By Jehan Perera
The EU parliament’s resolution to withdraw its GSP-Plus import duty concession to Sri Lanka comes as a body blow to the country at a time when it is economically on the brink. The EU sanction has come much faster than anticipated, if it was anticipated at all. Government spokespersons have tried to make the case that the EU parliament’s resolution is an unjust one. According to them, GSP-Plus is about economics and should not involve human rights. The problem is that the purpose of GSP-Plus is very different and the government leaders who got it wrong in 2010 when Sri Lanka lost it last, have got it wrong again. The EU has explained GSP-Plus as an incentive and a reward to those countries that are committed to improving the human rights situation within their territories. The support that is given to a country’s development is an outcome of respecting and promoting human rights.
The disregard of the purpose of the EU’s GSP-Plus duty concession goes back to the last election. Nationalism in the country reached a peak during the presidential elections of 2019. The winning election campaign emphasised that Sri Lanka would not any longer bow its head to the dictates of those in the international community who wished to impose their will upon Sri Lanka. They said that national security and national security came first, even though the ethnic and religious minorities feared that their rights would be trampled upon. A large majority of the Sri Lankan electorate endorsed this view. The new government leadership with President Gotabaya Rajapaksa at the helm, were impelled to give expression to a Sri Lankan nationalism that was prepared to take on those in the international community which was depicted as seeking to dictate terms to Sri Lanka.
However, the price of a confrontational approach is likely to be very high. If the EU withdraws GSP-Plus from Sri Lanka, it will mean that Sri Lankan exports to the 27 countries that comprise the EU will be taxed at regular rates at the point of entry into the EU. This will drive up the prices of Sri Lankan exports in the EU markets and reduce the demand for Sri Lankan goods. The last time this happened in 2010 the price that Sri Lanka had to pay was very heavy. Many factories and commercial enterprises had to close down and thousands of workers lost their employment. Sri Lanka also lost a significant amount of foreign exchange that could have helped to balance its payments such as the repayment of loans. Even after the government change of 2015, and its pledges to follow the EU guidelines on human rights, it took a further two years until GSP-Plus was restored.
The EU resolution has set out several conditions that need to be met by Sri Lanka if the GSP-Plus concession is to be kept. Many of the conditions imposed follow on the conditions set out in the resolution of the UN Human Rights Council in Geneva in March this year. The EU resolution of June 10 expresses “deep concern over Sri Lanka’s alarming path towards the recurrence of grave human rights violations”, which is an observation earlier made by the UNHRC and makes specific reference to the use of the Prevention of Terrorism Act (PTA) pointing to the arrests of lawyer Hejaaz Hizbullah and poet Ahnaf Jazeem, among others, who are in detention for over a year on charges that they had links to the Easter Sunday bombings. These two detentions have been denounced by national and international human rights organisations but to no avail.
The resolution also notes the continuing discrimination against and violence towards religious and ethnic minorities. At the UNHRC in Geneva, the government denied this and Foreign Minister Dinesh Gunawardena was eloquent in affirming with heart-stirring words that “No one has the well-being of the multi-ethnic, multi-lingual, multi-religious and multicultural people of Sri Lanka, closer to their heart, than the Government of Sri Lanka. It is this motivation that guides our commitment and resolve to move towards comprehensive reconciliation and an era of stable peace and prosperity for our people. It is therefore our strong conviction that the aforementioned actions within the framework of Sri Lanka’s domestic priorities and policies, are not only realistic but also deliverable.” The problem is that this is not the reality on the ground.
The reality on the ground is that wounds of the country’s 30-year-war have not healed. The attempts to promote healing have lacked commitment. Thousands of acres of land in the North and East still continue to be under military control. This is land that was once lived on and cultivated by Tamil people. Today it is being used by the military, some of it being cultivated, some it used for recreation purposes including hotels, and some of it for security purposes. Thousands of families still await news of the whereabouts of their loved ones despite an Office on Missing Persons which has yet to give a ruling on even a single missing person although four years have elapsed since it was set up. There are also still a few hundred persons in detention for a large number of years, some exceeding a decade in prison without trial.
