Photo courtesy of SCMP The focus of my recent writings has been the state formation of Sri Lanka. The starting point of this work is to see the state as a product of history that is constantly changing. In other words, the state is treated like any other element in society. This contrasts with the conventional idea of treating the state as a finalised static entity. Many symbolic elements incorporated into the identity of the state tries to strengthen the notion that the state has an eternal character. This also means getting away from grand theories of the state, and examining the formation of specific states within a specific historical context. Finally, this has to be done taking into account changes in the global context. In other words, it is the study of state formation in a global context. This approach forces us not only to rethink conventional ideas about the Sri Lankan state, but also makes it easier to bring about reforms. On the basis of these fundamental assumptions, this is a note on the global context within which the Sri Lankan state has evolved since 1977. The year 1977 has been chosen because it was a turning point in Sri Lankan state formation. The unresolved question of state-minority relations, which began from the moment the post-colonial Sri Lankan state defined its citizenship and made the bulk of the Indian Tamil population stateless, escalated to Sri Lankans Tamils demanding a separate state. Armed conflict around this issue lasted around three decades. Second, the process of Sri Lankan capitalist transition entered a new phase with an emphasis on the private sector, markets and openness to global capitalism. This created its own conflicts and state repression. The post 1977 global context has had an impact on both these processes. The focus of this short article is this global context, and how it has changed. Understanding this changing global context is essential for political strategies aimed at reforming the state so that we can live in a country without so much use of violence to maintain state power. Post-1977 state formation in Sri Lanka took place in a global context dominated by what I call a neoliberal global political project led by the United States. The economic dimensions of this project were based on the ideology of neoliberalism. Neoliberalism is an economic ideology that believes human well-being can be achieved by an economic system that promotes private property rights and open markets. The role of the state should be confined to creating the institutional framework for free markets. In areas where there are no free markets, such as social welfare and protecting the environment state should intervene to promote them. This ideology projected global capitalism as a benevolent system that incorporates more and more people into a market economy, brings about an interconnected world, and spreads prosperity. The political agenda was to establish liberal democracy, and reform states based on liberal principles. Liberal democratic states became an ideal to be promoted globally. It also believed that liberalism in economics and politics would lead to a more peaceful world. This is the security dimension of this project, often called liberal peace. Liberal principles in economics, politics and security added up to a vision of the total transformation of the world based on liberal principles – or a liberal utopia – in the post-Cold War period. Some ideologues of this project even boasted about an end of history. This meant that the collapse of the state socialist system ended ideological debates about social systems. Capitalism and liberal democracy were seen as the final answer in this quest, and the entire world was supposed to move towards this ideal. A key assumption of this liberal utopia was the continuation of Western hegemony in the world, led by the US. This ideology of liberal triumphalism led by the West was at its peak in the aftermath of the end of the socialist bloc of states, led by the Soviet Union. With the final break-up of the Soviet Union in 1991, this process was complete. However, it is important to remember that this was only an ideology that tried to legitimise a Western hegemony. The actual behaviour of Western states was determined by their strategic interests. On September 11, 2001 a political movement led by an extreme version of political Islam attacked a centre of world capitalism. Western states responded with a traditional military approach. This became a global phenomenon under the slogan of the global war on terror. Western powers used this opportunity to invade Iraq and Afghanistan and remove the political leadership of Libya. Other key developments were Western powers making use of the shift in the balance of power to expand the borders of the North Atlantic Treaty Organization (NATO) towards the East, threatening the security of Russia and the breakup of Yugoslavia into a number of states. The military hegemony of Western countries after the end of the Cold War contributed to these developments. However, if we look at the world now, around three decades after the neoliberal utopia became a hegemonic ideology, it looks quite different from what liberal ideologues expected. One of the biggest conceptual flaws in the ideology of the neoliberal political project was the zero sum approach to the relationship between states and global capitalism. With the expansion of capitalism globally, the importance of states was expected to diminish. Some propagated this idea with the notion of the coming of a flat earth. Even the widely-used notion of international community masks the fact that the world still consisted of competing states, with their own strategic interests. In contrast to what liberal internationalists believed, the growth of global capitalism under neoliberalism has had a diverse impact on states. In the case of some states, we have seen the growth of capitalism making these states stronger and challenging the balance of power at regional and global levels. This has happened in the past in the history of global capitalism and territorial forms of powers. Giovanni Arrighi’s, The Long Twentieth Century: Money Power and the Origins of our Times, is one of the best accounts of this historical process. What we are seeing is a new phase of this. It is better to understand the current global context within a framework of global capitalism and competing states, some of which are stronger. Looking at the world at present, a key outcome of the period of neoliberal capitalism has been capitalist growth in China, with China becoming a strong state. With these developments China has begun to challenge the hegemony of the US, especially in the Asia-Pacific region. The US has constructed a new regional strategic space called the Indo-Pacific to meet this challenge. There has been capitalist growth in India, and India is asserting its power in the South Asian region. Capitalist growth in both China and India is presided over by states where nationalisms of these states dominate. These nationalisms are based on the identity of a majority identity group in each state. Therefore, they impose oppressive conditions on minority identity groups. Both these states will be guided by their own political, economic and strategic interests when dealing with other states. Just because these are non-Western states there is no reason to believe that these states will assert their power differently. At present, wars involving states have made the liberal internationalist vision of a rule-based world a distant dream. Various forms of nationalism, and identity politics remain strong in the world. Capitalist growth has worsened economic inequality within many states. In some instances, the differential impact of capitalist growth has given rise to new forms of identity conflict, even in developed capitalist countries. State-formation conflicts continue to cost a significant number of human lives. Global migration due to the impact of uneven development, conflicts, the collapse of states and environmental degradation has had diverse impacts. One of them is thousands dying in the sea trying to get to countries where they believe they can have a better life. In the case of the Sri Lankan state, we are already seeing the impact of these changes in the global context. The US, India and China seem to be the most important major powers that will have an impact on state formation. What is noticeable is the involvement of these three major powers in the harbours of Colombo, Trincomalee and Hambantota. This is an indication of the current importance of the Indian Ocean in major power conflicts. Although ignored by those who look at the Sri Lankan state as a self-contained entity confined to its land mass, historically the Indian Ocean has always been an integral element of state formation. This is bound to become more important in the future. The key question is how will these new developments among the major powers impact on state formation and managing strategic state-society relations within the state.