28 October, 2020

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Gota, Please Don’t White-Van Sunli

By Kumar David

Prof Kumar David

Prof Kumar David

Neoliberalism Underpins Wanathamulla And Slave Island Evictions: The Informal Economy and its Enemies

The informal sector of the economy is the bedrock of an open society in third-world countries. When the bulldozers of the UDA roll in with white-vans in tow, flanked by jackboots in helmets, there is no place the poor can run, nowhere to hide. The assault of Rajapakse Raj’s corporate-state neoliberalism on the Informal Economy (InfEc) is a paradoxical turning of tables on Karl Popper who preached that the great facilitator of an Open Society was capitalist individualism. The PPP (Popper-popping-paradox) then is that free market capitalism in poor countries is predicated on authoritarianism thus exploding the capitalism-freedom marriage that Popper so artfully brokered. Left to themselves, the poor that is the majority in third world nations, seek self-supporting collective structures, Popper’s antihero.

This essay is a book-review of sorts where I inject local context into the generic discourse in “The Dilemma of the Informal Economy” by Sriyan de Silva. The monograph, published by the Employers Federation of Ceylon, 214 pages in length, has just come hot off the press. I have drawn on Chapter 5 for my purposes in the first part of this essay. The chapter has a jaw breaker of a title but it is about the flimsy property rights and underlying travails of the small people who earn their livelihood through InfEc.

InfEc consists of small and very small businesses; itinerant vendors, pavement hawkers, small repair joints, the ubiquitous 3-wheeler walla, small contractors and craftsmen. The littlest fellow could be the wewalkaraya who mends your rattan chair; at the more ambitious end would be the leader of a clique of four or five bass unahas who did that balcony extension for you. The residents and families of Slave Island and Wanathamulla are only in the minority a proletariat (workers employed by companies or the state); a significant majority are self-employed in the informal sector.

Sunil Samaradheera who was abducted in Wanathamulla last week after a heated argument with Gota, was a fish vendor, a hawker at a mallu lalla, typical of an informal sector person. Read Tisaranee Gunasekera’s story and watch Sunil’s embedded video exposé after his release thanks to a Wanathamulla citizen’s outcry;

My topic today is not to add indignation to yet another white-van outrage. No, what I am pointing at is that Sunil was a self-employed informal sector guy, like the majority of his neighbours. This is where SR’s (folks of poor taste call him Sriyan) monograph serves my purpose. Of course SR says not a word about the ‘slum’ clearance programmes in Colombo under the leadership of Gota and the UDA (so please don’t white-van him), he hardly mentions Lanka, but the monograph and especially Chapter 5 provide a generic framework within which I can locate the class and economic content of the ongoing UDA-Gota- Rajapakse Raj agenda. At the human level it is an obnoxious attack on the poor and a theft of their homes and land, but if you look at the underlying dynamics of the politico-economic change that is taking place in many parts of Colombo, then you will see that the informal economy is being driven out and the city is being fortified for the thrust of privileged classes and foreign and local businesses.

Pieter Keuneman presided over the protection of housing rights for the poor (some say he went too far), today, unpardonably, the Communist Party is inextricably sucked into the biggest neoliberal binge in the history of Lanka. Yes the biggest! The ventures of Rajapakse Raj will have a greater long-term neoliberal impact than JR’s unregulated market opening. This is not industrial capitalism, but the twaddle of shopping malls, luxury apartments, currency and stock market trading offices, gaming joints, and 5-star tourist hot-ills that the subaltern can only gaze at from afar. This is the neoliberalism for which people are being driven out of their homes and malls erected over the dead bodies of the economically weak; it is the graveyard of the informal economy.

Chapter 5 in summary

SR’s chapter takes its point of departure from the Peruvian Economist Hernando De Soto’s The Other Path: The Invisible Revolution in the Third World (1989) and blends it with the work of Elinor Ostrom on the Commons or Common Pool Resources. De Soto is the most important figure in the study of the InfEc and his life’s work was to explore the contribution of the sector to third-world society and encourage it to overcome obstacles. InfEc employs up to 70% of the population in some African countries and India and maybe a third or more in Lanka – I am not sure, but it is estimated at 15% in some Western countries so clearly it must be much higher here. The definition of the informal sector excludes employed workers and it should exclude traditional farmers and fisher folk, but SR is ambivalent about whether the latter two categories belong to InfEc. The sector’s contribution to the economy is usually not included in national accounts, or imperfectly included as it operates below the radar of taxation, registration and regulation. The author (SR) says that in many developing countries 50% or more of the national economy is contributed by the InfEc – he does not suggest a figure for Lanka.

