Economy Demands Ethnic Reconciliation

By Ameer Ali –

“Diaspora Investment to build economy” ~ (Vijitha Herath, Minister of Foreign Affairs)

President Anura Kumara Dissanayake and the NPP government are no doubt committed to make Sri Lanka an economically independent nation. Over three decades of uninterrupted misgovernance, maladministration, and systemic corruption had driven this fertile island to the brink of bankruptcy with a mounting external debt totalling $37.5 billion by June 2024. The country was virtually mortgaged to foreigners. A new generation of Sri Lankans united by anger over the prevailing economic disaster and chaos woke up, ignored all ethnic, religious, and linguistic divisions that were hitherto systematically exploited by successive regimes to win elections but without changing the style of governance and economic management, rose in revolt, and staged the aragalaya, which ultimately forced President Gotabaya Rajapaksa to flee the country and resign. It was a unique event unprecedented in the history of post-independent Sri Lanka. Ranil Wickremesinghe, a born loser, replaced Gota with the consent of a parliament on which the aragalaya generation had already lost all confidence. He at once ordered the security forces to disband the aragalaya gathering with force before inviting the IMF, the watchdog of the new capitalist world order, to take control over Sri Lanka’s economic and financial management. This was the seventeenth time that this institution was called upon to provide advice, a testament to past regimes’ economic mismanagement. This, in short, was the economic background to the entry of LKD and NPP with their promise to transform the country into an economically independent one. It is no doubt a challenging task and needs to be achieved with minimum disruption and inconvenience to people’s lives.

Economic independence, however, does not mean opting for an isolated and closed economy, because science and technology have inescapably forced humanity to live in an interdependent world, and that is the axiom on which the concept of an open economy operates and to which openness the new leadership made a commitment. Thus, despite all criticisms from an opposition that had lost all credibility among voters and was reduced to a minuscule group in parliament, AKD displayed his sense of pragmatism by not bidding goodbye to the IMF as many expected but by accommodating its reforms within his scheme for system change. True, the IMF’s primary focus is not on enhancing the welfare of ordinary citizens directly, but indirectly through stabilizing the monetary and fiscal environment so that the class of entrepreneurs would lay the golden eggs of economic growth and prosperity. Thus, with assistance from the Central Bank, whose current governor was formerly an employee of the IMF in Washington, the IMF concentrated on achieving monetary stability through capital controls and tight fiscal measures, which no doubt inflicted pains on people’s living conditions. Yawning twin deficits had to be curtailed, and the government had no choice but to swallow the IMF’s bitter pill. Pragmatism converted an otherwise revolutionary JVP into a reformist partner in the NPP coalition.

However, the coalition decided to minimise the pain in a roundabout way by closing the leakages through systemic corruption, which ultimately reduced the volume of the circular flow and consequently the size of the economy itself. Even the IMF applauded this decision. Accordingly, AKD introduced a vigorous campaign to eradicate corruption and bring those who promoted and benefited from it to confront the force of law. He also issued a severe warning to his own colleagues not to indulge in any form of corruption. His Clean Sri Lanka campaign meant not only a clean physical environment but also a clean government. It was corruption that turned all SOEs like Sri Lankan Airlines into loss-making white elephants, which in turn became a burden on national budgets. Anti-corruption campaign is not over yet, and the government cannot afford to relax its vigour until it is eradicated completely. In this respect, AKD and NPP are batting on a winning wicket.

Yet, there is a long way to travel to achieve economic independence. IMF believes that once economic stability is achieved, economic growth would gain momentum, the level of foreign debt would remain sustainable, and foreign investment would flow in to promote growth. Perhaps it was with this optimism restrained by the Trump Tariff Effect that Foreign Minister Vijitha Herath recently called for investment from the Sri Lankan diaspora to develop the economy. But there is a big hurdle to be removed before that happens.

The majority in this diaspora community are Tamils who fled the country after a series of anti-Tamil riots and violence since the 1950s, culminating in an unaffordable twenty-five-year confrontation between a Tamil militia and the state. The total extent of losses incurred by all communities in terms of human lives and material destruction has not been fully accounted for yet. Skeletons are now coming out to bear witness to the horror and causing nightmares to the perpetrators. But the mental wounds inflicted upon the Tamil community still hurt its members living locally and abroad. No meaningful attempt has yet been taken by any previous government to heal those wounds. Ranil Wickramasinghe talked about ethnic reconciliation on the eve of the last presidential election, but when a bunch of political bhikkhus demonstrated in public against his decision, he quietly let it die. Now it is the economy more than the politicians that demands ethnic reconciliation.

There is a fair amount of investable capital and entrepreneurial skill within the diaspora Tamil community, which could be welcomed to develop at least the eastern and northern parts of this country, which were deliberately neglected because of communal hatred. Even now, sixteen years since the end of the Eelam war, the intimidatory presence of military personnel in Tamil districts and the threatening behaviour of political monks are not encouraging features to attract diaspora investment. For example, inspired by Gotabaya’s Archaeological Task Force to Build Buddhist viharas in places like Thaiyiddi in the North, where there are no Buddhist populations except the military, but with the hope of colonising that area with Sinhala Buddhists in the future, is not going to achieve ethnic reconciliation. Similarly, the behaviour of monks like that obstreperous Gnanasara, who cremated the body of a monk who died in Colombo in the premises of Neeraviyadi Pillayar temple in Mullaitivu, is not going to create a conducive environment for the Tamil diaspora to risk its investment.

One of the welcoming characteristics of the aragalaya generation is its ethnic and religious inclusiveness. Unlike members of earlier generations, the aragalaya youth are not schooled in the philosophy of either political Buddhism or Sinhala supremacy. This is also true of AKD, who, unlike Rajapaksas, openly advocates that Sri Lanka belongs to all its citizens, whether they are Sinhalese, Tamils, or Muslims. Therefore, if there is a leader who can bravely confront the Sinhala supremacists and political Buddhists to make ethnic reconciliation a reality, it is AKD and his political comrades. It is time the new government starts the ball rolling, at least by initiating a series of dialogues with rationalists from all three communities.

Ethnic reconciliation should happen at two levels, at the state level and at the people level. The first should ultimately end in a new constitution founded on principles of secular democracy and power sharing between the centre and periphery, while the second should lead to a change of hearts. It is a sad note in the history of this blessed island that ethnic politics has made each of the three communities live in mutual suspicion and fear of the other two. Brevity prevents elaboration of this sad phenomenon. But the time has come for and the economy makes it imperative that a change of hearts and ethnic reconciliation go hand in hand through a social revolution and constitutional changes. Let the state make the first move for the new generation to complete the revolution. 

Economy Demands Ethnic Reconciliation