{"id":184186,"date":"2017-11-14T00:01:52","date_gmt":"2017-11-13T18:31:52","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=184186"},"modified":"2017-11-16T17:22:12","modified_gmt":"2017-11-16T11:52:12","slug":"social-war-budget-sri-lankas-social-contract-under-siege","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/social-war-budget-sri-lankas-social-contract-under-siege\/","title":{"rendered":"\u2018Social War\u2019 Budget: Sri Lanka\u2019s Social Contract Under Siege"},"content":{"rendered":"<p class=\"p1\"><strong>By <a href=\"https:\/\/www.colombotelegraph.com\/?s=Dayan+Jayatilleka\">Dayan Jayatilleka<\/a> &#8211;<\/strong><\/p>\n<div id=\"attachment_144849\" style=\"width: 160px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/05\/Dayan-Jayatilleka.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-144849\" class=\"size-thumbnail wp-image-144849\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/05\/Dayan-Jayatilleka-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/05\/Dayan-Jayatilleka-150x150.jpg 150w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/05\/Dayan-Jayatilleka-50x50.jpg 50w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\" \/><\/a><p id=\"caption-attachment-144849\" class=\"wp-caption-text\">Dr. Dayan Jayatilleka<\/p><\/div>\n<p class=\"p3\"><span class=\"s1\"><b><i>\u201c\u2026restore property rights in accordance with market principles\u2026\u201d ~\u00a0<\/i><\/b><\/span><a href=\"https:\/\/www.colombotelegraph.com\/index.php\/budget-2018-full-text-of-the-speech-in-three-languages\/\"><span class=\"s1\">Mangala Samaraweera, Budget speech<\/span><\/a><\/p>\n<p class=\"p3\"><span class=\"s1\">Earlier this year, the country\u2019s top economists and policy planners, current and previous, were gathered together to honor the country\u2019s top development thinker and perhaps the finest Sri Lankan intellect alive, Dr. Godfrey Gunatilleke. The specific occasion was to launch a volume of his writings covering forty years. Described as \u2018A Collection of Writings 1975-2015\u2019 it is with excellent reason that the main title of the volume was \u2018Towards a Sri Lankan Model of Development\u2019.<\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">It is this very idea of a \u2018Sri Lankan model of development\u2019 and its core concepts, that <a href=\"https:\/\/www.colombotelegraph.com\/index.php\/budget-2018-full-text-of-the-speech-in-three-languages\/\">Mangala Samaraweera\u2019s Budget<\/a> and the UNP\u2019s economic ideology has made a rupture from, in favor of the embrace of market fundamentalism and ungrounded neoliberal dogma.<\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">The idea of a Sri Lankan model of development was both cause and consequence of decades-long bipartisan, actually multi-party national and social consensus, which brought successful outcomes. Godfrey Gunatilleke sums up the key ideas of this creative national developmentalist consensus, this \u201csomewhat unique development mix it has achieved\u201d (p10) and towards which he was a crucial contributor. There are two key postulates: <\/span><\/p>\n<p><span class=\"s1\"><b><i>1. \u201c<\/i><\/b>\u2026<b><i>the final outcome\u2014development.<\/i><\/b>\u201d (p17) <\/span><\/p>\n<p><span class=\"s1\"><b><i>2. \u201c\u2026We can take some satisfaction at having arrived where we are\u2014a middle income country enjoying a state of high human development with an economy which is among the fastest growing economies in the world, a multiparty democracy which has been sustained without interruption from the time of independence and a clear prospect of advancing into the state of very high human development during the next two decades.\u201d<\/i><\/b> (\u2018From Retrospect and Hindsight\u2019, Chapter 9, pp. 315-352) <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Mangala Samaraweera has ruptured with this national consensus, has gone against the national grain and the Great Tradition of Sri Lankan developmentalism. Not only is his stated outcome \u201crapid growth\u201d, not \u201cdevelopment\u201d;<span class=\"Apple-converted-space\">\u00a0 <\/span>not only does he turn his back on any notion of a successful and desirable Sri Lankan model of development based on its fairly unique experimentation with a creative policy mix; his entire reading of Sri Lanka\u2019s development experience is one of <i>negativism<\/i>. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><i>\u201cSri Lanka needs to liberalize and globalize\u201d<\/i> pronounces Mangala Samaraweera in his Budget speech, adding that \u201c<i>\u2026The country needs to shift away from being more protectionist and inward-oriented\u2026We have tried many strategies including protecting local industries through tariffs.\u201d <\/i>He sounds like Rip Van Winkle. One wonders whether he thinks we are living in 1977 having experienced a closed economy for decades. Sri Lanka certainly needed to liberalize and globalize, and that is what we did under JR Jayewardene\u2019s leadership, Ronnie de Mel\u2019s strategizing and management, supported by Lalith Athulathmudali and Gamini Dissanaike\u2019s dynamism and Premadasa\u2019s synthesis of \u2018growth with equity\u2019. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">There is no problem with liberalizing and globalizing except that we have already done that in several waves. The problem is that there is no evidence that moving forward on that same track will help. This is not to argue for reversal of liberalization and globalization. It is however, to argue against going recklessly further, and I say recklessly because Mangala Samaraweera calls for \u201cfast-tracking liberalization\u201d. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Samaraweera promises to <i>\u201c\u2026restore property rights in accordance with market principles aiming at promoting faster and sustainable growth.