Sri Lanka - Politics, government, and taxation

When Sri Lanka obtained its independence from Britain in 1948 it had an educated electorate conscious of its voting rights and the concept of majority rule. The judiciary was respected and the rule of law was well established. The political party system was also established with the United National Party (UNP) as the foremost party of the time. Sri Lanka also had a written constitution incorporating some of the principles of the British Westminster system of government. There is a unicameral Parliament with 225 members elected to 6-year terms. The president is popularly elected to a 6-year term and is the chief executive.

The UNP was in power for 8 years until it lost the 1956 election to Sirimavo Bandaranaike. His Sri Lanka Freedom Party (SLFP)-led coalition swept into power on the promise to make Sinhala the national language. This created disquiet among minorities, especially among Tamils. Tamil leaders opposed the introduction of Sinhala as the official language because they wanted to speak Tamil; their opposition soon led to violence. The seeds of the separatist war in Sri Lanka can be traced to incidents that occurred in 1958. But the conflict grew into a large-scale military confrontation only after 1983, when a group of Liberation Tigers of Tamil Elam (LTTE) followers ambushed Sinhalese troops. The LTTE, who are the Tamil protagonists of the war, have used terrorist methods to finance and promote their cause. They have assassinated moderate Tamil leaders, including President Premadasa, and several Sri Lankan ministers and party leaders. They also killed Indian prime minister Rajiv Gandhi because he withdrew his support of the LTTE.

Another serious problem was the emergence of a Sinhalese youth revolutionary party called the JVP, which staged an armed insurrection in 1971, lasting for 2 years and followed by 3 years of sporadic outbursts. The JVP resurrected itself in the late 1980s with a subtle form of urban terrorism, but it was brought under control by a ruthless program of suppression by the government. Both the LTTE and the JVP have been serious impediments to steady economic growth in Sri Lanka. However, Sri Lanka has been endowed with a very strong democratic tradition which has managed to survive these major conflicts, even during periods of poor economic management.

The 2 dominant parties during 50 years of independence have been the UNP (conservative) and the SLFP ( socialist -left, and more recently center-left). The 2 political parties have alternated in positions of power for half a century, with the UNP heading the government from 1948 to 1956, 1965 to 1970, and 1977 to 1994. An SLFP-led coalition government was in power from 1956 to 1965, 1970 to 1977, and since 1994 as a coalition called the Peoples Alliance (PA).

The Sri Lankan government epitomizes a classic democratic 2-party political system in operation. The UNP regimes during the period 1948 to 1970 placed emphasis on private sector participation with several ongoing subsidized programs such as free education, free health care, village land settlement, and colonization. The SLFP regimes continued the welfare programs and moved increasingly to public ownership and nationalization with limited private sector participation. In the early and the mid-1970s, they placed strict restrictions on imports and currency movement.

In 1977 the UNP government came into power and decided to run an open economy with few restrictions. The private sector became the main engine of growth. The rupee was devalued by 46 percent from its former artificial value. This immediately stimulated growth and received the backing and financial support of the World Bank. This UNP government lasted for 17 years. When the SLFP-led coalition known as the Peoples Alliance was elected to government in 1994, it accepted the importance of this open market economy as a positive growth strategy for the country.

A short time before the end of the first term of the Peoples Alliance in 2000, the LTTE attempted to assassinate the president of Sri Lanka, Chandrika Bandaranaike Kumarathunga. The bomb caused damage to one eye but she survived, and her party was elected for a second term. The PA has had a very difficult period in government because of the financial and political pressures generated by the escalation of the armed conflict with the LTTE. The election itself generated a degree of conflict never experienced before in Sri Lankan politics, but democracy survived as it had in every one of the elections held after 1948.