Economic Growth and Social Polarisation under Globalisation

Abstract

The rise to power in Sri Lanka of a regime committed to economic liberalisation in the late 1970s has brought about many significant changes. Firstly, a state-dominated, economy has given way to an open liberal economy dominated by national and international capital. Secondly, globalisation has offered new income opportunities to many people while many traditional occupational groups have been adversely affected by cheap imports. Thirdly, incomes of those occupying higher positions in the externally oriented sectors have increased so rapidly that the gap between them and others has become scandalously wide. Fourthly, an emerging New Urban Middle Class has virtually displaced the conventional middle class as the dominant ideological and reference group. Fifthly, increasing dependence of the elites, on the privately-run educational, health and other institutions has led to a relative neglect of public services leading to a polarisation between the two sectors. And, finally, concentration of wealth in the hands of the rich has led to rapidly increasing private consumption. Against this background the present paper argues that economic liberalisation in Sri Lanka has led to unprecedented class polarisation raising many policy relevant issues.