By Tisaranee Gunasekara –
“…the social state is advantageous to men when all have something and no one has too much” –Rousseau (Social Contract).
The post-socialist world is experiencing a counter-revolution in ideas and attitudes. A key component in this regression is the return to certain economic beliefs, once abandoned as unethical and damaging/destabilising. A case in point is the triumphal return of the old – and historically invalidated – theory of ‘inequality as the driving force of capitalist growth’. The worsening chasm between the rich and the poor is no longer seen as undesirable, or dangerous. Denuding public services and anti-Robin Hood tax policies have become synonymous with ‘good economics’. The obscenely conspicuous consumption by the mega-rich, even in times of general economic distress, has become socially acceptable. Augustus Melmotte, Anthony Trollope’s stratospheric-earning, stratospheric-spending, corrupt and corrupting financier is the new entrepreneurial prototype, from New York to Beijing– and Colombo.
Refusing to learn from the past is a characteristic of not just the political man but also the economic man. Inequality was the great societal-de-stabiliser, from French Revolution onwards. Radical Enlightenment thinkers warned about the political dangers inherent in socio-economic inequality: “The man discriminated against is aggrieved. The man who possesses nothing lacks any stake in society”, cautioned d’Holbach[iii].
239 years later, the ‘Riots, Communities and Victims Panel’, appointed by the British government to study the August 2011 riots, concluded that societal violence is inevitable when people do not have a ‘stake in society’[iv].
Stable societies are cohesive societies. Cohesion is impossible when a society is racked by inequality. If some people feel that they are marginalised for ethnic/religious/sociological reasons or that development is something that happens to others, disenchantment sets in and politico-psychological fissures develop. Instead of the necessary ‘national’ perspective, ethnic/religious/caste/class perspectives become predominant. Instability breaks out, even in the midst of spectacular growth, as the ongoing events in Brazil and Turkey demonstrate.
Socio-economic equality is not an automatic outcome of growth. Like political equality it must be aimed for and worked at, by governments and by societies. Societal pressure and political will are important requirements for any real movement towards greater socio-economic equality, just as it was for political equality. Where governments do not make extra efforts to promote equality, inequality flourishes. This insalubrious atmosphere breeds the socio-political germs which eventually kill the growth-march of the economy, often in a fusillade of violence.
As happened in Sri Lanka, in the second half of the 1980’s.
The Relevant Interregnum
The Premadasa presidency marked an interregnum in more ways than one. Ranasinghe Premadasa was Sri Lanka’s first (and only) non-upper caste head of state. His ascendancy revealed the caste-fault-lines which bisect our society, underneath a veneer of modernity. As the discourse of that time demonstrates, even the left was not immune to this malaise; a visceral antipathy to this ‘caste-upstart’ was something dominant caste Sinhalese and Tamils had in common. Much of the baseless accusations levelled against Premadasa and the viciousness of the epithets hurled at him stemmed from this primordial hatred.
Premadasa was a member of a subaltern caste; he was born and bred in Keselwatte, the geographical other of Kurunduwatte and Sri Lanka’s equivalent of the old Harlem, a place which ‘the respectables’ avoided like the plague. He knew of the anger and the bitterness, the frustrations and the despair of the marginalised. His (misplaced and dangerous) sympathy for the JVP and the LTTE, and his persistent attempts to reach out to them stemmed, from empathy.
As President, Premadasa sought to bridge destabilising societal-gaps (poor-rich/rural-urban/powerful-powerless) with programmes such as Janasaviya, Gam Udawa, 200 Garment Factories and land-redistribution. This conscious adoption of a strategy of equitable development marked another epistemological break from the Lankan norm.
Available statistical evidence points to the success of this ‘growth with equity’ strategy. During the 1989-1993 period growth rate improved[v], unemployment decreased[vi], budget deficit was contained[vii], balance of payment and debt service ratios improved[viii] and the stock market thrived[ix]. More pertinently, poverty[x] and inequality[xi] decreased and literacy rates[xii], infant mortality rates improved[xiii], real wage-rates increased[xiv] and trade union activities intensified[xv].
This definitive movement towards a less-unjust equilibrium was made possible by an increase in expenditure on social services (as a % of total government expenditure)[xvi], the distribution of 327,368 acres of state land amongst landless poor, the building of 159,336 new housing units with state assistance, the setting up of 134 new garment factories in underdeveloped areas[xvii], the granting of free uniforms and mid-day meal etc[xviii].
What is significant is that this growth-equity improvement took place while the country was recovering from the Second JVP Insurgency and engulfed in the Second Eelam War.
Today we are headed in the opposite direction. According to the latest Mercer’s International Geographic Salary Differentials, Sri Lankais among the five lowest-paying countries for para-professional employees in the world[xix]. This is one more indicator of a development path which under-develops the people[xx].
