Foreign aid can be, and has been, studied from many perspectives. Quite numerous are the studies focusing on the impact foreign aid has on various aspects of socio-economic development to recipient countries. That foreign aid has been a political instrument in the hands of donor countries and donor institutions during Cold War days as well as in subsequent years is widely recognised. Since the mid-1960s foreign aid has come to play a significant role in Sri Lanka’s development and its impact on various economic variables have been examined in a number of studies at different degrees.
A comprehensive study of foreign aid flowing into the country focusing mainly on its politics has not, however, been available so far. Sunil Bastian’s work on the politics of foreign aid into Sri Lanka is therefore, a welcome addition to the available foreign aid literature. Covering the foreign aid inflows of the last several decades, this book examines certain facets of the political environment in Sri Lanka. The special focus of the book is on the association of foreign aid with, and its implications on the country’s recent history of political violence.
This book has an Introduction together with six chapters which deal with different building blocks, which the author has used to develop his principal theme. The author in chapter 1 traces the evolution of foreign aid policy in the world according to the gradual transformation of the global political economy). Thus issues like democratization, good governance, safeguarding human rights and human security, conflict resolution, world peace and so on, have come into foreign aid packages as conditions, in addition to the more widely known elements incorporated therein for promotion of relations and institutions of liberal capitalism in recipient countries. Bastian’s analysis of how foreign aid policy has undergone change after the 1980s is in this sense very revealing.
Chapter 2 whose content forms the next building block of the study is a critical look at the history of foreign aid in Sri Lanka since independence. More space is devoted to describe aid flow and their composition during the post-1977 period, which Bastian describes as the era of “liberal capitalism”.
Selected aspects of politics and political history of Sri Lanka during the period since independence are analyzed in chapter 3 as the other building block in Bastian’s argument. Again the more intensive focus is on the post-1977 era of “liberal capitalism”. This historical account is written with the main intention of describing the gradual development of Sri Lanka’s ethnic conflict. Certain weaknesses in constitutional provisions and the structures of political institutions within which Sri Lanka has exercised its post-colonial self-rule and are examined critically by Bastian as major factors behind the deterioration of ethnic relations in the country. As is widely known, there has been an unholy combination, during the post-1977 period, between the strengthening of liberal capitalism in society on the one hand, and use of violence for political purposes on the other. Bastian’s incisive analysis of the nature and consequences of the above combination is particularly interesting. The historical account in chapter 3 shows how Sri Lanka too has fallen victim to this pattern of social change.
Chapters 4 and 5 then go on to examine the issues surrounding the allocation of foreign aid to Sri Lanka in the context of the on-going conflict. Putting together the analyses in the three earlier chapters, Bastian brings up some interesting insights in this examination. Attempts to reach a negotiated settlement to the conflict, using foreign aid as an enticement to both parties to the conflict are analyzed. Contradictions and difficulties encountered in these attempts are also analyzed in these two chapters. Here chapter 4 covers the period 1977-2002, divided into two sub-periods 1977-86 and 1986-2002.
The focus of chapter 5 is the 2002-04 peace process experiment, a subject of great topical interest even today. As such, this chapter is bound to elicit a great deal of interest from the prospective readership. Bastian’s analysis of the experiences of this important period is quite revealing as well as interesting. The success and failure of this phase in the evolution of Sri Lanka’s “ethnic conflict” have influenced the thinking of many persons associated with this conflict and its resolution, irrespective of the various ideological camps they belong to.
Benefits of hindsight, however, would help us understand that there were serious lapses inherent in the underlying premises of the peace process of 2002-04. In regard to the approach to economic development, the most significant weakness of the regime at the time was the overwhelming significance placed on economic growth, to the neglect of equity considerations of the growth process emanating from liberal capitalism. John Richardson contends in his book “Paradise Poisoned” that there was a significant development failure in the neo-liberal policy framework adopted to accelerate economic development. He describes this as the policy makers’ failure to select a middle path between “efficient but Darwinian capitalism” and “egalitarian but stultifying socialism”. This was particularly so during 2002-04. Furthermore, in the peace process of the time, the economic agenda and peace negotiations were handled within two separate compartments. The neglect of the special problems of the North and East in the economic agenda was a particularly serious lapse.
There were critical errors of judgment in the choice of some crucial assumptions in the handling of the politics behind the peace process. Bastian explains convincingly the serious error of judgment involved in the grant of parity of status in negotiations to the two parties to the conflict, namely the elected government of Sri Lanka and the LTTE. There were also certain expectations in the minds of those who planned this peace process, which historical experience has shown very clearly to be quite untenable. One such expectation was that the LTTE would gradually become a democratic entity. In addition, the LTTE was treated as the sole representative of all Tamil-speaking people, oblivious to the very obvious intra-Tamil conflicts and the separate existence of a Tamil-speaking Muslim community. The neglect of these issues has produced disastrous consequences for the very peace process.
