The fourth round of talks to resolve the six-week standoff between Sri Lankan President Chandrika Kumaratunga and the government failed last Wednesday to reach any compromise. As a result, the deadline set by Kumaratunga for a deal on December 15, that is today, appears unlikely to be met.

According to media reports, the main sticking point in the discussions has been the defence ministry, which Kumaratunga seized control of on November 4 along with the ministries of the interior and media. Prime Minister Ranil Wickremesinghe has insisted that his United National Front (UNF) government cannot conduct peace talks with the Liberation Tigers of Tamil Eelam (LTTE) without control over defence. Kumaratunga, while offering various face-saving concessions, has refused to relinquish the ministry.

In using her autocratic powers as president, Kumaratunga was bowing to pressure from the military and within her own Peoples Alliance (PA), as well as Sinhala extremist groups such as the Janatha Vimukthi Peramuna (JVP) that oppose the so-called peace process. She claimed that Wickremesinghe was endangering “national security” by making too many concessions to the LTTE. A ceasefire signed in February 2002 remains in place but talks have been stalled since this April.

In the lead-up to last Wednesday’s discussions, diplomats from the United States, the European Union, Japan, Norway and India had all met with both Kumaratunga and Wickremesinghe to urge them to sort out a compromise. Japanese Foreign Minister Yoriko Kawaguchi issued a statement on December 5, explaining that Japan was observing the Sri Lankan political crisis “with serious apprehension”. She warned the president and the prime minister “not to miss this unique opportunity,” hinting that international economic aid to assist in reconstruction may be placed in jeopardy.

Along with sections of big business in Colombo, the major powers have been pressing for a deal with the LTTE to end the country’s 20-year civil war. Washington, in particular, regards the conflict as a dangerous destabilising influence in a region where it has growing economic and strategic interests. Sri Lankan corporate leaders now regard the war as an obstacle to economic opportunities opening up in South Asia.

There are no signs of any agreement, however. Government spokesman G.L. Peiris complained to the press last Thursday of the president’s “inflexibility” and admitted for the first time that the two leaders had failed to reach any compromise. He warned that Kumaratunga’s actions had “threatened the peace process”. He said he was hoping for a miracle, adding that things could “dramatically change”.

Speaking to the annual convention of his United National Party (UNP) last Saturday, Wickremesinghe insisted that if a deal were not reached with the president then the only way out was to have an early general election. He told 5,000 party delegates that he was prepared to go to the polls without any hesitation and return with a strengthened mandate to pursue peace. “The peace process must move forward. Otherwise it would have a detrimental impact on everything, including the economy,” he said.

Unless the UNF was decisively defeated, an election would not resolve the current political standoff or the underlying constitutional issues. Under the present Sri Lankan constitution, which prior to her election in 1994 Kumaratunga denounced as undemocratic, the presidency has extensive executive powers. A recent Supreme Court ruling found that the president has the power to decide on defence matters, which is disputed by the government.

Expressing the exasperation in ruling circles, an editorial in the Island on Saturday urged the two sides to reach an agreement rather than hold new elections. “This [a poll], the nation cannot afford and the people do not want it because of the violence and social unrest that will ensue... Both sides are equally uncertain about their chances of returning to parliament. The businessmen see the economy picking up and do not want it ruined... But now the prospects of another parliamentary election seem inevitable.”

In business circles, there is growing impatience over the lack of any resolution. Government spokesman Peiris told a press briefing on Friday that foreign investors have put on hold some $US150 million worth investment in the country’s free trade zones.

In a speech published in the Lanka Monthly Digest, leading banker Rienzie Wijetilleke declared: “Enough is enough, as far as shot gun marriages and slip-sliding cohabitation are concerned. Our leaders weren’t borne with semblance of statesmanship.” He noted that the LTTE appeared more responsible than either of the parties in Colombo. “Ironically a former terrorist leader by the name of Velupillai Prabhakaran [LTTE chief] chose not to hold the nation to ransom this time,” Wijetilleke said.

The present crisis is not simply the product of personality clashes or narrow political calculations but is the result of more fundamental contradictions. Ever since independence in 1948, the major bourgeois parties have exploited Sinhala chauvinism to build electoral bases, divide working people against each other and divert attention from their pressing economic and social problems. These communal politics culminated in civil war in 1983, which has produced an economic and social disaster.

But while dominant sections of big business now want an end to the conflict, sections of the military, state bureaucracy, the Buddhist hierarchy and business have benefitted from the war. Neither faction of the ruling elite have any solution to the pressing economic and social needs of working people. The supporters of the “peace process” want to turn the island into a cheap labour platform. The logic of the position of their opponents is a return to a war that has already devastated the lives of millions of people.