Economy suffers with few people acting on the slogan ‘Sri Lanka is ours and not theirs’

A man walks past a damaged house in Digana last week - Pic by Shehan Gunasekara

Behaviour like low level animals

The slogan that is being shouted in an angry loud voice by a minority section of Sri Lanka’s majority Sinhala Buddhist population conveys a non-negotiable message to minorities in the country. It says: ‘Sri Lanka is ours and ours only. All others who wish to live here should do so according to our terms. So, take it or leave it’. 

This type of instinctive behaviour is imbedded in the DNA of lower level animals who operate in packs for reproduction and economic power. Thus, a pack of wolves or monkeys will demarcate a certain geographical area for themselves and resist with deadly violence the entry of any intruder of the same species. 

For them, the law is that ‘We’ have the right to brutalise ‘They’ who do not belong to us. Hence, exchange, interaction and cooperation – common grounds that ensure welfare, well being and prosperity – are anathema to them. 

Homo sapiens is an evolved species

According to historian Yuval Noah Harari who documented the history of humankind in his 2011 book ‘Sapiens’, the Homo sapiens – Man, the Wise – too, behaved in the same instinctive fashion some 10 to 20 thousand years ago. These early humans who lived simply by hunting and gathering had to claim ownership to geographical territories to ensure the continuity of the ‘pack’.

However, about 10,000 years ago, they embraced the fundamentals of economics – producing grain by using their labour, implements and land funded by money lent by some wealthy Homo sapiens – by being farmers. Those farmers had to depend on more economics when they produced a surplus or could not produce enough to meet theirs, on the one hand, and when their needs expanded beyond domestic supplies, on the other. That gave birth to trade and commerce, migration of Homo sapiens and inter-settlement and inter-breeding. 

Thus, the hard-wired DNA of Homo sapiens evolved into a new system in which they could cooperate with others for sustenance, well being and prosperity. Harari has identified three factors which have united the peoples of the globe in this manner: Money or economics, empire-building and mega-religions. Now, some sections of peoples of the world – Sri Lankans are not an exception – have proved Harari wrong. Instead of uniting peoples of the world, they have caused a ‘fight to death division’ among them. It simply shows that their DNA has not evolved beyond that of lower level animals.

Attempts to seize economic power through religion

But in a way Harari is correct. The three uniting forces are still at work. Accordingly, the desire for economic power has forced people to go for empire building. It is in turn justified by using religion. Therefore, economic power, empire building and religion go hand in hand together. This was evident in the Crusades that were launched in the 11th to 12th centuries in the Mediterranean. 

It was supposed to be a religious war; but at the end, it was pure economic power that framed the rules of the game. The Oxford historian Peter Frankopan has given a number of examples in his 2015 book ‘The Silk Roads’ to substantiate this point. One is the power struggle for Venice which was at that time a thriving trading port like Singapore or Dubai today. The Christian crusaders had promised that the territories they would liberate in the Holy War would be duly handed to the Roman Emperor. They had done so by swearing an oath on the relics of the Holy Cross. 

But, after the territories were captured, there was no sign of fulfilling the promise they had given to God. When they were reminded of this, one of the Crusaders, Roger of Sicily, says Frankopan, who had made fortunes out of the Holy War, had ‘raised his leg and then given a loud fart’. He had then, pronounced confidently, ‘By the truth of my religion, there is more use in that [that is, in the loud fart] than in what you have to say [that is, meeting what was promised to God]’. 

Thus, the Crusaders who fought a religious war continued to manage Venice after they captured it. With that, they took control of the entire trade in the Mediterranean.

 

Mediterranean caliphs too used religion to consolidate economic power

According to Frankopan, about two centuries ago, the Caliphs of the Mediterranean had also grabbed economic power by using the new religion, Islam. 

Says Frankopan in The Silk Roads: ‘The Muslims had taken over a world that was well-ordered and studded with hundreds of cities of consumers – taxable citizens in other words. As each fell into the hands of the caliphate, more resources and assets came under the control of the centre’.

What this means is that the battle for economic power is normally fought with religion at the forefront of the battalions. Several centuries later, the Mogul invasion of India or Europeans’ invasion of Asia and Americas too took place in the same fashion. 

Priests delivering religion to those seeking economic power

Religion was, therefore, used by crafty people to capture economic power which was a sine qua non for a good life. Frankopan has put this very cogently in The Silk Roads as follows: ‘A series of chain reactions had been set in motion, whereby competition for resources and military confrontation prompted the development of sophisticated belief systems that not only made sense of victories and success, but directly undermined those of neighbouring rivals’. 

Then, it was the duty of the priesthood to give moral support to those who went to war in the name of religion, but in actual practice, to gain economic power. The priests were, therefore, recognised without questioning or protest as the source of the newly acquired economic power of nations. This recognition gave them an acquired sense of self-confidence elevating them to a higher status in society. 

To match this higher status, their role was extended to the spheres of politics giving them another unique power: that is to dictate terms to rulers as well as to the people at large. Frankopan has noted this originating in ancient Persia. But the examination of human history shows that it has been the general rule in all subsequent societies. 

The problem with such ‘behind-the-scene political manoeuvring’ by priests is that while they have called the shots, they were not accountable for their actions. If the things were successful, there was no problem. But if they went wrong, the rulers who acted according to their advice did not suffer since they had enjoyed political power for the time being. It was the people at large who would fall victim to such political machinations by priests who are not accountable for their action. 

Fear of losing economic power

Today, the old human experience is repeated in a new guise in many parts of the world. It may be the religion or ethnicity that is being put forward as the cover. 

