Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

188. National Intelligence Estimate¹

NIE 54–2–58

Washington , December 9, 1958.

THE OUTLOOK FOR POLITICAL STABILITY IN CEYLON²

The Problem

To estimate the outlook for political stability in Ceylon over the next few years.

Conclusions

1. Internal stability in Ceylon has deteriorated sharply under the present regime due to mounting political and economic problems and the weak leadership of Prime Minister Bandaranaike and his shaky socialist-neutralist coalition government. The outlook over the next few years is for little if any political or economic improvement, more strikes, and probably further rioting between the majority Sinhalese and minority Tamil communities. (Paras. 4–8)

2. Despite general lack of confidence in Bandaranaike’s leadership, there is no ready alternative to him within the present Parliament. However, we believe that the Bandaranike government will probably become increasingly vulnerable and that there is an even chance it will be voted out of office by Parliament before the end of its full term in 1961. Bandaranaike might, moreover, be forced out either by the Governor General acting in an emergency situation or by a coup staged by military, police, and conservative elements.³ We believe that there will be no significant change in foreign policy under any likely successor government. (Paras. 9–11, 14)

3. Communist influence in Ceylon will probably continue to increase despite the strong rivalry which exists between the three communist groups. We do not believe, however, that these communist groups, separately or together, will be able within the next few years to seize control of the government by extra-legal means—chiefly because of their small size and the almost certain opposition of the Governor General and the security forces to such a move. Nor do we believe it likely that any grouping of communists will win the next general election or dominate new government. However, “Trotskyite” leader, N. M. Perera who controls important elements of organized labor and is widely respected even in non-communist circles may be able to achieve an important place for himself and his party in a new government. (Para. 12)

Discussion

4. Ceylon has experienced a progressive deterioration in internal stability under the government of Prime Minister Bandaranaike. Serious economic difficulties have contributed to a decline in public confidence in the government. Long-standing tension between the majority Sinhalese community and the large Tamil minority has increased. The division of political forces among a number of erratic and highly competitive parties, including three rival communist parties, has complicated the island’s troubles.

5. The island’s economy has been badly weakened by inadequate food production, rising costs, growing unemployment, and an unusually high rate of population increase (about three percent annually). Foreign exchange reserves have been reduced as the result of rising imports and falling export earnings. The government’s economic development program has been poorly formulated and prosecuted. Threats of nationalization of key activities have resulted in a loss of confidence among Ceylonese and foreign businessmen.

6. In this situation, the weakness of the government is a major critical factor. The government is a coalition of divergent interests whose political and economic outlook ranges all the way from conservative socialism to Marxist communism and which continues to be split within itself on major domestic policy issues. Bandaranaike has proven himself a weak and vacillating leader. Labor unrest and general disrespect for law and order have increased. The traditional political neutrality of the police and the armed services, which include diverse racial and religious groups, is probably now uncertain. The government’s strongly pro-Sinhalese orientation has been a major factor in the rise of communal tension which culminated in May 1958 in bloody and widespread rioting between Sinhalese and Tamils.

7. In the face of Bandaranaike’s ineffectiveness in controlling the rioting, Governor General Goonetilleke picked up the reins of leadership, declared a state of emergency, and apparently directed personally the widespread use of the security forces to restore order. The state of emergency has been maintained by the Bandaranaike government, although the Governor General has played a less active political role in recent months. As relative calm has been restored, less and less use has been made of the emergency powers.

8. The outlook is for continued discontent and further turbulence. Little if any significant economic progress can be anticipated. Bandaranaike shows little promise of ever giving the island strong leadership. The morale of the security services, already weakened by political interference and probably by the communal tension, is likely to continue to decline. We believe that this is particularly true of the police. Continued labor unrest is probable and the leaders of the communist parties will probably call further strikes in order to advance their political fortunes. Such strikes might become widespread. While the Sinhalese by virtue of their numbers clearly dominate the island, demands by Sinhalese extremists for further privileges and by Tamils for recognition of their interests will continue. We believe that severe and widespread communal rioting may erupt again at any time, especially after the state of emergency lapses, and might also involve violence against indigenous Christians and Westerners.

