Opinion
Sri Lanka’s development dilemmas
by Uditha Devapriya
On May 18, the grace period for a USD 78 million coupon payment expired in Sri Lanka. For the first time in its post-independence history, the island nation defaulted on its foreign debt. The Governor of the Central Bank, Dr Nandalal Weerasinghe, then announced that it would take six months for it to start repaying its creditors. An agreement with the IMF is in the pipeline now, but such an agreement will take another month or two.From a global perspective, of course, there is nothing unique about Sri Lanka’s crisis. For the country’s 22 million plus population, however, its scale has been unprecedented. While horror stories of Sri Lanka turning into another Lebanon or Zimbabwe have been recycled relentlessly in the press, since 2020, in recent months such comparisons have been made more frequently. Inflation, which began peaking last year, hit 30 percent in April and 40 percent in May. While nowhere near Lebanon or Zimbabwe, estimates by certain observers and analysts put Sri Lanka at the top of global inflation indices.All this has given rise to certain perceptions about the country’s problems. Western and Indian media, in particular, ascribe the crisis to the convulsions of domestic politics. Very few commentators have noted that these problems have been decades in the making, that the government’s ineptitude is more a symptom than a cause, and that external factors have had a say in such issues. The President’s bungling has contributed to these problems, to be sure, but that only shows how complex they are in the first place.
Neoliberal prescriptions
Just how complex, though? To answer that, it is necessary to address the structural causes that neoliberal economists and commentators note as having led to the crisis. These groups underline four factors: the government’s indulgence of unorthodox economic theories, its drive towards organic agriculture, its refusal to go to the IMF, and its insistence on diverting foreign reserves to defending the currency and repaying bondholders.It must be noted that all these problems are linked to the structural weaknesses of the economy. While there is a consensus on those weaknesses, though, economists and political analysts are divided over what, or who, is to blame for them.
Sri Lanka’s economy has been paraded, even by some radical commentators, as “export-dependent.” Yet it has been running trade deficits for the last 50 years. Its exports include primary commodities like tea, textiles, and tourism. It also earns remittances from migrant workers, many of whom effectively subsidise West Asian economies.These sectors took a hit from the COVID-19 pandemic. While tourism was on its way up in February, most arrivals were from countries like Russia and Ukraine. Russia’s invasion of Ukraine thus, effectively, dealt a blow to hopes of a long-term revival.
Neoliberal economists, especially those linked to Colombo’s well-funded and well-oiled think-tanks, attribute the country’s problems to excessive money printing and government spending. They see the country’s public sector as bloated, politicised.To an extent, the latter view is correct. Sri Lanka’s bureaucracy has long been a preferred destination for unemployed graduates and the politically connected. While Gotabaya Rajapaksa came to power implying he would end such a culture, he reversed course two years later and hired 65,000 graduates to the state sector. Ironically enough, it is their peers who are occupying the frontlines of anti-government protests today.
The heterodox view: Industrialisation and local production
Heterodox economists see things differently. According to them, Sri Lanka’s problems have had to do with its failure to industrialise and shift to manufacture.One of Gotabaya Rajapaksa’s first decisions, after coming to power in 2019, was to appoint Dr W. D. Lakshman, a proponent of industrialisation, as the Governor of the Central Bank. Economic analyst Shiran Illanperuma describes Dr Lakshman’s appointment as having been “poorly received by comprador capitalists and economists.” Lakshman earned the wrath of this crowd heavily after he began enacting policies aimed, ostensibly, at stimulating growth, including a series of tax cuts which have now been reversed.
Another of the country’s biggest advocates of industrialisation is Dr Howard Nicholas. A Senior Lecturer in Economics at the International Institute of Social Studies at the Erasmus University of Rotterdam, the Netherlands, Dr Nicholas helped set up the Institute of Policy Studies (IPS), a think-tank that advocated industrialisation, in the late 1980s.In its first few years, the IPS promoted alternative development strategies. Its advocacy of these strategies was received positively by then president, Ranasinghe Premadasa; based on its recommendations, he spearheaded an ambitious Garment Factory Programme which provided jobs to the rural sector while stimulating growth. This was around the same time Vietnam embarked on export-led industrialisation via its apparel sector.