As a grade 11 student-participant of an essay competition to commemorate President Premadasa observed, “If the ‘development’ of a country goes hand in hand with the worsening of the living conditions of the people, for whom or for what is that development? A developed country for a malnourished people – is this not an insanity? Must the people of the country gaze at highways like a child looking yearningly at an empty ice cream cup?[xxi]
Inequality’s destabilising impact can assume particularly deadly forms in a country beset with ethno-religious divisions, especially if the rulers use the race/religious card to impose an artificial cohesiveness on an economically divided society. Premadasa understood the mutually sustaining relationship between anti-people development and the rise of fanaticism: “Sinhala villagers felt increasingly shut out from power and privilege which continued to be enjoyed by the few. These feelings of being denied access to a better life took an ethnic character when some of our leaders found it expedient to divert their emotions along ethnic lines”[xxii].
People, de-prioritised by prevailing developmental values and deprived of benefits of growth, can be bamboozled into demonising the ethno-religious ‘Other’.
The sense of déjà vu is palpable.
[i] English Economic History – George W Southgate
[ii] Just Four years after it refused to intervene to alleviate the condition ofAmerica’s working children, the US Supreme Court saw nothing unconstitutional in prohibiting the consumption of alcohol. During 1920-33, the consumption of alcohol was made illegal, carrying a fine of $1,000 and a six year jail term while child labour continued to be legal and socially acceptable.
[iii] The Social System
[v] Economic growth which had fallen to an average of 2.2% between 1987 and 1989 (the lowest in 15 years) showed a marked improvement to an average of 5.5% between 1990 and 1993.
[vi] From 19.5% in 1985/86 to 14.5 in 1993.
[vii] Budget Deficit (after grants) as a % of GDP averaged at 7.4% during the 1990-93 period.
[viii] For the first time in years there was a positive balance of payment, from SDR millions (-) 101 in 1988 to SDR million (+) 138 in 1990 and SDR million (+) 375 in 1993. Debt Service Ratio improved from 28.8% in 1988 to 16.5% in 1990 and 13.8% in 1993.
[ix] Annual turnover increased from Rs. Million 378.4 in 1988 to Rs. Million 1562.8 in 1990. The All Share Price Index increased from 172.44 in 1988 to 384.39 in 1990; the Sensitive Index increased from 309.56 in 1988 to 680.3 in 1990.
[x] According to the World Bank Head Count Index I poverty levels decreased by 4.9% between 1985/86 and 1990/91; according to the World Bank Head Count Index II, the decrease in absolute poverty during this period was 5.26%.
[xi] Income Distribution (Relative Poverty)
|Deciles||1985-86% of income||1990-91% of income|
The distribution of income improved not only in favour of the poor but also of the middle classes. For example the share of the income received by the lowest 50% of the population improved by 9.8% (from 12% to 21.2%). The only significant losers were the highest 10% of the populace whose share dropped by 12.8%.
[xii] Literacy rates which decreased for all age groups (5-18) between 1981 and 1985/86 increased to 86.9% by 1990/91
[xiii] from 22.6% in 1987 to 17.2% in 1991
[xiv] Real Wage Rates increased during 1990-93 for two of the three major categories – Workers in Wages Board Trades by 9% and all Central Government Employees by 2.2%. The real wage rate for the third major category, all Government School Teachers declined slightly by 0.8%.
[xv] The Number of newly registered trade unions increased during this period, from 83 in 1990 to 154 in 1993, as did the number of functioning trade unions from 1032 in 1990 to 1151 in 1993.
[xvi] from 23% in 1987 to 30% in 1993
[xvii] Of these 82.1% was outside theWesternProvince with 40.3% located in the zone with the lowest mean and median income level. 7 factories were established in the government controlled areas of the North and the East. As the Central Bank reported by the end of this first year the factories generated 70,000 jobs; their export earnings amounted to 29,589 million – 53% of the total textile and garment exports of the BOI industries during 1993.
[xviii] The sources for all the above statistics are the Central Bank Reports, Sri Lanka Labour Force Survey, Statistical Pocketbook of the Democratic Socialist Republic of Sri Lanka and Sri Lanka Economic and Stock Market Review.
[xix] The other four countries areVietnam,Pakistan,India and the Phillipines.
[xx] Tragically the UNP of today offers no alternative; both Ranil Wickremesinghe and Sajith Premadasa seem to believe in trickle-down policies, the latter with some handouts thrown in. Tom Paine said that “an hereditary governor is as inconsistent as an hereditary author”; developmental values are not borne genetically.
[xxi] quoted in ‘Ran Piyawara’
[xxii] A Charter for Democracy
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