ABSTRACT

The main purpose of this paper is to establish the importance of focusing on the politics of market reforms if Sri Lanka is to achieve sustainable peace. The late Newton Gunasinghe tried to draw our attention to this aspect in his seminal article analysing possible reasons for the July ’83 anti-Tamil violence (Gunasinghe 1996). In this essay he focused on the changing relationship between the state and different social classes among the Sinhalese because of policies of liberal capitalism and its impact on the ethnic conflict. Since the focus of the essay was July ’83 anti-Tamil violence of which Colombo was the centre, his foci were small businesses and the urban poor. He argued that the inauguration of liberal economic policies led to loss of state patronage in the case of small businesses and undermined welfare benefits received by the urban poor. He saw these factors playing a role in the July ’83 violence.