Post-war Sri Lankan state-Some Reflections

The post-war Sri Lankan state – some reflections

Sunil Bastian – June 2026

It was my experience of conflicts and state repression during the post-1977 period in Sri Lanka that led me to examine the subject of the state and state power more closely. The map below is from a report on mass graves in Sri Lanka.[i] State repression was responsible for 17 of the 32 mass graves recorded in this report. It is the task of future researchers on Sri Lanka not to ignore the fate of thousands of Sri Lankan citizens, and the families that suffered from these events. It is difficult to ignore these events if you want to understand Sri Lanka. 

My research on the question of the state and state power in Sri Lanka was published in 2025 in a book called State Formation and Conflicts in Sri Lanka. [i] In this book you will find a more comprehensive analysis of the topics covered in this article. This is an attempt apply the analysis to the current situation in Sri Lanka. 

First, it is important to note that studying the Sri Lankan state is different from studying Sri Lanka. Sri Lanka has its geology, physical geography, nature, and the people from different cultural backgrounds who have inhabited this land. These dimensions have a very long history. But the state is a manifestation of power that begins to control this land. The state as we know it today emerged only during the period of British colonialism. 

The normal way of looking at a state is to see it as a self-contained entity that has reached a final status. The spatial unit controlled by the state is objectified in maps. This geographic space is securitised, and this is called national security. This means the idea of security is equated with security of the state, whatever happens to people living in the territory when ensuring this security of the state. Many symbols are developed to identify the state. Often religion is used to legitimise state power over a territory. The mainstream discussion on geopolitics is also based on this notion of the state. Of course, those who control the state and their ideologues support this idea. Numerous symbols are developed to identify the state.  For some the state has an eternal character. The legal notion of sovereignty strengthens this idea. Within human history the concept of sovereignty began to dominate the world only after the Second World War. 

Finally, it becomes difficult to reform the fundamental features of a state, such as its institutional structure and identity, due to this dominant idea of the state. 

Contrary to this, it is necessary to look at the state as the product of historical processes like any other social phenomena. States are formed under specific historical conditions and undergo changes. Sometimes they even totally disappear. Therefore, what we need to focus on is not the state, but state formation.  

Marxist ideas of understanding the state progressed from looking at the state as a product of capitalist development, to accepting the relative autonomy of the state. This has developed further by focusing on relations between the state and society. In the historical process of state formation, a critical factor is the relationship between the state and society. In this process certain state-society relations become critical - these can be called strategic state-society relations. Depending on the history of state formation, these strategic state-society relations will vary from state to state. They can be managed through policies that create consent, or through use of the coercive power of the state. The former is peaceful, and the latter is characterised by conflicts and violence. States that can manage these state-society relations through consent are stronger than those that have to use the coercive power of the state. This also means we cannot equate the idea of security with state security. Security has to be analysed at different levels, taking into account state-society relations.

This state formation process takes place in a global context, which consists of other states and global capitalism. When it comes other states, states that are geographically closer to a particular state can become more important. Hence studying the history of state formation requires analysis at both global and regional levels. At the regional level there are spatial constructs that reflect the strategic interests of major powers in the region. 

The relation with global capitalism is a key factor for ensuring economic resources to take care of the general needs of the state, and to manage strategic state-society relations - in other words, to ensure the economic security of the state. In the case of states like Sri Lanka with an underdeveloped capitalist economy, foreign aid can become an important factor in ensuring the economic security of the state. When it comes to geopolitics, our concern is the impact of relations with other states on strategic state-society relations. This agrees with various traditions in critical geopolitics.     

British colonialism and the formation of the Sri Lankan state   

The Sri Lankan state as we know it today was formed under British colonialism. In 1815, using its military and economic power, Britain occupied the entire geographic space of the island. An institutional structure was created to control the territory, and laws were introduced to manage state-society relations. The state counted the people it governed through a regular census. The institutional model of the state was a centralised state, where a central authority controlled the entire territory. It was expected what was called a national identity would develop, and this would transcend the importance of separate cultural identities. The term communalism was used to identity these cultural identities, which was considered something backward. The colonial state also developed a method for electing the political elite who controlled the state – the same first-past-the post voting system that prevailed in Britain.  

