68.93 percent—the lowest turnout for an election since 2010. This likely played some role in boosting pro-incumbent bias as disenchanted voters of parties other than the NPP chose to stay at home.

Challenges Ahead

In the realm of economic policy, the new NPP government is sitting on the ticking time bomb that is Sri Lanka’s 17th IMF programme and its accompanying debt restructuring deal, sealed by AKD’s predecessor Ranil Wickremesinghe. One of AKD’s key campaign promises was to conduct an independent debt sustainability analysis and renegotiate this deal. This will be much easier said than done.

The debt restructuring deal negotiated by Wickremesinghe includes novel instruments such as “governance-linked bonds” which link interest rates to the government’s willingness to pass “anti-corruption” legislation—corruption being a dog whistle reserved for countries in the Global South that are insufficiently subordinated to the neoliberal paradigm.

The deal also includes “macro-linked bonds” which have no upside for Sri Lanka. According to these, higher GDP growth rates in the country will be met with higher interest payments to private bondholders, like BlackRock, who own the largest share of Sri Lanka’s debt.

Some analysts predict an economic meltdown starting in 2027 when Sri Lanka will have to begin repaying its external debt, likely running down its foreign currency reserves and forcing it to borrow again from international bond markets. In order to deliver on its campaign promise of system change, the NPP will have to put an end to this debt spiral and begin to industrialise the country.

In the realm of foreign policy, the NPP will have to navigate the recently elected Trump administration, which is likely to double down on the Indo-Pacific Strategy to contain China. Following the end of Sri Lanka’s Civil War in 2009, the U.S. has applied increasing pressure on the country, often leveraging human rights issues to push through a combination of economic and governance reforms.

In the past decade, the U.S. has attempted to push through economic agreements like the Millennium Challenge Compact which contained provisions to privatise land. It has also promoted military agreements like the Status of Forces Agreement and the Acquisition and Cross-Servicing Agreement, both of which aimed to improve interoperability between the U.S. and Sri Lankan military in order to draw the latter into the United States’ New Cold War on China.

Should it choose to take on these tasks, the NPP will have to tap into the insurgent multipolar movement in the Global South in order to build a united front against debt and imperialism. They will need to rekindle the Bandung Spirit and restore Sri Lanka’s leading position in the Non-Aligned Movement. Time will tell if the NPP is up to this task.

Internal Contradictions

A decisive factor in the next four years will be how the internal balance of forces plays out within the NPP coalition, where the biggest party is the Janatha Vimukthi Peramuna (JVP). Many of the NPP’s new parliamentarians are young and inexperienced and have few links with the old JVP. The latter was modeled on a Marxist-Leninist cadre-based party.

The ideological makeup of the NPP is therefore eclectic, including many middle-class professionals, academics, artistes, and political activists. Some have a markedly liberal cosmopolitan character that is in stark contrast to the old JVP’s base of mainly rural cadres known for their militancy and patriotism. Managing this dialectic of old and new will be another challenge for AKD.

Meanwhile, the shock of an electoral wipe may force the right-wing forces, namely the UNP and SJB, to regroup. They will take every opportunity to evoke a red scare and paint even the most moderate reform as a communist takeover. They will use their links with imperialists in the West to do this.

Finally, there is the traditional nationalist camp which includes the Rajapaksas, various splinters of the Old Left, and Sinhala nationalists. It is clear that it is primarily the disenchanted voters of this bloc that form the bedrock of support for the NPP. Therefore, there will likely be much pressure on the NPP to live up to the populist and patriotic traditions of southern Sri Lanka.

(Shiran Illanperuma is a Sri Lankan political economist and writer. He is a researcher and editor at Tricontinental: Institute for Social Research. He holds an MSc in economic policy from SOAS University of London. His research interests include industrial policy and structural transformation.)(This article was produced by Globetrotter.)

 by Jehan Perera

The political avalanche that swept the electoral landscape due to the demand for change was unprecedented.  In some electorates the majority achieved by the NPP exceeded 70 percent. The overall majority in the country was 61 percent.  The avalanche swept aside many who had earned names for themselves on account of their long years of commitment to influence policies in the national interest. In their place will be a host of much younger persons who will come in with their ideals and hopes for positive change but with little experience of governance and even administration.  The government is aware of this issue and has arranged for a three-day workshop on parliamentary procedures, session activities and the functioning of committees.

With 159 seats the NPP has won more than a 2/3 majority.  This is not the first time that a government has enjoyed such a huge majority.  The last time was as recent as 2019 when the SLPP under the leadership of President Gotabaya Rajapaksa obtained close to a 2/3 majority which it speedily converted into a 2/3 majority by persuading several opposition members to cross over and be rewarded accordingly.  A 2/3 majority is not a panacea as was experienced shortly after 2019 by disastrous decisions including constitutional amendments from which the country is yet to recover. The huge majority meant that the government leaders felt they could do anything and get away with it. This led to crooked deals, to murder and to impunity.

Prior to that in 1970 and 1977 there were 2/3 majorities in parliament won by the SLFP and UNP respectively, though under the first-past-the-post system which made it possible to win a huge number of seats even with less than 40 percent of the electorate voting in favour of the ruling party. Here, too, there were crooked deals, murder and impunity.  This time it has got to be different. The government needs to seize this moment of unprecedented goodwill to address the country’s long-standing problems. The people have voted with great expectations and if the results are not seen soon then cynicism and vested interests will make their comeback.

