Post-war Sri Lankan state – Challenges for progressive politics

The term post-war state in the title of this article is based on the fact that in 2009 territory of the post-colonial Sri Lankan state was consolidated through military means.  I argue that it is important to take this event into account in understanding challenges for progressive politics in Sri Lanka at present. In order to explain the basis of this assumption, I begin by clarifying how we understand the state. 

State and state formation

The conventional notion of the state analyses the state as a concrete self-contained entity that has attained a final status. The geographic space covered by the state is securitised. When it comes to discussions on security, the focus becomes state security. It ignores the security of groups and individuals in society. The spatial unit of the state is objectified in maps, and borders are drawn to demarcate it. A whole paraphernalia of rituals, histories and symbols has been developed – not only to promote the conventional idea of the state, but also to convey the eternal character of the state. Those who control the state, and their ideologues, always try to convey this notion. The notion of sovereignty, which came to dominate the world only after the Second World War, strengthened the conventional notion of the state. The dominance of these ideas of the state makes it difficult to bring about reforms of the state in areas such as its institutional structure, identity and critical public policies. 

In contrast to this, states have to be seen as a product of history – the same as any other social phenomenon. They are the product of specific histories and political struggles. This generates a process of state formation. They are formed under certain specific historical conditions. They continuously undergo changes. Under certain circumstances states can even totally disappear. A cursory glance at the history of the world shows this.

In understanding the state formation process it is crucial to focus on state-society relations. Depending on specific histories of state formation, certain state-society relations become strategic. Strategic state-society relations can be managed either through consent or coercion. A consensual approach means developing policies that manage these strategic state-society relations peacefully. Coercion means using the coercive power of the state to manage these relations. The latter results in social costs, with certain sections of the society becoming victims of the coercive power of the state. Managing strategic state-society relations through consent is the foundation for a strong state. This also means questioning the conventional idea of security, which focuses on state security. In certain circumstances ensuring the security of the state can undermine the security of individuals or groups in society. Therefore, security must be analysed at different levels in society. 

Finally, the process of state formation must be studied in a global context. The key actors in the global context are other states, organisations formed by states, and global capitalism. Other states have their own interests and hegemonic ideologies which dominate these states. Global capitalism is driven by the interests of capital and profit-making interests.  

Sri Lankan state formation

(See, Sunil Bastian, 2025. State Formation and Conflicts in Sri Lanka. London: Bloomsbury Academic, for a comprehensive analysis of post-colonial state formation of Sri Lanka) 

The Sri Lankan state was formed in a global context when European colonialism dominated. Under British colonialism the entire geographic space of the island was covered by a single unit of territorial power controlled by the British. Institutional structures were formed to control the territory and people. This included developing the coercive power of the state. Another dimension to be noted is that once the territory was consolidated under a single territorial power, the process of capitalist development intensified. 

During the post-colonial state formation of Sri Lanka two strategic state-society relations became important. First, relations between the centralised state inherited from the colonial period and minority ethnic and religious groups. The model of the state that emerged under British colonialism expected that this state would develop a single hegemonic national identity that would surpass separate cultural identities. Sometimes these individual cultural identities were considered a sign of backwardness. The term ‘communalism’ was used to identify them. 

The second strategic state-society relation is the one between the Sinhala majority and the state in the context of the politics of capitalist transition. Capitalist transition is a process that involves changing institutions or the ‘rules of the game’, so that markets become the primary mechanism for resource allocation. These changes must be legitimised at an ideological level. When institutions to establish markets are successful, they become ideas that seem to be natural and common sense, thereby creating a hegemony. But this is a political process, and not a technocratic one. Conflicts and struggles are always a part of this. 

Right from the beginning of the post-colonial period managing these two strategic state-society relations has not been peaceful. Political struggles, conflicts and state repression have been part and parcel of the post-colonial Sri Lankan state formation process. The post-1977 period - more specifically, from the time of the general election held in July 1977 - inaugurated a new period of state formation. Developments during this period pushed political struggles, conflicts and state repression underlining the state formation process to a qualitatively new level. This was due to two reasons. First, the political elites who controlled the Sri Lankan state began to implement a more liberal form of capitalism. This gave emphasis to the private sector, markets and openness to global capitalism. It posed new challenges to managing relations between the state and the Sinhala majority. Second, by this time the worsening relations between the centralised state and ethnic minorities had resulted in Sri Lankan Tamils demanding a separate state.

