Financial Times - New social classes but old values

There is evidence of growth in many sectors of Sri Lanka’s economy over the past two decades, although setbacks were witnessed during the period. However, this economic growth is by and larger confined to the urban sector and within it, the Western province. In the rural sector, poverty accompanied by the alienation of educated youth from the economic mainstream, the expanding private sector, presents the ‘flip side’ of the economy. Underpinned by the country's changing economic condition, significant social patterns appear to be unfolding in a particular strata of society that are increasingly exerting an influence on society, at large.

Traditional Middle Class (TMC)
One of the main outcomes of colonisation has been the spread of Western values, ideas and institutions in the colony. Many social scientists believed that this would pave the way for a transition from tradition to modernity. Empirical evidence however has shown that the result has been the creation of a small Westernized, native elite and the ways of the larger population have not radically altered.

In fact, after independence, instruments of modernisation, now in the hands of native leaders, have been employed to reinforce primordial identities and traditional institutions. As a result, traditional social institutions and cultural practices did not disappear. The intelligentsia of the 1950s and say, a decade and a half thereafter, was distinctively Sri Lankan unlike its alienated predecessors.

However, they were essentially cosmopolitan, and not entirely in consonance with the larger Sri Lankan ethos.

This was the class, which, from the 1950s to the early 1970s, kept the wheels of the administrative structure moving for the ruling classes, and producing through the schools and the universities, the ideologies, which have given intellectual momentum to society, and propagating them through their control of the mass media.

They basically belonged to an upper middle class, who were bilingual, and at its upper end, cosmopolitan and Western oriented, while at its lower end, populist and nativistic.

The foregoing delineation points to one sub-stratum of the Traditional Middle Class (TMC), which has lost its hegemony and has rapidly dwindled to the point of near extinction.

The class of intelligentsia that followed, comprises almost in its entirety, products of Free Education.

They are essentially monolingual and operate within the state sector, and under the rubric of the nation state. They are a grouping clearly rooted in the soil and identifying itself with the generality of the people.

New Urban Middle Class (NUMC)
The emergence of the private sector as the leading agent of economic and social change and its corollary, the relative down-sizing of the state bureaucracy, have set in motion a seemingly irreversible process of social structural change.

The liberalization policies not only helped jettison the rules and regulations that hitherto had impeded the free movement of goods, services and finances between the country and the world outside, but also substantially curtailed the sphere of influence of many state agencies in areas such as internal trade, licensing, imports, exports and foreign exchange transactions. These steps created considerable space for the organised private sector and private entrepreneurs, both big and small, to embark upon various business activities. In addition to export-oriented operations that directly benefited from the new policy regime over the last two decades, many other sectors of the domestic economy have flourished in the domain of the private sector. Banking, finance, wholesale and retail trade, transport, tourism, health services, legal services and construction are other sectors in which private firms have been actively involved.

Importantly, unlike in the public sector where salary and wage differentials are contained within reasonable limits based upon equity considerations, senior private sector executives receive salaries and a package of fringe benefits, which include the reimbursement of defined expenses and the use of cars.

The high salaries and attractive perquisites enjoyed by the senior executives of the private firms are comparable with those of their counterparts in the export production sector.

The unfettered economy has also brought forth a large number of development oriented NGOs. Given the large operating budgets, usually financed by one or more donor agencies or by their parent-organisations, primarily in the West, they have become an important source of well-paid employment for a significant number of people with the requisite social attributes, skills and experience.

The aforementioned groups that directly benefited consequent to the shift, away from a nation-state framework to an emerging transnational socio-economic framework comprise the vital new urban middle class (NUMC).

The significant discretionary incomes in the hands of the NUMC accompanied by its distinctive Western orientation and expressive life styles, increasingly shaped by the exposure to television and foreign travel, in particular, have thrown segments of Sri Lanka's society into the age of modern consumerism.

