Sunil Bastian

Some thoughts on the current global context

Some thoughts on the current global context


Sunil Bastian


The purpose of this short article is to provide an analysis of the major characteristics of the global context today and to point out a key implication for the Sri Lankan state. The main reason for this is, a cursory glance at discussions in Sri Lanka shows that they are either dominated by what I call the ideology of the global neoliberal political project that dominated the world in the post-Cold war period or liberal use of categories that dominated the Cold-War period. Neither of these approaches capture the nature of the current global context. I hoped that this brief intervention will open up the discussion with new ideas.


The break-up in 1991 of the Soviet Union, which consisted of 15 Soviet Socialist Republics, is perhaps one of the best recent examples of the historical nature of states. States are not finalised entities that continue for eternity, although those who control them like to give this image and create a whole discourse for this purpose. It is also important to remember that the Soviet Union was one of the most heavily armed states during the Cold War period. But this did not prevent it from breaking into 15 spatial units. As we can see today this process generated its own dynamics, and we have to wait and see what will happen in the future within the land mass that constituted the former Soviet Union. 


Along with the collapse of the Soviet Union, the notion of the Cold War that had dominated global political debates was replaced by a new ideology. The economic dimension of this ideology was neoliberal capitalism. This believed that human well-being can be achieved through private property, free markets and free trade. The state had to create conditions for this. This ideology applied to areas such as education, health and environmental protection. 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, globally. It also believed that liberalism in economics and politics would lead to a more peaceful world. This is the security dimension of this project, often called liberal peace. 


Liberal principles in economics, politics and security added up to a vision of the total transformation of the world based on liberal principles – or a liberal Utopia. Some 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. Of course, a key assumption of this liberal Utopia was the continuation of Western hegemony in the world, led by the US. 


However, if we look at the world now, three decades after the neoliberal Utopia became a hegemonic ideology, the world looks quite different from what liberal ideologues expected. One of the biggest mistakes of the liberal ideology was what can be called a zero-sum approach to the relationship between states and global capitalism. With the expansion of capitalism globally, the importance of states was expected to diminish. Some propagated this idea with the notion of the coming of a ‘flat earth’. Even the widely used notion of ‘international community’ covers up the fact that the world still consisted of competing states, with their own strategic interests. 


In contrast to what liberal internationalists expected the growth of global capitalism under neoliberalism has had a diverse impact on states. This also means states have not remained static. We have seen the growth of capitalism making some states stronger and challenging the balance of power at regional and global levels. A key outcome of the period of neoliberal capitalism has been capitalist growth in China, with China becoming a strong state. China has begun to challenge the hegemony of the US, especially in the Asia-Pacific region. The US has constructed a new regional strategic space called the Indo-Pacific to meet this challenge. 


In the history of global capitalism and territorial forms of power capitalist growth, taking place in different states at different times, is nothing new. Giovanni Arrighi in his book ‘The Long Twentieth Century: Money Power and the Origins of our Times’, provides one of the best accounts of this historical process. What we are seeing is a new phase of this historical process. A key issue is how the relationship between the emerging power and current hegemon will evolve.  A pessimistic and widely read analysis of this is Graham Allison’s book ‘Can America and China escape Thucydides’s trap: Destined for war’. Using a series of historical examples of the relationship between the established and the emerging powers, the book argues competition between the US and China is bound to end in a war in future. Thucydides was a Greek historian who analysed a similar situation between Sparta and Athens. 


It is better to understand the current global context within a framework of global capitalism and competing states, some of which are stronger. Terms such as great power conflicts, or major power conflicts, are used to characterise this world. These powers are found in different parts of the world. Like all other states, they are driven by their own political, economic and strategic interests when dealing with other states. In order to understand these dynamics in a nuanced manner, it is necessary to analyse inter-state relations at both global and regional levels. 