Once the territory came under the British, the process of capitalist development intensified. A significant amount of land was given to private capital to establish a plantation economy. Laws were passed to establish private ownership of land so that a market mechanism could operate. Various ideological constructs that projected an image of land in pre-colonial Sri Lanka not being properly used were utilised to legitimise these laws. The term waste land in the Waste Land Ordinance of 1897 is such an example. Using these mechanisms hundreds of thousands of hectares of land were transferred to private capital. The majority of this capital came from Britain, the colonial power. 

The measures undertaken to promote capitalist ownership of land had a long-term ideological impact in a society where many people depended on agriculture for their livelihood. The state’s responsibility for ensuring land for the peasantry became a major political issue in the post-colonial period. The plantation economy, where tea was grown in the hill country, depended on the exploitation of indentured labour brought from Southern India. How labour was treated in the estates where tea was grown has been characterised as another form of slavery. New research shows how indentured labour was used when slavery was banned. Thus, colonial capitalism introduced the need to look at land and labour as key issues of social justice. 

Post-colonial state formation

British colonial rule lasted for 133 years. The end of this colonial rule depended not only on what happened within Sri Lanka, but also the weakening of the British Empire after the First World War. In this global context, agitation within Sri Lanka led to independence in 1948. The post-colonial Sri Lankan state is located in what is called the South Asian regional structure. This spatial structure has both a materialistic and a constructivist element.[ii] In this regional structure India is trying to assert its hegemonic power.  

Due to the political, economic, and ideological interests of the ruling elite who inherited power from the British, the Sri Lankan state still remained a Dominion under the British colonial power. Just like under British colonialism, the country continued to be known as Ceylon. The queen was still the head of the state. A governor-general was appointed to represent the queen in Sri Lanka. The Privy Council in Britian was the highest court. There was a continuous presence of the Royal Navy in Trincomalee Harbour and the Royal Air Force at Katunayake. Dominion status ended in 1972, with the enactment of a new Constitution. Ceylon became Sri Lanka and a republic.   

A defining factor in post-colonial state formation was the hegemonic power of Sinhala Buddhist nationalism. This was reflected in the institutional structure of the state, symbols that identified the state, in certain public policies and some of the symbols associated with the armed forces. 

The very first act of defining the citizenship of the post-colonial state took citizenship rights away from a large section of the Indian Tamil population. The bulk of them formed the working class in the plantations. In other words, the plantation working class, whose labour was a major factor in the wealth created under colonial and postcolonial capitalism, lost their basic rights. From this point onwards they did not have the right to vote. Although it is common to hear that Sri Lanka is a democracy, there was no universal franchise for many years of the post-colonial period. Resolving this issue faced many political difficulties, and final steps were only completed in 2009.[iii]

The electoral system that chose the political elite that controlled the state could not construct a political space that transcended the geographical distribution of ethnic groups. In addition, the fact that a large section of the Indian Tamil population did not have a vote meant areas where they lived did not have proper representation in the parliament. These were critical factors in the failure of post-colonial state formation. 

The political outcome of the citizenship laws was the political leadership of the Sri Lankan Tamils demanding a federal state. This meant a significant reform of the centralised state. Subsequent actions by the centralised state resulted in further discrimination against the Tamil minority. The key ones were making Sinhala the only official language, a requirement for Tamil public servants to have a knowledge of the Sinhala language to ensure promotion, changes in the ethnic composition, especially in the Eastern Province, favouring the Sinhala majority due to land settlement policies and discrimination in university admission schemes against students studying in the Tamil medium.  On top of these there were violent events where the Tamil minority became the victims. One of the significant ones was in 1958.  There were two attempts at negotiations in 1957 and 1965 to resolve these issues, but these did not result in positive outcomes. 

Finally, in enacting the 1972 Republican Constitution the demands of the Sri Lankan Tamil minority were totally ignored. This resulted in significant escalation of the demands of the Tamil political leadership, which became a demand for a separate state covering the Northern and Eastern Provinces. This signified a total failure in one strategic state-society relation within post-colonial state formation.    