According to Dr Nicholas, Sri Lanka’s prospects were bright in the 1990s. It even had the potential to surpass Vietnam. Yet with the assassination of Premadasa and the election in 1994 of a regime that modelled itself on Clintonian Third Way Centrist lines, industrialisation was abandoned in favour of outright privatisation and deregulation.The new strategy filled the government coffers – for a while. But with the escalation of the civil war and, paradoxically, the elevation of the country to middle-income status in the 2000s, Sri Lanka found it hard to access traditional aid programmes. It was at that juncture that it started moving into international bond markets.
While Western media and think-tanks propagate Chinese debt trap narratives, it has been Sri Lanka’s reliance on bond markets, which constitute a greater proportion of its external debt than does China, that finally brought its economy to its knees.To be sure, over the years several groups have highlighted these concerns. Yet, they differ as to the strategies and tactics needed to chart a way out of the crisis.
Neoliberal commentators argue that the private sector should take the lead. But Sri Lanka’s private sector is dominated by rentiers. Moreover, the country’s exports are limited to commodities and tourism, along with sectors such as IT. These themselves are dependent heavily on imported raw materials and intermediate capital goods.According to Harvard University’s Atlas of Economic Complexity, Sri Lanka’s largest exports are in “moderate and low complexity products”, like textiles. This contrasts with Vietnam, where textiles are more highly complex. Sri Lanka is also seeing “a static pattern of export growth.” In other words, while in 1990 it could boast of much potential in garments, by the early 2000s the sector’s prospects had considerably reduced.
To resolve the economic crisis, heterodox economists and analysts thus contend that the government must oversee a radical, socialist strategy, centring on import-substitution and local production: a dreary, dismal prospect for Colombo’s neoliberal coterie.
Leaderless protests and lack of alternatives
Sadly, the protests themselves seem little concerned by these imperatives. As has been pointed out by Rathindra Kuruwita in The Diplomat, they remain leaderless and rudderless. This has exposed them considerably to the risk of manipulation.Thus, while the protesters have called for Rajapaksa’s resignation and coupled it with demands for the resignation of all parliamentarians, they have also claimed that the latter demand, which delegitimises the country’s legislature and empowers the Executive, was incorporated into the protests by government supporters. Moreover, many of them fault the government for not going to the IMF earlier, failing to realise that the IMF’s track record in the Global South, during the COVID-19 pandemic, has been questionable.
More seriously, none of the protesters seem aware of what led to the crisis in the first place. To quote Dr Asoka Bandarage of the California Institute of Integral Studies, they “have not been able to put forward an alternative leadership or a viable road map for the future” and seem “unaware of the global dynamics” of the crisis.
Gotagogama, the site of the protests at Galle Face Green, has played host to several radical activists and artists, many of them linked to Marxist, anarchist, and other anti-government parties and alliances. Yet even these groups have failed to call attention to the wider issues. Those that have, like workers’ collectives and leftist commentators, have been marginalised by neoliberal discourses and populist demands for resignations.
The failures of governance and the road ahead
On the other hand, unfortunate as it has been for advocates of alternative development, the government has failed to appreciate the importance of their recommendations. A combination of corruption, ineptitude, and an eagerness to capitulate has thus put alternative development, and industrialisation, on the backburner.Milco is a case in point. Sri Lanka’s state-owned milk manufacturer, Milco recorded profits after a while last year. Yet a year or so after this milestone in the island’s public sector, the government replaced its chairman rather inexplicably. Such actions, multiplied many times over, have only distanced capable individuals from the State.
At one level, all this fits in with South Asia’s legacy of dynastic politics. From India to Bangladesh, the subcontinent is hardly a stranger to family rule. The Rajapaksas are no exception there: despite the recent spurt in anti-government protests, members of the family continue to hold important positions in the country.However, at another level, the Rajapaksa family has gone well beyond the regional model. As the country’s leading political analyst Dr Dayan Jayatilleka has observed, “this is not the Asian phenomenon of familial succession in politics, which is serial and sequential. The contemporary Sri Lankan phenomenon and process is both sequential and simultaneous, vertical and horizontal.” In other words, while family rule in the rest of Asia has served to sustain the political system, in Sri Lanka it has led to its very dismantlement. This includes the Rajapaksas’ deployment of the military, and allegations of militarisation in the north and east of the country: regions which bore the brunt of a 30-year civil war.