So, naturally, the peace process of 2002-04 had failed as the underlying premises were not acceptable to the Sinhala majority, to the bulk of Muslims and even to some Tamil groups. Without a viable social programme to win the hearts and minds of the ordinary masses, the widely bandied about macro-economic success indicators were unable to win over the electoral support for the economic programme as well. The politics of the peace process as articulated, moreover, left enough room for the LTTE to sabotage it. The neglect of the fact that the LTTE’s agenda went beyond agreements signed and statements made at negotiations was also a fatal error.The analysis in this book of the role of foreign aid in conflict-ridden societies is of significant policy interest. In such societies, as Bastian argues, foreign assistance plays a two-edged role. On the one hand, foreign assistance is indispensable to enable poor war-torn societies to emerge from the damage and devastation caused by violent conflict to life and property, including the psychology of the people. This rehabilitation would be the basis on which a lasting peace could be built. For political, social and economic rehabilitation, to finance reintegration of ex-combatants and the civilians thrown into refugee status, for removal of mines, for macroeconomic stabilization, for rebuilding of financial institutions and legal frameworks and rehabilitation and improvement of transport and communication infrastructure and to do so much more within a tolerably short time period foreign aid is usually indispensable. On the other hand, foreign assistance can be non-neutral and risky at times as it can produce negative side effects. Aid is not always positive and constructive in societies in conflict as well as in post-conflict societies. It could sometimes help sustain and sometimes even revive conflict by increasing resources available to continue the conflict. Aid may sometimes be used as an instrument of war – foreign agencies’ access to victims can be manipulated, food from these agencies may go into the hands of combatants.
Bastian’s “Politics of Foreign Aid” is a well crafted book, based on careful research on links between foreign aid and political conflict in Sri Lanka. It is an excellent addition to the already large literature on conflict and peace in the country. While emphasizing this very positive judgment, I might also note a couple of ideas which came to mind while reading some of its chapters. First, the general perception running through chapter 2 and elsewhere seems to be that, generally speaking, foreign aid intends to achieve genuine developmental and/ or humanitarian objectives although political and ideological considerations become significant in its distribution among developing countries. Information pertaining to, and analyses of the use of foreign aid for socially destructive sinister purposes in recipient developing countries (Confessions of an Economic Hit Man by John Perkins comes to mind) are too well known to be ignored. Criticisms are often heard, from certain political/ ideological quarters in Sri Lanka, that the efforts of some economically advanced countries were guided by sinister motives when they extended financial and other assistance, allegedly for purposes of conflict resolution and peace building. In this backdrop, an effort to examine these criticisms attributing sinister motives to foreign aid would have made Bastian’s work on the subject more complete.
Second, some chapters of the book appear to stand alone with inadequate fusion with the main argument being developed. This may have been a result of the fact that the work published in this book was compiled over a long period of time. Chapter 3, for example, discusses the gradual development of the present separatist conflict in Sri Lanka in the backdrop of the country’s general political development. The next chapter attempts to show how foreign aid was granted to Sri Lanka during much of the era of “liberal capitalism” irrespective of exacerbation of domestic conflicts, with all their attendant ills, during that period. No attempt is made, however, to examine whether and how the political process discussed in chapter 3 or the process of aid disbursement to promote liberal capitalism discussed in chapter 4, has had any significant association with foreign aid allocations, or with economic policy stances at various stages.
On the important topics noted above Bastian’s book brings into dialogue and debate interesting insights. This book will undoubtedly serve a very useful purpose – both at the domestic level and at the level of international discourse on foreign assistance and other external interventions on peace in Sri Lanka. There is clearly a continuing state of flux in ideas governing policies of, and approaches to conflict resolution/ transformation and peace promotion. Persons involved at the level of debate and discourse as well as at the policy level are changing their views, guided by experience and critical analyses. Publications like that of Bastian are of immense use in such change.
One hopes that such changing ideas will loosen the hard positions taken by different political groups and help produce the illusive consensus. If, together with these changes in political perceptions toward consensus, there is equitably shared economic growth through well-guided domestic effort, helped by foreign capital, official and private, one can be optimistic for the future. Better and stronger economic conditions, enjoyed widely and equitably in the society, would provide for the sustainability of any political / constitutional system that may be devised.
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