By Kumar David –

Prof. Kumar David

My essay two weeks ago (“What Options for Jaffna Economic Revival?” on 17 July) was on the whole grim and pessimistic and it followed discussions outside the Northern Province with a NGO types, small investors and a potential venture capitalist. I had the good fortune a week later to participate in two and a half days of events and discussions in Jaffna thanks to Marshal Fernando of the Colombo based Ecumenical Institute for Study and Dialogue and Ahilan Kadirgamar of the Jaffna based Fellowship for Social Justice. I do not intend to review the proceedings or report on the rich variety of views except to say that participants included local activists, grass roots campaigners, religious dignitaries and radical Tamil leftists. About 20 of the 100 or so present were Sinhalese from the South. What I do intend to write about is how my views on economic revival in Jaffna were advanced by this exposure. Hence my title has progressed from “What options” to “Some options”. The relevance of this essay is confined to Jaffna and the Northern Province – even it’s bearing on Mullaitivu and Mannar is limited – and if one were writing about the Eastern Province the approach would be different. The EP economy is progressing better, its ethnic mix is sharply different and the caste and land logjam is far less severe.

The Jaffna, Mullaitivu and Kilinichchi Districts have undergone a social revolution in the last few decades. Deleterious effects predominate, so the term counter-revolution is more fitting than revolution! Thirty years of war, subjugation to an alien culture, too-and-fro occupation by the LTTE and the military, land, home and business premises grabbed, forced eviction of Muslims and wholesale theft of their property by Tamils and finally the flight of hundreds of thousands from Jaffna into the Vannie wilderness, when taken together this constitutes a trauma of apocalyptic proportions. Then there was the flight of tens of thousands of young people to forestall forced recruitment by the LTTE or harassment by the military – actually just about anybody who could get away did not hesitate to take off overseas and those who could not get that far escaped to the south of Lanka. Thus the economy was devastated, agricultural lands fell into disuse, fishermen’s boats lay at anchor, cement and chemical plants were abandoned and afterwards stripped and even the informal economy declined steeply.

The region reverted to the infamous money-order economy now sourced not from Colombo but Toronto and London. This in turn has had a psychological impact on young people. One hears in the south of how women’s remittances from the Middle East engender male and youth idleness. The constant refrain of contractors and urban households in the south is that unskilled labour is hard to find and people with skills (carpenters, masons, electricians, plumbers, fitters, welders and mechanics) a prize worth its weight in gold. Jaffna is a worse version of this. Even after making allowance for exaggeration it is hard to deny that the labour supply scene in Jaffna is a new ball game compared to pre-war times and the economic consequences are bad. Nowhere in the world can a society go through three decades of such trauma without profound social transformation. The old Jaffna, that quaint place is no more; whatever takes its place in the next decade will be different both in economy and in social traditions and values.

Even the small number of carriers of old traditions who come back from abroad to resettle, in the main choose to make their homes in Colombo. The Tamil diaspora has not invested in Jaffna not for want of feeling for their fellow Tamils but because there is scant business opportunity. Donations to schools and computer labs are fine but not the same as economic investment in the production of tangible goods. Opportunities for productive investment on a capitalist basis are not plentiful. Tourism which is attracting quick-buck investment does not fall into the category of an outlay that generates agricultural and industrial wealth. I do not denigrate the service sector but am only pointing out that hotels and guest houses belong to a different category, a category which does not increase material output or contribute to wealth creation through a multiplier effect.

Land and caste issues

The topics I will touch on today are land and caste which are interlinked, and indebtedness and economic growth which are also linked. I wrote extensively in the previous 17 July piece about the reluctance of the military to return occupied lands and quality homes and the business benefits and holiday privileges that the forces are reaping. These observations need to be supplemented by reference to the arbitrariness of the authorities in the exercise of power. Just one example will have to suffice for reasons of space, but it is not atypical. There is a road behind the KKS cement factory which is also the access to several lanes and properties. These lands were occupied by the military till recently but a few months ago owners were invited to repossess their lands. Then quite arbitrarily and without warning the police fenced off portions, denying everyone access. Appeals and demands for explanation fell on deaf years as always. In truth Jaffna is still occupied by a politically hostile and culturally alien force.

