By Kumar David –

Synopsis: This paper argues that the Rajapakse regime is on a premeditated course to establish an authoritarian regime in Sri Lanka and that the specific modality through which power will be exercised is a totalitarian Corporatist State strategy. The paper elaborates the concept and explores the national economy to justify the hypothesis.

There have been occasions in Sri Lanka’s post-independence history when the terms authoritarian and dictatorship were used, but it was episodic, not sustained and systematic. This time is different as never before seen phenomena mark an altered landscape. For the first time the island faces a premeditated plan to usher in an autocratic state (of a particular type whose modalities are the topic of this paper). Sri Lanka is not there yet, but half way down the road; the pace is mounting and resistance is swelling. This opening paragraph is not hyperbole, nor is it written in anger; it is a measured appraisal.

History, often, is pregnant with twins. The period 2013 to 2015 will either see autocracy consolidated or the Rajapakse siblings driven from power. An implacable ogre confronts a, not insurmountable, wall. Not locals alone, but international forces too, including Indian public opinion (not Sonia-Singh Delhi, which is irretrievably on Rajapakse’s side) will count in the settling of this do or die confrontation. The regime sees the black hand of foreign influence and imperialism behind every local protest, while rights lobbies demand more meaningful international monitoring.

This paper is not about establishing that the Rajapakses are bent on this course; it is intended for readers who grant this. Its purpose is to examine the particular modalities in the evolution of this state-form and focus on its economic facets. An analogy or two may help, though analogies are of limited value; the Marcos and Peron regimes exemplify features embedded in the Rajapakse case. The process is constitutional, not imposed by a military coup, and a cohort of place-seekers and politicos constitutes the first layer in a patron-client relationship. Below this lies an active populist base of perhaps a million; these are not the frenzied masses of the Nuremburg rallies, but they too serve their purpose. The regime sits atop a structure fashioned in two layers; tawdry sycophants, who in turn manage a mass prop.

The fundamentals of populist dictatorship

The patron-client network fans out as follows. Holding up the heavens of 5 to 10 dynastic deities are about 3000 UPFA MPs, provincial and local councillors, and operators in patronage positions in ministries and corporations. (UPFA, the United Peoples Freedom Alliance is the governing alliance of nine parties and is supported in Cabinet by three other non-UPFA formations).These lesser gods are a vibrant middle-layer through which the apogee of the regime exercises leverage. What makes this case different from similar phenomena elsewhere in South Asia is the determination of the regime never to step down. If it loses an election either brazen fraud or the exercise of power will settle the matter. This determination, and its effect on support structures, is the distinctive feature of the Rajapakse regime that imbues its client layers with confidence.

It cannot relinquish power for two reasons. Abductions and alleged kickbacks on a mind boggling scale will lead to prosecutions when the leadership loses power. Then there is the overhanging threat of international war-crimes prosecution. Additionally there is a slim possibility of diaspora LTTE elements seeking retributive vengeance when the security blanket is thinned. It is not only a question of unwillingness to give up power; it is also not being able to do so. At some point there will be a fight to the finish whose outcome will mainly be predicated on the ability of the opposition to unite.

The middle layer of the client network demands perks and votes from the grass-roots in exchange for favours which may be as simple as a letter of introduction, or a phone call to a police station, or more substantive such as partiality in securing a job, or fraudulently fixing a land title deed. If each middle-level flunkey can commandeer 300 persons it works out at about a million. This is entirely Sinhalese, and mainly petty bourgeoisie, but not only rural as it spreads into the informal sections of the urban economy.

This three-layered patron-flunkey-client nexus underlies the degeneration of public life. “Everybody is corrupt, even the man next door” is a ubiquitous remark that paints the UPFA as a maggot which has rendered all society corrupt in its own image. People ignore abuses by politicos, though well aware of it. Fear is a lesser reason; the erosion of public morals the greater.

