Sunil Bastian

Sunil Bastian is a political economist. His current research interests are politics of state formation and development of capitalism in Sri Lanka. He has published widely and authored many books. He has been a Senior Research Fellow at the International Centre for Ethnic Studies, Colombo and chairperson of the Centre for Poverty Analysis. He has more than two decades of consultancy experience with a range of donor agencies.

Politics of capitalist transition and state repression

5 mins read

Capitalist transition within a state is a process that involves changing institutions or the ‘rules of the game’, so that markets become the primary mechanism for resource allocation. These changes must be legitimised at an ideological level. When institutions to establish markets are successful, they become ideas that seem to be natural and common sense, thereby creating a hegemony.

The establishment of the hegemony of markets is not a technocratic process, but a political one. Conflict and struggles are always a part of this. These conflicts can be violent. The process of capitalist transition takes place in a particular society within its own history. This means capitalism is not some sort of a model. It is a historical process, influenced by political forces in a particular historical context. It takes place in a context of global capitalism.

Institutional changes to promote markets create social classes. Since the socio-economic impact of capitalism is always unequal, in Sri Lanka, different sections of the Sinhala majority benefitted unequally from capitalist transition. In other words, although the Sinhalese were unified in ethnic terms, they were divided in class terms. The inequality generated by the capitalist transition within the Sinhala majority could always combine with Sinhala nationalism to oppose the regime in power. In a political space defined by ethnicity, the Sinhala majority was the deciding factor who came to power thorough elections. The opposition to regimes could also turn into an opposition to capitalism, and a general opposition to the state itself.

Post-1977 is a new period of capitalist transition in Sri Lanka. It emphasised markets, the private sector and openness to global capitalism. It changed the process of capitalist transition from the state-dominated capitalism that characterised the 1970-77 period. Political leadership to the process was given by J.R.Jayawardene led the United National Party (UNP) in 1977 general election. Jayewardene saw the challenges that economic reform will face from the Sinhala majority long before 1977. In 1966, in the keynote speech to the 22nd annual session of the Ceylon Association for the Advancement of Science, he argued for the need to establish a directly elected president to carry out unpopular economic reforms. A powerful president would be elected directly for a fixed number of years and be able to face opposition to economic reforms.

The UNP won the 1977 election securing 50.9 per cent of valid votes. This translated into 140 seats in a parliament of 168. In other words, it gave the UNP, a degree of political power that was disproportionate to their voter base. At this point it is worth recalling how UNP the brought about this major change in institutions controlling the Sri Lankan state using this power. Prof. A. J. Wilson’s book The Gaullist System in Asia: The Constitution of Sri Lanka (1978), give details of how this happened.

The election was won in July 1977. On 22 September 1977, the government put through an amendment to the 1972 constitution that established a directly elected president as the head of state. Jayawardena, who was elected as prime minister in 1977 general election, became the first president. This bill was not even discussed by the government parliamentary group. It was discussed only at cabinet level, adopted by what then was known as the National State Assembly, and certified by the Speaker on 20 October 1977. There were only six speeches in parliament when this fundamental change to the structure of the state was instituted. Then a parliamentary select committee was appointed in November 1977 to draft a new constitution. This was totally under the control of the UNP. The select committee held only 16 meetings. There was no serious effort to get public participation. A questionnaire that was circulated received 281 responses. Sixteen organisations and a Buddhist priest presented evidence before the committee. The report of the Select Committee was tabled in June 1978, debated in August 1978, and the 1978 constitution became law in September 1978.

It is clear that what determined the establishment of the constitution that still rules over us was the political power enjoyed by the UNP. Often the key role played by the balance of political power in establishing these institutions get masked by discussions on legal aspects. Balance of political power is the key in forming constitution. Linda Colley’s recent book The Gun, the Ship and the Pen demonstrates this, by analysing the history of constitution making in many parts of the world.

Once established, controlling the presidency became the most important political objective for the Sinhala political elite who controlled the state. Although politicians criticised the presidency when out of power, they were reluctant to give up this power when they became president. A powerful presidency existed in a society where there was little possibility to challenge the power of the president through societal mechanisms. In addition, factors such as patronage politics, which seeped into all spheres of social life, and a traditional attitude of looking towards powerful leaders for solutions, made this office even more powerful. As soon as this kind of powerful centre of power was created, these factors generated a political culture based on loyalty towards the centre and the person who became president.