Nevertheless, despite all this, it goes without saying that what protesters consider as the government’s failures have been symptoms, rather than causes, of the structural faults underpinning the economy. The government must share the blame for this: in particular, its tendency to surround itself with yes-men and henchmen.Yet beyond this narrative, there is a far more compelling problem: a failure to resolve pressing issues like the island’s dependence on imports and sovereign debt. That in itself is linked to the sprawling global debt crisis, which has extended to other countries. While not all protesters are oblivious to these priorities, many of them are yet to address them fully. So long as debates over the crisis remain dominated by narratives of corruption and political personalities, such problems will go unnoticed and unresolved.
(The writer is an international relations analyst, researcher, and columnist based in Sri Lanka who can be reached at udakdev1@gmail.com. A shorter version of this article appeared in Global South Development Magazine.)
It was just over one month ago that Gnana Moonesinghe departed from this world after having lived a very fruitful life on this earth. It was indeed a privilege that Mallika and I came to know Gnana after we moved into Havelock City. During that short period, we became very close friends, along with another mutual friend of ours, Dr. Disampathy Subesinghe, who, too, was living in the same Tower after having come from the United Kingdom. Unfortunately, Dr. Subesinghe pre-deceased Gnana.
Gnana was a graduate of the University of Ceylon, Peradeniya having been at Peradeniya during the halcyon days of that University.
She tied the nuptial knot with Mangala Moonesinghe who was a very respected politician and who served as our High Commissioner in London and New Delhi. She was an exceptional hostess while being the wife of the High Commissioner. It was a very interesting coincidence that our second son, Anuke, had won a trip to New Delhi having won an All-Island essay competition about India while still a schoolboy. The team had met the High Commissioner and Gnana when they attended a reception hosted at the High Commission, where Gnana had been an exceptional hostess to the young boys.
Gnana was a member of many organisations and played an important role in all of them. In addition to these activities, she contributed to newspapers on varied subjects, especially relating to good governance and reconciliation. She was a keen player of scrabble and rummy with her friends and of course entertaining them to a meal if played at her home.
It was while in New Delhi that Gnana wrote and published a book titled “Thus have I heard…”in the year 2009 and she presented a copy to me). This book gives lucid descriptions of the Buddhist teachings of the Buddha and the places of interest in India with historical descriptions of what transpired in each place.
Gnana had brought up a very good daughter Avanthi and a son Sanath. She doted on her grandchildren and in turn they loved her. It was Avanthi and her husband, Murtaza who looked after Gnana during the last stages of her life.
We will miss Gana’s hospitality, soft spoken conversations, and the love that she used to emanate towards her friends.
HM NISSANKA WARAKAULLE
The current government’s spectacular electoral success, was in essence a clear rejection of the chaos, incompetence and corruption, that were hallmarks of the traditional parties that have exercised dominant electoral power since Independence in 1948.
The remarkably successful Aragalaya was an emphatic rejection of the ‘old’ parties and hopes of a refreshingly enlightened “System Change”. This was the unspoken reliance on the NPP, (a lightly disguised JVP).
The unsavoury history of the unimaginable and intolerable violence of the JVP, matched by an equally cruel retaliation by Government forces, thankfully faded out around the last decade of the 20th century, is still a feared eventuality, in the memories of those who experienced the nightmare. Maybe, most of the currently active youth, had not even been born at the time. But the fear lingers. It is not unusual that the current NPP leadership, is none too eager to remember that period of history, nor to market this ancestry.
The shift into oblivion of the LSSP, is perhaps a signal that the era of sloganeering and “catch phrases of Marxist verbiage” as electoral currency, is now past.
One hopes that a home-grown model, based on the rugged strengths of rural society, is much more marketable, and representative of the Swabasha nourished, youth leadership. The leader in this transformation, AKD stamps his class with remarkably effective oratorical skills. The ready recall of incidents and instances, to follow logical trends of thought, and the ease with which he changes style and substance, to suit his varied audiences, is simply brilliant. This, with not a note (or prompt) in support, nor an hour to craft his fresh delivery to a new audience. The massive crowds that attended the pre-election rallies, seem to have morphed significantly into votes. The 150-odd seats secured, would have surprised even the most committed supporters. However, can they “walk the talk” of electoral rhetoric?
