Groundviews

Donald Lu’s Comeback Story

Photo courtesy of Sunday Times

More than a year after he visited Sri Lanka, US Assistant Secretary of State for the Bureau of South and Central Asian Affairs Donald Lu went on record calling Sri Lanka the greatest comeback story in “the region I work on.” He contrasted the situation two years ago – rife with shortages and riots – with the relative stability and calm present today. Applauding the support given by India in 2022, he highlighted USAID’s humanitarian efforts in the country and the debt restructuring assistance given by Japan, France and India.

Not surprisingly, Mr. Lu does mention China but only in the context of the pressure that US allies applied on it to grant Sri Lanka debt relief. Just as unsurprisingly, he credits Sri Lanka’s recovery to “a little help from friends” and “this better proposition” that the US Indo-Pacific strategy offers for the region. One can only assume he means that Sri Lanka is a comeback story partly, or largely, because of US intervention in the Indian Ocean.

Mr. Lu’s presentation garnered polarising responses almost immediately after it came out. Sri Lankans took to Twitter in particular to berate what they saw as his ignorance of ground realities in the country. On the other hand, supporters of the present government and of President Ranil Wickremesinghe praised his comments with the president’s official Twitter account promoting the video. Mr. Lu has not responded to these comments. He is not obliged to. But the video has had massive repercussions on social media and elsewhere.

The presentation looks and sounds out of sync with the country he is referring to on at least three counts. First, there is his reference to stability and calm. Not a few Sri Lankans feel that the stability we are living under is more imposed than organic, more extrinsic than intrinsic. There is a sense of disaffection not just with the government but with the policies being enacted. Since the government frequently uses these policies as justification for its austerity measures, people no longer bother distinguishing between the two.

If the conventional, orthodox understanding of stability is the lack or absence of price and currency fluctuations, we have certainly made it. But when fuel and food prices are three times what they were three years ago, when the dollar rate of the rupee has come down to a third of its pre-2021 value, when salaries have failed to keep up with inflation and cost of living, this stability seems little better than the queues and shortages the country faced in 2021 and 2022. Not surprisingly, many of those responding positively to Lu’s narrative seem to hail from a milieu which has been able to weather these storms.

Most Sri Lankans do not have that luxury. They are angry at the government, the tax hikes and price hikes being imposed on them and practically everyone who bats for the government or its policies. That much was clear at a recent programme on News First, where a representative of a prominent economics think tank was overwhelmed, first by a left wing political economics professor and second by the YouTube comments feed. What such developments show more than anything is that anyone advocating for austerity or policies which depend on austerity will lose credibility among the public.

My critique of these policies should not undermine the veracity of some of their propositions. For instance, it is true that SOEs need drastic restructuring. It is true that we need to implement growth-centric reforms. But it is also true that this can be done outside of the hard, harsh, austerity-oriented universe we are occupying now.

As a political analyst pointed out last week, the issue with pro-market economists in Sri Lanka, including those attached to opposition political parties, is that they view the problem in terms of a conflict between capitalism and socialism when it is possible, within a capitalist framework, to think of alternatives to austerity.

The problem is that anyone even remotely suggesting such alternatives are, as Pasan Jayasinghe pointed out in a recent, thoughtful piece in the Daily FT, “painted as a unique, society-destroying danger… cast as stupid and selfish…Such is the contempt that the establishment holds ordinary Sri Lankans in that they are required to be grateful for the very policies driving them to ruin.”

Mr. Lu’s comment blithely ignores these realities. One does not have to be a degree holder to understand that there is a huge rift between the acclaim the government is getting for implementing neoliberal policies and the backlash those very policies have provoked on the streets.

The narrative may have shifted in favour of this regime since 2022. And to an extent, it has. But the contradictions on the ground are just too much for anyone, even a diplomat of Mr. Lu’s standing, to predict or welcome the restoration of stability.

Second, it is not in the best of taste to describe what happened on the streets here in 2022 as mass riots. They were much more than riots. They represented the frustrations of an entire country which felt that the political system was being skewed against the very people who were supposed to benefit from it. To reduce such a phenomenon to the category of a mass riot is to diminish its significance and continuing relevance. Besides, we are still seeing protests on the streets. Not all the hosannas to stability can stop them.

The United States is no stranger to “riots.” The Minneapolis protests of 2020 is a recent example. Would Western governments dismiss them as street riots or would they try to examine the causes for them? The West doesn’t have the best track record when it comes to addressing such issues. Systemic racism, which is what sparked off protests in Minneapolis and in Ferguson, has yet to be resolved. But no responsible government would want to dismiss their relevance, at least not publicly.

Jon Stewart recently tweeted about CNN’s reporting of the IDF attack on an aid convoy in Gaza: “A ‘chaotic incident’ is college kids storming a basketball court, not a massacre at a food line.” The aragalaya was many things. A mere street riot it was not.

Economic policy is not the only grounds on which Mr. Lu’s comments can be critiqued. Nor is the left the only political orientation within which such a critique can be formulated. Mr. Lu’s reference to the US Indo-Pacific strategy and his view that such strategies are to the benefit of countries such as Sri Lanka has riled nationalist feathers.

It is no secret that this is a crucial year for the US. With the prospect of a forever war in the Middle East – particularly in Gaza – and a series of elections in some of the biggest, most important countries in the world including India and Russia, the Indo-Pacific is bound to figure prominently in Washington’s scheme of things. Sri Lanka is an important player to the US and the US knows it, as the recent donation of another coastguard cutter – a thank you gift, presumably, for Sri Lanka’s efforts in the Red Sea – makes clear.

Rightly or wrongly, this government’s lurch towards the US, be it in the Red Sea or on the economic front, has opened it up to allegations of siding with Washington, an allegation that has almost always been toxic for any presidential candidate, as President Wickremesinghe himself discovered in 2019 over the Millennium Challenge Corporation fiasco.

The advantage President Wickremesinghe has at present is the support he has secured from the SLPP. The question remains as to how long the SLPP will cling on to him. There are several ideological differences between the president and the party. Will the party tolerate the president’s tilt to Washington forever? Probably not.

Mr. Lu’s view of Sri Lanka is rose tinted, overtly optimistic and, to his critics, utterly unrealistic. It is true that Sri Lanka has returned to stability but the stability we are seeing now is more imposed than intrinsic. It cannot continue for long. If Western diplomats, particularly those who work in regions where electoral coups have become part of the political culture, cannot see that, well, too bad.

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