Groundviews

Sri Lanka: Where Free Market Wouldn’t Sell Reform & Reconciliation

Featured image courtesy Asianews

The case for serious reform necessary to return to a decent, civilised life for all in Sri Lanka has not been seriously argued in political forums all these years. There is a total disconnect between the economics of life and politics in this unrestricted open market economy. Discussing reform and reconciliation thus leaves out market economics. In a globally enforced free market, no reforms for greater citizen participation in the decision making process can be accommodated as the “neo liberal” economic model demands less and less governance in socio-economic life. This was logic President J R Jayawardene well understood, as demonstrated when in 1978 he turned the decades-old closed economy of Sri Lanka into a neo-liberal free market economy.

In 1978 when all State restrictions imposed by elected governments were done away with, allowing the market to function on the dictates of investors on consumption, President Jayawardene brought in a totally new Constitution to take care of the free market. With Executive Presidency installed and electoral reforms that completely alienated the elected member from the “citizen” voter, MPs were free from social pressure. The rationale was clear. He was taking care of a market that had to be free from government policy in regulating and supervising the economy. As George Monbiot writes in The Guardian of 15 April, 2016 As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending.”

Jayawardene’s republican Constitution in 1978 and the electoral reforms that followed introduced the Proportional Representation (PR) system. It thus became necessary for voters to first vote with the political party before selecting a candidate. Citizens were turned into struggling and competing “consumers” more interested in the choice they had on shop shelves than in the candidate lists in elections.

The first few years of free market life, provided for a complete change in social mind-set that blinded the citizenry to the quality of human life. Having lived under severe restrictions where even a loaf of bread was rationed and no one was allowed to carry more than 02 measures (2.5 kg) of rice in any part of the island, a free market that gave a select choice of goods for consumers and the freedom to earn as you wish was “emancipation”. This market liberalism was not just a consumer right, but a reintroduced “democracy” for citizens who did not have a choice in consumer life. This consumerised “democracy” was at the expense of State and government regulations that shaped the economy. The economy was left in the hands of investors who decided what the consumer should have and at what price. The government was expected to create space for such investor behaviour. Investor freedom on the one hand decided the rights and freedom of labour hired and on the other allowed the hoarding of wealth in cities, leaving rural life to sweat it out.

Since then, Sri Lankan society has gradually come to terms with the adverse impacts of the economy, but this has not been discussed in terms of free market economics. The net result- an accumulation of wealth centred in and around Colombo, along with usurped political power that lived on growing wealth, and an increasing choice in local and global markets. The creation of employment was left to investor needs and the market they defined, designed and controlled. The latest Census and Statistics Department survey on household income and expenditure (2012-2013) shows the average urban monthly income as Rs.69,880. This is too low an average compared to Colombo life. The average income of Colombo urban middle class is easily over Rs.100,000 per month. The survey shows monthly rural income as Rs.41,478, again an inflated number for the vast majority of village families. The estate sector is said to earn an average of Rs.30,220 per month. Nevertheless, these figures clearly indicate urban life has definitely grown more lucrative than neglected rural life over the past few decades.

One doesn’t need these numbers and data to understand the widening, intimidating gap between the relatively comfortable Colombo urban life and the frustrating life of the rural poor. Walk through the new developed Colombo, with condominiums changing the city skyline, cafes, restaurants and star studded hotels that dot the city roads, serving expensive menus from any part of the world, the centrally air conditioned, multi-storeyed shopping malls that sell designer wear, sprawling buildings housing private hospitals where the best specialists can be channelled at a high cost, the best of international schools co-existing with the most privileged national State schools for sons and daughters of the urban elite and the politically powerful, karaoke and casinos for the nightlife of the rich and the elite and their brawling sons, large car parks and well laid out jogging paths to burn out extra calories, overhead bridges with “one way” traffic that burns barrels and barrels of imported fuel on dead mileage morning and evening.

Now walk through villages where rural school life is scattered and incomplete, with inadequate teachers, broken toilets and even water at a trickle. Malnourished children (A PGIA survey in Weeraketiya in 2007 shows 59% of the children there were malnourished) walk many kilometres to school and back every day. Hospitals that have desperately dependent patients but not enough trained staff, specialist doctors and even a shortage of common drugs. Incomplete, half built houses that have no proper roads, and barren and thirsty looking land with no proper irrigation. Little boutiques selling essentials by the gram. Cramped wayside eateries for commuters to sip extra-boiled tea and smelly open latrines for easing bladders for travelling commuters, where roads that link towns are empty of buses and dark without street lights, even before the commuters get back home. Farmers who toil with their family to have their harvest sold at least at cost – if they are lucky. Elephants that roam through villages, thanks to the fast depleting forests they once called home.

