By Janakie Seneviratne –

Janakie Seneviratne

Development aid from Western nations to the Global South often comes with conditions that compel recipient countries to adopt neoliberal policies, such as deregulation, privatization, and cuts to social programs. Sri Lanka has been seen as a model of neoliberalism in South Asia, being the first country in the region to embrace open market policies in the late 1970s. After rising to power in 1977, JR Jayewardene established an authoritarian regime and became Sri Lanka’s first Executive President in 1978 prioritizing economic liberalization, supported by Western financial institutions.

JR Jayewardene’s policies in Sri Lanka dismantled protections for domestic industries, leading to significant job losses, particularly in sectors like handloom textiles, which employed many women. These reforms, combined with structural adjustments, reduced government spending on healthcare and education, increasing poverty levels to about one-fourth of the population by the late 1980s, while a false façade of consumerism masked this reality.

In response to unbearable increases in the cost of living, around 100,000 workers participated in the July 1980 general strike, demanding a wage increase of Rs. 300 (Rs. 10 per day) and an additional Rs. 5 for each rise in the cost-of-living index. In retaliation, the government suspended salaries for strikers, sealed trade union offices in state-owned buildings, and allowed strikers to return to work under specific conditions by July 23. Many workers claimed illness during the strike to reclaim their jobs, but those who did not report for work were considered to have vacated their positions, resulting in 40,356 employees facing this consequence.

Export Processing Zones (EPZs) emerged during this period, primarily employing women and providing tax exemptions to corporations. Unions were banned, leaving these vulnerable women workers voiceless; in the apparel sector, over 412,000 workers—85% of whom are female—face high, haphazard targets and compulsory overtime for meager monthly salaries.

At the same time, a feminized migration industry emerged, primarily recruiting women from impoverished backgrounds to work as domestic or care workers in affluent households throughout the Middle East, Singapore, Malaysia, and Cyprus. These migrant women in Middle Eastern countries are subjected to the kafala system, which commodifies their labor and strips them of autonomy, creating an environment highly vulnerable to exploitation and abuse, including demands for sexual favors.

The kafala system, often likened to modern-day slavery, has faced increasing criticism for its severe exploitation of migrant workers, characterized by low wages, poor working conditions, and pervasive racial discrimination and gender-based violence – akin to slavery. Despite these challenges, the contributions of women migrant workers and those in EPZs are vital to generating foreign exchange for the country.

Neoliberal policies in Sri Lanka has also facilitated corruption, with numerous cases involving close associates of JR Jayewardene, Chandrika Kumaratunga, Ranasinghe Premadasa, the Rajapaksas, Maithripala Sirisena, and Ranil Wickremesinghe accused of unethical practices. Despite these allegations, there is a notable lack of thorough investigations into these claims. Furthermore, these leaders have utilized “corruption” as a moral deflection to advance their privatization agendas. This has led to the sale of public land and national assets, worsening inequalities and allowing corporations to dominate essential resources, often harming vulnerable communities.

The prevailing neoliberal urban development model has intensified income inequality, favoring the wealthy while marginalizing the poor, and ultimately failing to achieve authentic development. Data indicate that most manufacturing industries are concentrated in the Western Province. This concentration has led to internal migration among youth seeking employment in Colombo and its surrounding cities, where many encounter social challenges. Meanwhile, rural areas struggle with inadequate transportation, poorly maintained road networks, and limited cultural activities and farmers’ markets, compounded by deficiencies in basic infrastructure. These issues result in a significant lack of essential resources and heightened social exclusion. Furthermore, the intellectual development provided by vital cultural institutions—such as contemporary libraries, inclusive theaters, community cultural centers, museums, and art galleries that cater to diverse segments of society—has been overlooked.

Since JR Jayewardene’s administration, successive governments in Sri Lanka have upheld the neoliberal policies of his model, prioritizing economic liberalization over public welfare. The newly elected National People’s Power (NPP) government now faces the challenge of shifting away from these entrenched neoliberal practices toward a more democratic and equitable approach. This transition necessitates a re-evaluation of economic priorities to emphasize social equity, community empowerment, and sustainable development.

To achieve this, the NPP must restore state oversight in key sectors, ensuring equitable distribution of economic growth benefits. Investments should focus on public services like healthcare, education, and infrastructure, catering to all citizens instead of a wealthy elite. Additionally, promoting local industries and supporting small and medium enterprises will help uplift marginalized communities.

Engagement with civil society and grassroots organizations is crucial for fostering inclusive dialogue and ensuring diverse voices are represented in policymaking. By prioritizing transparency and accountability, the NPP can rebuild public trust, addressing skepticism stemming from years of perceived corruption.

Ultimately, the NPP has the opportunity to redefine development in Sri Lanka by prioritizing democratic values and human rights over profit-driven motives, requiring bold leadership and a commitment to tackling the root causes of inequality while fostering an inclusive economy.