A second strategic state-society relation in state formation was that between the Sinhala majority and the state, in a context of the politics of capitalist development. Capitalist development is a political process. Political power is used to bring about institutional reforms so that the private sector-oriented, market-driven economy dominates. This process, begun under British colonialism, continued during the post-colonial period. 

A key defining factor of capitalist development was the unequal distribution of economic benefits. During the post-colonial period this affected the Sinhala majority. The post-colonial state had a set of what were called welfare policies to manage this strategic relationship. The key ones were a universal rice subsidy, policies to protect the livelihood of the smallholder peasantry, developing some institutions to protect the rights of labour, and state responsibility for providing universal education and health services. There was an underlying ideology of distributive justice in these policies. However, the ability of the state to continue these policies depended on how the Sri Lankan capitalist economy performed within global capitalism. This was not always successful. 

In the early 1950s the export-oriented capitalist economy faced a crisis. Following the advice of a World Bank mission, the political elite who controlled the state brought about changes in welfare policies. The most important one was removal of the universal rice subsidy. A section of the Sinhala majority organised a protest, called a Hartal, against these policies. The state used its coercive power to put down the protest, and this resulted in a number of deaths. This was the first major incident showing failure to manage the strategic state-society relation between the centralised state and the Sinhala majority.  

The second event was the insurgency in 1971. Here a key factor was failure to ensure employment for the educated younger generation, especially from rural areas. This was the first full-scale insurgency against state power in the post-colonial period. The state used its coercive power to deal with the insurgents, resulting in a massive social cost. This included a number of deaths of Sri Lankan citizens. An important aspect that should be noted in this event was that the state received a significant level of support from foreign powers to deal with the insurgency. This event happened during the Cold War period. The Sri Lankan state received military assistance from both sides of the Cold War. As shown below, foreign powers providing support to ensure the security of the Sri Lankan state despite the loss of lives of Sri Lankan citizens, gets repeated in the history of Sri Lankan state formation during the post-colonial period.            

The post-1977 period

The Sri Lankan state formation process faced new challenges in managing both strategic state-society relations in the post-1977 period. In this period capitalist development entered a new period, where the private sector, markets and openness to global capitalism were given a new emphasis. The politics of promoting this agenda led to new challenges in managing relations between the centralised state and Sinhala majority.

Due to the deterioration in relations between the centralised state and the Tamil minority, the main Tamil political party contested the July 1977 general election demanding a separate state covering the Northern and Eastern Provinces. In addition to the parliamentary parties, there were Tamil political groups engaging in armed struggle to achieve these political objectives. This gave rise to a qualitatively new situation in the strategic state-society relation between the centralised state and Tamil minority. 

The global context within which the post-1977 Sri Lankan state formation took place was characterised by the dominance of what can be called a global neoliberal political project led by US hegemony. The ideology behind this project presented global capitalism as a benevolent system, which 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. Liberal principles were expected to manage international relations. It was also believed that liberalism in economics and politics would lead to a more peaceful world. This was the security dimension of this project, often called liberal peace.

Liberal principles in economics, politics, and security added up to a vision of total transformation of the world based on liberal principles – or a liberal Utopia. The ideology was at its peak in the aftermath of the collapse of the socialist bloc led by the Soviet Union. It is necessary to remember that this was only an ideology that tried to legitimise a Western hegemony led by the US. The actual behaviour of Western states was determined by their strategic interests. For example, there was a US-led invasion of Iraq in 2003. This was a manifestation of US imperialism. There have many other military interventions of this nature, especially against Islamic countries. 

As a result of the Sri Lankan state beginning a more liberal period of capitalist development, it began to receive a significantly higher level of foreign aid from developed capitalist countries of the West, Japan, and the multilaterals. This contributed to strengthening the economic security of the state. To understand the politics of this increased flow of foreign aid, it is necessary to focus on how donors responded to the manner in which the Sri Lankan state managed the strategic state-society relations of the state formation process. 