The use of the coercive power of state became a major means of dealing with this challenge. As a result of violence associated with managing both strategic state-society relations during the post-1977 state formation process, this period can be characterised as a period of ‘mass graves.’

A high point of this post-1977 history of Sri Lankan state formation was in 2009, when the territory of the centralised state was consolidated through military means. Before this event, the central state did not fully control areas affected by the armed conflict. It was a fractured state. For example, the central state could not carry out the basic functions of a state, such as a regular census. The censuses in 1991 and 2001 did not cover the entire island.  

The centralised state did not fully control the war-affected areas in the north and east during the period when the armed conflict dominated. The area was relatively sparsely populated, and had land where capitalist exploitation could be extended. In addition, the strategically important Trincomalee harbour was in this area. 

The military operations to consolidate the territory of the state began in 1979, with the enactment of the Prevention of Terrorism Act and sending troops to the North. It succeeded 30 years later with the destruction of the Liberation Tigers of Tamil Eelam (LTTE). With this event the Sri Lankan state became another example of a state where conflicts arising from the failure to manage state-minority relations through consent ended with use of the coercive force of the state, consolidation of territory and a significant level of civilian casualties. The report of the panel of experts appointed by the UN Secretary General estimated that around 40,000 civilians were killed in 2009. It also noted that war crimes have been committed. 

Several factors helped the success of the military strategy. First, the regime improved the military capability of the armed forces. Second, by this time, due to several factors, international actors engaged with the Sri Lankan state in various roles were supportive of seeing the end of the LTTE through military means. In the case of Western powers, the ideology of the ‘war on terror’, which was a part and parcel of the strategy to deal with Islamic extremism played a role. A new development during this event was the assistance of China to the Sri Lankan state in military operations. Although not often recognised, this was actually a revival of an old relationship between the Sri Lankan state and China. 

The final outcome of the concern about civilian casualties and war crimes was a US-sponsored resolution in March 2014 at the United Nations Human Rights Commission (UNHRC). The most challenging element in the resolution for the post-war state was the call for an international inquiry into what happened during the last stages of the war. Part of the reason for the US decision to give leadership to the 2014 resolution was based on its own strategic interests – to counter the growing influence of China with the Sri Lankan state. The regime that came into power in 2015 improved relations with the US, and cosponsored a new resolution at the UNHRC. The content was almost same as the 2014 resolution, with one a key change. The section on having a war crimes investigation by international judges was replaced by a Sri Lankan one, with technical support from international sources. At present a mechanism established by the UNHRC regularly reports on the status of implementation of the resolution by the Sri Lanka state. There have also been a number of resolutions on Sri Lanka. But it is not clear whether these will be effective in ensuring accountability and satisfying the grievances of people affected in the last stages of war. On top of this, in the current global context, characterised by global capitalism and major power conflicts, there has been a considerable weakening of international mechanisms trying to protect human rights. 

In addition to continuing to focus on what happened to civilians during the last stages of the war, the social cost of the armed conflict on the population in the Northern and Eastern Provinces is a topic that needs much more research. What we have now are largely numbers and reports of events. What is needed is research that takes a comprehensive look at village level. For example, taking a sample of villages, tracing the history of what happened to people in these villages over three decades, and placing the current situation in this context, will give a better picture of the various dimensions of the suffering that they faced. These are tasks for future researchers.  

The post-war state and minorities

In 2009 the territory of the centralised Sri Lankan state was consolidated through military means with a significant level civilian casualties, mainly within the Sri Lankan Tamil population. The war ended with a relatively larger presence armed forces of the state in the Northern Province, the heartland of Tamil nationalism, compared to what was there before. This security force is materially and symbolically linked to the centralised state. 

The 30 years of armed conflict has resulted in the dispersion of the Tamil population to other countries. Usually the term diaspora is used to identify them. The construction of this term is based on looking at the Sri Lanka state aa some sort of an enclosed entity. This artificially divides post-war Tamil political activism, which at present is found in different parts of the world. It is necessary to accept this in analysing relations between the post-war Sri Lankan state and Tamil minority. 

