[I wrote this article in response to an “internet-project” initiated by the Sri Lankan journalist, Kusal Perera]
Vasantha Raja
20 April 2009
In countries like Sri Lanka, capitalism did not organically evolve from feudalism. In contrast, European capitalism grew within the womb of feudal society systematically challenging all aspects of feudal consciousness and institutions. Sri Lankan capitalism, on the contrary, was arbitrarily imposed by colonialists on a feudal society. Therefore, it is not surprising at all that its feudal past is still alive. The feudal consciousness continues to persist in various forms. The Sinhala politicians’ pathological failure to politically solve the Tamil Question is partly a result of that.
Sri Lanka‘s capitalist economy and its state are invariably intertwined and dependent on the global capital serving rich countries interests. Sri Lanka’s capitalism has no future without direct help from global capitalism. Thus, the formation of a fully-fledged capitalist class with a commitment to democratic values fails to take roots; and the greed ‘for a few dollars more’ with foreign blessings becomes the sole interest. In the absence of a strong capitalist class, the state plays the major role in profit-sharing with the global capital. The political elite have become indistinguishable from the business circles, and corruption inevitably has become the hallmark of political power.
During the past few decades, easily available global credit facilitated Sri Lanka’s economic and political survival. The US-led global capitalism had no choice but to pump in mountains of paper money using a deregulated banking system to keep the poor afloat – which is essential for their own survival.
There’s no viable internal market in Sri Lanka for a capitalist class to thrive on. So the SL state had to orientate the country towards ‘dollar-earning’ activities: garment industry, tourist industry etc. Expanding tea exports, ‘exporting’ labour to foreign countries (particularly to the middle-east), along with textile exports and tourism, (all of them major foreign exchange earners) have been the central pillars of the SL economy. The service sector, including construction related industries, has been closely linked to them.
But here’s the rub: The mainstay of Sri Lankan economy during the past few decades has been thoroughly dependent on colossal amounts of global credit that was part of the global credit bubble that recently collapsed.
I explained all this for a reason: to show that the Sri Lankan economy is very much a tiny part of the global economy, and what happens to the SL economy is directly linked to what’s happening in the global economy.
The global economy’s existing format is going to change dramatically in the foreseeable future. The recent G20 summit in London has given important clues in this regard, and before addressing how Sri Lanka should economically orientate towards the onrushing changes let me briefly mention how the global world-order may look like in the near future. [Read the top articles in Global Economy, Global Politics and Global Vision sections of www.lankaeye.com]
The global leaders, including China and Russia, will take decisive action to launch a new global currency that is independent of any single country’s domination. [China proposed this in no uncertain terms. US President Obama didn’t like the wordings. This is excusable for the time being, considering the entrenched western prejudices against such radical views. So, politicians like Obama will have to move slowly of course. However, this is essentially the project the G20 leaders finally agreed to.]
Also, a global central bank that has immense power to create money for the purposes of global economic development seems to be very much on the agenda. All banking outlets, in the final analysis, will have to be part of this new order. The financial anarchy that existed prior to the global credit crunch will have to go.
The ongoing ‘bailout efforts’ by many governments may turn out to be mere ad hoc efforts to postpone a social chaos on a global scale. The governments fear the immediate political and social repercussions if the big banks and industries are allowed to collapse overnight. Pumping trillions of tax-payers money into these bankrupt institutions is not going to solve anything. G20 leaders know this, and they know the old system will have to be fundamentally transformed. The hitherto existed USdomination, dollar domination and western domination will have to go. Global institutions of supranational nature that are democratically accountable to nation-states will have to play the dominant role within the new world-order. Only a highly regulated private sector will have to be allowed to operate within the framework of such global parameters.
Surely, changes of such magnitude will not happen overnight. But, that is the direction things are heading. And, these new realities should be taken into account in planning Sri Lanka’s economic and political future.
Firstly, immediate steps should be taken to radically transform its constitution that, in the final analysis, is the main culprit of Sri Lanka’s conflicts. There cannot be any economic prosperity without a constitution and a new political framework that tally with Sri Lanka’s social realities.
Secondly, a viable economic vision that is attractive to all communities should be in place. Such a vision should be firmly based on the fast developing global realities I outlined above.
The first step in this regard is to discard some existing nationalist prejudices: In the context of the emerging democratically globalized future we must not think in terms of national self-sufficiency. Instead, we must learn to relate to the global economy in the most efficient way possible.
Considering the wide variety of geographical and cultural assets Sri Lanka has, no doubt there are many ways of contributing to a globally harmonized ‘One World’. But, in my view, Sri Lanka’s scenic and cultural beauty comes on top. Thus, tourism should become the central plank in planning the state’s blueprint for islandwide infrastructure.
Remember, planning of infrastructure that include roads and railway networks, energy distribution, communication networks, education, health, housing and welfare networks and so on should be the task of the public sector. A regulated private sector should operate within the parameters of an islandwide economic vision of such calibre. Negotiating funds for infrastructure projects designed to dramatically increase Sri Lanka’s productivity as part of IMF’s future funding for global development is, I believe, bound to be fruitful.
In conclusion I argue that there should be a united front of Sri Lanka’s Left primarily based on two central tenets: One, a political programme to transform Sri Lanka’s constitution and the institutions that is unambiguously appealing to all communities. Two, an economic programme based on common welfare that is equally beneficial to all communities and all regions in Sri Lanka.