It also seems that even the few of the Old Guard, possibly crippled by left wing ideology, have taken on a new stance, with emphasis on existing local reality.
The hopes of a majority, enthused by the change of attitudes, professionalism and integrity of the new dispensation, will endure and thrive. The early signs are positive, but this leopard may well change its spots.
The claim that the promised changes, especially of seizure of the proceeds of crime and lawful punishment of fraudsters, is demonstrably slow. There must however be much discomfort among these rogues, that the handcuffs to adorn their wrists, may not be too far away. The President assures the people that the seeming delay, was to allow irrefutable and water-tight evidence to be assembled for successful prosecution, and to eliminate the all too frequent instances where the accused are acquitted and released.
It is increasingly evident that the roots of criminality run deep and far, and even the institutions designed to aid in successful probes, can be compromised by massive enticements, which would be easily accommodated, within the sheer size of the sums involved.
The trails may be clear to the optimistic, but the craftiness of seasoned rogues ensures that although the truth will eventually prevail, it may be a very deep dig. If the lack of “legal provision” is a real impediment, the present parliamentary majority should facilitate speedy correction. However, in many instances, it seems apparent that it is not the lack of laws, but the tardiness in acting where sufficient laws already exist is the problem.
To return to the matter of lying or otherwise distorting reality, there seems to be a kind of permissible and generous threshold, beneath which unreal extravagance can be concealed. If conscience overrides mere legality, and zero tolerance of fraud prevails, there will be public aversion towards any departures from common decency and rectitude.
Credit will be its reward, for the “Clean Sri Lanka” initiative if it goes beyond mere elimination of environmental pollutants and encompasses restoration of moral and ethical standards as well.
But, are we not presently guilty of a shallow pretense of religiosity, when our Constitution urges (or permits), the creation of Ministries of Buddhism and those charged with the “protection” of Christian, Muslim or Hindu affairs? This is hypocrisy of a high order especially in a country, wedded to concepts of equality, compassion and fairness in a pluralistic community. It is infinitely easier to preserve unity in a mixed populace, than to repair a fractured one. As one of our political leaders asserted, in a different context, “We have scrambled the egg and invite any to try “unscrambling it”.
As the late D. M. Jayaratne, as PM, as well as Minister of Buddha Sasana, saw no qualms about declaring that “Only idiots would believe Election manifestos, when their intent was merely to deceive voters into voting for them”. One has to trust that this still prevails. We remain undaunted, in a country that prides itself in a religiosity cemented within a constitution which permits such divisive content.
Dr Upatissa Pethiyagoda
by Sudharman Siripala
Sri Lanka is grappling with the increasing threat of climate change, which has led to unpredictable weather patterns. The country faces a dangerous combination of flooding in some regions and water shortages in others, a situation exacerbated by shifting rainfall patterns. Rivers originating in the Central Hills, such as the Mahaweli, Kalu, and Kelani, flow through much of the country, but these water sources are not being distributed evenly. Districts like Monaragala and Hambantota, located in the dry zone, are experiencing severe water shortages. To address this challenge, experts suggest the development of an interconnected river system to harness excess water during floods and redirect it to drier areas, ensuring a year-round water supply for agriculture and daily use.
Global Case Studies in River Management
Several countries facing similar water-related challenges have implemented successful water management systems that Sri Lanka could adapt to its unique circumstances:
The Netherlands – Room for the River Programme
The Netherlands, a country prone to flooding, widened its rivers and relocated dikes to create floodplains. This approach allows rivers to overflow without damaging urban areas, while preserving water flow and natural habitats. Sri Lanka could apply this concept by designating specific riverbank areas for temporary flood storage.
China – South-North Water Transfer Project
China’s massive project channels excess water from the flood-prone Yangtze River to drier northern regions. This system of canals and reservoirs could inspire Sri Lanka to divert water from rivers in the Central Hills to drier areas in the south and east.