9. Despite general lack of confidence in Bandaranaike’s leadership, there is no ready alternative to him in sight in the present Parliament. The conservative opposition in Parliament is small and lacks leadership, although the United National Party (UNP) has apparently regained some popular support in recent months. The leftist opposition in Parliament, although stronger than the conservatives, is also relatively small and lacking in cohesion. Although the government has lost some strength in Parliament, it continues to hold a small majority. However, the government will probably become increasingly vulnerable under Bandaranaike’s weak leadership. Despite the desire of the major elements in the government coalition to stay in power, festering differences among them may lead to the government’s downfall. On balance, we believe there is an even chance that Bandaranaike will be voted out of office by Parliament before the end of his full term in 1961. In that event, there would probably be a call for new elections. Furthermore, if Bandaranaike, who has been reported in ill health, should die in office or be obliged to retire, the present coalition would probably not survive.

10. At the same time Bandaranike may be removed from office by some other means before his term is over. If another major crisis develops, and if Bandaranaike again fails to respond to the situation, the Governor General might choose to assume power himself. In such an eventuality, the Governor General would probably seek to maintain a constitutional facade for his actions, and would probably have the support of the security forces and the civil service. He could probably provide effective government for the country at least for a short time. However, popular opposition to authoritarian rule and the small size and relatively limited capabilities of the Ceylonese police and military services would create strong pressures to restore some kind of representative government fairly promptly.⁴

11. There is a lesser chance that a group of leaders from among conservative elements and the military and police might attempt a takeover of the government without the leadership or support of the Governor General. Such a group might succeed in seizing power, but we do not believe that it would be able to maintain control of the country for very long. If a coup of this kind failed, the position of conservative elements would be badly damaged. In any event, the loyalties of the armed forces and police would be put to a severe test and significant numbers might withhold their support.

12. Communist influence in Ceylon will probably continue to increase despite the strong rivalry which exists between the three communist groups: the orthodox Communist Party, the “Trotskyite” party (LSSP) of N. M. Perera, and the “independent” communist party (VLSSP) of Philip Gunawardena which is part of Bandaranaike’s coalition. We do not believe, however, that these communist groups, separately or together, will be able within the next few years to seize control of the government by extra-legal means—chiefly because of their small size and the almost certain opposition of the Governor General and the security forces to such a move. Nor do we believe it likely that any grouping of communists will win the next general election or dominate a new government. However, N. M. Perera who controls important elements of organized labor and is widely respected even in non-communist circles may be able to achieve an important place for himself and his party in a new government.

13. It appears unlikely that Bandaranaike will be able to remain as prime minister beyond the next election. His demonstrated lack of leadership, the generally poor government provided by his coalition, and unfavorable economic developments make it unlikely that he will be again able to organize a winning coalition. Popular support will probably gravitate to the right and the left. While it now appears that the UNP and the LSSP will be the largest gainers, we do not believe that any of the presently existing parties is likely to get a majority. The result will probably be another coalition government.

14. The Bandaranaike government has won widespread support for its neutralist foreign policy. As long as it remains in office, it will almost certainly continue to follow this policy, and to adopt positions much the same as those of India on international issues. The government has received or accepted commitments of more than $100 million in foreign assistance since it came to power. Of this, almost $60 million has come from the Bloc and $43 million from the West. It will almost certainly continue to seek as much foreign aid as it can get “without strings” from both sides. It is unlikely that there would be any significant change in foreign policy if a conservative regime were to come to power, either by a coup or victory in the elections, but such a government would in private probably be more sympathetic toward the West.

1. Source: Department of State, INR–NIE Files. Secret. According to a note on the cover sheet, the following intelligence organizations participated in the preparation of this estimate: the CIA and the intelligence organizations of the Departments of State, Army, Navy, Air Force, and The Joint Staff. All members of the U.S. Intelligence Board concurred with the estimate on December 9, with the exception of the representatives of the Atomic Energy Commission and the Federal Bureau of Investigation. Those representatives abstained since the subject being considered was outside their jurisdiction.
2. Supplements NIE 54–58, “The Outlook for Ceylon,” dated 18 March 1958. [Footnote in the source text. NIE 54–58 is printed as Document 182.]
3. On November 24, the Embassy in Ceylon reported rumors of a plot to establish a dictatorial government in Ceylon and liquidate leftists, particularly Philip Gunawardena. The coup allegedly had been planned for November 20. (Telegram 436 from Colombo, November 24; Department of State, Central Files, 746E.00/11–2458) Rumors and parliamentary charges about this matter continued into December; documentation is ibid., 746E.00.
4. Ceylonese security forces include 8,000 police and 7,600 armed forces personnel (6,000 regular and 1,600 reserves now on active duty) with about 3,700 reserves currently demobilized. Ceylon’s population is about nine million. [Footnote in the source text.]