\u201d<\/i> What does he mean by \u201crestore property rights\u201d? To \u2018restore\u2019 means to go back to what it was. So when does Samaraweera want the country to go back to? To the era in agriculture prior to the Paddy lands act, in which sharecropping (\u2018ande\u2019 cultivation) was unchecked and unrewarded? To the era before rent controls made urban housing affordable for the middle classes? To the era before the Land Reforms of 1972 and 1975 which imposed land ceilings of 50 acres? <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">The UNP of Ranil Wickremesinghe obviously does not know that when the Land Reform Bill was introduced in 1972, R. Premadasa, who was familiar with the formula for social stability and de-radicalization through creating a rich\/middle peasantry (a kulak class) of the brilliant Fr. Peter Pillai: \u201cfive acres and a cow\u201d. He moved an amendment from the Opposition benches calling for the land ceiling to be limited to five acres! This was no theatrical gesture. When elected the country\u2019s leader, Premadasa appointed a Presidential Task Force on Land Redistribution which earmarked 750,000 hectares of state land to be given to the landless\u2014NOT corporate business. When Liberal leader Dr. Chanaka Amaratunga proposed at the All-Parties Conference of 1990 that the Constitution be amended so that private property and that private ownership of land be made a fundamental right, President Premadasa rejected it from the Chair, declaring emphatically that <b>\u201cland is the patrimony of the whole people!\u201d <\/b> When the plantation sector needed a new dynamism to pull it out of a rut, the same UNP President refused to re-privatize the ownership of the plantations and decided instead to limit the reform to the grant of <b>management<\/b> contracts for five years to private companies.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">The Mangala Budget not only launches an all-out attack on the broadly bipartisan <b>developmental paradigm <\/b>that Sri Lanka has adhered to, with whatever strategic variations, since Independence, itself the most credible claim to an internationally recognized \u2018Sri Lankan exceptionalism\u2019 in a positive sense of the term. By so doing it also attacks the Sri Lankan Social Contract that underlay this developmental paradigm and reciprocally was held together by it. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">When one factors in the new Constitution project which does the same thing, undermining the bipartisan paradigm of a unitary state and thereby undermining the National Contract between the Sinhala majority and the state, what we have is a cosmopolitan-liberal or neoliberal-globalist assault on both the Social and National Contracts that kept Sri Lanka intact.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">What are the social classes and strata targeted for disintegration or subordination by the Mangala-Ranil Budget? What are the social classes and strata targeted for all-out attack by the Budget? <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">They are (I) the local industrialists (II) the middle and upper middle classes, including professionals (III) labor and (IV) the peasantry. <\/span><\/p>\n<p><strong><span class=\"s3\">I.<span id=\"m_-4291520126229458457yiv0261498951yui_3_16_0_ym19_1_1510541029744_8604\">\u00a0<\/span>Local industrialists: <\/span><\/strong><\/p>\n<p class=\"p3\"><span class=\"s1\">How will <i>\u201cour policy of liberalizing and globalizing\u201d<\/i> as Mangala puts it, help local industry? Will it not harm it instead? Who will benefit from this policy of fast-tracking further liberalization and globalization?<\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><i>\u201cWe have legislations that do not allow foreign investments in certain sectors. Perhaps, most of all, our complex labour laws and bureaucracy have unwittingly obstructed foreign enterprises from entering into the country, thereby, preventing the much needed competition for the local industries.\u201d<\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">What will befall local industry when foreign industries enter the local market unimpeded? And what happens when having decimated our local manufacturing base, they move away as foreign industries have done in many countries, as well as areas within countries, some of them in the developed West, leaving such zones and populations prostrate?<\/span><\/p>\n<p><strong><span class=\"s3\"><span class=\"s1\">II.<\/span> The middle\/upper-middle classes and professionals: <\/span><\/strong><\/p>\n<p><span class=\"s1\"><i>\u201c\u2026For example; the Rent Act, No. 7 of 1972 which limits the ownership of houses and the rent to be charged requires amendments&#8230;\u201d <\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><i> \u201cAs I already mentioned, we will remove restrictions that limit the land ownership rights of listed companies with foreign ownership together with the restrictions on foreigners\u2019 ability to purchase condominiums below the 4th floor.\u201d<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/i><\/span><\/p>\n<p><strong><span class=\"s3\"><span class=\"s1\">III.\u00a0<\/span>The Peasantry<\/span><span class=\"s1\">:<\/span><\/strong><\/p>\n<p class=\"p3\"><span class=\"s1\">\u201c<i>Without proper ownership of land and property, no country could achieve faster growth ensuring prosperity for all. In this context the country\u2019s land and property ownership issues need a careful and urgent appraisal&#8230;\u201d<\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><i>\u201c\u2026restore property rights in accordance with market principles aiming at promoting faster and sustainable growth.