As the 75th anniversary of independence gathers steam, it will be important to reflect on the gradual erosion of checks and balances and the rule of law. No crisis, be it in 1953, 1971, 1983, the long civil war, or the current crisis, has seen a desire for accountability, good governance, commitment to social justice and economic competence from the three families that have ruled the country since independence. Instead, they have demanded more centralised and unaccountable power. Currently the Rajapaksa clan and several notable personalities from the UNP have combined to crush the demand for meaningful political change, using the draconian power enshrined in the Executive Presidential constitution, with such repressive legislation as the Prevention of Terrorism Act, whereby a person can be held without charge for up to two years.
This essay will look at the economic and structural reasons that lay behind to the 1971 JVP insurrection and led to the current economic crisis.
Like the current crisis, the economy in the seventies was characterised by sinking export income, growing foreign debt and escalating unemployment. Throughout the 1960s the size of the industrial sector remained static and hovered between 12 and 13 per cent, with the majority of income derived from the service sector and agriculture. In the export sector there was a fundamental dependence on agricultural products. The country was caught in a classic economic pincer movement and still is – declining export prices and rising export costs.
The country’s debt rose from Rs 95 million in 1957 to Rs 349 million in 1966, and again to Rs 744 million in 1969. Then as now, the money to pay for the foreign debt came from foreign loans and the running down of the country’s foreign exchange reserves.
Like today, foodstuffs made up a large part of county’s imports around 53 per cent.
Unemployment continued to rise in 1971. Out of a labour force of 4.4 million, 585,000 were officially unemployed. The economic authority of the time, Dr N.M. Perera, estimated the figure to be around 700,000.
Out of the 585,000 who were unemployed, 460,000 were in the rural areas and 250,000 were aged between 19 to 24. 167,000 of these had received a secondary education or went on to tertiary level.
The children of the era which began in 1956, the “beneficiaries” of the Official Languages Act, were not given the economic fruits promised to them. As a result of government repression in 1971, though never acknowledged by the country’s rulers, around 10,000 to 15,000 young Sinhalese were killed and tens of thousands more were imprisoned and tortured without due process. In contrast, according to the government, 61 civilians and 63 members of the armed forces lost their lives. The security forces’ extra-judicial killings and torture escaped scrutiny and impunity became the norm.
To prosecute the leaders, of whom I was one, the rule of law was trampled on, habeas corpus was waived and confessions gained by torture were admissible. The murder of countless thousands of Sinhalese youth by the security forces has never been examined.
The repressive playbook was set: an unwillingness to examine and fix structural issues, be they economic, political and judicial, accompanied by ever more restrictive and unaccountable measures and a marked reluctance to investigate crimes committed by the state.
An economic snapshot before the second coming of the Rajapaksas.
By the 1980s the economic direction changed, neo-liberalism became the mantra, and welfare provisions were gradually dismantled. Lanka now relied on tourism, garments, remittances and tea. National debt continued to rise
Billions of dollars were spent on vanity projects by the ruling clan: airports, stadiums, freeways, convention centres and a seaport, with no thought of who would need or use them.
Debt by the 2000s had risen to 79 per cent of Gross Domestic Product (GDP). It continued to rise and rise, reaching 100 per cent just before Covid struck. The economic instability is exacerbated by the fact that the top 20 per cent of the population have 42 per cent of the Island’s income, whilst the lowest 40 per cent make do with 17.8 per cent.
Accession of Gotabaya and the latest Resurrection of Ranil
The economy contracted after the fall in tourism as a result of the 2019 Easter bombings, putting a strain on the country’s foreign currency reserves. Gotabaya Rajapaksa exacerbated the crisis by cutting taxes collected from a very small base, costing the country hundreds of billions of rupees. Next, he banned the import of fertilisers, partially due to the lack of foreign exchange to pay for them. Agricultural production declined at an alarming rate, in particular vital export earners like tea and rubber. The economy went into freefall, with a shortage of food, fuel, medicine, cooking gas and other essentials. Whilst the top 20 percent had the economic means to cope, for the vast majority the burden was catastrophic.
A spontaneous protest movement erupted which forced the resignation of the then president Gotabaya Rajapaksa and the installation of the veteran serial aspirant, Ranil Wickramasinghe. Instead of opening dialogue with the protestors and dealing with their legitimate demands, we got state repression and the scapegoating of the protestors. The same people who looted the public purse and were ineffectual economic managers are in charge of the recovery! Solutions on offer do not deal with the heart of the problem: the mismanagement, corruption and wastage prevalent in the economic and political system. Those least able to pay will be forced to shoulder the burden, and the structural issues, if not addressed, will lead to another economic and political crisis.
It is vital that celebrations to mark the anniversary of independence be tempered by reflection on how the country got to the current crisis and how it should be fixed. Otherwise, we will be forced to relive past disasters. As 1971 and 2020 remind us, the failure to change the system comes with enormous costs, both at a personal and economic level. It is the least we can do for those thousands of young people being detained on spurious grounds and those nameless 15,000 young people who lost their lives at the hands of the state in 1971.
Dr Lionel Bopage
25 January 2023