SIMILAR OUTCOMES

Significantly, the widespread support for the NPP, cutting across geographical, ethnic, and religious divides, represents a remarkable step toward national unity. Even regions historically disillusioned with central governance have placed their trust in the president’s leadership. This inclusivity, evidenced by the support of ethnic and religious minorities, is an encouraging sign that the NPP has succeeded in fostering a national perspective that transcends traditional divisions. However, this trust brings with it a significant responsibility.

The electoral outcome in the north and east of the country in which the ethnic and religious minorities predominate is a first-time occurrence.  In these parts of the country, the electorate had voted for parties that represent particular ethnic and religious interests for many decades, during which the ethnic conflict and their sense of neglect grew exponentially.  Likewise, in the rest of the country, the ethnic and religious majority voted for political parties that represented their own particular ethnic and religious interests.

As a result, the electoral map in the aftermath of elections invariably took on a two-tone complexion, with the north and east being in one colour and the rest of the country being in another.  Even 15 years after the end of the three-decade long war for separation, the electoral map resembled the maps produced by the LTTE which spearheaded the military campaign.  For the first time the map is now of a uniform colour with the exception of a single district, the other 24 being of one colour.

What has been noteworthy at these elections has been the similarity of outcomes in the north and east and the rest of the country even though some of the most pressing problems of the people in the north and east was not a part of the election campaign of the major political parties.  All parts of the country share the problems of economic recovery and have a common interest in ensuring that corruption is minimised and the poor are protected rather than being subjected to economic extraction.  But the north and east has a special interest in issues of devolution of power, demilitarisation and return of land and resolving the problems of missing persons and long-term prisoners from the days of the armed conflict. And though less discussed, they also want the development of the two provinces which are below the average standard in the country.

REJECTING PAST

The massive vote for the NPP is as much an expression of trust and positive expectations from the government as it is a rejection of the other political parties that have governed the country in the past and brought it to the bottom in 2022.  The stabilisation of the free fall by former President Ranil Wickremesinghe from May 2022 until his defeat at the presidential election of November 2024 did not receive the appreciation his supporters anticipated.  This was because a section of the population was continuing to prosper through relationships with those in positions of power while the main burden of the economic collapse was thrust on the majority of people.  It was also due to the former president’s failure to seek the causes of the economic collapse and deal with the associated corruption, even though that was not the only cause.

The fact that the main political parties that had dominated national politics continued to give nominations to those widely believed to be corrupt was one of the main reasons for the flight of voters away from those political parties.  Indeed, some of these tarnished politicians managed to win seats in parliament probably due to the patronage they had extended to the electorates they nursed.  However, the party leadership needs to keep in mind that the consequence of such nominations was to alienate a much larger segment of the electorate and thereby serve to erode their voter banks.

In the north and east, the failure of the political leadership of the political parties that represented minority interests to show any significant results over the past decades was a factor that alienated the electorate away from them.  It is largely these negative factors that have caused the minority voters to move away from continuing to support them. The government needs to seize the opportunity that its landslide victory provides to engage in the necessary discussions, negotiations and accommodations to bring about a political, and long lasting constitutional, solution to the ethnic conflict.  Such a solution would require the 2/3 majority that the NPP has obtained to amend the constitution and to entrench the political solution in law.

QUICK CHANGE

However, unlike the people in the rest of the country who may be willing to give the new government more time to reform the system, those in the north and east who have been let down time and again by the promises of successive governments, may not be willing to wait.  There is much that can and should be done without needing constitutional amendment but by simply implementing existing laws, to resolve problems regarding land, memorialization use of the Tamil language, appointment of Tamil officers as heads of units and department, and so on. The government has an incentive to act speedily in this regard to hold on to the support that they have received from the ethnic and religious minorities.  It will be easier to show speedy results in dealing with ethnic and religious grievances than in reviving the economy, given the constraints the national economy is under.

Due to the prevalent economic conditions, which are at “knife’s edge” if the IMF is to be believed, the new government will be hard pressed to show quick fixes, just as the previous government under President Wickremesinghe also could not show quick fixes.  The fiscal realities give the government little room to manoeuver on the economy.  However, in the case of resolving the ethnic conflict there is no reason for the government to delay. Unlike in the case of economic recovery for which there are no short-term panaceas, the solution to the ethnic conflict is one that can be resolved soon as it has been discussed, negotiated and publicised on several occasions, but not implemented due to the failure of leadership.

A solution to the ethnic problem will be welcomed not only by the ethnic and religious minorities within the country but also by those living outside in the diaspora and by the international community, most notably India which has always been promoting it as good for Sri Lanka and good for India.  A successful resolution of this problem will gain international recognition in a world that is looking for success stories and can induce foreign investors to come in due to the assurance of peace. The NPP government has the opportunity to set a precedent by engaging with all stakeholders, including civil society and opposition parties, to craft a sustainable political solution that ensures lasting peace and reconciliation.  It cannot be overemphasised that achieving a sustainable political solution that will last the test of time will require the participation and consent of all communities and collaboration with opposition parties.