Secretary to the Ministry of Defence and Urban Development

Secretary to the Ministry of Defence and Urban Development

The arguments of De Soto, Ostrom and others as communicated by SR can be summarised as follows. People in the informal sector are poor, do not have strong property title to their homes and lands, lack legal and political clout and have difficulty in raising bank credit. In view of the contribution the sector makes to the economy and its massive contribution to livelihood and employment, it is a moral and economic imperative of government to assist by providing land title, lines of credit and protection of homes. Then there is the matter of Common Pool lands and facilities. The idea of the Commons is not new, vide Goldsmith’s “Sweet Auburn loveliest village of the lawn” for the sentimentally inclined, and Chapter 27 and 28 of Capital-1 for the truth about the genesis of capitalism. [En passant, SR suggests that in England, in the nineteenth century, power holders opted for pluralism and inclusive institutions thanks to the pressure of “relatively wealthy and affluent people”. I think otherwise, it was the blood sweat and tears of the working people and two centuries of struggle that forced change].

To return to InfEc and to SR’s text, the author and the sources he quotes make an impassioned plea for protection, sustenance and promotion of informal sectors. Ostrom’s emphasis on Common Pool resources has local resonance; the eviction of the poor from homes, lands and livelihood by the Rajapakse Raj entails curtailing services and resources to tenement blocks and wattas (garden precincts) previously enjoyed in Common. The individual’s right to survive and Common Pool resources are both under attack. I am obliged to repeat myself before moving as these have not been elaborated from the focus of the informal economic sector before. What is happening now is not only an attack, in a humanitarian sense, on subaltern peoples; it is also an economic project to destroy Colombo’s informal economy in the guise of beautification to make way for the neoliberal dream of a new hegemony.

Chapter 9

The strongest chapter in the book is the ninth on “Formalising the Informal”. Chapters 5 and 9 are the longest and most important in Sriyan de Silva’s thirteen chapter monograph, but I will provide brief comments on five others as well anon. The discussion in Chapter 9 is about:

  • The resilience of the sector. For example when the ex-USSR descended into abject destitution in the mid-90s and greedy oligarchs ripped off state assets with the advice of the IMF and American academia, it was the mushrooming of informal enterprises that prevented even worse starvation and despondency.
  • Village and Township Enterprises (VTE) in the middle years of Deng’s reforms in China were robust responses energising China’s vast rural mass. They started as cooperative or collective enterprises under the leadership of local Communist Party and country level local governments. As they prospered and subdivided they evolved into a thriving semi-formal sector. They are semi-formal in that they have a formal relationship with local government, pay taxes and can win bank credit, but at the same time they are not formal capitalist business enterprises. If one reverts to old categories, the best label to stick on them is petty-bourgeois small enterprises. Their main focus is trading, eating houses, marketing local agricultural outputs, and only limited manufacturing.
  • There is a sensitive and intelligent discussion in the chapter on whether the informal sector will whither and die as a country transits from a developing status to a more developed economy with strong formal firms. SR’s answer is not definitive and leans towards “not for decades”.
  • SR poses but is less ambivalent about another crucial matter. Should policy make an effort to formalise the informal sector. He takes the position, and I agree, ‘No don’t push, rather give the sector the help it needs to grow (recognition, credit facilities, information facilities, productivity and education improvement) and leave it to some to prosper beyond the informal to formal business enterprises if they can’.

I would like to develop these ideas further but that would go beyond the remit of a review; go buy the book if you are interested.

The rest of the book

Chapter 3 is a good primer for a student who would like a more formal definition of InfEc beyond the rough and ready sketch in my third paragraph. Chapter 10 has an interesting title “Impact of Globalisation” but the discussion is limited in scope. SR occupied some big-shot capacities in the ILO and IOE (L for Labour, E for Employer. Life is so schizophrenic!) in Geneva, years ago. Chapters 7, 8 and 10 on legal systems, business environments and labour standards reflect this experience.

The book is clearly written and easy to understand; if anything the author is loquacious; what do you expect, he is a lawyer. Sriyan de Silva is a productive writer and monographer; a web search brings up about 25 short works, studies and pamphlets. This one is pretty good.

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Latest comments

  • 2
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    Gota, should be proud that he created an terminolgy.

  • 4
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    Gota, should be proud that he created an terminolgy “White-Van”.

  • 10
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    These poor people contribute immensely to the economy. They are the bus drivers, conductors, three wheel drivers, tailors, bakers, grocers, vegetable vendors, masons, bar benders, natamis, gardeners, coolies, mechanics, technicians, attendents and labourers. Without them society could not function.

    Living in the city side by side with the wealthy, rich and powerful they serve a useful purpose. They live from hand to mouth and on bare essentials. If all were born rich there would be no one to remove the garbage, sweep the roads or climb a tree. It is our duty to look after and protect the interests of these humble people. Save them from the greed of the Rajapakse’s and Casino culture.