In order to promote the more liberal form of capitalism, the ruling elite brought about institutional reform of the state. Introducing a presidential system and proportional representation (PR) system of elections were the key ones. The first centralised state power even more. The president had a degree of autonomy from parliament in making decisions about economic reforms. The PR system of elections did away with huge majorities for the dominant party in the parliament, which were the result of the first-past-the post system of elections. The expectation was this would create a greater degree of political stability. The regime in power believed that this was necessary to ensure political stability to promote the new period of capitalist development.  

There was opposition within the Sinhala majority to economic reforms. The July 1980 general strike was one of the first such events. This was suppressed using the coercive power of the state. In 1982, using a fraudulent referendum, the ruling regime postponed a general election that was due in 1982. This allowed the ruling regime to maintain its majority in the parliament from the July 1977 general election. This was used to continue with economic reforms. 

State repression reached a high point in 1989-90. This was in response to an insurgency that arose due to both the contradictions of capitalist transition, and some of the steps that the state took to deal with relations between the state and Tamil minority. Some estimates put the death toll in certain parts of the country at 60,000. This was one of the events that resulted in mass graves in the state formation process. Although there is data collected, especially by human right organisations, on these violent events, there is no study that gives an overall comprehensive picture. Such a study will demand fieldwork. This is a task for future researchers.  

At this point it is important to note that this loss of civilian lives due to state repression did not have an impact on the flow of foreign aid. Especially the multilaterals, whose main agenda was promoting the more liberal form of capitalism, continued to fund the Sri Lankan state. With the regime in power agreeing to some key reforms, the flow of foreign aid increased. In addition, the key policies like the privatisation of plantations took place in the middle of this state repression. There was hardly any room for opposition to these steps. Some of the bilateral donors tried to use the liberal notion of human rights to discipline the state. But this did not have any significant impact.  

Under a more liberal form of capitalism the social policies that managed relations between the state and Sinhala majority underwent changes. The most important undermined the ideology of distributive justice that prevailed up to now. In other words, the growth of economic inequality, which is a key outcome of capitalist growth, was ignored. The new social policies were supported by donor agencies. Poverty alleviation became the main idea in social policies. This was closely linked to the growth trickle down thesis. In other words, the main objective of social policies was to give some relief to the poor, until the capitalist class accumulated wealth.

As a result of this shift in social policies, the universal food subsidy was removed. Due to the operation of markets, smallholder agriculture became uneconomical. There were several attempts to promote markets in state-owned land that had been distributed through permits. Both education and health were opened to the private sector. The establishment of free trade zones in order to develop export-oriented industries undermined labour rights. Privatisation of former state-owned enterprises undermined institutions to protect labour rights. Attempts by the working class to protect their rights were put down using the coercive power of the state and thugs loyal to the political party in power.  

However, there was an important exception to this trend in social policies. This was the implementation of the Accelerated Mahaweli project. This was a continuation of a welfare policy that existed before 1977, but on a much larger scale. A closer reading of how this happened shows that the political elite who began social policy reforms under the more liberal form of capitalism realised that there was a need for the continuity of a key previous policy to manage relations with the Sinhala majority. The Mahaweli project was the answer.

A close look at raising funds for the Mahaweli project shows an interesting insight into the politics of foreign aid. The Mahaweli project included building five dams, state land distribution, and settlement of people. Most of them came from the Sinhala majority. However, there was concern from multilaterals about the impact of such a large construction project on the macro-economy. Hence the Sri Lankan political elite decided to approach bilateral donors. Obviously the first target in looking for funds was the former colonial power, Britian. Keeping with colonial traditions, the dam that was built with British funding was called the Victoria Dam. The British prime minister was the chief guest in an opening ceremony of the dam, and the contract for the construction of the dam went to a British company. Finally, Sri Lanka became one of the twelve countries that voted against the UN resolution on the invasion of the Falland Islands by British troops. This is a very good example of the politics of foreign aid at work. Once the Sri Lankan state secured funding from one bilateral donor for the Mahaweli project, it was easy to secure funding from several others.