\u201d<\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Mangala Samaraweera has not explained what\u2019s \u2018improper\u2019 about the ownership of land and property in the country, which warrant a careful and urgent appraisal of the country\u2019s land and property ownership issues. One could have sympathized if he named landlessness among the peasantry and growing inequities in property ownership and the ability to own property. But he said nothing of the kind so one cannot but assume that he is referring to some other sense in which there is no \u2018proper ownership of land and property\u2019 and that the country\u2019s land and property ownership issues need to be reappraised. That this is so is confirmed in yet another sentence in his Budget speech, to wit \u201c<i>we will remove restrictions that limit the land ownership rights of listed companies with foreign ownership\u201d. <\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">In short, Mangala Samaraweera is planning to repeal or disembowel the Paddy Lands Act (1958) and the two Land Reform Acts (1972 and 1975), at the same time that Ranil enhances the powers over land of the Provincial Councils. Thus, we shall not only see the abandonment of the DS Senanayaka strategy of relieving landlessness by utilizing the unpopulated extents of land in the country\u2019s North and East, but we shall also see large corporate landholdings, both local and foreign, back in Sri Lanka\u2014a recreation of the Planter Raj that Dr. Colvin R de Silva and hector Kobbekaduwa brought down. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">This is precisely what previous governments strove to avoid. They undertook land reforms after the violent uprisings of 1971 and 1987-90 precisely because the prevailing land ownership structures caused land hunger and radicalization among the rural youth. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Previous governments were also thankful that this island never saw a classic peasant based uprising or guerrilla movement, nor could the JVP fall back on peasant support for a protracted campaign, precisely because we did not have a large landowning (\u2018latifundist\u2019) class as in Latin America and the Philippines. In their myopia, Ranil-Mangala are about to change all that. <\/span><\/p>\n<p><strong><span class=\"s3\"><span class=\"s1\">IV.\u00a0<\/span>The workers:<\/span><\/strong><\/p>\n<p class=\"p3\"><span class=\"s1\"><i>\u201c\u2026Country\u2019s labour demand against the constraints on labour supply requires a closer examination of all areas of the labour market including labour laws, to pave the way forward to harness the productive resources of the economy.\u201d <\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><i>\u201c\u2026Perhaps, most of all, our complex labour laws and bureaucracy have unwittingly obstructed foreign enterprises from entering into the country, thereby, preventing the much needed competition for the local industries.\u201d <\/i><\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Thus the Ranil-Mangala Budget is a Budget of social warfare. It embarks on social warfare, targeting specific social categories, and will trigger a response of social warfare. The frontal attack on all these social classes will cause massive unemployment, povertization, proletarianization, decline of purchasing power, shrinkage of the domestic market and therefore economic crisis on the one hand and the accumulation of wealth in the hands of a few foreign and local business interests on the other. It will be tantamount to a <b>social genocid<\/b>e project. Social polarization of a sort that Sri Lanka always avoided and buffered itself against will appear and rapidly proliferate. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">The Ranil-Mangala economic philosophy is based on a lie, a fraud, in that it flies in the face of the most spectacular economic success story of our lifetime, that of China. The Chinese model is, as every informed economist knows, based not on fast-track liberalization and unfettered opening, but on an economic guiding role for the Chinese state (a version of \u2018state capitalism\u2019) and a national playing field that is tilted in favor of Chinese companies. Furthermore, China\u2019s perspective on the global economy in which it plays such a huge driving role, is not one that fetishizes global free trade and totally \u2018free\u2019 economies. Mangala Samaraweera is ignorant of all of this and inhabits a fading universe of neoliberal globalism.<\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">This economic philosophy and the quasi-federalizing new Constitution project cannot but generate resistance on two fronts, the social and the national, either running parallel or forming a pincer, which can cumulate in revolt and rebellion. The prelude to 1956 was the \u2018Hartal\u2019, the unarmed popular uprising of August 1953. Just as the prelude to 1956 was the worker upsurge of 1953, the postscript to 1956 was the ugly ethnic riot of 1958, and the postscript to \u201958 was the heartrending lethal denouement of 1959. What the policies of this UNP government, enshrined in the Budget and the Interim report on the Constitution, may trigger is an incendiary combination of 1953 and 1956, or more horrifically and nightmarishly, the chain reaction of 1953-1956-1958-1959. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":144849,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,46,8],"tags":[],"class_list":["post-184186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-constitutional-reforms","category-editorial"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>\u2018Social War\u2019 Budget: Sri Lanka\u2019s Social Contract Under Siege - 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