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BTI 2020 Country ReportSri Lanka

This report is part of the Bertelsmann Stiftung’s Transformation Index (BTI) 2020. It coversthe period from February 1, 2017 to January 31, 2019. The BTI assesses the transformationtoward democracy and a market economy as well as the quality of governance in 137 countries.More on the BTI at https://www.bti-project.org.Please cite as follows: Bertelsmann Stiftung, BTI 2020 Country Report — Sri Lanka. Gütersloh:Bertelsmann Stiftung, 2020.This work is licensed under a Creative Commons Attribution 4.0 International License.ContactBertelsmann StiftungCarl-Bertelsmann-Strasse 25633111 GüterslohGermanySabine DonnerPhone 49 5241 81 81501sabine.donner@bertelsmann-stiftung.deHauke HartmannPhone 49 5241 81 81389hauke.hartmann@bertelsmann-stiftung.deRobert SchwarzPhone 49 5241 81 81402robert.schwarz@bertelsmann-stiftung.deSabine SteinkampPhone 49 5241 81 81507sabine.steinkamp@bertelsmann-stiftung.de

BTI 2020 Sri Lanka3Key IndicatorsPopulationMPop. growth1% p.a.1.0Life expectancyyears76.6UN Education Index0.756Poverty3%10.118.5Gender inequality20.380Aid per capita 13.9Urban population %21.7HDIHDI rank of 1890.78071GDP p.c., PPP Gini Index1345039.8Sources (as of December 2019): The World Bank, World Development Indicators 2019 UNDP, Human DevelopmentReport 2019. Footnotes: (1) Average annual growth rate. (2) Gender Inequality Index (GII). (3) Percentage ofpopulation living on less than 3.20 a day at 2011 international prices.Executive SummaryThe period under review covers 20 months under a coalition government, a constitutional crisisand a few months when the president and the prime minister, leading different political parties,jockeyed for position. There was little political progress under the coalition government. TheOffice of Missing Persons was set up to investigate extra-legal disappearances and initiated someinvestigations. Parliament approved legislation to set up the Office of Reparations, but this is yetto be operationalized.The recommendations of the Consultation Task Force on Reconciliation Mechanisms (CTFRM),appointed by the prime minister, languished. When local government elections were held inFebruary 2018, both governing parties were trounced by the new Sri Lanka Podujana Pakshaya(SLPP), which owed allegiance to former President Mahinda Rajapaksa. The SLPP gained 42%of the vote and control of 231 out of 340 local government bodies. Continuing differences betweenMaithripala Sirisena, leader of the Sri Lanka Freedom Party (SLFP) and Prime Minister RanilWickremesinghe, leader of the United National Party (UNP) paralyzed the government. OnOctober 26, 2018, the president finally attempted to ameliorate the situation by dismissing theprime minister and replacing him with former President Mahinda Rajapaksa. When Sirisenarealized that Wickremesinghe continued to command a majority in parliament, he sought toillegally dissolve parliament. However, the Supreme Court nullified parliament’s dissolution andthe president had to reappoint Wickremesinghe as prime minister, which he did on December 16,2018. Differences between the two continue. The prime minister’s proposals for constitutionalreforms supported by minority parties seem unlikely to receive sufficient support to be enacted.There is thus no immediate prospect for further ethnic reconciliation.On the economic front, Sri Lanka has seen slower development, with just over 3% growth in 2017and 2018. Foreign reserves have fluctuated somewhat, but were around 6 billion in January 2019.Foreign remittances by Sri Lankan workers declined slightly, but tourism continued to grow withthe number of visitors increasing to 2.3 million in 2016. By early 2019, inflation had risen to 7%.