However, land settlement policies under Mahaweli clashed with managing the other strategic state-society relation in state formation - the relation between the centralised state and Tamil minority. As mentioned above, land settlement and changes in the ethnic composition, especially in the Northern and Eastern Provinces had been a major grievance of the Tamil minority. The Accelerated Mahaweli Project had some examples of this in the Eastern Province. 

Moving now to the post -1977 state minority relations, in addition to the largest Tamil party contesting on a separatist platform, a number of Tamil political groups took up arms to achieve the same objective. The immediate response of the centralised state was to adopt a discourse of terrorism, enact a Prevention of Terrorism Act (PTA) in 1979, and send troops to the North and East. 

In parallel there were several violent events that targeted the Tamil population in the southern part of the country. The first event was in August 1977, immediately after the general election. This was followed by organised violence that had the characteristics of a pogrom in July 1983. This was a turning point of the conflict. As a result of this violence a large number of Tamil refugees moved to India. There was political agitation in Tamil Nadu, which has a Tamil-speaking population. The ultimate outcome was the regional power India intervened as a mediator in the conflict. There were several rounds of negotiations with Indian mediation. At one point, when the regime controlling the Sri Lanka state tried to continue with military operations in the middle of negotiations, India intervened, violating the air space of the Sri Lankan state. The ultimate outcome of these events was the Sri Lankan state signed an agreement called the Indo-Lanka Accord in 1987 with India. In this agreement the Sri Lankan political elite agreed to reform the centralised state by devolving power to the provinces. This was implemented through the 13^th Amendment to the Constitution. Nine provincial councils were established to cover each province. However, making these institutions an effective answer to Tamil grievances is an ongoing process.

India’s intervention as a mediator gave India an opportunity to ensure that the strategically important Trincomalee harbour would only be developed in collaboration with India. The Sri Lankan state agreed to this through an exchange of a letter between the president of Sri Lanka and prime minister of India. This was attached to the Indo-Lanka Accord. 

After the Indo-Lanka Accord, India sent troops, called an Indian Peace Keeping Force (IPKF), to disarm armed groups. All Tamil armed groups except the Liberation Tigers of Tamil Eelam (LTTE) gave up arms. The LTTE continued its armed struggle. The armed conflict between the LTTE and Sri Lankan state resulted in a high degree of social costs. Repercussions were seen, not only within the Sri Lanka, but internationally as well. Tamil refugees became a political concern, especially in some European countries, as Tamil refugees sought asylum in these countries. These countries were keen to send back to Sri Lanka what they called failed asylum seekers. Foreign aid became an instrument used by these countries to get the Sri Lankan state to agree to accepting these failed asylum seekers.

Due to the escalation of the conflict and its international repercussions, donors began to focus on peace and conflict issues. But the bulk of the projects they supported looked at the conflict as a question in society and not linked to state-society relations. On the other side, the availability of foreign aid indirectly helped the Sri Lankan state in its military operations. Since foreign aid was available to take care of some of the needs of the Sri Lankan state, the state could use its own resources to fund the military strategy. In the analysis of the politics of foreign aid this is called the ‘fungibility’ of foreign aid in conflict situations. This means in conflict situations it is difficult to determine the role that foreign aid plays only by looking at the stated objectives of donor-funded projects.      

In 2001 the impact of the conflict and other factors within global capitalism led to negative economic growth. This prompted the ruling political elite to accept an offer from Norway to promote negotiations between the LTTE and the Sri Lankan state. Given the international repercussions of the conflict and its impact on capitalist growth this was supported by all donors. The Tokyo donor conference held in 2003 was a high point of this event. Internal contradictions within the negotiation process led to its collapse. The political outcome was the emergence of a new Sinhala nationalist leader, who gave leadership to consolidating the territory of the centralised state through military means. 

Post-war Sri Lankan state

What follows is an account of the Sri Lanka state at present. I would like to characterise the present Sri Lankan state as a post-war state. In 2009 the military strategy started in 1979 succeeded in consolidating the territory of the centralised state after 30 years. Prior to that it was a fractured state. It did not fully control the war-affected areas in the North and East. 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.

This area had land where capitalist exploitation could not be extended. The strategically important Trincomalee harbour was also located here. 