As seen above, the EU resolution makes particular mention about replacing the Prevention of Terrorism Act with a national security law that will conform to international standards. In addition to all those incarcerated in the aftermath of the end of the war 12 years ago, there are a large number in custody in the aftermath of the Easter Sunday bombings. Several of the long term prisoners arrested under the PTA and held without charge or being produced before courts are said to be members of the LTTE. After the Easter bombing another large number of people have been held in custody without trial or charges against them including the former head of the Jamaat e-Islam which is a benevolent social service organization devoted to the social upliftment of the less privileged sections of society. Those who know Rasheed Hajjul Akbar say this is a travesty of justice. Unless corrected, these injustices will sear into the people’s consciousness and create long lasting enmities.
One of worst features of the PTA is that it makes it impossible to bail out detainees if the government is opposed to granting them bail. The detainees can be held indefinitely in custody. The danger of giving this power to the government can be seen in the case of the arrest and detention of police crime buster Shani Abeysekera who was held in custody for over a year. During this time he contracted Covid and suffered a heart attack. In a landmark case the Appeal Court granted him bail. In the course of its judgment the court said “The allegations against the suspect Shani Abeysekara are a result of falsification and embellishment and a creature of after-thought.” This case highlights the importance of revising the provision in the PTA that can delay detainees from being brought before a judge and being bailed out regardless of the approval of the government.
Bringing the PTA into conformity with international standards by amending or repealing it would be a confidence building measure. The accompanying measures such as releasing all those held without charge or trial for many years would increase the trust level that the government is serious in its commitment to the protection of human rights and induce the EU to hold back on its plans to withdraw GSP-Plus from Sri Lanka. This could also pave the way for the government to engage in a successful dialogue with the TNA when it takes place hopefully, soon, despite last minute postponement of planned talks last week. Underlying the EU resolution and the UNHRC resolution that preceded it is the issue of the long unresolved ethnic conflict. President Gotabaya Rajapaksa and former president and present Prime Minister Mahinda Rajapaksa who took leadership in ending the 30-year-war have an opportunity to perform another historic task. This is to seal a long lasting settlement of the ethnic conflict that has eluded Sri Lanka for the past 60 years and restore the lost prosperity and hope we had at independence.
Prospects for NPP/JVP at the next election
by Kumar David
Several months ago I brought to my reader’s attention a straw-poll that I had conducted among my friends on the left of the political spectrum, university colleagues and liberal intellectuals on two matters; (i) their own voting intentions, (ii) what they perceived were the electoral prospects of the NPP/JVP. The replies were consistent. Most said that they would vote for the NPP/JVP or that they were mulling over it. Almost all declared that would not seriously consider Sajith or Ranil led outfits and that anything linked to the Rajapaksa-Porotuwa garbage heap was out of the question. Regarding whether the NPP/JVP could win an election most people in my straw-poll had reservations. While they were themselves satisfied that the JVP would never again repeat the madness of 1971 and 1989-91 they reckoned that the electorate at large was still anxious (minissu thaama bayai). I am grateful to all who wrote to me (actually everyone I contacted replied) for their frankness and careful evaluation of ground realities.
The National Peoples Power (NPP), an alliance of about 28 political parties, trade unions and grass-roots organisations conducted a public seminar on January 24, 2023, which was jam packed, not enough seating room. The keynote speaker was Anura Kumara Dissanayake (Anura hereafter) who was very clever in how he handled the seminar by declaring right at the start “People are concerned about our economic policies; they want to know how we will handle the economy”. Now indeed this is true, but it also let him off the hook about the insurrectionary folly of 1971 and 1989-91 and allowed him to skirt the concerns of the ethnic and religious minorities. I will touch on all three issues, economy, minorities and political adventurism in this short article while giving priority to the economic discussion in the light of the enormous success of the January 24 Seminar/Symposium/Consultation.
Yes, there is considerable interest in the JVP’s economic programme since it has never been explicitly spelt out in the past except as simple anti-imperialist and anti-neoliberal slogans. Anura, as expected focussed on the great hardships the people were suffering because of the ongoing economic crisis, the unbearable increase in prices and the breakdown in public services – hospitals for example are short of medicines, dressings for wounds and beds.