BTI 2020 Sri LankaThe unemployment rate remained at 4.1%. Public debt is 76% of the GDP. The basic literacy levelof the workforce remains high. Educational opportunities for women are excellent, although thereare considerable gender barriers to female engagement in society and the economy. The femaleparticipation rate in the workforce has risen very slowly to just over 35% in 2018. One might note,however, that the informal sector makes up some 60% of the economy and that this sector is oftenomitted in statistics. Private property is relatively well-protected, although there are barriers toforeign ownership of companies in some sectors as well as constraints on foreign propertyownership. The public sector remains overstaffed and relatively inefficient, despite some movestoward public-private partnerships. The budget deficit is gradually being reduced by more efficienttax collection and the extension of the scope and rate of the value-added tax. There are signs ofgreater investment in education. However, there are regional disparities in economic development,and foreign trade is impeded by para-tariffs.Continuing economic links with China, Russia and Iran are now complemented by better relationswith India and the West.History and Characteristics of TransformationBy the end of British colonial rule in 1948, the country’s elite had been socialized into acceptinga British-style parliamentary system. This system survived several power transfers in the wake ofsuccessive defeats of the ruling party in the 1950s and 1960s. A party system developed with theUnited National Party (UNP) and the Sri Lanka Freedom Party (SLFP) as the two major parties.During the second half of the twentieth century, the two parties combined won a steady 80% ofvotes and seats. The left and minority ethnic groups such as the Tamils and Muslims wererepresented by a multiplicity of small parties, some of which participated in coalition governments.However, political transformation of Sri Lanka to a democracy has met with several obstacles.Political parties remained elite-dominated with minimal internal democratization. Theestablishment of a French-style presidential system in 1978 provided opportunities for thestrengthening of executive power, which reached its apogee in the period of 2005 to 2014.However, in reaction to this, a constitutional amendment enacted in 2015 has restrictedpresidential power.Additionally, ethnic tensions escalated after 1948, principally between the majority Sinhalese andminority Sri Lankan Tamils of the north and east. Sinhalese politicians implemented a number ofpolicies that alienated many Sri Lankan Tamils. Examples of such measures are the exclusion ofmost Tamil plantation workers in the central part of the country from citizenship in 1948, makingSinhala the only official language in 1956, and giving special constitutional recognition toBuddhism – the religion of most Sinhalese – in 1972. The largely Hindu Sri Lankan Tamils werefurther aggrieved by diminishing opportunities for state employment in the 1960s, and schemesintended to limit their access to some areas of university education in the 1970s. During the 1950s,4

BTI 2020 Sri LankaSri Lankan Tamil politicians demanded a federal system, and in the 1970s began a campaign fora separate state.In the late 1970s, the more radicalized Tamil youth moved toward armed struggle. Faced withthese challenges, as well as with a short-lived insurgency among the Sinhalese youth in 1971, thestate began to continually invoke a state of emergency, exerting greater control over the media andexpanding the military forces. New anti-terrorist laws were enacted. Increasing attacks on stateinstitutions and on the armed forces by Tamil militant groups in the 1980s and a pogrom againstTamil civilians in 1983 made matters worse. An offer of a quasi-federal system following Indianarmed intervention in 1987 failed to resolve the issue. By the late 1980s, the state faced twin armedinsurrections, one by Tamil separatist groups and another by Sinhalese Marxists. It was able tocrush the latter in 1989, but the Liberation Tigers of Tamil Eelam (LTTE), which emerged as thedominant Tamil rebel group, controlled parts of the north and east of Sri Lanka and fought a civilwar that lasted for 26 years until the LTTE was militarily defeated in May 2009. A basic problemin post-war reconciliation is reaching a consensus on arrangements to reconcile the minorityTamils of the north and east.Meanwhile, reforms permitted most plantation Tamils to gain citizenship rights in the 1980s, andTamil political parties representing them currently participate in mainstream politics. Muslimpolitical parties that had emerged in the last 20 years and had advocated a separate Muslimprovince have begun to ally themselves with one or the other of the main parties. However,sporadic violence against Muslims, in both Tamil majority and Sinhalese majority areas, havemade them apprehensive about their future in Sri Lanka, particularly in view of recentdevelopments in Myanmar.The economic transformation has been more promising. The British left Sri Lanka with a colonialeconomy in which the state depended on the plantation sector for much of its revenue. Sri Lankanpoliticians maintained the well-developed health care system that they inherited, and they vastlyexpanded secondary education. On the other hand, they also inherited a weak industrial sector andhad to make heavy investments in agriculture to reduce the country’s dependence on food imports.A development model of import substitution and of economic development through public sectorcompanies was attempted until 1977. From then on, market-oriented reforms were graduallyadopted. Successive governments of different political hues have pursued privatization, publicsector reforms and the liberalization of trade and capital movements, although there were somemoves toward a more protectionist economy in 2005 to 2015. The current government is open tomore trade liberalization and export-oriented growth, but populist opposition to such policiescontinues.5