Several factors helped the success of the military operations. The regime in power improved the strength of the armed forces and increased the defence budget. The centralised state secured military hardware from number of foreign sources. China, Pakistan, India, Israel, Ukraine, Russia, and the US were important sources. Other suppliers included some EU countries.[iv]

On top of that, key foreign powers influential in Sri Lanka wanted to see the end of the conflict and the LTTE because of their own strategic interests. In this regard the most important country was the regional power, India. In June 1987 India intervened to stop a military operation of the Sri Lankan state which resulted in the Indo-Lankan Accord. This time India had no such interest. The LTTE politics had alienated the support of the Indian state. US imperialist policies, which by this time focused on a fight against what was called terrorism at global level, adopted a similar position. In a speech to the American Chamber of Commerce, the US Ambassador made it very clear that it was supporting the military efforts of the Sri Lankan state.[v] By this time the EU has also categorised the LTTE as a terrorist organisation.

A new development was an improvement in the relationship between the Sri Lankan state and China, and military support from China. This was a revival of an old relationship with China. The post-colonial Sri Lankan state always accepted the 'One China’ policy, recognizing only the People’s Republic of China. When the Sri Lankan state faced a foreign exchange crisis in the 1950s, the Rubber-Rice agreement signed with China provided rice below world market prices. When Sri Lanka hosted the non-aligned summit, China donated a conference centre. When the US cut off foreign aid to the Sri Lankan state in 1962 because of nationalisation of US oil companies, foreign aid from China began to play an important role. During the post-1977 period, when relations between developed capitalist countries of the West and Japan became dominant, relations with China became less important. But with Chinese support to military operations for the consolidation of the territory of the centralised state, the relations with China improved.   

Military operations were not concerned about civilian casualties. They resulted in heavy civilian costs and mass graves. With this event the Sri Lankan state became yet another example in the world where the territory of a state was consolidated through military means with heavy civilian costs. Close to 300,000 people were trapped in an ever-shrinking area during the last stages of the military operations. The report of the Panel of Experts appointed by the UN Secretary-General estimated that around 40,000 civilians were killed during the last stages of the war, and the Sri Lankan state committed war crimes.[vi]

UN High Commissioner for Human Rights Navi Pillay reacted to what was happening within the Sri Lankan state during military operations. In the middle of the military operations the High Commissioner issued a statement indicating that the military actions of both parties were violating international human rights and humanitarian laws. After the war ended, she visited the North and met people affected by the war and got a first-hand account of what had happened during the last stages of the war. The ultimate outcome with these concerns within the UN system was the US sponsoring a resolution at the United Nations Human Rights Commission (UNHRC) in March 2014. The most challenging element in the resolution for the post-war Sri Lankan state was the call for an international inquiry into what happened during the last stages of the war. 

In trying to understand what has been the real political outcome of this resolution, the first question to ask why did the US, which supported the military operations, sponsor such a resolution? It is always necessary to distinguish between the politics of human rights advocated by countervailing political forces, and by states. When states utilize human rights in relation to other states, their strategic interests always play a role. The same political interests operate in their behaviour within the UN system. It should be clear by now that the main reason why the US sponsored this resolution was to counter the growing influence of China with the Sri Lankan state. 

When a more pro-Western regime came to power in 2015, the regime co-sponsored with the US a new version of the UNHRC resolution. The text was almost the same as the 2014 resolution, with one 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. In other words, the Sri Lankan state promised to appoint its own mechanism to inquire into war crimes. After more than a decade it is not clear whether this resolution will ever lead to punishing those responsible for war crimes. In addition, in the current global context the more Right-wing regime in the US has undermined UN mechanisms.  It is doubtful whether UN mechanisms will ever succeed in making the Sri Lankan state accountable for war crimes.

Whatever happens with international actors, it is the duty of more progressive Sri Lankan researchers to record the social costs of the last stages of the military operations for those who lived in the conflict-affected areas. This is necessary so that future generations will have better idea of the history of the Sri Lankan state. This needs to take 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 suffering they have faced. This will raise fundamental questions about what it means to return to ‘normalcy’ for a population whose lives have been affected by an armed conflict for so many years. 

