Negotiating Development in an Evolving Democracy – Lessons from Sri Lanka.
(Article published in the Harvard Asia Pacific Review in 2005)
By Godfrey Gunatilleke
Introduction
Sri Lanka’s development after gaining independence in 1948 has been an intriguing mix of successes and failures. It highlights the importance of simultaneous progress in the social, political and economic domains. It also draws attention to the mediating role that a developing democratic system has to play in resolving social and economic issues. In most assessments of the Sri Lankan case, this mix is reduced to a sharp contrast between the exceptional performance of the social sector on the one hand and failure to manage both its economy and polity on the other. This is only a part of the story. The mixture of positive and negative outcomes is intrinsic to each of the three main processes of development -social, economic and political.
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Sri Lanka’s current average life expectancy of about 74 years, is higher than that of most South East Asian countries that have much higher per capita incomes. However, the proportion of infants with low birth weight remains a high 18%, and that of underweight children is 29%. These indicators are worse than those of many countries of Sub Saharan Africa where the average life expectancy is far lower. Furthermore, about a quarter of the population of Sri Lanka lives in absolute poverty.
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From the time of independence, the country has had an uninterrupted record of democratic government with several changes of government, demonstrating a remarkable resilience in the face of insurrections and a prolonged civil war . These violent eruptions were the outcome of intrinsic flaws in the evolving democratic system. This system was unable to resolve the conflicts that were generated during the continued exercise of democratic power.
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Sri Lanka’s economic performance has lagged far behind many of the South Asian countries, e.g. South Korea and Thailand had a similar per capita income in the early 1960s. However, when Sri Lanka’s economic performance is placed in the context of violent social upheavals and the devastation of the civil war, the modest average annual growth rate of about 4.3% during 1948-2004 denotes an unusual viability and capacity for adjustment.
In any country development is likely to proceed with a mixture of positive and negative outcomes. What is perhaps unique for Sri Lanka is its particular compound of equity, growth and democracy and how the inconsistencies and contradictions in the social, economic and political arenas interacted to produce the total outcome. Sri Lanka’s development process was taking place in an evolving democracy with high expectations and limited economic resources. This process had to be managed democratically which also meant that the development policies and programmes that were delivered had to be negotiated democratically with a wide variety of constituencies and stakeholders with diverse and often conflicting interests. Here, the negative development outcomes, social, political and economic, were most often due to the incapability within the democratic system to negotiate effectively with the competing interests and gain acceptance of the right solutions and the right mix. It is also important to note that this system with its mix of equity, democracy and growth and all its imperfections, did not breakdown under the stress of the problems it generated. The resilience and sustainability it demonstrated were themselves capabilities and attributes that were intrinsic to this mix. The rational solutions came after a long period of trial and error. The bias in favour of short-term popular solutions had to be corrected through empirical evidence or societal experience of their imprudence and lack of sustainability. This is seen in the field of social development. The social welfare programme was the axis of the development process and had to be steered and negotiated democratically. It kept the goal of equity at the centre of development. It included :
- Free preventive and curative health care, serving the entire population throughout the country.
- Free primary and secondary public education accessible to all children and, free tertiary public education accessed by competitive admissions.
- Food security to all households through a food subsidy and a low priced bundle of essential goods.
- Development of small scale agriculture which contained the largest proportion of the poor.
- Livelihoods to the landless and poor through a large scale programme of agricultural settlements with irrigated land, housing and extension services.
These core policies and programmes that ensured a high degree of equity were sustained over the long term and implemented consistently through successive changes of government since independence. This commitment to social welfare became the implicit social contract between the state and the people. The social policies became the frame of reference for the management of both the economy as well as the polity. All political parties showed equal commitment to its main elements. The two major political parties which held office during this period the right oriented United National Party and the socialist oriented Sri Lanka Freedom Party competed to implement the social welfare programme.
The critically important underpinning of these policies and programmes was a democratic political system, which from the outset, evolved in a highly competitive form in Sri Lanka. Despite its imperfections the system functioned and compelled the power holders to be constantly attentive to the people’s needs. We observe this from 1931 when universal adult franchise was introduced into the country, with a constitution giving it a limited form of self government. Under this constitution representatives were democratically elected by clearly demarcated territorial electorates with the responsibility for improving the well –being of all the people. They became the intermediaries between the state and the people for procuring the basic public goods required for the satisfaction of basic needs. The representatives had to ensure that the constituency was well served with the state delivered services. The relationships that evolved between the state and the people through the elected representatives were instrumental in creating what was almost a structure of rights and responsibilities. They placed well –defined obligations and responsibilities on the state for improving the well-being of the people. At the same time the process generated the people’s expectations of the state, casting it in the role of the principal benefactor and provider of services. The social welfare benefits obtained by the people acquired the character of entitlements that citizens enjoyed in a democratic society. After independence, these elements in the relationship between the state and citizens were further consolidated and strengthened.