I now move on to a more general issue concerning land; the shortage of labour on a sufficient scale to undertake productive farming. This is not entirely correct in a certain sense but give me a moment to complete my comment on land shortage. Almost all land that has been returned – indeed most land anyway – belongs to the “upper” castes (who affirms their altitude!), the vellelas (govigama) or farmer caste. Many owners are absentee landlords resident in the South, in Toronto or in Jaffna Peninsula towns. They are no longer farmers in the active sense. In the past too active vellala farmers supplemented their labour with exploitation (in the surplus value extraction sense) of “low” caste (nalavar, pallans, etc) labourers but things are different now.

The old arrangement has declined after the war because absentee landlords and their sons are not and have no intention of functioning as active farmers. Some may like to use “low” caste agricultural labour but even they are inhibited by two considerations. First, in these turbulent times landowners are terrified that active agricultural labourers who have been farming for years may refuse to surrender lands. The same fear restrains the creation of new employment on returned lands; vast tracts on both sides of the road to Jaffna through the Kilinochchci District are absentee-owned and unfarmed. In the Peninsula, say KKS, a different concern restrains absentee landlords. The sharp witted Jaffna man anticipates escalation of land values; the airport is to be developed, Indian commercial capital may be energised, etc. The trend is to hang on to real-estate for price speculation purposes rather than commit to productive initiatives.

This has a direct relationship to caste. If I may be allowed to exaggerate a little I could say: On the one hand we have poor, cast-wise socially depressed, landless labourers and on the other side absentee landlords sitting on prime estate. Eureka, a Russian Narodnik of former times would exclaim! Here are the ingredients of a peasant revolution; two birds with one stone! Expropriate absentee and non-active (mostly snot caste) landowners and give possession to the peasants (mostly downcast if you forgive a terrible pun). Of course I know this is not doable in these times; imagine the howls! I am more likely to be taken away in a white-van hired by the Tamil landed gentry than the peril of being offered a lift in Gota’s vehicles in previous years.

Nonetheless the principle remains correct. Caste oppression in the North cannot be overcome by merely preaching the fatherhood of god and the brotherhood of man. My liberal friends – bless their bleeding hearts – wish to educate the oppressor and preach equal distribution of god’s love among all men. Hardened materialists have no objection to god ladling out his love by the bucketful to all, but they say that unless economic exploitation (access to land) is addressed the GPS location of the kingdom of heaven will remain confined to its previous coordinates. Caste oppression will never be overcome until its material basis is abolished. Abolishing the caste roots of the land deadlock is the specific form that peasant liberation, the agricultural revolution, has to take in the Hindu Tamil north. (No hard feeling about Hinduism per se, but institutionalised Hinduism is the bulwark of caste oppression in Jaffna).

Indebtedness and economic growth

Many sessions of the Jaffna dialogue were immersed in the imbroglio of rural indebtedness. It was mostly women (mothers, heads of single breadwinner families, labouring women) who poured their hearts out. They do not have the money to feed a family and make ends meet; in a single phrase that’s it! At the end of each month they find themselves mired deeper and deeper in debt. This is not a problem of undisciplined spendthrifts or extravagant habits; no, most are parsimonious as they have to be if they are to survive at all. It seems as if the poor in Jaffna and the Central Government in Colombo are up the same gum tree. And the solution in both cases is the same, wealth creation or economic growth or whatever one wants to call it. It goes without saying that economic growth that does not spread some degree of equity will not address poverty. It is pretty obvious that there has to be economic growth, fast growth is needed in the North, if one is to have any butter to spread around at all.

It took a while to get this simple message across to the distinguished intellectuals assembled in the Conference Hall in Jaffna. The initial proposals were to control of interest rates, impose constraints on rapacious lenders who draw the unwary into easy loans only to grab their property and so on. Many debt ridden ladies confessed to having taken four and five loans; one or two were mired in a dozen. Control and regulation is a short-term panacea; the la solution is wealth creation, economic development always trumps bureaucratic regulation. It took a little effort to get this penny to drop.

I dwelt at some length in my 17 July piece on the obstacles to growth and in this essay I have made the case that land reform will serve the twin objectives of releasing productive forces in agriculture and overcoming a social curse. The other implied essential in this essay is that the state should foster and lead public and private capital into productive enterprises. Road building and pouring concrete does not trigger an economic multiplier since most of the released capital goes out of the Peninsula to circulate elsewhere, maybe the South. The state-led Deng Xio Ping, Lee Kwan Yew, South Korea private, public or joint-venture strategy is the most feasible option for growth on a capitalist basis.