Sri Lankan Uprising: Struggles against neoliberal austerity

10 June by Nagesh Rao , Nimanthi Rajasingham


Source : Groundviews

Sri Lanka is in the throes of political upheaval as a spiraling economic crisis has sparked widespread mass protests and strikes against the government. On May 9th, then prime minister, Mahinda Rajapaksa resigned and was forced to take refuge in a naval base in Trincomalee to escape the wrath of his people. At the time, it appeared that it was a matter of days before his brother and president Gotabaya Rajapakse too would be forced to resign. However, Gotabaya Rajapakse invited Ranil Wickremesinghe, former prime minister and leader of the United National Party to become prime minister.

The president has also ordered the military to repress the protests and imprison key activists in the movement. While the momentum of the struggle has decreased because of these factors, the call for Rajapakse to resign continues everyday, as do protests against austerity and rising costs.

Nagesh Rao spoke to Nimanthi Rajasingham about the roots of the crisis and the nature of the protests. Dr. Rajasingham teaches English and Women’s Studies at Colgate University and recently returned from a visit to Sri Lanka. She is the author of, Assembling Ethnicities in Neoliberal Times: Ethnographic Fictions and Sri Lanka’s War.

Nagesh Rao:Tell us about the protests that seem to have erupted all over the country.

Nimanthi Rajasingham:The protests have continued unbroken for over 50 days. The biggest site has been at Galle Face Green in the heart of Colombo, but there are protests all over the country, especially in the South. It feels very similar to the Occupy Movement in the United States. It started on April 8-9 when people gathered at President Gotabaya Rajapaksa’s house in Mirihana and called out, “Gota go home!” There was very severe repression against people who had gathered peacefully outside his home; the police were unleashed and many people were arrested. People were angered by this because they were facing so many economic deprivations. Soon after that, people decided to come to Galle Face Green. It was supposed to be a 48-hour protest, and the aim was to bring out a million people with the demand “Gota go home!” but also “Rajapaksas go home.”

On May Day, a million people showed up. On other days, students turned up, mothers of the disappeared from the war turned up. Different groups turned up and created a collective space under the broad demand that we want this regime to end. Galle Face Green organically turned into a continuous protest site. That’s why I say it is like Occupy. People set up tents such as a library, an artists’ tent, a performance site; they started living there. The site was named GotaGoGama, or Gota Go Village and is a really joyful place. And this is important to register because the situation in Sri Lanka is so dire. By some accounts inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. is at 74 percent. For example, gas cylinders that we use for cooking used to cost 1200 rupees in December 2021, and now a cylinder costs 5000 rupees, and they are difficult to get. At one point there was a funeral procession with a coffin carrying an effigy of Gotabaya. People followed it and danced at his funeral. People feel a great release being together.

Volunteers at the GotaGoGama Library, Colombo, April 15, 2022.
Photo by Kajanka Mathi.

It’s also been a very safe space for women. I saw this woman who sang about corruption and how the working classes have been oppressed for several generations, and she did call and response sessions with thousands of people. So, women’s participation in these spaces have been central to their success.

On May 6, there was a one-day general strike, and the entire country was shut down. The unions threatened to go on an indefinite general strike starting May 11 if Gotabaya did not step down. In response, the prime minister declared a state of emergency and bused in thugs to break up the peaceful protests. They invaded Galle Face and burned tents. But thousands of people descended on the site to reclaim it, sparking widespread resistance at an unprecedented scale.

However, subsequent to these large protests against repression, President Gotabaya Rajapkse unleashed the military with orders to shoot protestors. There were military tanks and checkpoints in Colombo, and throughout the country. Since then, the state has arrested a number of key leaders of the protest movement in an attempt to scuttle it. This has made many people extremely fearful.

At the time, Gotabaya first invited the leader of the opposition, Sajit Premadasa, to be prime minister and form an all-party government. Premadasa was willing to do so only if the president resigned. Of course, Gotabaya then invited extremely unpopular and neoliberal darling Ranil Wickremesighe to be the prime minister. It should be noted that when he agreed to be prime minister, Ranil was the only member in his party to hold a seat through the proportional representation system. While he was prime minister from 2015-2019, he turned a blind eye to corruption scandals such as the bond scam in the Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx
. He is also seen as extremely friendly to neoliberal reforms by international investors, and as someone who is willing to carry out some of the most unpopular demands of the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
etc.

N. Rao:Can you give us a quick note on the political parties in Sri Lanka?

N. Rajasingham:Since independence in 1948, we have had two main parties. The United National Party (UNP) is an urban, corporate, right-wing party. The Sri Lanka Freedom Party (SLFP) claimed the mantle of socialism, but was also ethno-nationalist, and responsible for first institutionalizing the state as a Sinhala Buddhist one. Since 1977, when neoliberalism was introduced to the country, both parties have in one way or another implemented free-market reforms. Both parties have also continued to wage war on minorities, even as they promised political solutions to the ethnic problem. So, the differences between the parties are no longer clear.

