Life has always been hard for workers like Premalatha featured in the Winter Story, Sometimes we Starve, but now it is getting harder. The severe economic crisis has already pushed 5.7 million people of its population of 22 million to the brink of hunger. Food prices have risen 57.4% since the beginning of the year and fuel supplies are extremely low. According to the Office for the Coordination Humanitarian Affairs an estimated 73% of the population have lost their source of income or had it reduced.
The government has been in talks with the IMF about a bailout passage. In April it suspended repayments on US$12 billion of foreign debt. Nearly US$21 billion is due by the end of 2025. There is unlikely to be any relief in the near future.
CWS partner, the Movement for Land and Agricultural Reform (Monlar), is one organisation pointing to long standing economic policies that have contributed to the crisis. Board member Sandun Thudugala says the situation in Sri Lanka is partly a product of economic policies that do not work. Under guidance from the World Bank and/or IMF, the country has implemented 16 programmes which have all failed.
In a webinar, he pointed back to the 1990s when the government implemented policies discouraging small scale agriculture and local food production. The result was the corporate capture of resources and a reliance on imported food that the poorest people could not afford he said. Rural people were dispossessed of their land. Young women like Premalatha from rural areas provided cheap labour to the factories set up to earn foreign exchange. These factories operated under special concessions in the country’s Export Processing Zones.
“There is a global debt crisis coming – and it won’t stop at Sri Lanka” warned Jayati Gosh an economics professor at University of Massachusetts in the Guardian. The country imported more than it exported. The factories were funded with foreign capital funded from overseas increasing the level of foreign currency debt. Sri Lanka could not earn enough to meet the loan repayments either from exports including tea. Workers in the plantation sector are employed in some of the worst living and working conditions. Remittances from Sri Lankans living abroad also contribute to income.
The pandemic and war in Ukraine have made matters much worse. The government could not afford to meet even the interest repayments. Ghosh warns developing countries were hit much harder by the pandemic in part because of the actions of big companies that have profited over the last two years and commodity prices. The consequence he warns is that more countries will face severe debt distress and billions of people will be unable to afford a basic nutritious diet or meet health expenses unless governments take urgent action.
After weeks of peaceful protest, the departure of former president Gotabaya Rajapaksa ended 15 harsh years of government dominated by members of the Rajapaksa family. The installation of Ranil Wickremesinghe as the new president has not been welcomed by the protestors. Gune coordinator of CWS partner Devasarana Development Centre reported they were not happy with his appointment and the future remained uncertain. He said food prices continued to rise daily, medicines were in short supply and public transport was barely operating.
The new president moved quickly to impose a state of emergency. On July 22 government security forces attacked the protest, injured more than 50 people and arrested at least nine others. The government has been criticised for is failure to respect human rights.
Previous governments have relied on public security laws to dampen dissent, imprison critics and judges, and turn a blind eye to political disappearances.
Sri Lankan governments have been able to block United Nations efforts to improve human rights and investigate war crimes. Former president Gotabaya Rajapaksa was the Defence Chief during the final years of the bitter war against the Liberation Tigers of Tamil Eelam. In February the UN Human Rights Commissioner described an alarming human rights record in Sri Lanka and its unwillingness to investigate accusations of war crimes.
August 2, 2022