By Dayan Jayatilleka –

The ongoing and deepening economic crisis is tailor-made for a ‘Premadasaist’ or ‘neo-Premadasist’ intervention, for two reasons:

(a) President Premadasa demonstrated that it is practically possible to revive economic growth, increase industrial exports and foreign investment while simultaneously, not sequentially, increasing the real wages of the people and reducing inequality

(b) The Opposition is led by his only son. It would be as absurdly incongruous for an Opposition party led by President Ranasinghe Premadasa’s son not to adopt Premadasa development policy as it would be someday for an opposition party led by Namal Rajapaksa, not have his father Mahinda Rajapaksa’s achievements as template and Mahinda Chinthanaya as the basis of its guiding ideology.

The situation is ripe for a progressive, social democratic, center-left Opposition with necessarily populist appeal, but how can the main Opposition party become a truly progressive centrist formation which can be a magnet for voters from the vast bloc that voted for the Rajapaksas/Pohottuwa? What must it do?

The answer to that is clear and simple, and it isn’t mine. Twenty years ago, the UNP held power at the presidential, parliamentary and Local authority levels. That was the last time it was to do so. The leader responsible for that achievement made a typically unorthodox and fascinating remark while addressing his last May Day rally in 1992, on Galle Face Green, a year before he was assassinated by a Tiger suicide-bomber. Premadasa made a pointed reference to SWRD Bandaranaike:

“…The late Prime Minister SWRD Bandaranaike…left the UNP and formed the Sri Lanka Freedom Party because he thought that his views cannot be implemented through the UNP. If one were to take into account the changes that have taken place in the UNP between then and now, I am sure that if he were still alive, he would have rejoined the UNP…When you look at it from that point of view, you will be able to guess which May Day rally he would have attended if he were alive—the rally at Galle Face or the one at Campbell Park.” (President Premadasa: His Vision and Mission, Selected Speeches, p 192)      

What Premadasa says here is that SWRD Bandaranaike with the center-left views (the SLFP’s founding document used the definition ‘social democratic’) he held at the time he ruptured with the UNP because he thought they could not be accommodated, would have felt compelled and comfortable enough to rejoin the UNP because it had been transformed so radically as to be able to accommodate such a personality and such views.

Translated into today’s politics, it can be understood as an injunction to the post-UNP successor party (led by Premadasa’s son) to be a party so transformed that it can win over the voters and personalities of the progressive center, the moderate nationalists, by representing their ideology, sentiments and grievances. In short, an Opposition party capable of winning over the center-left SLFP and SLPP voters; the Rajapaksa voters. 

However, there is at least one strategic problem: can the main Opposition party win over those voters if an archaic, conservative, rightist economic theory is propounded as an alternative to the government’s oligarchic crony-capitalism?

In short, the problem is that there is an ideological inclination on the part of some in society and politics, to ignore the Premadasa development model and philosophy, and elevate instead the rightwing economic doctrines that were dominant in the UNP pre-Premadasa presidency, when an imbalanced growth model caused the JVP uprising and then again under the infinitely prolonged (and conspicuously unsuccessful) leadership of Ranil Wickremesinghe.

In international terms these are the economic ideas of the likes of Arthur Laffer and the “supply siders” that President George HW Bush (Bush Sr.), a moderate Republican, derided as “voodoo economics”.

The UNP started losing, never winning a Presidential election and leading the nation and winning only two parliamentary elections 15 years apart with never a second consecutive term as government, when it dumped the Premadasa development paradigm and (under Ranil) shifted to neoliberal economics, or shifted back to the pre-Premadasa economic model which helped cause the Southern uprising.

It is irrational and counterproductive to revive and restore such a reactionary economic ideology, almost as reactionary as that of the current Rajapaksa regime’s economic ideology, in a post-UNP Opposition space, which because of its leadership and its Presidential candidate is more organically suited for a neo-Premadasist strategy for economic revival and social upliftment, which recovery from the current crisis demands.            

JR+Shenoy

A slightly surreal sloganistic tweet was doing the rounds recently, claiming that “we need JR+Shenoy reform once again”. This relates to the ideas of rightwing economist BR Shenoy who produced a pamphlet in 1966 which was adopted as a policy platform by JR Jayewardene, then a Minister in the Dudley Senanayake Cabinet of 1965-’70.

This policy perspective is wrong headed several times over, starting with the contextual fact that the JR+Shenoy platform was not intended as alternative to the parental precursor of the current Rajapaksa government’s policies, namely the Sirimavo Bandaranaike-NM Perera policies of the coalition government of 1970-’77.