I will begin by picking up six crucial economic issues that arose from the January 24 seminar without stating whether the questions were or were not adequately addressed by the panellists on the stage. It is the right answer to the questions that matters most not whether the panellists got it right or are still working towards adequate solutions. What’s the rush, the elections aren’t tomorrow?
Will an NPP/JVP government be friendly to private-sector businesses?
How will Small and Medium Enterprise (SME) be encouraged and financed?
What is the attitude of the NPP/JVP to loss making state enterprises?
How will foreign investment be encouraged?
What is the is the right approach to Free Trade Agreements with other countries?
How will digitisation of production and of enterprises be encouraged?
I will now proceed to comment on these seven economic issues without indicating whether my comments are the same or different from what the panel members said. There is lots of time more to the next election; we are in the midst of a discussion in progress. Let’s go step by step. Yes, the NPP/JVP should aim to consolidate a mixed economy and therefore the role of the private sector must the recognised. As will become clear when I answer questions lower down what has to be consolidated is a dirigisme economy where the state directs fundamental policy, emphasis being on the word fundamental. In Singapore, South Korea and above all in China (Deng Xiaoping onwards) the private sector prospered although the directive role of the state in the broad sense was retained.
Making resources available for SMEs has to be undertaken as a matter of policy. Certain banks must be identified for that purpose, policy instruments create and funding provisions made via the Treasury. Support for SMEs has to be a state responsibility.
In my view policy towards loss-making state enterprises needs to be well defined. White elephants like Sri Lankan Airlines should be sold off. Loss making state enterprises have to be divided between those who make a loss because they carry a huge consumer subsidy (electricity for example) and others which are fattening an excessive work-force (some portions of the petroleum industry). In respect of the former the NPP/JVP has to decide to what extent and for how long a subsidy is a political necessity, and in respect of the latter a ruthless but time diversified closure policy adopted. Time has to be given for people to learn new skills to find alternative employment avenues. Digitisation is a specialist topic and I was pleased with the response of the relevant member (I am unable to recall his name) of the Seminar Panel who spoke briefly on digitisation and showed an expert grasp of his subject.
From a left propaganda point of view to speak of the tremendous hardship that the sudden economic crisis and the post-Covid and post global-recession period, had created is straightforward. Anura drew attention to the great hardships of the masses, the need to provide additional resources and made a fairly straightforward moral argument. The practical point is how to get this done without cutting other contending demands and how to persuade China to restructure rather than defer (postpone) debt repayment. Though I am a member of the NPP and have been an electoral candidate on the NPP National List slate what I say in this article is not NPP policy, rather is an open-ended contribution towards the ongoing discussion and it is intended to help formulate NPP policy. There is a long way to go before the next election and the lot more water will have to flow under the bridge before the NPP finalises its positions.
It is in this spirit that I make the comment that the NPP needs to openly declare that its model can, broadly, be described as social-democracy. Obviously, it is absurd to focus on prescriptive details but alternatives such as a USSR type state directed economy or the outdated Cuba-Venezuela-Angola-Ne Win Burma models are out of the question. Pakistan with the tacit approval of the Imran Khan opposition, Bangladesh, Malaysia, Indonesia and Mongolia de facto, in the context of post-Covid, global recession threatened world, have explicitly or all but explicitly endorsed social democracy. The NPP must have the gumption and the courage to explicitly state that it stands for social-democracy. It must tell the JVP that the old model of in the Wijeweera days is all dead and useless.
“Pepe” Mujico (Jose Mujia) the 40th president of Uruguay from 2010 to 2015 is described as the world’s humblest head of state. He donated 90% of his $12,000 monthly salary to charities. He was an outspoken critic of capitalism. A former guerrilla with the Tupamaros, he was tortured and imprisoned for 14 years by the military Uruguayan dictatorship (1973-85). Military dictatorships are the foulest and most abominable of regimes in the world. In Argentina for example the military dictatorship (1976-83) threw its opponents, alive into the sea out helicopters and that included pregnant women. Have no doubt that a military dictatorship in Sri Lanka will do the same. Have we not had enough experience of what unfettered military power can do? Sixty thousand young men and women perished when military power ran unchecked in 1989-91. But this comment is by the way, what I wish to say is something else; it’s about social-democracy. Pepe’s most famous quip is that if Uruguay was a big European country it would have become famous as the home of modern social-democracy. The point then is that in this complex and uncertain period the correct model to explicitly assert is social-democracy. The NPP must openly and explicitly declare itself a social-democratic entity.