That yawning gap is visually evident. The luxuries of the free market economy were never meant for the rural poor. Not much new and economically viable employment was created over the past decades for rural youth. Rural life was not profitably or constructively included in any development project to provide decent income in their own local areas or in nearby townships. The employment of rural youth who were left out of market economics and herded into free trade and industrial zones, does not amount to more than 100,000 each year. Today, in the Katunayake FTZ, the workforce is less than 60,000. With over 80 per cent female workers, the apparel sector is in crisis with over 45,000 vacancies going unclaimed due to very poor wages, extremely difficult working conditions for long hours, harsh and crude management practices and a lack of decent and safe lodging; all negatives bundled together.

Therefore, migrant labour to the Middle East remained a viable option for employment at the rate of US $ 150 per month for housemaids. Every year over 100,000 young women left to the Middle East, despite continuing publicity on brutal and inhuman treatment. For the young men, it was the protracted war that provided employment. Some went into the frontline as soldiers of battle. Others remained in conflict prone, vulnerable villages as “civil defence forces”. Meanwhile graduates from State universities remained as “misfits” in an economy where they were not sought out for employment. Their unemployment was blamed on education that never was seriously updated and reformed for modern life. The youth from Colombo, its suburbs and from other main cities were absorbed into the fast growing, heavily exploitative IT industry that rarely, if ever, respects an 8 hour working day.

Neo liberalism in Sri Lanka as elsewhere has thus left a pauperised rural society for over 35 years, living side by side with urban life that thrives on incomes brought to the country by mainly the labour of women; with plantations, migrant and apparel sectors contributing over 67% of foreign income. The per capita income declared every year was more an urban number the middle class were chasing after in a free market that turned “citizens” into “consumers”.The growth of this Colombo-centric urban middle class was what every government comfortably projected as “development”. All other annually increasing numbers, that of serious crime; rape of women and children, murder, robberies, extortions were explained strictly in terms of degeneration of “rule of law”. But that “rule of law” is what the heavily competitive free market allows. The continued migration of poor women for employment is counterbalanced against the foreign exchange remittances the country earns. Women and their families are not provided opportunities to live a human life in this neo liberal economy. All deaths and persons missing in action were labelled as heroic sacrifices for the (Sinhala) motherland. Nationalist politics was needed to counter all the economic poverty and cultural degeneration.

These negative and frustrating impacts, post 1977, changed the free market economy. This has not been discussed in terms of the neo liberal economy. For over 35 years, neo liberal economic life was taken for granted even by “Leftist” intellectuals. The fall of the “Soviet bloc” regimes in late 1980’s and early 1990s, left traditional “Leftist” thinking there was no alternative. Neo liberalism has to date not been challenged with an alternative, not only in Sri Lanka, but globally as well.

Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was … nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.” writes George Monbiot in The Guardian of 15 April, 2016.

In a rotting, intellectually backward world, Sri Lanka has little chance of pushing through any reforms, any moves toward reconciliation and transitional justice on the strength of regained Western allies. These Western allies cannot sustain this government economically to even demand respect for the OISL Resolution they co-sponsored with Sri Lanka. They themselves are corrupt and are war mongering arms dealers in the world market. This “Yahapaalanaya” government is now compelled to seek economic assistance from China that is least concerned about human rights, democracy and social justice. In such politico-economic context where there is no alternative either to growing pauperisation and erosion of civil liberties and rule of law, both mainstream parties remain locked with the majority Sinhala vote in gaining political power. The continued pandering to Sinhala sentiment is therefore the only comfortable platform for vote getting in a world without progressive alternatives. Tamil aspirations thus cannot be accommodated in Sinhala politics and are pushed out of popular Southern Sinhala politics in return for Sinhalese votes. Let’s therefore not be optimistic about reconciliation and transitional justice, that are no issues this government would venture upon – especially with President Sirisena competing against Rajapaksa for power in the SLFP. He would ensure his Sinhala popularity is not weaned out for the sake of nation building on plurality.

In addition, the fact is that the major coalition partner in this “Yahapaalanaya” government is on a neo liberal programme that would not allow for the strengthening of democratic structures. Strengthening democracy contradicts free market economic life. The centralising of state power is thus the order of the day to ensure that the government allows more space for investor freedom. Tamil politics too would therefore hit serious barriers in negotiating devolved power within a neo liberal economy. A way out for all thus depends on alternatives to this free market economy and not mere political reforms proposed as solutions in this neo liberal economy.