Current policy debates on constructing a state that has legitimacy in a multi-ethnic society cannot be confined only to a discussion about Tamils. It must include at least two other ethnic groups – Muslims and Indian Tamils, or Hill Country Tamils (Malayaga Makkal), as they would like to identify themselves now.

Instead of focusing on policy debates on state reform for a plural society a notion of reconciliation has begun to dominate the ideological debate. This is also legitimised as promoting peace. It is also supported by foreign powers. This is not surprising because the political agenda of many of them during the period of armed conflict was to support the state. This was because of the focus of foreign policy interests in promoting interstate relations, and the agenda of promoting capitalist transition. 

Reconciliation focuses on society, rather than the nature of the state and state-society relations. Arguing that Sri Lankan’s conflict is a conflict in society is to continue the discourse of communalism that started with the establishment of the centralised state under British colonialism. Once a centralised state was established, Sri Lanka was supposed to develop a national identity. This meant transcending what were called ‘communal identities’, which were supposed to be backward. When this did not happen, rather than critically analysing the nature of the state, processes in society were blamed. 

Although there is an element of prejudice and animosity between identity groups in Sri Lanka society, they exist in the context of a centralised Sinhala Buddhist state. To ignore this, as is happening with the ideology of reconciliation, is to ignore the need for fundamental state reform. What Sri Lanka needs is not a centralised state with a single national identity, but a state that accept the plural character of Sri Lankan society. In order to achieve this there have to be changes in the institutional structure, identity and several areas of public policies. The only significant reform that happened in this area during the post-colonial period is the enactment of the 13^th Amendment to the constitution which devolved a limited amount of power to provincial councils. Even this has not been implemented comprehensively. 

The politics of capitalist transition and social justice

The second area that needs attention within the post-war state is the question of social justice in a context of the politics of capitalist transition. This is the second strategic state-society relation in the state formation process.

Over four decades of the more liberal form of capitalism has brought major changes in the economic structure. The share of agriculture in the economy has significantly declined. In 1977, 30.7 per cent of the national output was from agriculture.  In 2019 it accounted for only 7.0 per cent. The contribution of agriculture to household income has decreased. The 2019 Household Income and Expenditure Survey shows it as only 6.7%. This was 0.9% lower than in 2016. 

Greater impact of market forces has contributed to a gradual deterioration in the viability of smallholder paddy. In parallel, the number of those earning an income through wages has increased. Those who earn a living through wages are employed in situations where the strength of the institutions protecting the rights of labour varies. A large section of the working class sell their labour in sectors with a minimum level of institutions to protect labour rights. Some of them sell their labour power in other countries under similar conditions. 

With the growth of the importance of wage labour to earn an income, education and skills development have become important for social mobility. But the benefits of education and skill development get distributed unequally. Since the state monopoly on education was broken in the more liberal period of capitalist transition, the role of the private sector in education has expanded. This has become a new avenue where richer classes can ensure quality education for their children. In addition, the state sector is not an equal system. Therefore, both private sector education and state education provide more opportunities for the richer section of population to provide a quality education for their children. 

More than four decades of more liberal capitalism has resulted in the growth of economic inequality. Data for 2019 shows that while the richest 10 per cent of the population acquired 36.2 per cent of national income, the poorest 10 per cent had only 1.5 per cent. These numbers are only a beginning of the discussion on inequality. Its impact on social and political relations needs more research. 

What these developments show is the importance of focusing on working class issues and inequality in order to struggle for social justice within the post-war state. This means the focus on poverty alleviation, which became a dominant focus after 1977 should be challenged. It is also important to note that the political agenda of donors played a big role in constructing the hegemony of poverty alleviation during the post-1977 period. Finally, in analysing all these issues on social justice within the post-war state, we should not forget that one part of the country suffered to a greater degree due to 30 years of armed conflict.   

It was in this socio-economic context produced by more liberal form of capitalism that the post war state’s inability to fulfil the demands of global finance capital led to an economic crisis that devastated the lives of millions of Sri Lankans. In order to understand this event it is necessary to take into account the nature of the post-war state and its external finances.

The post-1977 Sri Lankan state, due to its liberal economic policies, received a significantly higher level of foreign aid from developed capitalist countries of the West, Japan and multilaterals. This included loans at concessional rates. The primary condition was continuing with neoliberal economic policies. This support helped to sustain the resource base of the state while it waged an armed conflict that demanded more and more resources.