Once the territory of the centralised state had been consolidated through military means, with a significant loss of lives of Sri Lankan citizens, several steps were taken to ensure the security of the post-war state. Foreign powers played a key role in some of these steps. 

The first was to reconnect the areas that had come under the centralised state with the centre of power in Colombo. This was necessary both for security purposes and to spread capitalist exploitation - especially on land in these areas. Two projects - Neganahira Udanaya (Eastern Revival) and Uthuru Vasanthaya (Northern Spring) - played an important role in this. Both titles of the projects were in Sinhala. They had an ideological connotation. They implied a new beginning to these areas. The state secured foreign aid for this purpose. Most of the funding came from two multilaterals. An estimate of foreign aid disbursements for 2009 shows that around 60 per cent of foreign aid was for infrastructure development in these areas.[vii]

The second element of the security of the post-war state was continuation of the strength of the armed forces. A by-product of three decades of armed conflict was a larger security sector. According to what is called functional classification of government expenditure by the Central Bank, defence and public order accounted for 12.1 per cent of public expenditure in 2018. The year 2018 is chosen because this was the year preceding several events that ultimately led to the post-war state defaulting on re-payment of loans due to global financial capitalism. Along with maintaining the strength of the armed forces. the post-war state continued to maintain the discourse of terrorism and the 1979 PTA to support the coercive capacity of the state. This was supplemented by a continued presence of a larger military force in the Northern Province, the heartland of Tamil nationalism. This security force is materially and symbolically linked to the centralised state. 

The last element for ensuring the security of the post-war state was promoting the ideology of reconciliation.  Many projects supported by foreign aid were also based in this idea. The notion of reconciliation focuses on society, rather than on state-society relations. It assumes that the conflict in Sri Lanka is one of homogeneous identity groups clashing with each other. Although there is an element of prejudice and animosity between identity groups in Sri Lanka’s conflict, they exist in the context of a centralised state. It ignores the fundamental reasons for conflict in a multi-ethnic and multi-cultural society. It ignores the need for reform of the state, including its identity, public policies, and institutional structure, to suit a multi-ethnic and multi-cultural society. What Sri Lanka needs is not a nation state with a unified identity, but a state that is suited for a plural society. Only if we combine state reforms and changes at the level of the society can we achieve this.  

Post-war state and state-minority relations

Although the territory of the centralised state has been consolidated through military means with heavy civilian costs, the post-war state is far from being a plural state suitable for a multi-ethnic and multi-religious society. In discussing this issue in post-war state, we need to take into account not only the interests of Sri Lankan Tamils, but also of Muslims and Hill Country Tamils. 

The loss of lives, and war crimes committed by the centralised Sri Lankan state, have become a new grievance within the Sri Lankan Tamil community. Today Tamil nationalist politics cannot be understood by confining ourselves within the territory of the Sri Lankan state. Overseas Tamils are a part and parcel of Tamil politics. This is a common phenomenon in many struggles of ethnic and religious minorities in the world. 

Within the post-war state control of state land, especially in the Northern Province continues to be a major issue for Tamils. A report from US-based Human Rights Watch in 2018 pointed out some of the key issues.[viii] These included army occupation of land, land being taken over by institutions of the central state, and private land-grabbing. More recently a report published by the Centre for Policy Alternatives covered the same question.[ix] As in the past, Buddhism continues be a tool used by the Buddhist majority for special rights over land in the Northern and Eastern Provinces. 

Within the post-war state the Muslim community has been at the receiving end of prejudice and violence. Prejudice against Muslims, which has always been there has become more overt. Anti-Muslim sentiments have become a global phenomenon, especially in Western countries. Its impact is seen within the post-war Sri Lankan state as well. The suicide attacks on two Christian churches on Easter Sunday in 2019 resulted in a qualitative shift in anti-Muslim sentiments. This was an act of extreme forms of Islamic politics that have become a global phenomenon. But the entire Muslim population in the post-war state became a target of prejudice and victims in the use of the coercive power of the state. A significant section of the non-Muslim population perceived the situation through an extreme form of Islamophobic ideology. 