In India, even today, caste is being used effectively to keep economic power among privileged groups. The Brexit campaign in the UK was targeted against migrant ethnic groups that had flooded the country from Eastern European countries. Even the migrants from Asia and Africa are reported to have supported Brexit because of the threat these East European migrants have posed to their jobs and future. 

In Myanmar, minority ethnic group Rohingya is being targeted by the majority Burmese Buddhists because they feel that these minorities have captured economic power which they claim has been theirs. In Malaysia, the ethnic Malays feel threatened by minority Tamils and Chinese which led to the proclamation that Malaysia is the country of the Bhumiputras – the Sons of the Soil. 

In Sri Lanka, during the whole of the post independence era, the majority Sinhala Buddhists have claimed that they have been threatened to extinction by the minority religious groups like Sinhala Christians and Muslims or minority ethnic groups like Tamils and again, Muslims. In early 1950s, a popular slogan uttered by the majority Buddhists was the onset of a Catholic invasion. While this threat has been imbedded in their psyche, a new threat against Tamils got rooted in them since around mid 1950s and against Muslims, especially after the end of civil war in 2009. 

Economic cost of ethnic war

This need not be the case since economic power in Sri Lanka and elsewhere has been captured by the state in modern days. Functioning as a secular organ, the state has to be the arbiter between rival ethnic, religious and social groups. It has to protect the rights of every citizen living within it. These rights specifically mean property rights – the right to one’s body and physical property irrespective of one’s ethnicity, faith or social standing. 

Yet, clashes occur mainly due to the failure of the state to function as an impartial arbiter, on the one hand, and economic hardships that have been brought on the citizenry in general in bad times, on the other. With regard to the first case, the political power enjoyed by the majority of the citizens has prevented the state from functioning as an impartial arbiter. This leads to discontent among the minority groups forcing them to protest peacefully at first and with deadly violence later.

This is the root of the Tamil insurrection in Sri Lanka that cost its economy at the rate of about 2% in economic growth every year since early 1980s. During the five year period immediately after the economy was opened in 1977, the country recorded an average economic growth of 6.3%. After the 1983 anti-Tamil riots that propelled the country to a bloody civil war, the growth decelerated despite the maintenance of the same level of investment as before. The average growth rate during the 27 year period till the end of the war in 2009 amounted to 4.3%. 

The loss of the output by about 2% every year at a compound rate precluded Sri Lanka from reaching the average income per citizen, known as the Per Capita Income, needed to reach the status of a rich nation within a generation. Thus, the proponents of ethnic violence had given the loud message to every Sri Lankan: suffer the economy.

Central Bank’s plan to stabilise the economy are being derailed

After the end of the war, the economy was driving on the high hope of ethnic reconciliation. Accordingly, the annual average growth rate boomed to 8.4% from the previous low rate of 4.3%.

But, with no effective reconciliation with the minority Tamils and the onset of a new economic power struggle with minority Muslims, growth began to falter since 2013. During 2013 to 2017, the average growth fell once again to 4.3%, the rate which the country had recorded when it had been going through the costly ethnic war. 

Against this background, the Central Bank had begun to consolidate the macroeconomy providing a boost to long term investments by the private sector – both local and foreign. Inflation rate was successfully reduced to 5%, government revenue was temporarily raised to 14% of GDP and measures were introduced to tackle the alarming debt picture as well as the ailing external sector. 

The hope of continuing with this program has now been shattered by organised attacks on minority Muslims in Gintota, Ampara and Kandy recently. Since the present good governance government had failed to nip them in the bud, a fear psychosis has been created among other minorities in the country, namely, Christians and Tamils. 

This was voiced by the leader of the opposition and leader of Tamils in Parliament whilst participating in the Parliamentary debate on the attack on Muslims in Kandy. 

These concerns should not be ignored since they will affect the economy victimising all citizens, including the majority Sinhalese. They all have to shoulder the bill to pay compensation to victims. Given the present budgetary problems, they will have to do so by sacrificing other important needs. The axe will thus surely fall on their plans to have good schools for children or good medicare for citizens. That is the direct cost to be borne by them. 

Violation of property rights of minorities with impunity 

In addition, there is an indirect cost on the economy as well. It will come from the reluctance of both local and foreign entrepreneurs to invest in the country. They would be dissuaded by the fear of losing their investments if they are burned down or their lives taken away by hooligans on flimsy excuses. 

The economists call this violation of property rights, the protection of which is essential for any nation to sustain its economic growth. When a section of the majority Sinhala Buddhists can take those property rights away from minorities at will and with total impunity, the feeling which investors would get that their property rights are at stake cannot be avoided. 

These hooligans are at war with Muslims today. It is only a matter of time that they would extend their attack on minority Tamils, Sinhala Christians and foreign investors whom they will consider as enemies of the Sinhala Buddhist nation. Once all these groups have been taught a lesson for conspiring against them, their attention would be directed toward those among the majority Sinhala Buddhists who would do well economically. LTTE which annihilated their own members has already proved this point. 

Hence, if the Government is interested in long term economic prosperity, it has to observe the rule of law to the letter. Failure to do so in search of short-term political expedience would mean only one thing as far as the economy is concerned. Sri Lanka’s economy has lost about 2% of its annual economic growth during the horrendous ethnic war in the past. It is poised to make a similar loss in the future as well.

Suffer the economy

Hence, the good governance government which is accused of failing to observe the rule of law and the extreme groups among the majority Sinhalese as well as among the minority groups have jointly delivered only one message: Suffer the economy.

When the economy suffers, it is all Sri Lankans who will jointly suffer. 

(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected]).