Gotabaya’s brother, Mahinda Rajapaksa had been president for two terms when he was ousted in 2015 by the UNP. Then came the Easter bombings of 2019, when a number of churches were bombed and a Muslim fundamentalist group was blamed for it. Mahinda had by then revitalized a small party called the Sri Lanka Podujana Peramuna (SLPP), popularly known as the Pohottuwa Party, and Gotabaya launched his Islamophobic and racist campaign right after these bombings, posing as a strong man who will protect the Sinhalese against Muslim fundamentalists. Both Tamils and Muslims have borne the brunt of his bid for power. The Rajapaksa family has five brothers and sons in key positions of power and a whole bunch of relatives with other important positions in the government, which explains the slogan “Rajapaksas go home!”

An all-night Buddhist sermon, Nov. 5, 2014, in honor of the Rajapaska parents. Then-President and recently removed Prime Minister Mahinda Rajapaksa, together with his wife, Shiranthi Wickremasinghe Rajapaksa, and brothers Chamal Rajapaksa, Basil Rajapaksa, current-President Gotabaya Rajapaksa, along with other family.

When the UNP was defeated a few years ago, Sajit Premadasa, whose father was president in 1989–1993 and oversaw the escalating war on the Tamil population, broke away from the UNP and formed another party, the Samagi Jana Balawegaya or The United People’s Power Party. He is the head of the parliamentary opposition today.

The newest and most hopeful formation is the Jathika Jana Balavegaya, or the National People’s Power (NPP), which is a coalition of a number of different Left parties, intellectuals and trade unions. They may be able to offer more hope than the other two.

N. Rao:Tell us more about the roots of the crisis, and its impact on people’s lives.

N. Rajasingham:The immediate crisis was caused by the Sri Lankan government running out of foreign currency to import basic necessities like fuel. People have to wait hours in line for gas; there’s a severe shortage of medicines. A number of big hospitals have suspended all medical services except emergency surgeries, etc. There are rolling power cuts. The currency has plummeted. It was 200 rupees to the dollar in April, today it is 364, and losing value every day, so people are losing their purchasing power at an incredible rate.

How did this happen?

Soon after the civil war ended in 2009, Mahinda Rajapaksa, then president, started these massive infrastructure projects and borrowed all this money from commercial banks, which have exorbitant interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
. Fifty percent of Sri Lanka’s debt is from commercial loans. So these were unsustainable loans taken on the promise that Sri Lanka will develop rapidly, that these loans will modernize the country and make it more like Singapore. While the neoliberal narrative of success has been that Sri Lanka will have this amazing import-export economy where we export garments from free trade zones, and that our tourism and tea will reap great wealth, this has really not happened. The country is US$52 billion in debt and recently defaulted on paying its loans because it just does not have enough foreign currency.

While the neoliberal narrative of success has been that Sri Lanka will have this amazing import-export economy…[t]he country is US$52 billion in debt and recently defaulted on paying its loans because it just does not have enough foreign currency.

We can add to this that the Easter Day bombings in 2019 negatively impacted the tourism industry, and that Covid-19 meant the loss of remittances sent from workers who work as house maids and workers in the Middle East. Typically at any given time, close to 2 million workers live and work abroad and send money home. They send back somewhere between US$500–800 million each year. Many of them lost their jobs and were sent home during the pandemic. So, there were huge hits to the high income earners: tourism, foreign remittances, garment and tea exports.

One of the other major contributors to the crisis is that last year Gotabaya Rajapaksa decided to transform Sri Lankan farming toward 100 percent organic farming within one year. He stopped the imports of all chemical fertilizer, claiming farmers were too dependent on it. Despite warnings from various leaders that this could fail unless he did it gradually, he simply stopped importing fertilizer. As a result, they say about 70 percent of farming failed. Sri Lankan farmers are typically small land holders, and rice is a staple. So, if we were 90 percent self-sufficient in paddy cultivation, we are now completely short of rice. This year too because of lack of funds, not enough fertilizer has not been imported for farming. So, this has led to food scarcity and insecurity.

Economists like Ahilan Kadiragamar have pointed out that as this crisis was developing over the last two years, the government did nothing to prepare by stopping the import of luxury items such as cars or other items that were non-essential. As a result, we now do not have money to buy even the basics.

Finally, I would say that this crisis has been in the making for four decades and is not a result of corruption or simply mismanagement. It’s the belief in a neoliberal economy, based on an import-export model, with little industrialization except for, say, the garment industry, and with few regulations. I would say that contemporary globalization has linked us to the global market and exposed us to its trends with few protections. In a sense, we see the end result of free markets, we are not very free at all, but literally starving. So, the recent crises have exacerbated the situation, but it’s been a long time coming.

N. Rao:How have India and China responded? What about the IMF? What are the solutions being offered, and how do people on the Left view these options?