The Sri Lankan state became ineligible for concessional assistance in the post-war period because of its middle-income status.  A major result of this was that the post-war Sri Lankan state depending to a greater degree on global financial markets for its external finances. This rose sharply in the post-war period. Certainly, the fact that the state had been stabilised made it easier to raise funds in global financial markets.

However, the structure of the Sri Lankan state has undergone significant changes during the post - 1977 period. One of the results of more than three decades of armed conflict was the growth of the armed forces. The post-war state has to carry the cost of this security sector. In addition, there has been a proliferation of state institutions. The structure of the post-war state has institutions at presidential, parliament, provincial, district, sub-district and local authority levels. Almost all these levels include elected members and a bureaucracy. Both provincial and sub-district level institutions were the result of trying to manage strategic state-society relations. Provincial councils were an attempt to manage relations with the Tamil minority, and sub-districts level institutions was a response to violence in Sinhala majority areas in 1989/90. Decentralisation has always been a strategy that the centre deployed to regain control of the periphery when there were violent challenges to the state from the Sinhala majority. The result of these developments can be seen in what the Central Bank identifies as functional classification of government expenditure. Data for 2018 shows that the post-war Sri Lankan state spent 49.9 per cent of public expenditure to cover maintenance of the bureaucracy, security sector and interest payments on loans.  Of this, 32.1 per cent was to pay interest on borrowing, demonstrating the extent to which post-war Sri Lankan state has become dependent on global finance capital.

In the context of such dependence on global financial markets, the ability of the post-war state to manage public finances and ensure adequate foreign exchange earnings become important. Depending on how the state managed these variables, rating agencies, who are basically agents of global finance capital, give ratings for the state’s ability to service foreign loans. A series of events worsened the Sri Lankan state’s ability to service foreign loans, ultimately leading to a default. As can be expected the socio-economic impact of this crisis of capitalist transition was felt widely. In a country with a high degree of inequality this was felt more by the poorer social classes. 

These developments led to a protest movement popularly identified as the ‘Aragalaya.’  The response of the political elite controlling the post-war state was to use the coercive power of the state and repression. For this purpose, the state was now backed by more-developed security forces that emerged to deal with state - minority issues and a legal framework represented by the PTA. This is another example of the state using coercive power to manage a strategic state-society relation in the state formation process. 

The post-war Sri Lankan state in a changing global context 

The final variable that I would like to look at is the global context within which the post-war state is existing, and what are its implications. The dynamics of the two strategic state-society relations discussed above began in 1977. These events happened in a world where a neoliberal political project led by the US came to dominate the world after the collapse of the state socialist system led by the Soviet Union. This international context had an impact on how both strategic state-society relations evolved. 

The economic dimension of the neoliberal political project was based on an ideology of neoliberalism that believed human well-being can be achieved by establishing private property rights, free markets, and free trade. The role of the state was to create and maintain institutions that promote these dimensions in the economy. This ideology was extended to areas such as education and health. The state should take steps to develop the private sector and markets in these areas. Apart from this, the role of the state in the economy was expected to be minimal. 

This ideology projected global capitalism as a benevolent system that incorporates more and more people into a market economy, brings about an interconnected world, and spreads prosperity and freedom to all corners of the world. The political agenda was to establish liberal democracy, and reform states based on liberal principles. The neoliberal political project also believed that liberalism in economics and politics would lead to a more peaceful world. International relations were to be managed through liberal principles. This was the security dimension of this project. 

Liberal principles in economics, politics, security and international relations added up to a vision of the total transformation of the world based on liberal principles – or a liberal Utopia. Some ideologues of this project even boasted about an ‘End of History’. This meant that the collapse of the state socialist system ended ideological debates about social systems. Capitalism and liberal democracy were seen as the final answer in this quest, and the entire world was supposed to move towards this ideal. A key assumption of this liberal Utopia was the continuation of Western hegemony led by the US. Some analysists have characterised this as a new manifestation of US imperialism. 

