Analysis

Sri Lanka’s international straitjacket

The failure of Sri Lanka’s peace process is partially due to the simplistic government-versus-LTTE formulation adopted by international mediators.

by | Sunil Bastian

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While the history of the current process of Sri Lanka’s globalisation goes back to the colonial period, the opening up of the country’s economy 40 years ago worked to intensify it. The civil war that has plagued the island nation for more than two decades has done almost nothing to undermine this dynamic. Rather, the conflict has brought the international system into affairs that had hitherto been protected on the basis of the nation’s sovereignty. Today Sri Lanka is indeed a fragmented state, part of which is controlled by the LTTE, but all of which is now inextricably linked to the global politico-economic system.

Unfortunately, it is largely the contradictions of the global system that have exerted such influence on Sri Lanka, leading to pessimism in the context of the breakdown of the peace process. The dynamic today is relatively straightforward: on one side, violence and conflict; on the other, a framework for the peace process, dominated by international actors, that is not working. Even when the war was being fought at its highest intensity in the past, this had not been the case. For example, at the time of the People’s Alliance regime’s ‘war for peace’ strategy, war was a reality, but the space for peace was still open and available. Today that space is closed, given a procedural structure that seems ineffectual, while the violence continues.

Within Sri Lanka there have been diverse responses to the intervention of international actors in the country’s peace process. The Sinhala nationalists and old-style leftists have been uncomfortable with it, and some have actively opposed it. Some liberal internationalists, on the other hand, view the world community as a bunch of do-gooders, eager to deliver peace to the island. They ignore the politics and power-play that are part and parcel of these interventions in a globalised world. The construction of the term ‘international community’ itself is a ploy to hide the politics inherent in this dynamic. What Sri Lanka needs today is an analysis that can highlight the politics of power in these interventions, so that its citizens can spot the contradictions, as well as the opportunities available to promote the cause of peace.

Growth in conflict
The liberalisation of the Sri Lankan economy in 1977 was a turning point in the expansion of the involvement of international actors in the country’s affairs. Sri Lanka was the first country in Southasia to liberalise, and the process generated a tremendous response from the aid agencies. At one time, Sri Lanka received one of the highest per capita levels of international aid in the world, both bilateral and multilateral. While the civil war has forced some donors to rethink their policies, Sri Lanka has consistently enjoyed the commitment of key donors, including Japan, the World Bank, the Asian Development Bank and the International Monetary Fund. From around the mid-1980s, the latter three accounted for about 75 percent of foreign aid to the country.

Meanwhile, the implementation of Sri Lanka’s economic-reform process has always been more important to these key donors than concerns over the civil war. Aid from them has regularly been reduced, adjusted or diverted to new projects depending on how successful the Colombo government has been in carrying out the economic-reform agenda towards the further development of liberal capitalism on the island. The war was for a long time only of concern to these organisations to the extent that it impacted on the economic agenda. But the Sri Lankan economy has been performing reasonably well despite the conflict, with an average of four to five percent annual growth. This has not been the eight percent growth that mainstream economists have been hoping for in order to equal the East Asian miracle, and certainly Sri Lanka would have performed better had there been no civil war. But the fact remains that the conflict has not significantly affected the country’s economy, which in turn has allowed donors to view the country as relatively ‘stable’.

According to international indicators, Sri Lanka is no longer a ‘poor’ country, but rather a ‘low middle income’ one, with an annual per capita income of more than USD 1000. The economy has diversified from its agricultural base, and a significant portion of people now earn an income in sectors linked to the global economy. A large number also make use of global labour markets. Although Sri Lanka has a heavy burden of foreign debt, many believe that the debt-service ratio, meaning the proportion of export earnings spent on servicing foreign debt, is still at a manageable level. In addition, there is no danger of Sri Lanka defaulting on debt-service payments. Of course, this relative success does not mean that the country has solved its development problems. Both the economy and society show the usual social contradictions of a capitalist economy. Nonetheless, it is crucial to note the fact that, seen through the logic of capital, Sri Lanka has performed reasonably well in the midst of the civil war.

A number of factors explain this peculiar picture. First, the core of economic production has been confined to areas surrounding the capital. Close to 50 percent of the gross domestic product is now within the Western Province, close to Colombo. So long as the war is confined to the north and east – which were never particularly important economically, even before the conflict began – the economy can function perfectly well. Many sectors in Sri Lanka, not to mention the incomes of more and more of its people, depend on the health of the global economy. Hence, if the global economy performs better, so too does Sri Lanka’s – regardless of the war. Finally, several other factors have helped Sri Lanka to achieve economic gains while simultaneously waging an expensive war: generous donor support, the reduction of the burden on the state coffers by getting rid of loss-making state enterprises, and the relative degree of autonomy that the central bank has maintained.

The entry of the Norwegians as mediators in the peace process coincided with the breakdown of this order. This took place during 2000 and 2001, years of a global economic recession. Then, in 2001, the same year that a severe drought struck the island, the LTTE carried out a devastating attack on the country’s only international airport – the nerve centre for an economy that depends on global linkages. These factors combined to produce a negative economic growth in 2001 for the first time since Independence. The International Monetary fund came up with a rescue loan package, and the People’s Alliance government of Chandrika Kumaratunga requested the Norwegians to act as mediators in negotiations with the LTTE.