    People boast about singapore with all its glamour, roads and casinos. But it is the most expensive city in the world.

    Singapore has dethroned the Japanese capital to become the world’s most expensive city in 2014, according to the Economist Intelligence Unit’s latest Worldwide Cost of Living survey.

    The bi-annual report, which ranks 131 global cities, credits currency appreciation, solid price inflation and high costs of living for Singapore’s dubious new distinction.

    http://edition.cnn.com/2014/03/04/travel/most-expensive-cities/

  • 5
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    Sunil has been martyred by the residents of Wanathamulla. He must feel
    crucified. He should contest for seat in parliament With best wishes to him.Bensen

    • 0
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      If he enters politics, his thinking, policy, ideology would change or would be compelled to change, otherwise he would be thrown out or worst can happen. This is Sri Lankan politics!!!He would be forced to isolate himself from the “common man”

      • 0
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        Truth,when i look at sunil i feel he will be the ideal president for this country.He would not be able to isolate himself from the common man as you claim will happen,even if he wanted to unless like micheal jackson he does plastic surgery or something.I feel this is gods way of sending us a message for the selection of the common opposition candidate to dethrone mahinda.

        Kumar is trying to deviate attention from sunil to the issue of relocation because he is afraid that his favourite candidate sobitha will be ditched in favour of sunil who is more representative of the large majority of people and therefore the most suitable for the universal franchise system of choosing leaders.He seems very articulate too which is a must for the masses endorsement and does not look too educated too which will make them happy that he is not a pandithaya.

  • 2
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    Prof. David@

    thanks for the great article.

    I find you have made it very clear that people in the country has no choice today. DJ had also reiterated that EA of the current regime is caricatured by Gota and his unnecessary, unacceptable mediation.

    Lankens like me being out of the country become fear whenever planning to visit our parents this year. If things have turned to this appalling levles, how can you expect to return safe. Wanathamulla Sunil or tomrrow some else will have to face it – perhaps, there are numbers of untold stories similar to that of Wanathamulla sunil – he had no fears to expose his story, but many including senior professionals, senior academics stay mum today – grasphing the reality of present day. Dr. Harsha Silva had mentioned to today´s press that his phone lines are tapped. They the rascals in power want to harrass any dignity and respect loving people. Today, only thugs can be pleased about the so called achievements of the current administration while all other put the kibosh their future plans.

  • 2
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    I would like to emphasise that the main issue is not the injustice done to Sunil, though that should be condemned.

    The main issue is that the informal economy of poorer and lower middle class people is being detroyed to make way for a massive neoliberal economic programme that even outdoes JR.

    • 8
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      Massive neoliberal economic programme …Yes..Yes…So we can have Marxists scholars coming and teaching Electrical Engineering at our own Hong Kong Polytechnic University at Wanathamulla.

    • 0
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      You could draw an analogy to how independent farmers have been squeezed out by Multinational AgriBusiness.

      In the financial independence of the common man is reduced and power is concentrated even more in the hands of a few.

    • 2
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      Comrade KD,
      We must unite the workers and peasants and fight against imperialism.Imperialism is our main enemy.Once there is communism in our country,everything including ethnic problem will be solved.My worry is comrade,you dont utter a word against imperialism,instead working closely with pro imperialist forces and reactionaries.

      “REVOLUTION UNTIL VICTORY”

  • 1
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    “Gota, Please Don’t White-Van Sunli”

    Kumar david,please don’t jump to conclusions like this and be so biased against the Defence Secretary.Have some respect for the position at least if you don’t have for the person in that role.Gota used a red van,not white as you trying to make out. Sunil himself said it was red,red,red.

  • 0
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    When abductions by vans of whatever colour are taken with a pinch of humour it says a lot about the cynicism of a society…..especially when the perpetrator is known to be the brother of the president.

  • 3
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    “Government to resolve the problems in the working of the 13th Amendment at least as it is and leave the un-kept governmental promise of 13th Amendment Plus to a future date”
    -As long as Mahinda remains in power and the TNA doesn’t change their confrontational stance ,Tamils wont get anything politically.Even though there are some progressive members in the government who have been supportive to devolution they are powerless and Mahinda is not in a position to hear their voices.Having said that,flying to western countries and meeting the western leaders and asking for international investigation is also not going to solve the problem.We must not forget what the western countries were doing when our people were being killed.The western countries were simply watching us when we were being killed are now shedding crocodile tears.Even now,the international community which is asking for international investigation is not ready to exert pressure on the government for a political solution.Even TNA gives more importance to international investigation than a political solution because they are not interested in a political solution.

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