However, it is important to remember that this was only an ideology that tried to legitimise a US-led Western hegemony after the collapse of the Soviet Union. The actual behaviour of Western states was determined by their strategic interests. For example, after the attack by an Islamic political movement on the Twin Towers in New York, the US, with the support of some Western countries, resorted to military aggression against a number of Middle Eastern countries and Afghanistan. This strategy continues even now, as seen by what is happening in Gaza. 

Looking at the world today it is clear that it did not evolve in the manner those who advocated the post-Cold War neoliberal political project expected. A major flaw of liberal analysis was a zero-sum approach towards states and markets. With the expansion of free markets globally, the importance of states was expected to diminish. However, the evolution of states has its own dynamics. In addition, liberal internationalism never recognised the unequal economic benefits of neoliberal capitalism and their political outcomes within states. This applies to developed capitalist countries of the West as well.

The growth of global capitalism under neoliberalism had a diverse impact on states. In the case of some states there was a growth of capitalism - making them stronger and challenging the balance of power at regional and global levels. This happened in the past in the history of global capitalism and territorial forms of power. Giovanni Arrighi’s, The Long Twentieth Century: Money Power and the Origins of our Times is one of the best accounts of this historical process. What we are seeing is a new phase of this.

Competition between states in the current global context is very different from what happened during the Cold War period. During the Cold War there was a clash between two different political and economic systems. This is not the case at present. Global capitalism and major power conflicts is a better way to understand the current global context. 

A key outcome of the period of neoliberal capitalism has been capitalist growth in China, with China becoming a strong state. With these developments China has begun to challenge the hegemony of the US. There has been capitalist growth in India, and India is asserting its power especially in the Asian region. Both India and China are guided by their own political, economic and strategic interests when dealing with other states. Each of them has a hegemonic ideology that dominates. 

The rise of new centres of capitalist growth and major power conflicts are already having an impact on the global economic integration that neoliberal capitalism advocated. There have been significant shifts in the economic policy of developed capitalist countries of the West. Several terms are used to characterise these changes. The Economist magazine, a long-standing supporter of economic globalisation, has pointed out how the global economic system is fracturing. It has used the term ‘the Rise of Homeland Economics’ to identify this trend. The US-based Foreign Affairs journal refers to the rise of the ‘Economic Security State’ to characterise the same phenomenon. The central message is that ensuring the economic security of the state is prioritised over the promotion of globalisation.

A major recent development in this process has been the emergence of protectionist policies in the US under the new regime. The latest example of this is a policy of increasing tariffs on goods imported by the US. Closing down USAid, and reducing foreign aid assistance is part of same political trend. We also need to note that these new economic policies are backed by an ultra-conservative ideology. This is opposing liberal values in many areas. This Right-wing shift is seen in many developed capitalist countries of the West.  Finally, in contrast to the peaceful rule-governed world that liberal internationalists hoped for, the current global context is characterised by conflicts of various types. 

The impact of these global level changes is already seen within the post-war Sri Lankan state. As stated in the Central Bank Report for 2024, India has become the main trading partner for the Sri Lankan state. This is followed by China and the US. These three countries accounted for about 40 per cent of total trade of the post-war state.  Another important issue to note is the interest of major powers in Sri Lankan harbours. This is a continuation of a historical trend seen during the colonial period. For example, there is a 17^th Portuguese map of Sri Lanka clearly indicating Trincomalee, Galle and Colombo harbours. This was important for expansion of Portuguese colonialism. Trincomalee harbour was important for British colonialism. Even after independence the UK’s Royal Navy was stationed in Trincomalee until 1957. When the Indo-Lanka Accord was signed in 1987 there was an exchange of letter between the President of Sri Lanka and Prime Minister of India. In this the Sri Lankan state agreed to develop Trincomalee harbour only with the participation of India. At present we are seeing the result of this. Similarly, an outcome of support from China during military operations was an agreement with China to develop a harbour in Hambantota. This is now a part of China’s Belt and Road strategy. Finally, Colombo harbour is of interest all the three major powers – US, India and China.  Many analysts have pointed out that the Indian Ocean is becoming a strategically important area in the current global context. The major power interest in Sri Lankan harbours is related to this development.  

These observations show that one of the major challenges of the post-war Sri Lankan state will be managing relations with these three major powers. Of course, the other question is how these international relations will affect how the post-war state manages strategic state-society relations within the state formation process.