The JRJ-Shenoy policy doctrine was one corner of an intra-governmental policy debate in the mid-1960s. Today it is being revived at the second corner of a bipolar patterning of policy discourse, i.e., in an unhealthy polarization.

As a precocious lad who spent time in the editorial offices of Lake House and hung out with my father and his journalist friends, I was quite aware of the Shenoy episode real-time, because he was tapped and his product promoted by Esmond Wickremesinghe, the Managing Director of Lake House (and Ranil’s brilliant father). That episode was part of a policy debate that buffeted the UNP government of Prime Minister Dudley Senanayake in 1965-1970.

Far from being the antipode of the statist closed economy of the Sirimavo regime, the JR+Shenoy (actually JR+Esmond+Shenoy) platform targeted the genuinely liberal-welfarist economics of the PM Dudley Senanayake and his Planning Ministry tzar, Dr Gamini Corea.

Looking back, it is absurd to exalt the JR+BR Shenoy line, when the logic of the Dudley Senanayake-Gamani Corea response at that time has been so clearly validated by our political history: “It is wiser to spend on welfare, than cut welfare and have to spend much more on military expenditure later.”

As the John Attygalle Report (he was the IGP, and the report was co-authored by D.I.G Ana Seneviratne) on the pre-1971 JVP revealed, and the statements of the accused in the main trial of the Criminal Justice Commission (CJC) confirmed, the movement was founded for armed revolution partly as a response to the ideological struggle within the UNP government. Rohana Wijeweera’s view was that the JR Jayewardene+ BR Shenoy project would require the ouster of the Senanayake faction, the installation of an Indonesian style dictatorship and the scrapping of national elections scheduled for 1970.

This was not as wildly outlandish as it seemed. The Indonesian coup and massacre had taken place in 1965.  Esmond Wickremesinghe and those who backed the JR+Shenoy program against Senanayake liberal-welfarism, were applauding the post-coup Indonesian economic model. My father Mervyn de Silva had been in Indonesia (with his family) at the invitation of President Sukarno’s Foreign Minister Dr. Subandrio for the celebration of the 10^th anniversary of the Bandung conference– virtually on the eve of the coup. Mervyn was the last foreign journalist to interview DN Aidit, leader of the PKI (the Indonesian Communist Party) who was murdered by the Army a few months later while in hiding. My father was among the few (I’m being generous here) in the Lake House press writing against the Indonesian coup and the massacre of 1965.    

Coiled for armed resistance to a dictatorship which never came at the hands of the UNP Right led by JRJ equipped with the Shenoy agenda, the JVP uncorked uncontrollably on the watch of the elected successor government, the SLFP-led UF coalition in 1971.

It is not that today’s JVP or FSP is dabbling in any way with violent resistance or ever likely to, but a worker-peasant-student social movement radicalized by the policies and political culture of the Gotabaya presidency, has grown to almost the same capacity as in the 1960s, and if ‘JR+Shenoy’ economic policies are followed after the Rajapaksa regime is inevitably turfed-out, the social explosion will occur no less inevitably on the watch of the incoming ex-UNP administration.      

Premadasa+Gamani Corea+Godfrey Gunatilleke

Today’s Lankan economic neoliberals (who call themselves ‘economic liberals’) target a giant of Third World economic thinking, Raul Prebisch. The bridge to the tradition of Prebisch, and indeed the great Ceylonese contribution to the global economic debate, was not the Sirimavo Bandaranaike-NM Perera regime, but rather, through those who had been the targets of JRJ and Shenoy in the policy debate within precisely the UNP in 1965-1970: the liberal-welfarist progressives of the Planning Ministry under Prime Minister Dudley Senanayake, namely Dr. Gamani Corea and his deputy, Godfrey Gunatilleke.

In the 1970s, the Lankan node of that development thinking was the MARGA Institute, which was targeted by the UF coalition government, most especially Minister Felix Dias Bandaranaike.

Contemporary pundits of economic policy should spend some time in research at the library/documentation center of the Marga Institute, where they’d find more (progressive) ideas on development policy which they are allergic to, than at the NM Perera Center! 

The Gamani Corea-Godfrey Gunatilleke perspective that JRJ+BR Shenoy (plus Esmond Wickremesinghe) had targeted within the UNP government of 1965-1970 and eventually overthrown and supplanted, found itself revived, revised and reaccommodated within the economic paradigm of Ranasinghe Premadasa.

Prime Minister Premadasa’s extempore remarks at the panel discussion on the sidelines of the UNGA 1980; his invocation of justice for the global South at the UNGA and the Nonaligned Conference in Harare in 1986, are evidence of his commitment to the international tradition of development thinking which Dr. Gamani Corea was among the giants of, but is reviled by today’s para-UNP economic neoliberals. 