In a world characterised by global capitalism and major power conflicts there is bound to be an impact on the global economic integration that liberals advocated. Even strong supporters of neoliberal globalisation recognise this. For example, in January 2023, the IMF published a report with the title ‘Geoeconomic fragmentation and Future of Multilateralism’, analysing what it called the fragmentation of global capitalism driven by the interests of states. Obviously, the report sees this as a problem and want to remedy it. The Economist magazine, a long-standing supporter of economic globalisation, has pointed out how the global economic system is fracturing in several issues. It has used the term the rise of Homeland Economics to identify this trend. The US based Foreign Affairs Journal uses term 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 promotion of globalisation.


In contrast to the peaceful, the rule governed world that liberal internationalists hoped for, in recent times, both the intensity of conflicts and defence expenditure by states have increased. The Armed Conflict Survey by the International Institute for Strategic Studies covers the period 1 May 2022 to 30 June 2023. During this period both fatalities and events have increased by 14% and 28% respectively compared to previous year. Some of these conflicts inter-state conflicts and other conflicts within borders. Often these two types of conflicts are inter-linked. 


Similarly, defence expenditure by states have increased. This summary picture for 2023 is from a report by the Stockholm International Peace Research Institute (SIPRI) published in April 2024. In 2023 total global military expenditure reached $2443 billion. In real terms it increased by 6.8% from 2022, and this was the steepest year-on-year increase since 2009. For the first time since 2009 military expenditure increased in all five regions covered by the SIPRI report. The United States, China and Russia led the military spending, and India, with $83.6 billion, was the fourth largest military spender.


As far as the Sri Lankan state is concerned, a major implication of this changing pattern of capitalist growth is the Indian ocean becoming strategically important both for the battle for hegemony between the US and China, and in major power conflicts. There is a significant body of literature and institutions focusing their energy on the Indian Ocean. 

Within the Sri Lankan state three major powers, US, China and India are interested in the development of Sri Lankan harbours - Colombo, Trincomalee and Hambantota. Harbours play a role in promoting capitalist growth, as well as becoming an important asset in military conflicts. Colombo and Trincomalee have played this role during colonialism. Hambantota Port incorporates the Sri Lankan state as a part of the Chinese Belt and Road strategy. 


As mentioned at the beginning, the purpose of this short article is to open up a discussion about how we view the global context within which the Sri Lankan state currently exists. A proper analysis of the global context is essential, because it is impossible to understand the major questions faced by the Sri Lankan state without viewing it as a part of the world. We need to break away from the artificial barriers created by borders. For example, the Sri Lankan state getting independence was a result of what happened in the island, as well as what happened to the British Empire from the beginning of the First World War. This framework of analysis is also relevant for the post-colonial period. This is obvious in relation to the economy. It is also true when it comes to other issues, like social justice, and promoting a state that accepts the multi-ethnic and multi-religious nature of our society. 


May 2024


The politics of foreign Aid in Sri Lanka The politics of foreign Aid in Sri Lanka
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Sustaining a state in conflict: Politics of foreign aid in Sri Lanka, Colombo:ICES, (2018) Sustaining a state in conflict: Politics of foreign aid in Sri Lanka, Colombo:ICES, (2018)
This study focuses on politics of foreign aid to Sri Lanka from developed countries of the West, Japan and multilateral agencies during the period 1977 to end of the armed conflict in 2009. This period is characterised by economic policies that emphasised liberal economic policies and an armed conflict resulting from the Tamil demand for a separate state. The study looks at politics of foreign aid in this context. Foreign aid played a dual role. It helped to sustain a state engaged in an armed conflict, while at the same time trying to promote a negotiated settlement. Therefore it was neither a do-gooder that liberals tend to believe nor a 'foreign devil that Sinhala nationalists like to see.

Devolution and Development in Sri Lanka Devolution and Development in Sri Lanka
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Can democracy be designed? Can democracy be designed?
(2003) Co-editor, Can Democracy be Designed? London: Zed Books.


(2009) Politics of Land Reform and Land settlement in Sri Lanka.

(2013) Post-war political economy

Reflections on social justice and pluralism

The Sri Lankan state in a changing global context – some thoughts


Post-war capitalism

Post 2015 Presidential Election-Some thoughts

Copyright @ 2024 Sunil Bastian.