Besides the rapid social advancements, the social welfare programme had other positive and negative impacts on all parts of the development process. As an implicit social contract between the state and the people, it became a mainstay of the democratic system and with its near universal reach gave all citizens a stake in the democratic state. It certainly blunted the edge of the first agenda for violent revolutionary change advocated by the Marxist parties in the 1930s and 1940s. This first wave of revolutionary Marxist fervor was peacefully absorbed into the democratic mainstream. The anti-democratic struggles in the early 1970s and late 1980s were also unable to mobilize broad based popular support within this welfare system with its democratic entitlements. The state commitment to equity in the social welfare programme had acquired an unconditional character. Consequently, one mitigating feature in the brutal war that has ravaged the North East is the manner in which the humanitarian core of the social welfare programme governed the policy of the state in dealing with the civilian population living in the war-torn areas. The government has continued to finance and maintain the social infrastructure to provide health care, educational facilities and food security to the areas which are under rebel control. The public responsibility which is institutionalized in the social welfare programme with its universal reach demonstrates a capacity to respond to a wide variety of challenges. This also became evident following the Tsunami disaster.
Given these achievements and strengths of Sri Lanka’s social welfare programme, what then accounts for some of the starkly negative social indicators –e.g. the persistence of a relatively high level of malnutrition and absolute poverty? While the state developed and maintained the services which extended the average life span, it could not improve the quality of life up to an acceptable standard for about a quarter of its citizenry. Analysts have rightly attributed this failure to the poor performance of the economy and slow economic growth. Then to what extent did that failure lie in the social development policies and their consequences for the economy? To what extent was it due to the unsoundness of the economic policies themselves? And to what extent was it the result of political mismanagement and failures of the political system that led to the devastating war?
Analysts have argued that this pursuit of welfare diverted resources from investment for development to current consumption and that it frittered away the substantial resources that the country had accumulated by the time it became independent. They linked this mismanagement to inherent flaws in the democratic practices in Sri Lanka which led to heavy and improvident public expenditure to satisfy the short –term expectations of the electorates. Much of this argument is misconceived; it is correct, if at all, only in parts. The major achievements in health and education were gained with a modest total public expenditure. Since independence the public expenditure on health and education averaged about 4% of GDP and ranged from a high of 6% to a low of 3.5%. This part of the social welfare system functioned with a high degree of cost effectiveness. The component causing the main problems for fiscal management and impacting adversely on the economy was the food subsidy . In 1952 it was already absorbing 5.3% of GDP and reached a peak in mid 1970s of about 6.4% of GDP- more than the total public expenditure on health and education. The food subsidy was effective in meeting the nutritional deficit of the poor households and helping them across the threshold of undernutrition. But it could be justifiably argued that the food subsidy as administered was wasteful. It could have been targeted better and its cost reduced by one half. The two major political parties when in power made efforts to reduce the food subsidy in 1953 , 1962 and 1971. But these efforts failed due to strong political opposition, popular protests and political pressure from the rank and file within the parties. The politics of the food subsidy exposes the soft underbelly of the democratic system. Both parties, when in power, and faced with the hard economic realities, recognized the need to reduce the food subsidy. But they were reluctant to campaign openly for this and to inform and educate the public on the issue as long as they felt that their political rivals would strive to mobilize political opposition to such policies and try to emerge as the more benevolent party.
Eventually, the rationalization of the food subsidy came when the major economic reforms were implemented in 1978. The subsidy was reduced by approximately half and targeted to the poor who comprised 35% to 40% of the population. The reforms came only after the policies that were pursued proved to be unviable. The previous policy regime was based on an economy closely controlled and regulated by the state, and relying heavily on state enterprise and import substitution. These macro-economic policies were the main cause of the sluggish economic growth in the preceding period. The past policies contained a mix of equity, democracy and growth where state control and public ownership became mechanisms to guarantee equity. This policy regime proved incapable of solving the problems it had generated in the form of a sluggish economy with a massive backlog of unemployment and acute scarcity of supplies. It was then that change became democratically acceptable. In 1977, a new government was given an overwhelming democratic mandate to move rapidly in the direction of a market economy with major structural adjustments. Here again as in the case of the negative features of the social welfare package, the corrections had to come as a part of a costly sequence of trial and error which had to be democratically negotiated. This process, however, ensured that the positive elements of the social welfare programme – free health, free education, food security and income earning opportunities to the poor – were adequately protected and strengthened. After 1978 the major part of the social welfare package remains intact. The market economy had to be anchored to a new mix of equity, growth and democracy. The most recent changes of government is a renewed democratic negotiation of this mix with an adjustment of the relative weights given to the different elements.