BTI 2020 Sri Lanka6The BTI combines text analysis and numerical assessments. The score for eachquestion is provided below its respective title. The scale ranges from 1 (worst) to10 (best).Transformation StatusI. Political Transformation1 StatenessQuestionScoreThe state’s monopoly on the use of physical force is unchallenged. However, thereare a few signs that armed opposition to the state has not been entirely abandoned. InJune 2018, two persons were arrested in Mullaitivu District while transportingexplosives and separatist flags. At the same time, police forces have demonstrated aninability or reluctance to intervene immediately in civil riots in which majorityBuddhists are involved, as, for example, in the case of civil violence against Muslimsin Digana in March 2018. There was also an incident in Kilinochchi in November2018, in which two policemen were killed by a former LTTE cadre. In April 2019,after the end of this report’s review period, Islamist terrorists conducted a series ofattacks on Christian churches, indicating that Sinhalese-Tamil frictions are not theonly source of cultural conflict and extremist violence in Sri Lanka.Monopoly on theuse of forceAll groups in Sri Lanka have legal access to political rights. Nonetheless, Sri Lankais a deeply dived society. For more than 80 years, the country has been marred byethno-religious and linguist tensions. Relations between Sinhalese (about 75% of thepopulation, mostly Theravada Buddhists), Sri Lankan Tamils (11%, mostly ShaiviteHindus), Sri Lankan Moors, (about 9%, mainly Sunni Muslims) and Indian Tamils(4%) are severely polarized. Linguistic and religious cleavages largely superimposeand reinforce each other, giving rise to sharp identity politics. Accordingly, mostSinhalese and Tamils alike equate the Sri Lanka “nation” with the Sinhalesecommunity, from which other ethnic groups are de facto excluded.State identityThe current political leadership of the Tamil minority in the north and east, asrepresented by elected representatives in the center, publicly accepts the Sri Lankanstate, while campaigning for more devolution of power. While support for a separatestate remains among some Tamils, the debate has largely shifted to devolution,reducing the involvement of military forces in minority areas and the restoration ofconfiscated land to civilians. The policy of reconciliation with minorities supportedby the government has not resulted in any significant constitutional or legislativesafeguards for minorities. At the same time, civil violence in March 2018 againstMuslims has increased feelings of insecurity among many in that group.96

BTI 2020 Sri Lanka7The constitution specifies that “The Republic of Sri Lanka shall give to Buddhismthe foremost place,” although it also safeguards freedom to have or adopt a religionof one’s choice and the freedom to teach and practice one’s religion in public orprivate. State funds support Sri Lanka’s four major religions (Buddhism, Hinduism,Islam and Christianity). Nonetheless, aggressive rhetoric by some Buddhistnationalists against Muslim and Christian minorities has continued. The Sinhalesemajority tends to equate Buddhism with national identity. Buddhist-Sinhaleseextremists argue that Sri Lanka is a Buddhist homeland, which excludes Tamils andother minorities or at least marginalizes other religious groups.No interference ofreligious dogmasSri Lanka has an effective administrative structure that provides basic health andeducational facilities to all regions. National and provincial agencies provide power,water, housing and other basic facilities, and implement such state policies. By 2015,96% of people had access to an improved water source and 95% to sanitation.However, due to history and political influence there is an imbalance in the provisionstate facilities in health and education in various areas. For example, the percentageof untrained teachers serving in 2017 in state schools in the rural district of Badullawas double the national average.Basicadministration772 Political ParticipationElections are regularly conducted on the basis of universal suffrage through multiparty contests. A survey in February 2016 revealed that a vast majority (about 96%)felt totally or somewhat free to exercise their vote. The response was virtually thesame in minority and majority groups.Free and fairelections8The opposition has limited access to state-owned media. However, non-statecontrolled media are often openly critical of the government. The electionmanagement agency is professional. Registration and vote counting mechanisms arefair. Polling centers are located in accessible places.The 2018 local government elections conducted throughout the country saw anopposition party win a majority in 231 out of 340 local government bodies. This hasfurther reinforced confidence in the electoral process. However, provincial councilelections, long overdue, continue to be postponed by the government.Democratically elected officials have been able to implement their policies. There areno extra-constitutional veto powers, but the military and the Buddhist establishmenthave influential voices. For instance, leaders of the Buddhist clergy have effectivelyinsisted that the constitution should retain a clause decreeing a special place forBuddhism. Administrative officers are subject to political pressure and may besubject to transfers to less desirable locations if they resist such pressures. Legislatorswield extensive influence over administrators in their constituencies and receivefinancial allocations from the national government for minor projects. Crediblepublic accounts of efforts to bribe legislators to change party allegiance in October2018 reduced faith in the political process.Effective power togovern7