The truth however is somewhat complex. The decline in civic morality is ongoing in all post-colonial societies and is to a degree inevitable with the opening of political spaces previously the preserve of an elite, to society at large; an overhead cost of decolonisation and populism. A second reason is celebration of neo-liberalism, post 1978 in Lanka. Neo-liberal, get-rich quick, market worship does not conceal its creed: ‘Each man for himself and the devil take the hindmost. You are not the keeper of the public-good’. This erodes an ethic of social-responsibility and abandons moral resistance to egregious behaviour of the powerful. The ennui of the citizen at large is the ganger on which authoritarian impunity feeds.

The Rajapakses have excelled at nepotism and family patronage like no other. The Senannayakes had a bit of it, the Bandaranaikes a lot, but squabbled and nullified the benefits of clannishness. The Nehru-Gandhi dynasty is in pitiable squalor compared to the imperial thrall in which Lanka’s dynastic clique holds state and society. At no time in history since the olden monarchies did one family exercise such a grip on power. Hence many threads come together in the authoritarian project.

Neither a military regime nor fascism

Lanka is not, and is not on the way to becoming a military dictatorship. The Generals are poodles on a leash and dance to sibling tunes; they have no independent national base and never had, even in the brief months overlapping the end of the war. Lanka is not, and is not on the road to classic fascism. Despite the torpidity of a clientele public, there is sufficient resistance in the youth, radicals, religious leaders, business classes, the elite and the working class, to render an experiment with naked fascism untenable. The international climate and democracy in India, however chaotic, make a kaki-clad military regime or naked fascism unsustainable in Lanka.

What we are sliding towards, if the siblings get their way, is totalitarianism of a Corporatist variety. Allow me to elaborate. Though the word fascism is of Italian origin (fasco, meaning tightly gripped bundle), classic fascism is identified with Nazism; the original Mussolini version is softer, a nuanced version. Its medley: ardent nationalism, the umbrella of the state, perverse socialism, and control of trade unions, police, military, judiciary and the economy. The Mussolini state did not smash every trace of independence in working class, Church, learned society and scientific bodies, as Nazism did. Hence it was called Syndicalism, in that it gathered populist organisations, anti-communist unions, business, the media and notable Italian intellectuals under the patron umbrella of Il Duce. There were strong patron-client relationships in Mussolini’s Corporatist State, in Peron’s Argentina and in Marcos’s Philippines.

An objection has been made to this thesis on the grounds that Mussolini emerged in a different historical setting and had a relationship to finance capital. Neither vitiates the thesis. Varied causes can stimulate similar morphologies; otherwise all generalisations will have to be rejected. The space that finance capital afforded Mussolini in the 1920s is furnished to the Rajapakses by global power balances and the stout support of China. If one wished to stick a longish label of categories on Lanka’s emerging state form, try: Politico-constitutional autocracy, riding on the back of populism, and ticking along on a Corporatist model. Rather a mouthful, sorry!

Divineguma Bill

The Corporatist hypothesis requires economic justification. I begin with the Divineguma (life-uplifting) Bill, then deal with larger economic issues. The Bill before parliament (November 2012), seeks to consolidate several poor relief programmes, now administered by the country’s eight Provincial Councils (PCs) and the Governor of the Northern Province (NP) in lieu of the NP-PC. (The regime refuses to hold elections in the NP-PC because it will not permit even one Tamil led PC). Administration of poor relief will be vested in a Divineguma Department under Minister Basil Rajapakse, the president’s brother and the nation’s economic tsar. This reverses the economic basis of devolution spelt out in the Thirteenth Amendment (13A) to the Constitution and as well as consolidating the Rajapakse economic empire.

The pie chart maps the 2013 fiscal expenditure proposals laid before parliament. If the Divineguma Bill is enacted, the share of recurrent and capital expenditure under the direct control of the Rajapakse siblings rises to 64%, leaving aside Public Debt servicing. (MR is Mahinda, GR Defence Secretary Gothabahaya and BR Basil Rajapakse, Wimps is a collective for thirty-something other Ministers). If the Bill fails under public and judicial opprobrium, BR’s share falls back to 11% and the sibling’s empire stays at 57% of fiscal expenditure.

