Sri Lanka seemed so peaceful over the recent holidays, especially near the city of Galle where I was staying on the southern tip of this beautiful island. Fishermen (see picture) perched on their sticks every evening just off the beach till sunset, while lazing western and other tourists sipped drinks and watched them from nearby terraces. The hotels were full, all doing brisk business, with prices up to $475 a night being charged by top boutique places in the old fort area of Galle. The talk was of famous authors such as Gore Vidal who are due at Galle’s second annual literary festival in two weeks’ time.
Along the three-to-four hour drive to the capital of Colombo, everywhere looked busy with many shiny new buildings. Property prices are rising, especially along the coast where foreigners are buying plots of land fronting beaches which just three years ago were pounded by the tsunami tidal wave that devastated the area with tragic loss of life.
But this tranquility is in many ways a mirage. On Wednesday morning, while I was ending my holiday with breakfast on the terrace of Colombo’s graceful old Galle Face Hotel, Liberation Tigers of Tamil Eelam rebels blew up a military bus just a kilometer or two away, killing five people and wounding 28. A navy boat was patrolling off the shore, on the look-out for possible attacks from the sea. A day earlier, a leading politician had been shot dead in a nearby temple. In the evening, the government announced it was cancelling a six-year but long-irrelevant ceasefire agreement with the Tamil Tigers.
It was clear that stories I had heard over the previous few days were quickly coming true. President Mahinda Rajapaksa and his brother Gotabaya, the defense secretary, are bent on tough military action, backed by a 20% increase in defense spending, to defeat the Tamil rebels in the north. It could, I had been told, be a rough year for Sri Lanka.
It is now over 24 years since bloody clashes began between Sri Lanka’s militant Tamil minority and the majority Sinhalese. Some 70,000 people have died since the start in July 1983, but the story remains the same. The Tamils, mostly Hindus and Christians, feel they are a beleaguered minority who were treated unfairly by the Buddhist Sinhalese majority and want to win independence for the north and eastern parts of the island. The Sinhalese fear that, unless they resist the Tamils, their island, which they regard as a major centre of Buddhism, will be overrun by India’s Dravidian hordes.
It should have been possible to broker peace but all efforts have failed because of two seemingly immovable forces. On one side is Velupillai Prabhakaran, the reclusive and powerful leader of the Tamil Tigers, who seemingly will settle for nothing less than independence and only agrees to ceasefires when he needs to regroup and rebuild his forces. On the other side are Sri Lanka’s mainstream self-serving and competitive politicians who seem unable to resist hard-line anti-Tamil Buddhist monks.
The economy is in poor shape. Economic growth of only 5% is expected in 2008-09. Consumer prices rose nearly 20% in the year to last October. Overall inflation is forecast at 11-12% next year, and there is little sign of the government restricting populist economic policies and tightening fiscal controls. Tourism is an important foreign exchange but – until the recent holiday boom – had been declining because of the 2004 tsunami and increasing Tamil Tiger violence that included an air attack on military installations at Colombo airport last March.
That’s a sad record for a country that started capitalist economic reforms at the end of the 1970s, around the same time as China, and long before they became fashionable on the Indian subcontinent. Instead of becoming a rich Hong Kong-style entrepot off the southern tip of India, its limited successes have been hobbled – and there is no solution in sight.