BTI 2020 Sri LankaOpposition parties and civil society groups critical of the government continued tooperate relatively openly. Public protest gatherings are organized by oppositiongroups in all areas. Nevertheless, under the laws relating to public security, the statecan prevent groups from meeting in public, a power that inhibits the exercise of freeassociation in the north where there is a large military presence. In 2017 and 2018,there were several reports that journalists working in “high security” areas close toarmy encampments in the north were detained and questioned.8Association /assembly rights7A survey in February 2016 revealed that while 90.8% of majority Sinhalese felt freeto join any political party they wished, only 72.9% of Tamils and 68.5% of Muslimsfelt the same. However, there was a decrease in the percentage of Sri Lankans whofelt free to protest or attend a demonstration against social injustice. While 56% in2013 and 69.4% in March 2015 expressed that they were free to do so, this figuredropped to 52.4% in February 2016.The new government made considerable progress in fostering democracy by allowingmedia outlets critical of state policies to freely express their views. In a February2016 survey, 59.6% of Sri Lankans said that they are completely free while 25%indicated that they are somewhat free to express their feelings about politics,irrespective of where they are and in whose company they are. These figures wereslightly higher among members of the Sinhalese community and somewhat loweramong minorities.Freedom ofexpression7While the state controls some major media outlets, there is scope for expression of adiversity of opinions. For instance, access has been restored to on-line news outlets,including those controlled from overseas, although one e-news outlet critical of thepresident was banned in November 2017. Many sensitive topics, including theoccupation of private land by the military, are reported openly, unlike under theprevious regime. However, journalists reporting on such topics have been subject tooccasional harassment. The scope for free exchange of opinions seems morerestricted in parts of the north, where there is a large presence of security forces. Opencriticism of the military remains rare.3 Rule of LawThe separation of powers was challenged by the actions of President MaithripalaSirisena in late 2018. Having fallen out with his coalition partner, RanilWickremesinghe, leader of the UNP, he dismissed Wickremesinghe from the post ofprime minister and appointed former President Mahinda Rajapaksa as prime ministeron October 26, 2018. This was despite the fact that Wickremesinghe had the supportof the majority of members of parliament. The president also prorogued parliamentfor a few weeks to enable Rajapaksa to gain support from defecting UNP supporters.Wickremesinghe refused to give way and when parliament met, he won a vote ofconfidence. The president then attempted to dissolve parliament and call for newSeparation ofpowers6

BTI 2020 Sri Lanka9elections. The Supreme Court unanimously ruled that dissolution wasunconstitutional under the 19th Amendment to the constitution, which specified thatthe president was prohibited from dissolving parliament without its consent for fourand a half years after the date of the previous parliamentary election. The fifty-dayconstitutional crisis ended when Rajapaksa resigned and President Sirisenareappointed Wickremesinghe prime minister. This crisis established the supremacyof the rule of law. However, it also shook the public’s confidence in politicians withregard to their willingness to disobey the law relating to the separation of powers.The unanimous decision by the Supreme Court on December 12, 2018, maintainingthat the proclamation issued by the president on November 9 to dissolve parliamentand call for a General Election was ultra vires and unconstitutional, revived thereputation of the judiciary. The court’s judgment came at a time when Sri Lanka’sconstitutional and democratic processes were under severe strain. The acceptance ofthe verdict by all parties led to the resolution of a dangerous political crisis.Independentjudiciary8While the judiciary has clearly become less susceptible to executive control, it hascontinued to have challenges in ensuring accountability of p

Nonetheless, Sri Lanka is a deeply dived society. For more than 80 years, the country has been marred by ethno-religious and linguist tensions. Relations between Sinhalese (about 75% of the population, mostly Theravada Buddhists), Sri Lankan Tamils (11%, mostly Shaivite Hindus), Sri Lankan Moors, (about 9%, mainly Sunni Muslims) and Indian Tamils

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source of imports to Sri Lanka) while Sri Lanka's exports to India stood at 5.8% of overall exports of Sri Lanka (3rd largest destination of Sri Lankan exports) with total trade between the two countries amounting to US 4.2 billion. The ISFTA has made a substantial contribution in

Sri Lanka: Ethnic Fratricide and the Dismantling of Democracy (University of Chicago Press 1991) 93-102. 7. Michael Roberts, ‘Ethnic Conflict in Sri Lanka and Sinhalese Perspectives: Barriers to Accommodation’ (1978) 12 (3) Modern Asian Studies 353. 8. Roshan de Silva Wijeyeratne, Nation, Constitutionalism and Buddhism in Sri Lanka

ber 2007; N 134, Sri Lanka’s Muslims: Ca ught in the Crossfire, 29 May 2007. For analysis of the nearly three-decade civil war and insurgency of the Liberation Tigers of Tamil Eelam (LTTE), see Crisis Group Asia Reports N 125, Sri Lanka: The Failure of the Peace Process, 28 November 2006, and N 191, War Crimes in Sri Lanka, 17 May 2010.

II. OVERVIEW OF SRI LANKA DEVELOPMENT CONTEXT 6 2.1 Summary 7 2.2 Sri Lanka’s performance in achieving the MDGs 8 2.3 Sri Lanka – Overview of the post-conflict political situation since 2009 10 2.4 Sri Lanka’s economic growth 13 2.4.1 Poverty and exclusion 13 2.4.2 Unemployment 14 2.

American Revolution were the same white guys who controlled it after the American Revolution. And this leads us to the second, and more important way that as a revolution, the American one falls a bit short. So, if you've ever studied American history, you're probably familiar with the greatest line in the Declaration of Independence: “We hold these truths to be self-evident, that all men .