N. Rajasingham:China is very visibly the enemy for many in the popular imagination For one, during the final phase of the civil war in 2008–2009, China funded and armed the Rajapaksa regime. Both China and India also blocked many attempts to censure the state’s actions at the UN. Furthermore, after the war, China gave Mahinda Rajapaksa, then president, money to build an enormous harbor in Hambantota, his electoral base. This harbor was a white elephant and did not bring in ships, and has now been leased to the Chinese for 99 years because the state cannot pay back the loan for it. Using Chinese money, the state also built the Mattala airport, which they claimed would be an international airport, but is completely in disuse. The Chinese have also given loans for highways and infrastructure that have really enabled huge corruption, as the other projects have. The tolls for these roads are too expensive for ordinary people, so they serve the rich to get to places fast, but most people do not even use them. So, it has stratified mobility by class. China is doing the kind of infrastructure projects globally to buy influence in the world. But the debt to China is only 10 percent of Sri Lanka’s debt. So, they are unpopular and blamed, but a large part of the debt is to Wall Street banks.

Now, India has also wanted control of the Trincomalee Harbor for strategic reasons, and these rounds of debt may help them get it. They have been providing Sri Lanka with bridge loans to tide its way through this crisis, amounting to about $3 billion since January. But these will come with some kind of asset Asset Something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities, that is the part of the balance sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts). being leased to them as payback.

At present the government is in talks with the IMF for further loans. The IMF might do so, but only if certain conditions are met. One of the conditions is further privatization of state-owned enterprises. They argue that the public sector is wasteful, that state industries are not being profitable. But the role of the state is also to provide employment to people so they can live in dignity. Now, imagine if you were to privatize public assets and fire a lot of people from their jobs, at a time when people are already struggling to pay for food because of inflation. This is asking the working classes and the poor, who are not to blame for this crisis, to pay for it, and bear the brunt of the mistakes of the elites. Another condition is that the state should stop all price controls. While the IMF wants to reverse Gotabaya’s tax cuts for the wealthy, they also want to increase a higher value-added tax that will disproportionately burden working-class people.

The Left has rejected this solution to some extent. So, even if the Left does not fully reject the IMF bailout, they are critical of these conditions that will force the working classes to bear the burden of not only the corruption, but also neoliberal changes that have by far benefitted the elite these last four decades. There have also been arguments saying we should default on our loans and think of other solutions outside of a capitalist framework. That has been part of the discussion.

I think the solidarity needed is to demand that global institutions not practice austerity on an already-struggling population. Why is it that ordinary people have to bear the brunt of problems created by the elite? If you want to prevent the rise of extremist and right wing political leaders, then you have to think of not punishing the poor.

N. Rao: Have Sri Lanka’s minority populations been welcome at these protests? How diverse are the crowds?

N. Rajasingham: On the Left, there’s a lot of discussion about whether the protest movement will address the other issues in Sri Lanka about minorities and about state violence against them. It’s really important to say that Sri Lanka is still recovering from a massive ethnic conflict which ended very badly for Tamils in 2009, with large numbers of Tamil civilians being killed at the end of the war. We have to remember that Gotabaya Rajapaksa was Defense Secretary at that time. It was under his direction that, for example, Tamil civilians were asked to come to no-fly zones and then bombed by the army, despite assurances that these were humanitarian spaces of safety. So we have to ask how did people elect a party and a leader that orchestrated such violence.

N. Rao:To what extent is this discussion about minorities part of the popular discourse on the streets?

N. Rajasingham: That’s uncertain to me. At the protests you see signs of solidarity. In April Ramadan, Easter, and Sinhala/Tamil New Year came together and you saw Muslims breaking fast among Sinhalese, you saw them sharing food. For the first time since the end of the war in 2009, there was a commemoration of the murder of Tamils during the final war at the GotaGoHome site. But does the site of protest reflect a consciousness that minorities have faced for decades what the Sinhalese are now facing? I’m not sure. I think there are hopeful signs, but it’s not explicitly there.

N. Rao: What can people in the U.S. do in terms of solidarity? How are people coping, and what can we do?

N. Rajasingham: So, in a very basic way, there are sites that are collecting money to get medicines to Sri Lanka etc. So, if you want to donate some funds, there are ways to do that.

Beyond that, I think the solidarity needed is to demand that global institutions not practice austerity on an already-struggling population. Why is it that ordinary people have to bear the brunt of problems created by the elite? If you want to prevent the rise of extremist and right wing political leaders, then you have to think of not punishing the poor. Over and over, as austerity is practiced and people are forced into greater poverty, these conditions give rise to extremism that scapegoats minorities and increases nationalism. The Sinhalese have typically blamed minorities for their problems during the war and have claimed the country as a country only for Sinhala Buddhists. These tendencies will only worsen if inequalities widen. Instead, the focus should be on debt forgiveness, especially some plan so the Sri Lankan state does not have to pay these toxic loans with high interests. Within Sri Lanka, taxes on the rich and through it redistribution of wealth should be a priority.




Source : Tempestmag

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