 Budget Allocations 2013

To put matters in perspective, total fiscal expenditure in 2013 is estimated at Rs 1.18 trillion [1 INR = 2.43 LKR] and revenue at about 1.05 trillion. Overruns are inevitable; eventual expenditure will be about Rs1.6 trillion and the deficit about Rs 550 billion. GDP in 2013 is estimated at Rs 7.5 trillion. Hence I estimate 2013 expenditure, revenue and fiscal deficit, are 21%, 14% and 7% of GDP, respectively.

Dismantling devolution, promised in 13A, is of concern to Tamils, and to India and international opinion (and may arouse Delhi from its perennial slumbers), but what is relevant to this essay is the family’s domination of state finances. The Rajapakses are a closely knit family and grabbing control of a lion’s share of state revenues fits a greater Corporatist strategy.

Ostentation in concrete

Grand infrastructure enhancing the image of the great leader is reminiscent of Peron and Mussolini, though not Marcos, a straight felon whose image could not have been salvaged. Much of Lanka’s hefty infrastructure building is vapid, wasteful image building in cement and concrete. It is done on tick, running up debts that future generations will have to settle. Hambantota harbour should never have been developed as anything more than a bunkering point. Having blasted obstinate rocks and erected a breakwater, the harbour lies underutilised. Government is forcing unwilling businesses to shift there; typical when political power runs wild and officials dare not tell the emperor his garments are absent. When the President willed to have an elephant as white as snow in his remote home town, who would dare! The port will never be competitive because a world class port and transhipment point is not a pool of water; it must be backed by world class business and IT skills and an English savvy workforce.

The international airport in Hambantota is another colossal waste. A modest domestic terminal may have made sense. Funds are drained first in capital, then maintenance of aviation facilities and air-traffic control at international standards, and then running customs and immigration offices. International carriers avoid it and will pull out of Lanka altogether if their arms are twisted. The proposed tower to top all towers on Macallum Road is insane, and the lotus shaped Nellum concert hall can find no thespians. The next generation will be saddled with repaying harbour, airport, heavenly tower and floral dancehall debts. Factotums dare not talk, sycophants attend autocrats; recurring images of a Corporatist syndrome.

Some infrastructure projects are clearly in the public interest. Road and highway development is long overdue. Not withstanding allegations of rapacious graft, highway and road improvements are essential and the job is being done well. The same can be said of the beautification of Colombo city. Investment in electric power generation and supply is urgent. And when oh when will the railway to Jaffna be restored; is there a military-political agenda behind the delay?

Chinese loans: The lifeline of project financing

The quantum of Chinese funds injected into infrastructure development has swelled in the last five years, and in principle is good, if projects contribute to growth. Unfortunately some will not. Hambantota harbour (all stages) will cost $1.3 billion, the airport $230 million, the Nelum extravaganza $26 million, and the planned show-tower $105 million, all downright waste.

Conversely the Norochcholi power station ($450 million) and the southern highway ($600 million) are in principle sound infrastructure projects though the former has run into operational hitches and the latter is underutilised. There are a number of other sensible Chinese funded projects in the pipeline including the $750 million Colombo port development programme. Putting the good, the bad and the indifferent together, a fair estimate is that by 2015 the total outlay (loans and grants) on all Chinese funded projects in Lanka will be $4.5 billion, say Rs 600 billion. An issue concerning Chinese financing is secrecy on the part of the Government of Sri Lanka; how much is grant, how much loan, what interest rates, repayment terms and periods for different tranches, what grace periods?

This leaves one guessing. If Chinese loans, excluding grants, add to $4 billion, if 20 year repayment and 5% interest across the board are assumed, a simple mortgage-table shows that annual repayment is $300 million (with repayment and interest calculated on a monthly basis). The wasteful portion thereof is chargeable to the overhead costs of setting up a Corporatist State, in style.