I promised to comment briefly on minority concerns and the insurrectionary history of the JVP before I sign off. I would like to see the NPP explicitly reject the Wijeweera-Somawana storylines. That is reject Wijeweera’s fifth lecture and his general antipathy to plantation Tamils. Likewise, I would like to see the NPP dissociate itself from the Somawansa – Sarath Silva intervention that dissolved N-E provincial unity. More broadly I would like to see the NPP declare itself in favour of devolution to minority communities and to provinces. Obviously specific details remain to be clarified and that should be the topic of many fruitful discussions in NPP forums.
On the matter of apologising for the insurrectionary excesses and anarchist folly of 1971 my friend Prof Eich persuaded me that this is an unrealistic expectation and I should drop the matter. I agreed and remained silent for about two years. But as the NPP/JVP influence spreads more broadly into the Sinhala petty-bourgeois and rural classes the topic is raising its head again – (minissu bayai). An election winning strategy cannot plaster over that. The pathological madness that, as in the Cultural Revolution, the past has to be utterly destroyed in order to build the world anew may have influenced some in the extremist ranks of the JVP some decades ago. I have indeed run into many admirers of the Cultural Revolution in “those” times. However now the NPP must be uncompromising; there is no room for sympathy for any of this in its commitment to social-democracy.
75 Years: How a halcyon start became a horrible sorrow – A tale of two compacts and two economies
by Rajan Philips
Sri Lanka, then Ceylon, became independent in the best of times. Almost all contemporary accounts said so. A model colony was becoming independent unexpectedly soon with no struggle or sweat. No other emerging polity apparently had it so good. The economy was on a roll by the measures of foreign reserves and local consumption levels. As a small island it was easy to be overcome by modernization. Road and rail networks crisscrossed the island, telecommunications and postal services were bringing people closer. Public education was free and public health was looked after, the two anchoring a robust welfare system that was unique among comparator colonies. The population was under seven million and even though the vast majority of the people were relatively deprived, there was optimism that there was opportunity for everyone.
Universal franchise had been introduced 17 years earlier, in 1931, and the people had had a head start in experiencing electoral democracy – uniquely among non-western polities and well ahead of quite a few western ones. Independence arrived on the back of a new constitution, which was a simple text crafted by unassuming legal drafting and not the exalted product of a ponderous constituent assembly. Yet Sri Lanka’s first constitution, unlike its successors, was a compact document that possessed too many virtues and too few faults. Most importantly, it underwrote the communal compact that was the necessary and sufficient prerequisite for the colonial rulers to handover power to their local successors.
“Communal Compact” (AJ Wilson) is the idea that the (Soulbury) Constitution and the granting of independence were the result of a political agreement among the country’s constitutive “communal groups.” Put another way, the British had to either assume or believe that there was such an agreement among the Sinhalese, the Tamils and the Muslims before deciding on the timing and the terms of their departure. Before long, however, the communal compact came under stress and eventually broke.
After 75 years, the controversy is over a different and somewhat narrower compact – the ‘devolution compact.’ Equally, the seemingly salubrious economy that greeted independence in 1948, has now become a deflated and damaged economy requiring intensive treatment in 2023. Hence, the tale of two compacts and two economies. But how did we get here?
The answers go back to the circumstances in which Sri Lanka became independent. There was more to them than the rosy pictures painted by contemporary accounts. There were already economic fissures and sociopolitical fault lines. These fissures and fault lines defined the political questions of the day and the political alignments that arose out of them. How they unfolded is the story of Sri Lanka after independence. It is an overtold story, but there are always new takes on them as new generations come along to live through the same old problems.