However, it was the United National Front (UNF) government, elected in December 2001, that made use of the Norwegians’ entry to sign a Ceasefire Agreement, embark on an extensive programme of economic reforms, consciously expand the internationalisation process, and include the US, EU and Japan as co-chairs of the peace process. The political objectives of the UNF strategy – led by Ranil Wickramasinghe, the nephew of former President Junius Jayawardene, the architect of Sri Lankan liberalisation – included not just peace, but also the pushing of the economic-reform agenda begun by President Jayawardene. This agenda, which developed independently of the peace process, had its sights on an extensive reform programme covering all aspects of the economy. The Wickramasinghe government consciously sought international support for both of these agendas. This strategy lasted for a very short period, however, and its neo-liberal peace was defeated by both Sinhala and Tamil nationalism, working side by side.

Two-sided stranglehold
The current situation is thus one wherein a war is being fought and fuelled by nationalist forces on both sides. At the same time, contradictions of the international set-up inherited from the Wickremasinghe period are not only complicating matters, but do not allow much hope for securing a long-term settlement.

The Norwegians, who are very much wedded to the Ceasefire Agreement (CFA) secured during the UNF period, are working with a framework much more suited to an inter-state conflict based on a two-actor model. Hence, the CFA recognises only two sides, the LTTE and the Colombo government. There is an acceptance of the presence of two armies, rules of engagement and no-go areas between these two armies, and rules dictating how either side can withdraw from the agreement.

This set-up entirely ignores the complexities of conflicts that build on the basis of identity politics. It legitimises the demands of the LTTE as the sole representative of the Tamils, and undermines space for democracy within the Tamil population. It also forgets that there have always been struggles for political supremacy among Tamils, even while simultaneously fighting the Sri Lankan state. The LTTE has taken care of this issue by eliminating its opponents. Meanwhile, the rights of the Muslim population have not been given due importance, thus pandering to a position among Tamil nationalists that has deliberately ignored Muslim rights by creating a notion of a Tamil-speaking people.

The two-actor structure of the CFA also cannot take into account the complexities of politics among the Sinhalese, which is fought through a problematic multi-party system. The Norwegian approach gives the impression of being based on ‘primordialist’ interpretations of identity conflict, where a monolithic group of Sinhalese, represented by the Colombo government, is fighting a monolithic group of Tamils, represented by the LTTE. As such, the Norwegians are involved as impartial mediators between these two ‘underdeveloped’ communities, to find a ‘rational’ solution that only Europeans can provide.

The formation of the ‘co-chairs’ group came about due to initiatives of the UNF government, and not the other way around. In order to understand the positions of the co-chairs, it is important first to focus on the individual policies of each of these countries. The fundamental objective of the Japanese, US and EU policies is one of security and stability, in order to continue work on the economic agenda, and promote capitalism in the island. At the very beginning of the peace process there were divergences from this position, mainly among EU countries. Pressure from the global ‘war on terror’, however, has pushed these countries into uniform alignment. The recent ban on the LTTE by the EU as a ‘terror’ group is a reflection of this policy convergence, made with the objective of establishing stability.

This position is strengthened by support given by multilateral agencies such as the World Bank and the Asian Development Bank, which work on the basis of a similar policy perspective. Of course, promoting negotiations is an important element in this strategy, with the aim of ensuring security. But the fundamental motivation of supporting negotiations is very different from the objectives behind the Norwegian two-actor, impartial-negotiator model. Suddenly what becomes more important is not balancing between warring parties, but rather the stability of an established state in order to promote capitalism.

Despite the presence of this fundamental position, it is not one that the ruling classes of Sri Lanka can take for granted. Continuation of this policy, after all, will depend on the good behaviour of those elites. Developments such as a stepped-up military strategy could worsen the humanitarian crisis, increase human-rights violations, instigate a greater flow of refugees and destabilise the core areas of the economy – evolutions that would clearly go against the policy objectives of the co-chair countries. Similarly, any significant reversal of the economic agenda, or any move to undermine the influence of the co-chairs by courting other international actors, could also bring about a change in the international approach.

As much as the two-actor model reveals contradictions that undermine the chance for long-term peace in Sri Lanka, the policies of the co-chairs have their own inconsistencies. For example, even while calling for negotiations, two of these actors – the EU and the US – have banned the LTTE as a ‘terrorist’ organisation. Though prescriptive statements are made about human rights, humanitarian crises and the like, there remains a continuous flow of foreign aid from these key donors, so long as the reform agenda is maintained by the Colombo authorities. Promotion of the private sector likewise continues unabated, with the support of many agencies. Finally, although security and stability are the underlying motives of this approach, there is very little commitment to actually support Sri Lanka through military means.

The contradictions of this international conundrum create complicated problems for those who accept that working with international actors is essential in the current context of global capitalism. This is relevant not only for Sri Lanka, but for other countries in Southasia as well – particularly in the situations of internal conflict that have become such an integral part of the region’s socio-politics. Unfortunately, our dominant response to these complicated issues is generally one of two. We either remain within a framework of liberal internationalism that naively believes in the goodness of an ‘international community’; or our response originates among nationalists of various guises, who believe in an ahistorical notion of sovereignty.

The time has come for us in the global south to break through this conceptual trap, which does not provide us a framework with which to deal with these international interventions. All our societies are now already a part of globalised capitalism. Our belief in the sovereignty of the nation-state will not isolate us from it. Neither can we afford to go along with liberal internationalism naively. Globalisation, while integrating the world, also brings out differences more sharply. How global factors affect South Asia will thus be a result of our own histories and social conditions. Only a much closer look at our specific historical situations will help us to identify spaces within global capitalism that we can make use of for our own purposes. And only in this lies the foundation for a new politics with which to deal with international intervention.