The second institutional mechanism that enhanced the despotic power of the state was the Prevention of Terrorism Act (PTA). This was established just one year later, in 1979, to deal with the Tamil separatist threat to the Sri Lankan state.  It also normalised a discourse of terrorism. Although it came about because of a different issue, it has been used to deal with opposition to economic reforms in Sinhala majority areas. Reforming it, or totally getting rid of it, has been a consistent demand from those who have opposed state repression. But, even after four decades, the political elite who control the state is not ready to give up the power that the PTA provides. In post-war Sri Lanka, the power that presidency and PTA give to the political elite who control the state, is enhanced by well -developed security forces. These now absorb a significant amount of resources of a state facing fiscal problems.

The presidency and the PTA have been part of the Sri Lankan state for more than four decades. An account of the social impact of these in Sinhala majority areas is a study on its own. What we have is largely reports of individual incidents and numbers. A social history of this violence will reveal the true nature of state-society relations in Sinhala majority areas in the post 1977 period. This is a task for future researchers. We need similar research on the social impact of efforts to consolidate the territory of the Sinhala nationalist state threatened by Tamil separatism.

This year, the inability of the Sri Lankan state to satisfy the demands of global financial capital has led to social unrest. This is a part of a global capitalist crisis. Several other factors, like the situation Ukraine, have complicated the situation. A BBC news item reports that there have been various forms of social unrest because of economic discontent in 90 countries. For those who know the history of capitalism, this is not a new situation. What is important is to focus on is how the ruling political elite respond to the situation. In the case of Sri Lanka what we are witnessing now is a repetition of the same strategy of dealing with protests by using the coercive power of the state provided by the presidency and PTA. The scale of suppression might be different from what happened in the past, but the political economy is the same.

A key demand for any kind of progressive movement in Sri Lanka in this situation should be getting rid of both the presidency and PTA. It should be total removal of these institutions and not any kind of reform. The latter only goes to further legitimise these institutions.  Continuous criticism of the various discourses that currently legitimise these institutions will be essential. For example, the use of the term political stability, without clarifying how this to be achieved is opening doors for state repression. Instead, what we need is a regime that seeks to establish political legitimacy with a new social contract. This is necessary not only to promote democratisation, but also to promote social justice and pluralism.

Views expressed are personal

Sri Lanka: Towards a political vision combining social justice and pluralism

8 mins read

The post-war Sri Lankan state’s inability to fulfil the demands of global finance capital has devastated the lives of millions of Sri Lankans. This is a country where we see the socio-economic impact of the new period of capitalist transition that emphasised the private sector, markets and openness to global capitalism for more than four decades. The other dimension that has had a wide-ranging impact on society has been three decades of a military strategy to consolidate the territory of the centralised Sinhala nationalist state. This began in 1979 with the enactment of the Prevention of Terrorism Act and sending troops to the North and was achieved in 2009. A full understanding of the social impact of this dimension needs a lot more research. If we add to these the impact of COVID and the economic crisis we get the full picture of the socio-economic issues that people within the Sri Lankan state are facing. Of course, the impact of these issues is mediated through the social structure. Therefore socio-economically marginalised population is facing a worse situation, and their condition is bound to deteriorate further.

The media is full of analyses and answers to these problems. But as one of my favourite Critical Theorists – Robert Cox – who worked in international political economy, says all analyses are done for someone and for some purpose. There is no politically neutral analysis. The bulk of the discussion is geared towards restoring capitalist growth. Often this is accompanied by a desire for what is called political stability. But advocating political stability without defining how this is to be achieved, in a country where we have seen thousands of deaths through state repression, is not only dangerous but downright reactionary. Rather than political stability, we need to talk about political legitimacy. A regime that has a greater degree of political legitimacy can give leadership to developing a new social contract, which is essential for Sri Lanka to face the current situation. This note is aimed at the social and political forces that have begun to challenge existing orthodoxies in the current context. These protests are found cutting across ethnic groups. It aims to combine social justice and pluralism and point towards new areas where progressive politics can be strengthened.