Given these achievements and strengths of Sri Lanka’s social welfare programme, what then accounts for some of the starkly negative social indicators –e.g. the persistence of a relatively high level of malnutrition and absolute poverty? While the state developed and maintained the services which extended the average life span, it could not improve the quality of life up to an acceptable standard for about a quarter of its citizenry. Analysts have rightly attributed this failure to the poor performance of the economy and slow economic growth. Then to what extent did that failure lie in the social development policies and their consequences for the economy? To what extent was it due to the unsoundness of the economic policies themselves? And to what extent was it the result of political mismanagement and failures of the political system that led to the devastating war?
The democratic change in 1978 and subsequent international developments produced a national consensus on the macro-economic policy regime. All political parties are agreed that this regime has to be based on an economy in which trade liberalization, the market and the private sector play key roles. The changes in 1978 were expected to usher in a period of sustained high growth that rapidly eliminated poverty and unemployment.
This could have been easily accomplished within a decade, with an average annual growth rate of about 7%, assuming that income inequality did not worsen. Analysts have pointed out that an average growth rate of about 7% in the 1980s and 1990s was well within the country’s reach. Then why were these expectations not fulfilled? The average annual rate of growth during the period 1978 – 2002 was in the region of 4.8%, well below the potential. Most of this shortfall can be attributed to the cost of the insurgency during 1987-1990 and the civil war that ravaged the country since 1983. After the economic policies had been corrected and the economy set on the path of high growth, the grievous mismanagement of the political process intervened to retard the growth of the economy in a drastic manner.
The political errors had accumulated from the time of independence. They were errors that had stemmed from the flaws that were inherent in the democratic system that had been installed in Sri Lanka at that time. The concept of the nation and the state on which the first constitution of independent Sri Lanka was designed did not give sufficient weight and value to the pluralistic character of the nation and the strength of the ethnic identities that made up Sri Lankan society. It assumed that democracy would produce a civic identity which would soon transcend the ethnic identities and that the ethnic minorities would be soon integrated in that larger civic identity. The concept of nationhood implicit in the new democracy was closely linked to the nature of the state which was proposed for it. Once the concept of a pluralistic multi-ethnic nation was laid aside, the constitution makers rejected the federal forms of government and the systems for the devolution of power that went with multi-ethnic multi-cultural nationhood. From the inception, this form of democracy raised the problem of power sharing in a multi- ethnic society where one ethnic group, the Sinhala community, made up the overwhelming majority. These features of the constitution distorted the central principle guiding the operation of the democratic system the rule and exercise of power by the majority. The concept of non-ethnic nationhood in the Sri Lankan context encouraged a majoritarian form of democracy in which the majority ethnic community assumed that by virtue of it possessing an absolute numerical majority, democracy conferred on it the intrinsic right to impose its will on the whole of society regardless of the rights and aspirations of the minority. The social forces that were released by the democratic system reinforced the majoritarian trend and intensified the ethnic divisions. In the mid 1950s the majority community decided to make Sinhala the official language of the country. In 1972 the Sinhala leadership firmly rejected the federal idea or any form of power-sharing with the minorities and installed a unitary constitution. The mono-linguistic unitary state in a multi-lingual multi –ethnic society was soon confronted with strong resistance by the Tamil minority which grew into an armed struggle for a separate state that continues.
The efforts to provide a democratically acceptable solution has been a protracted and costly process. Over the last two decades the two main political parties have moved in stages in the direction of a federal system. But the federal solution has not yet received a firm democratic endorsement from the majority community.
In each of the processes that have been briefly surveyed , -social, economic and political - the focus was on the hard core problems which emerged from the democratic process itself . In the effort to find solutions to these problems , the democratic imperatives have intervened at critical times overriding criteria of sustainability and rationality that would have provided the best and most viable solutions. These best solutions had to be negotiated democratically through a process of trial and error. It may be that they came late and led to a considerable waste otherwise available to enhance the well-being of the people. In the case of the hard core political problems that have led to war the solutions have not yet come. The democratic system did not have the capacity to negotiate the democratic acceptance of the best solutions in a speedy and orderly manner. That capacity could come only through a broadening and deepening of the democratic process which brings the state and the citizens into a partnership in the formulation and implementation of development policy from the lowest tier of governance upwards. It has to both empower the people through the appropriate mechanisms that practice the principle of subsidiarity and impart the necessary knowledge and understanding that enables them to make the sound democratic choices on the critical national issues.