For all its consumption complacency, the economy in 1948 was the “classical colonial export economy”. Plantation exports paid for consumption imports and left a not too small Sterling surplus as bonus. However, the situation was structurally unsustainable. A fast growing population and a politically demanding consumption culture could not be supported indefinitely by the export earnings from tea, rubber and coconut alone. Within a decade, foreign reserves fell from one year worth of imports to four months of them. There has been no looking back since, albeit the wrong way.
The decades following saw severely imposed import restrictions that did not, however, serve the textbook purpose of stemming consumption and accumulating aggregate savings for productive investments. Import scarcities also had to pay a heavy political price. Unemployment became the new scourge along with the chronic mismatch between the outputs of free education and the labour needs of the economy.
Free education expanded the imparting of academic learning and not the technical mass education needed for the development of industries. Industrial development itself was circumscribed by the small national market of the island, its total lack of non-agricultural raw material resources, and indiscriminate import restrictions. State led industrialization proved to be too capital intensive and addressed neither the unemployment problem nor the needs of consumers.
The open economy alternative did unleash the potential for private industrial development and shifted the economic base from its sole reliance on plantation exports. But skyrocketing consumption levels, privatization of education that serves no social or economic purpose, criminal neglect of and corruption in the vital energy and transport sectors, and economically inappropriate and graft generating infrastructure investments have brought the national economy to its current parlous state.
In the assessment of Sri Lanka’s current President, there is no economy left to be reformed! He is promising, among many other promises, a new take off for a better landing at the hundredth anniversary of independence, which neither he nor his followers and critics will be around to witness.
One beam of light that needs to be added to this rather bleak recounting is the story of domestic agriculture, which has been an impressive one in terms of overall growth, if not quite so in terms efficiency of input allocations and certainly not in terms of the distribution of its outputs. Whether comparatively advantaged or not, agriculture is the bulwark of livelihood for the majority of Sri Lankan households; and inclusive of the plantations, it also provides the main domestic base for local industries. Any government can ignore agriculture only at its peril, and the punishment for anyone choosing to monkey with it will be the swiftest and the severest. The organic fertilizer fiasco just proved that, and rightly so.
In 1966, concluding his monograph, Ceylon: An Export Economy in Transition, Donald Snodgrass saw only one certainty “from the historical perspective of 120 years of modern Ceylonese economic development;” and that was, “the search for an economic system that will provide a politically acceptable and economically viable replacement for the classical export economy will continue.” The economy now is far more diverse than what was there in 1948. But the point about the elusiveness of the search for a “politically acceptable and economically viable replacement,” is spot on, 75 years on.
Of the two, political acceptability and economic viability, it is the political part that has been playing the weightier role in Sri Lanka’s political economy. Politics itself has been swayed by non-economic pressures and compulsions than it has been informed by economic imperatives. The current debate over devolution would suggest that nothing might change even now. Economic doldrums, notwithstanding.
Political divisions along party lines were in their embryonic stage at the time of independence in 1948. The newest political party, the United National Party, had just been formed by DS. Senanayake to contest the 1947 parliamentary elections on a rightwing platform. GG Ponnambalam had formalized his Tamil Congress a few years earlier. And the country’s oldest political party, the Lanka Sama Samaja Party, that had just been freed of its proscription was already in two parts marking the second of its many splits. Rounding off the Left was the Communist Party that had come into being as the first splinter of the LSSP.
Many candidates ran as independents in 1947 and an unhealthily large contingent of them were returned as MPs. The UNP did not win an overall majority (50 of its 92 candidates lost in the elections) but was able to form the new government with the help of independents and Appointed MPs. The efforts of non-UNP MPs, through their historic gathering at Yamuna, the Havelock Road house of highly respected lawyer politician, Herbert Sri Nissanka, to present an alternative bid for power ended in failure, marking the first of many such failures to come. (To be continued).
Sri Lanka at 100
by Ram Manikkalingam
Sri Lanka’s future is hanging in the balance as we turn 75.
On its 75th birthday Sri Lanka is divided. There is a stand-off between the people and the political institutions. The people reject Parliament and the President. And Parliament and the President fear the people. This standoff cannot last indefinitely. It will lead to authoritarianism, anarchy or reform. The decisions made, not only by politicians who control our political institutions, but also by the people who want them changed, will determine where we end up.