In a situation where wages become a major source of income, education and skills development becomes a critical area for social mobility. State monopoly on education was broken in the new period of capitalist transition

To begin, we need to consider the impact of more than four decades of the more liberal period of capitalist transition. The bulk of the economy is concentrated in the Western Province, which was better endowed to benefit from the new directions in the economy. Central Bank data shows that in 2019 these areas accounted for around 39 per cent of the total national output. According to the Household Income and Expenditure Survey of 2019, which managed to cover the entire territory of the state because it was unified through military means, 11.9 per cent of the households in Sri Lankan live below the official poverty line. There is a great degree of variation in this indicator between districts. While Colombo district had 1.8 per cent of households below the poverty line, the Mullativu district in the Northern Province. it was as high as 39.5 per cent of households. This area has also been affected by three decades of armed violence. In reading this data it is necessary to remember that the poverty line, as defined by the state, measures a basic minimum a household needs for survival, although it is propagated as a great achievement in development. What these figures show is the proportion of the population who could not secure even this basic minimum.

With the deepening of capitalist relations of production, there have been significant changes in the agrarian sector. The share of agriculture in the economy has significantly declined. In 1977, 30.7 percent of the national output was from agriculture. By 2019 it had declined to 7.0 percent. There has been a gradual deterioration in the viability of smallholder paddy. The 2019 Household Income and Expenditure Surveyshows that only 8.6 per cent of income in the rural sector was from agriculture.Further reforms in capitalist transition backed by international actors will try to promote markets relations in state land. This will make it even more difficult for the smallholder peasantry to earn a living from their land.

The other side of this rural transformation is the growth of a population depending on wages. The growing working class is found in multiple socio-economic formations – organised, informal, sub-contractors, etc. A significant section of this labour are women. Some sections of the working class sell their labour in other countries. While the working class has grown, institutions that protect their rights and working conditions don’t operate in many sectors. What existed in the past has been gradually dismantled. The effectiveness of these institutions depends a lot on the presence of trade unions. But the working class is not organised in all sectors. On the other side, business interests will continue to try and dismantle the remaining institutions that protect rights of the working class.  

It is necessary to pay attention to the austerity measures that are sure to follow an agreement with the IMF.

In a situation where wages become a major source of income, education and skills development becomes a critical area for social mobility. Since the state monopoly on education was broken in the new period of capitalist transition, the role of the private sector in education has expanded. This has become a new avenue where richer classes can ensure an education for their children. In addition, the state sector is not an equal system. Therefore, both private sector education and state education provides more opportunities for the richer section of population to provide a quality education for their children. The cumulative effect of these changes has been the growth of a significant level of inequality. Data for 2019 show that while the richest 20 percent of the population acquired 51.4 percent of national income the poorest 20 percent had only 4.6 percent.

The answer to these socio-economic issues from those whose main agenda is restoring capitalist growth in the current context, is the same old idea of protecting vulnerable groups that we heard 40 years ago. The foundation of this idea is the notion of growth and trickle-down. Sometimes these policies are called targeted safety nets. The argument is that these policies are meant to safeguard the poor from the impact of capitalist reforms. This is supposed to be the main role that the state should play vis-à-vis the poor – in the long run, economic growth would take place, and the benefits would trickle down to the poor. The analysis that underpins these ideas always focuses on households in isolation from the structures of socio-political power that maintain this population in this condition in the first place. Therefore, it takes us away from the need to tackle the reasons for marginalisation.

During the new period of capitalist transition that emphasised markets, private sector and openness to global capitalism, all sections of the Sri Lankan population did not accept these ideas of safety nets propagated by the political elite and their international backers. That is why there have been struggles in various sectors, such as the urban working class, plantation working class, sections of smallholder peasantry, fisheries, etc., to improve their living conditions by challenging the structures of power that maintained existing the social relations of production. The entry of women’s groups into these struggles added a new dimension. Of course, there were setbacks, such as state repression of the July 1980 strike. At present what is needed is to take a close look at this experience, learn lessons and look for possibilities of reviving these struggles.