When it comes to the Indian Tamil population, although there have been improvements in their socio-economic conditions there are key outstanding issues. Perhaps the most important one is ownership of their houses. Within plantation capitalism these were called line rooms. The plantation workers could live in them only if they work in plantations. This is an issue that has to be rectified by breaking the link between estates and line rooms, and making them permanent settlements for this population.

An important development within this population has been a process of changing identity. Calling themselves Indian Tamils became a problem after they got Sri Lankan citizenship. The term Malayaga Makkal or Hill Country Tamils has come into practice, giving them a distinct ethnic identity. Much more work has to be done to recognise this distinct identity. Like other ethnic groups they are not just workers, but a population that has their own history and a cultural identity. There is a need for research in this area, and activities that will bring recognition to this distinct identity. But the question is how the post-war Sri Lankan state will accommodate this new identity. 

Post-war capitalist development and relations with the Sinhala majority 

The consolidation of the territory of the centralised state through military means, with the loss of civilian lives and the end of the armed conflict, removed a major problem for capitalist growth.  However, the Sri Lankan state became ineligible for concessional foreign aid because of its middle-income status. This was a result of the established foreign aid policy of developed capitalist countries of the West right from the beginning of the aid industry after the Second World War. The policy was to confine concessional aid to countries with low income. Foreign aid was supposed to assist these countries in the initial stages of capitalist growth. The stages of economic growth theory legitimised this. According to this theory, foreign aid is needed to achieve what was called ‘take-off’ of capitalist growth. Middle-income status is an indication of reaching this point. Once this stage is reached concessional aid is reduced, and states are supposed to depend on global finance capital for external finance. This means new markets are ensured for global finance capital located in donor countries. However, as happened in many parts of the world, countries with underdeveloped capitalism begin to face many difficulties when they become dependent on global financial capital for external finance.    

The dependence of the post-war Sri Lankan state on global financial markets rose sharply. Certainly, the fact that the state had been stabilised through military means with a significant loss of civilian lives made it easier to raise funds in global financial markets. Central Bank data shows that, in 2018, 56.1 per cent of the ownership of foreign debt was to financial markets.

Once a state becomes dependent on financial markets a completely different type of politics of international economic relations begins to operate. When a state receives foreign aid from bilateral and multilateral donors, the Sri Lankan state can negotiate debt issues with these sources.  Of course, in these negotiations each of the donors tries to pursue their own interests. But foreign debt becomes a subject of negotiation. When a state becomes dependent on loans from finance capital, market mechanisms and the interests of finance capital begin to play the dominant role. States where these companies are located use their power to ensure that loans are repaid so that the profitability of finance companies is not affected. The role of the IMF is to ensure that loans are paid, and the stability of global financial market is maintained. 

When the post-war Sri Lankan state became dependent on financial markets for external finance, managing the budget deficit became more important. But this had to be done within a state that had undergone significant changes in the post-1977 period. First, three decades of armed conflict led to the growth of the armed forces. The post-war state continued to maintain the strength of the armed forces as a security measure. Second, the institutional structure of the state has undergone significant changes. The institutional structure of the post-war state consists of institutions at presidential, parliament, provincial, district, sub-district, and local authority levels. Some of these levels have elected members and a bureaucracy. Some only have a bureaucracy to manage them. 

The introduction of institutions at provincial and sub-district levels was linked to state reforms as a response to two different types of conflict. Provincial councils were a response to the Tamil demand for devolving power from the central state. Sub-district-level institutions were the result of the discourse of decentralisation, which has always been used to manage relations with the Sinhala majority in situations of conflict. In addition, there was a proliferation of institutions at central level in order to maintain coalition cabinets. This was a product of the PR system of elections. Sometimes, in order to satisfy the interests of cabinet members, existing state institutions got divided.

The nature of the structure of the post-war state and its finances can be understood by looking at what the Central Bank calls functional classification of state expenditure. It shows that, in 2018, 49.9 per cent of public expenditure went to cover maintenance of the bureaucracy, the security sector, and interest payments on loans. In other words, half of government expenditure was to sustain the state