Bangladesh – River Interlinking Projects
Bangladesh has implemented river interlinking projects to redistribute water from flood-prone rivers, such as the Brahmaputra, to drier regions. Sri Lanka could link its major rivers like the Mahaweli and Kelani to smaller rivers in water-scarce districts to balance water distribution.
India – National River Linking Project
India’s National River Linking Project connects major rivers to manage both floods and droughts. Sri Lanka could use similar strategies, connecting rivers around the 500-foot contour line in the Central Hills to help distribute water more effectively.
United States – Mississippi River and Tributaries Project
The Mississippi River system combines levees, floodways, and diversion channels to manage flooding. Sri Lanka could adopt similar flood-control measures in vulnerable river basins such as the Kelani and Kalu.
Japan – Underground Reservoirs and Flood Channels
Japan’s G-Cans Project in Tokyo channels excess water into underground reservoirs to prevent urban flooding. A similar underground system could be implemented in Colombo and other flood-prone cities in Sri Lanka.
Singapore – Marina Barrage
Singapore’s Marina Barrage serves as both a flood control measure and a water supply resource. Sri Lanka could develop similar systems to control flooding in urban areas and ensure water availability during dry spells.
Thailand – Chao Phraya River Basin Management
Thailand uses diversion channels in the Chao Phraya River Basin to prevent flooding in Bangkok and direct water to agricultural areas. Sri Lanka could replicate this by creating diversion channels to supply water to its agricultural zones.
Actionable Solutions for Sri Lanka
Develop an Interconnected River System
Establish water diversion channels along the 300-500 meter contour lines of the Central Hills to capture excess rainfall during floods and redirect it to drier areas.
Build Reservoirs and Storage Tanks
Construct reservoirs to store diverted water, ensuring a steady supply for agriculture and domestic use. Sri Lanka has around 14,000 ancient tanks out of 30,000 that could be revitalized for this purpose.
Improve Urban Flood Defenses
Drawing inspiration from Japan and Singapore, build underground reservoirs and flood channels in cities like Colombo to mitigate urban flooding.
Strengthen Watershed Management
Restore natural floodplains and create wetlands to absorb excess rainwater, as seen in the Netherlands, helping to reduce flood risks.
Encourage Public-Private Partnerships
Foster collaboration between the public and private sectors to fund large-scale water management infrastructure, leveraging models from China and the United States.
Leverage Technology
Utilise modern forecasting and real-time water management systems, similar to those in Bangladesh and Thailand, to monitor water levels and manage river flows dynamically.
International Collaboration
Form partnerships with countries that have successfully implemented flood control and water management systems to share expertise and technology.
Sri Lanka’s dual challenges of flooding and water scarcity, compounded by climate change, require immediate action. By developing an interconnected river system and learning from successful global water management models, Sri Lanka can mitigate the effects of floods while ensuring a sustainable water supply for agriculture and daily life. It is crucial for the country to act now, as these solutions have the potential to transform Sri Lanka’s water management system for the better.
Sudharman Siripala Managing Director of Geoinformatics Group and a Registered Licensed Surveyor, specializes in geo-spatial applications. He also serves as a freelance value chain consultant for Vivonta Green Tech Consultants (www.vivonta.lk)
Ramadan is a time to share the profound message of generosity, and compassion with the World – PM
First phase of the Urban Forest Project under the ‘Clean Sri Lanka’ programme launched
May this Eid-ul-Fitr bring peace, reconciliation and the fulfillment of our shared hopes for a new era of renewal and prosperity – President
-
Sports2 days agoSri Lanka’s eternal search for the elusive all-rounder
-
Features6 days agoCelebrating 25 Years of Excellence: The Silver Jubilee of SLIIT – PART I
-
Business4 days agoAIA Higher Education Scholarships Programme celebrating 30-year journey
-
Business6 days agoCEB calls for proposals to develop two 50MW wind farm facilities in Mullikulam
-
News3 days agoGnanasara Thera urged to reveal masterminds behind Easter Sunday terror attacks
-
Features6 days agoNotes from AKD’s Textbook
-
News2 days agoComBank crowned Global Finance Best SME Bank in Sri Lanka for 3rd successive year
-
Features2 days agoSanctions by The Unpunished