Multiple television networks, the proliferation of modern restaurants in and around Colombo, luxurious office buildings and hotels, rapid expansion of the advertising industry, the increased number of luxury cars on the city streets, the spread of mobile telephones (an estimated 3.3 million in number) and an estimated 575,000 active credit card holders are tell-tale signs of the transformation of the urban landscape.

The increasing number of up-scale private hospitals and nursing homes, rapid expansion of international schools (around 80) and an estimated 6,000 Sri Lankan students who attend universities overseas essentially cater to the NUMC.

The consumerist ideology championed by the NUMC has thus reached all corners of the country with varying impacts.

Indeed, as observed earlier, those who are denied access to the NUMC life-style and do not possess the requisite socio-economic attributes, constitute the vast majority of the country's population.

This, however, does not necessarily mean that all those who are so denied tend to abhor this life-style as illegitimate and immoral. Many, in fact, admire and attempt to emulate the NUMC life style, at least in symbolic fashion.

Herein lies the pivotal marketing implication of the emergence and spread of the consumerist ideology. Marketers may well endeavour to recognise the changing definitions of social status and the redrawing of the contours of social class structures as a direct consequence of the evolving social trends that have been recognized.

Alienated Rural Youth (ARY)
The "flip side" of the economic condition of the Sri Lankan consumer highlighted income disparities and poverty, particularly in the rural areas of the country, the impact of which on the rural youth is significant and far-reaching.

The aspiration of educated youth to seek white-collar jobs is accentuated by the consumerist ideology that has impacted on the rural areas as well.

The down-sizing of the public sector which results in fewer job opportunities for educated rural youth in that sector should be examined, both from the point of view of the youth, and that of the private sector.

Of the total unemployed, as recorded in the Youth Survey, 50% declared their preference for a public sector job.

Importantly, 54% of the unemployed youth believe that the private sector is discriminatory in recruitment and other employment related practices.

They believe the private sector companies show favouritism to known groups and individuals, and that they discriminate against persons of low-income groups.

From the perspective of the employers in the private sector, the lack of readiness of the educated rural youth for employment in terms of requisite skills and knowledge has been cited as the chief reason for the low level of employment of rural youth in the private sector.

Importantly, the poor knowledge of English of the rural youth acts as a bar which prevents entry to the private sector.

Fluency in the English language continues to be confined to a very small minority of youth, except in the highly urbanised Western province).

New Working Class (NWC)
Cities and towns have become centres of wealth accumulation and private consumption, producing rapid changes in the urban landscape.

This state of affairs facilitate rural-to-urban migration which has, however, remained a marginal phenomenon for nearly three decades after Independence, owing largely to pro-rural economic and social policies implemented by post-independence regimes.

There are signs that this situation is rapidly changing as more and more youth tend to look for livelihood opportunities outside the rural sector). Consequently, we witness the emergence of the new working class (NWC). On the one hand, for reasons described earlier, the educated rural youth do not have easy access to white-collar jobs in the private sector.

On the other, types of opportunities that have come up in urban areas are mostly for low-status, casual employment in construction sites, Free Trade Zones, and the informal sector.

Those employed in these sectors and unskilled migrant workers constitute the new working class, in the main.

The NUMC, though not significant numerically, is becoming increasingly important, both in economic and ideological terms. The growing influence of the NUMC is, however, resisted by the TMC and ARY, in particular, though not overtly.

The TMC, especially its younger members though somewhat distant from the mainstream NUMC, are becoming increasingly influenced by the life style of the NUMC.

The ARY, on the other hand, though aspiring to belong to a higher socio-economic stratum of society in relation to their current position, finds their upward mobility thwarted by an expanding private sector which fails to accommodate them.

The ARY, though not necessarily opposed to the NUMC life style and consumption patterns, find themselves increasingly removed from the economic and ideological dictates of society. Importantly, if the resultant discontent and frustration of ARY are not adequately and expeditiously addressed, the very stability of the nation-state will be at stake.