If there is one person, who has a decisive role in where our country will be in 25 years, it is President Wickremesinghe. While parliament and the people can no doubt make a difference, their decisions must come through political persuasion and mobilization. But President Wickremesinghe can act on his own.
He was picked by the Rajapaksas to protect their interests. But he is not of the Rajapaksas. He protects the Rajapaksas indirectly, by protecting the system that they, and other politicians have benefited from. This system is a combination of rentier capitalism and majoritarian democracy. Businessmen make their money from permits, contracts and quotas provided by politicians. In turn, these businessmen fund the politicians, who run campaigns that favour the majority. Breaking out of this is not what the leading politicians of Sri Lanka want. When the Aragalaya peaked, and the Rajapaksas found themselves rejected, they looked for the next best leader. Someone who would maintain the system the Rajapaksas required for their survival. So Ranil Wickremesinghe was chosen. But he also has a choice.
He can hang onto the Rajapaksas and let the Rajapaksas hang onto him. Or he can begin a serious process of reform that by its very definition will require ditching the Rajapaksas and their ilk.
If he chooses the former option, he will preside over the rapid erosion of the economy and the gradual deterioration of democracy. Because the Rajapaksas very much represent the faction against both political and economic reform. This would prevent him from making the kind of economic reforms required to restructure our debt with the creditors, attract investors, promote equality, and improve public services. As anti reformists, the Rajapaksas would prevent Wickremesinghe from making critical changes required to move the country forward. Instead, they will act as a reactionary force, hostile to any democratic impulse and economic changes that reduce their corrupt grip on power.
This alliance between Wickremesinghe and the Rajapaksas would, in terms of policy, transform itself into an alliance between Sinhala extremism and neo-liberalism. This would precipitate political opposition, not just from political parties, but also from newly mobilized political groupings, including the youth, the students, the middle class, the trade unions and civil society. This opposition, in turn, can lead to state repression, as the government uses its control over the security forces to crack down on the newly revitalized Aragalaya, leading to authoritarianism or anarchy.
Ordinary people, spooked by threats and suffering under the burden of a rapidly deteriorating economic situation, would not even have the wherewithal to protest. They would be struggling to make ends meet, feed, clothe and educate their children, while taking care of the elderly and their struggling kin. The result would be a dispirited country, submitting, once again, to the authoritarianism of a narrow political elite, that unites in the face of popular mobilization.
Instead, the crackdown may also lead to greater mobilization, spiraling out of control despite the armed forces using excessive force. And in an echo of last year, gets rid of the President and this time the parliament, as well. In the absence of a sensible political programme, this systemic change brings neither reform nor revolution. Instead, Sri Lanka becomes saddled with a series of unstable governments that lack the capacity to advance democracy or the economy. Sri Lanka becomes a country where governments come and go, not because of fundamental political changes, but because an influential faction in or out of government is dissatisfied with a particular policy or leader.
This leaves Sri Lanka with a narrow path to political and economic reform that must be picked within the next couple of months.
At the end of February, President Wickremesinghe would have the power to dissolve parliament. He may fear doing so, because the new parliament will be dominated by political parties that are his rivals. He will then have to negotiate reforms with a prime minister who may have more popular support than he does. But does he really have the power to enact reforms, today? Even his positive efforts to release military occupied land and PTA prisoners, and implement the 13th Amendment are being met with hostility by his own faction in parliament. Moreover, any effort to balance the budget, strengthen welfare measures for the poor and vulnerable, raise taxes, restructure loss making State Owned Enterprises – would require a government that has the support of the people, not one that fears them. It is not too late for President Wickremasinghe to lead such a government that includes all political parties.
Sri Lanka has a narrow window to begin a process to deepen democracy and enact economic reforms that would bring us dignity and equality when we celebrate our centenary.
(Ram Manikkalingam is Director of the Dialogue Advisory Group. He was an adviser to then President Kumaratunga and was a Visiting Professor at the University of Amsterdam)
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