Finally, it is necessary to pay attention to the austerity measures that are sure to follow an agreement with the IMF. In approaching this question, it is important to remember what we have is a post-war state. The result of more than four decades of the new period of capitalist transition and three decades of armed conflict has been the growth of armed forces and proliferation of state institutions at several levels. Today the institutional structure of the centralised Sinhala nationalist state has institutions at presidential, parliament, provincial, districts, sub-district and local authority levels. Almost all these levels include elected members and a bureaucracy. In addition, institutions of the central state have undergone numerous divisions. One of the reasons has been the need to maintain coalition regimes and large cabinets.The strategy of the political elite has been to divide state institutions and distribute them among coalition partners. State is bound to give priority to ensure resources for these institutions in implementing austerity. The objective of progressive sections should be to focus on how policy changes will affect the marginalised, and counter possible negative impacts.

During the new period of capitalist transition that emphasised markets, private sector and openness to global capitalism, all sections of the Sri Lankan population did not accept these ideas of safety nets propagated by the political elite and their international backers.

If we are to go by the past experience in Sri Lanka, the politics of economic reforms to ensure capitalist growth need not be peaceful. We need to remember that the state has draconian laws and a better-developed security apparatus to meet any challenges to these reforms from society. As in the past, the political elite is more likely to use this repressive apparatus to achieve their own political objectives, rather than aim towards political legitimacy through a new social contract.

Beyond reconciliation

As pointed out at the beginning of this note,policy discussions on social justice should not ignore the political demands that have been raised by ethnic minorities right throughout the post-colonial period. While the political elite inaugurated the new period of capitalist transition after the 1977 elections, the Tamil minority demanded a separate state in the same election. One of the responses of the centralised Sinhala nationalist state, that presided over the new period of capitalist transition was to enact a Prevention of Terrorism Act (PTA), establish a discourse of terrorism and send troops to the North-East. This military effort lasted for 30 years, and in 2009 the territory of the centralised state was consolidated. But none of the major issues in relation to minorities and the centralised Sinhala nationalist state have been resolved. In fact, in some areas, the situation has worsened for example, with the Muslim population becoming a target of extremist violence. 

At present some of the key aspects that the ensure security of the post-war state are maintaining the strength of the armed forces, continuing a presence of armed forces, especially in the Northern Province at a level higher than when Tamils demanded a separate state, and keeping the PTA in the statute books. In this context various activities under the title of reconciliation become an element to stabilise the post-war state.

The focus of reconciliation is society, rather than the nature of the state and state-society relations. Although there is an element of prejudice and animosity between identity groups in Sri Lanka’s conflict, they exist in a context of a centralised Sinhala nationalist state. Ignoring this within the discourse of reconciliation means ignoring the need for fundamental state reform focusing on its identity, public policies and structure to suit a multi-ethnic society. What we need is not a nation-state with a unified identity, but a state that has space for multiple identities. Its structure and public policies have to fit into this vision.

Given the socio-economic impact of the economic crisis that is affecting all ethnic groups at present, there is space to focus on a strategy where diverse ethnic groups come together to struggle for common socio-economic rights. This can give a new meaning to reconciliation and combine social justice with a vision of a plural society. There are scattered examples of this happening already. For example, every year we see demonstrations by the mothers of the disappeared from the North (victims of the military strategy to consolidate the territory of the Sinhala nationalist) and South (victims of the state repression in 1989/90). There have been some links between them. But this certainly can expand. During my work in the North/East after the war ended, I have seen examples where people from a Tamil village and adjoining Sinhala village come together to lobby state institutions to restore their land documents. Another example is Muslim and Sinhala villages coming together to lobby about supply of water in the irrigation canals. There can be many such examples that can built upon. These are small examples. In the current context there is space to build on this strategy.

To end this note I would like to emphasise the need to get away from an analysis that places class and ethnicity in isolated compartments when dealing with the problems of the marginalised in Sri Lanka. In this regard, my best personal experience has been when working with the plantation working class/Hill Country Tamils. There was no way one could separate ethnicity and class at analytical or political level when working with this population. The struggle for political,socio-economicand right to a distinct ethnic identity had to go together. This is an experience that we can learn from.

Views are personal