After a nearly three-decade civil war those devastated by it had to rebuild their lives and finding employment was a challenge. The strategy adopted by the Government was to expand credit and promote self-employment. But then things took a turn for the worse when their livelihoods did not flourish. People could not repay the mounting debts. The once war-torn areas of the country are now mired by multiple loans which include ‘predatory’ microfinance loans and loans provided by informal lenders at exorbitant interest rates.Failed attempts at self-employment coupled with accumulating high interest loans have now driven families to the brink of poverty.
According to plans mooted by the Finance Ministry, the government intends to support community-based co-operative sector by investing in fifty small industries run by over 1,900 regional co-operative movements, in a major bid to spur sustainable and inclusive reconstruction, while generating employment for over 2,500 people.
The Pathfinder Foundation’s prescriptions in its recent report, ‘Charting the Way Forward: Prosperity for All’ are a blueprint for the failed neoliberal policies of the past and would lead to prosperity for a few and misery for many. While vague and superficial in its analysis and conclusions, the Pathfinder Report’s conceptualization of structural changes to Sri Lanka’s economy has many faulty if not dangerous assumptions.
In particular, the report proposes cutting back on state budgets while promoting labour regimes that will further undermine workers’ rights and incomes. These ideas will only consolidate tendencies of political decay in Sri Lanka, further removing citizens from decisions made by economic ‘experts’. Finding alternatives then must inevitably expose the hoary claims in the report that are being rejected around the world in the wake of economic crisis.
“Sri Lanka needs good relations with both China and India but Rajapaksa turned it into a zero sum game, which made him a liability for India,” said Paikiasothy Saravanamuttu, executive director of the Centre for Policy Alternatives in Sri Lanka.
“A pristine white building with a classy brown wooden finish overlooks the blue Indian Ocean at Kankensanthurai, about 19 km from Jaffna in northern Sri Lanka. It’s a luxury resort, and on Sunday mornings, families come here for a meal, a swim in the pool, and to play on the beach. Foot-tapping music plays at the restaurant, and DJs are hired for corporate-sponsored parties.
The owner and operator of this beachfront property, called the Thalasevana holiday resort, is the Sri Lankan Army. It is one of the many commercial establishments that the Sri Lankan armed forces — numbering a massive 300,000 uniformed personnel in this small country of about 2 crore — own.”
Although, the coalition criticized the Colombo Port City project as a waste of a colossal sum and promised to terminate it once elected, it now appears that the government is retracting from its earlier commitment. A major promise made prior to its election was the removal of the executive presidency. The Sirisena government is now having second thoughts.
Those who voted for this administration are watching with a keen interest and will no doubt pass judgement on its performance or lack at the soon to be held general election.
The stage is now set for a resurgence in India-Sri Lanka relations. This will depend on dynamic leadership in India and Sri Lanka. India will certainly look forward to regaining lost ground in Sri Lanka and should therefore re-engage Colombo as a vibrant partner and a reliable neighbour.
Since the end of the war, Sri Lanka’s economy is being transformed through a rapid process of financialisation. Such widespread financialisation facilitated infrastructure development, a real estate boom linked to urbanisation and expansion of credit leading to increasing indebtedness of the rural population. In short, financialisation contributed to the geographical changes of the economy through beautification of Colombo and infrastructural connectivity of the country. Furthermore, it has changed the class structure of the society with increasing inequality leading to a new wealthy class and an increasingly indebted population.
In four months’ time, Sri Lanka will mark the sixth anniversary of the end of its bloody civil conflict. Ever since government armed forces declared victory over the Liberation Tigers of Tamil Eelam (LTTE) on May 19, 2009, the country has savored peace after a generation of war.
While the election victory for President Maithripala Sirisena was due to a unique political moment that united minorities and many in the Sinhala electorate to vote out an authoritarian regime, expectations of major change in economic policy need to be tempered. The momentum gained from overthrowing an authoritarian regime should now be channelled into a radical democratic agenda for social justice through mobilisation and struggle in which the leftist forces in Sri Lanka have to play an important role.