The formula ‘we need JR+Shenoy reform once again’ also overlooks the history of the evolution of policy within the UNP in the Opposition in 1970-1973. The Dudley Senanayake line was being eclipsed, the JRJ line was becoming dominant, but a third line was coming into view, which was to be validated by real history when the ‘JR+Shenoy’ project was a causative factor of the civil war in the south.

This ‘third paradigm’ was Ranasinghe Premadasa’s, an early articulation of which was his 4th April 1973 address to the Colombo West Rotary Club. He was so committed to that speech (delivered several years before Susil Sirivardhana joined him) that he republished it in the ‘SAARC Summit special supplement’ of the Daily News during his Presidency, accompanied by an introduction in bold type which read: “The seeds of today’s concepts were sown years ago…President Ranasinghe Premadasa, then First Member of Parliament for Colombo Central was invited by the Colombo West Rotary Club to deliver an address on the topic ‘A Plan for Sri Lanka’ at a luncheon meeting of the Club. The speech was delivered when President Ranasinghe Premadasa was only an Opposition member of Parliament and portrays the vision of a young politician of what he thought was the best for Sri Lanka”.

That he chose to reproduce it in the SAARC special supplement (1991) indicates that this perspective is one he wanted the outside world to know about, and which he hoped to radiate in the region. 

In April 1973, he wrestled with the same problem that the economy faces today– the crisis of foreign exchange and dependency—and gave an answer that is distinctively redolent of the Rooseveltian New Deal (his 1988 Presidential election manifesto was to be entitled ‘a New Vision, a New Deal’):

“…If the problems of foreign exchange, development and unemployment are to be satisfactorily tackled, a massive development venture has to be launched to provide the necessary infra-structure such as a network of roads, a network of electricity, a network of irrigation and a network of domestic water supply. With the launching of such a scheme large number of people could be gainfully employed. Together with development of the infrastructure the country’s agricultural and industrial ventures will automatically improve. As a result, foreign exchange could be conserved. People will get more money into their hands thus enabling them to purchase their requirements. The question of subsidies will eventually be eliminated. We can solve our problems. Scarcity of foreign exchange is no obstacle. To earn foreign exchange, we must increase production; to increase production we must develop our national resources, and if we are to develop our national resources, we must harness the human potential that we have in abundance. It is futile to go on bended knees to foreign countries begging for assistance…” (Republished as ‘People’s Participation in Government’, CDN Nov. 21, 1991.) 

After the UNP victory of 1977 and the installation of ‘JR+Shenoy reforms’ the evidence of its downside piled up in the 1980s from the reports of various UN agencies which had replaced ‘classical liberal economics’ with indices of inequality, the physical quality of life index (PQLI) and later the Human Development report (HDR), under the intellectual impact of a global struggle for ‘Another Development’ (as it was conceptualized) in which Gamini Corea and Godfrey Gunatilleke were the foremost Sri Lankan figures.

Prime Minister Premadasa appointed the Warnasena Rasaputram Commission. Janasaviya was Premadasa’s response to the revelations of the Rasaputram Report. The hubris of the Open economy and the ‘JR +Shenoy reform’ model had evaporated with the bloody near-extermination of the UNP in the latter half of the 1980s by Sinhala youth from the South (just as Premadasa had predicted).

JR+Shenoy? Or Premadasa Paradigm?

This was Premadasa’s perspective on the open economy:

“In a world of economic interdependence, those who are self-dependent grow in strength. We live in a world society. We cannot close ourselves off from the world. Yet, we must be free to live and develop as we wish to. We will provide all the conditions for economic growth in an open economy. But, an open economy does not mean an economy dictated to by others. An open economy does not mean an economy run for the benefit of others. An open economy must first benefit Sri Lankans before it benefits outsiders.” (‘Address at the Inauguration of the Koggala Export Processing Zone’-June 14^th 1991, in ‘President Premadasa: His Vision & Mission-Selected Speeches’, pp 89-92.)

The Premadasa economic philosophy, though partly based on the Open Economy, is not that of ‘JR+BR Shenoy reforms’ of 1977 still less of 1966. It is a different, far more progressive policy paradigm or economic episteme. It is Sri Lankan Social Democracy.

President Premadasa shared a loyalty to the open-economy, the market, and economic liberalization but he was not an ‘economic liberal’ not was his policy paradigm one of ‘liberal economics’. “If anything, I am for economic democracy” he told civil service legend Neville Jayaweera in a substantive interview given to the latter published as ‘Charter for Democracy’ (1990). For him, ‘economic democracy’ meant “turning the nation into one where ‘have-nots’ become ‘haves’”.