A surreal gestation 

Political life in Sri Lankais surreal. It cannot be that the Secretary of the Judicial Services Commission was beaten up in broad daylight by thugs sent by everybody knows who, it cannot be that the Chief Justice is to be impeached for resisting the Executive, it cannot be that a Deputy Minister ties a public servant to a tree and whiplashes him in plain sight of public, press and police, it cannot be so much else; but it is! A certain madness gripped Italyas Il Duce rode to Rome, or when the SA burnt the Reichstag, or in 1938 on Kristallnacht. Lanka is smaller and this is the Twenty-first Century, so manifestations are muted, but correspond. It is surreal.

Allow me to repeat that history is pregnant with two options. Waves of strikes, some breaking out some being broken, signal the rapture between the working and employed classes, and the regime. One strike subsides and another erupts – university academics and non-academics were on strike for months; utility workers, nurses and doctors, railwaymen and state employees, are on strike, have just returned to work, or are threatening to strike. The government is losing control of the strike situation in the public sector and it must break this trend if the Corporatist project is to make progress.

There is unmistakable differentiation of attitudes towards the regime along class lines. The elite and the bourgeoisie have turned hostile. The urban and rural petty-bourgeoisie is more accommodating. What underlies this drift? Let me first add, in parenthesis, that Peronism, a left edition of Italian Corporatism adapted to the needs of the Argentine working class, evoked even deeper differentiation along class lines.

The petty bourgeoisie, in the sense of those engaged in small businesses and informal activities are reaping a post-war dividend; so are farmers. More vans ply their trade selling cooked food and providing transport facilities than ever before, and small construction business is booming. Farmers reclaim and cultivate marginal land that fear had kept them away from during the war. Produce from North and East arrives in the South, anchors living costs, and contributes to GDP numbers.  The boom in the informal and semi-formal economy is a post-war dividend, albeit the one least expected and least talked about.

How long the petty bourgeoisie can bask in the post-war sun is moot. The factors driving urban classes to the wall will arrive in the countryside – ubiquitous price increases and contraction of demand (for a variety of reasons).  Headline inflation, the one that matters and includes fuel and food, is at a shade below 10% and will reach double digit magnitudes. Workers and city folk on fixed incomes are hard hit, hence the strike wave. When the petty-bourgeoisie and farmers find prices rising and incomes falling, in which direction will they turn? The opposition’s leadership skills and intervention will hold the key.

Received wisdom was that the post-war dividend would take the shape of a flood of foreign investment; the bourgeoisie smacked its lips. Imagine its shock when the roguery of government turned the expected flood into trickle, ventures between local and foreign investors failed to materialise, and the ethics of public life declined. The bourgeoisie hold the government responsible for the evaporation of the rule of law and good governance. The Attorney General was kicked upstairs for refusing to kow-tow and insisting on prosecuting in politically sensitive cases. The Mannar Magistrate’s Court was attacked by goons and a minister intimidated the magistrate. The Norochcholi power station is a dud and will cause problems for long-term electricity supply. Oil products are contaminated and Petroleum Ministry and Corporation officials exchange imprecations. The upper crust of society curses the government.

The Chairman of the Securities and Exchange Commission (SEC) threw in the towel in September and all ‘bourgeoisdom’ was mortified. The SEC was going after rouge operators were wrecking havoc on the stock exchange. President and Basil would have none of it; the operators were well connected and laundering billions. The bourgeoisie is aghast at the damage the government is prepared to inflict on the business environment. The last straw was the move in November to impeach the Chief Justice. She used to kow-tow to the President, but recently ceased to do so. It is alleged that this is for personal reasons to do with her husband’s financial incompetence during his tenure as Chairman of a state corporation, and it is counter-alleged the questionable act was at the behest of the President conveyed through the Governor of the Central Bank.

The Corporatist project is contested on many sides; history is in the making, the outcome undecided. The principal defect of the opposition is petty squabbling and disunity, largely subjective, especially a near suicidal conflict within the UNP, the main opposition party. There is still time and opportunity to inflict defeat, beginning with the impeachment issue, and turn back the Corporatist strategy, permanently, but it is predicated on class, civil society, ethnic and political opponents of the authoritarian project working together in close collaboration.