Last Updated on September 7, 2022 by Lankae Cast
The Paris Club has declared its satisfaction at the agreement reached between the government and IMF regarding a USD 2.9 billion loan to be given over a period of 48 months. The loan will be made under the IMF’s Extended Fund Facility, which helps countries deal with balance of payments or cash flow problems. The Paris Club is an informal group of rich countries which have given loans to less developed countries. They seek to find solutions to the repayment difficulties experienced by those countries which invariably occur. The enlightened self-interest of the countries that constitute the Paris Club can be seen in their member countries’ provision of time, space, advice and more loans to ensure that the original loan obligations to their countries are respected.
In the same manner as the Paris Club group of countries are seeking to ensure that Sri Lanka repays its loans it is important for the government to ensure that it can repay the new loans it is taking without impoverishing the people. The past six months has seen the living standards of the majority of Sri Lankan people fall precipitously. The increase in the price of a loaf of bread to Rs 300 is a 500 percent increase of the price that existed six months ago before the economic crisis hit the country. Likewise, the price of kerosene, the poor man’s fuel, whether fisher, farmer or lower income families, has gone up by about 400 percent.
It was the collapse in the living standards of the masses of people during the period of the Rajapaksa government that generated much antipathy towards the government. The savings of people has been more than halved due to the fall in value of the Sri Lankan currency and resulting high inflation, though official estimates put the figures at less. The protest movement obtained the people’s support due to the reasons that affected all of the people regardless of ethnicity, religion or community due to their unmet basic needs. This is the main problem that the government should be focusing its attention on. Unfortunately, the government does not appear to be prioritizing the mitigation of the collapse of the people’s savings and standards of living or even small local producers.
The government’s non-consultative approach has been criticized by small businesses. Sri Lanka United National Businesses Alliance (SLUNBA) chairperson Tanya Abesundara has been reported as saying that the decision to place a temporary ban on the import of 300 items was taken without considering the sub contents listed under the relevant product codes. She said that small and medium enterprises (SMEs) make up a large part of Sri Lanka’s economy, accounting for 80% of all businesses. These are found in all sectors of the economy, primary, secondary and tertiary and provide employment for persons of different skills, skilled, semi-skilled and unskilled. SMEs are an essential source of employment opportunities and are estimated to contribute about 35% of employment.
“We have come to a situation of being unable to continue with our activities. The people who took the decision to ban the importation of 300 consumer items do not realise the local production of the country,” she said. “Nearly 4.5 million workers belonging to 4,500 SMEs will fall on to the streets for not being able to pay their workers’ wages. The government is contemplating to print one trillion rupees to pay the salaries of the government sector and for the maintenance of the Parliamentarians, but did not take any measures to protect the SME, which serves as the backbone of the country,” she said.
Unfortunately, the government is proceeding as if life were normal and it is business as usual. It seems as if the protest movement never existed. Or that it was defeated and negated in the aftermath of the shrewd government strategy to bring in the former prime minister from the ranks of the opposition and thereby create the impression of a new government leadership. The return of former president Gotabaya Rajapaksa who fled the country due to the intensity of the protest movement is an indication oof the government’s belief that it has been subdued and quelled. This has enabled some of those in the ruling party to call for the former president to be appointed as the new prime minister and for the current president Ranil Wickremesinghe to be guided by the ruling party’s 134 seats in parliament though this number has been reduced by some of them crossing over to the opposition.
The political reality at the present time is that the anticipated influx of IMF funding has induced the government to provide for massive and unproductive funding for a full complement of 30 ministries with 40 deputy ministers and their entourages and provide patronage for their private and corporate friends. There is also continued acquiescence with the long prevailing trend of providing for increased military spending. As a result, it can be seen that the country continues to go down to bankruptcy and kleptocracy along the same old path, which simply means a government by those who seek chiefly status and personal gain at the expense of the governed.
On the other hand, on this occasion the country is likely to escape the tragic fate of bankruptcy and all the unintended consequences. This will be because the IMF and Paris Club, among others, will ensure that the government is provided with sound technical advice. If implemented it will enable it to both borrow more loans while increasing its capacity to squeeze the rest of the economy to repay the international donors. The problem, however, is that far from increasing the production capacity of the national economy, those who have politically supported the government to remain in power will be the ones who will be provided for under the cover of darkness, while the rest of the people are squeezed so that repayment of emergency loans can be offered.
It is also unfortunate that the government is continuing to ignore the basic human rights issues that trouble the people and have earned it the opprobrium of the international human rights community. Sri Lanka faces the unhappy prospect of being subjected to severe criticism at the present session of the UN Human Rights Council in Geneva. Successive government delegations have taken differing positions over the years with regard to the concerns articulated by UNHRC in Geneva. The present session will be particularly important to the country as the UNHRC is expected to decide whether it will come up with a new resolution or continue with the existing one which includes the functioning of a human rights monitoring mechanism in Geneva. The decision taken at the UNHRC this September can have major consequences to the national economy, in view of the EU’s position that its provision of the GSP plus concession is dependent on Sri Lanka’s human rights record.
External intervention on human rights issues has been rejected in the past and will continue to be articulated in the 51st session of the Council as well. Strategies to address human rights issues need to show tangible evidence of progress in order to remove Sri Lanka from scrutiny of the Council, which seems unlikely in the near future based on Sri Lanka’s past records. It is unwise of the government to disregard the UNHRC and EU’s expressions of concern on human rights issues especially as they pertain to the Prevention of Terrorism Act.
The government has been utilizing the PTA to intimidate and arrest members of the protest movement on flimsy and illegitimate grounds which the PTA permits. The PTA was established in 1979 to deal with the growing armed insurrection against the state by armed Tamil militants. It was extensively used both during the Tamil rebellion and also the JVP insurrection of 1988-89 that occurred in-between successive phases of the Tamil rebellion. It was extended to the Muslim community following the bombings of April 2019. Horrendous human rights violations took place on all sides. It is unreasonable and illegitimate to use this much criticized law to suppress the protest movement, which has been overwhelmingly peaceful and non-violent.
The coming week will also see the 32nd anniversary of the enforced disappearance of more than 180 persons from the Vantharamoolai camp for internally displaced persons in the eastern theatre of war in 1990. Former Vice Chancellor of Eastern University, Prof Thangamuthu Jayasingam who was himself one of the inmates of the camp was also officer-in-charge of the camp. He was a personal witness to the forcible removal of 180 persons under his care. His lament, which he has written on numerous occasions, is that successive governments have done nothing to find out what happened to those people. This government has done nothing either. Unless addressed, the unresolved ethnic conflict and impunity for human rights violations (apart from economic crimes) will mean that Sri Lanka continues to slide down the slope to further division and conflict regardless of IMF bailouts or Paris Club endorsements.
–Jehan Perera, Executive Director, National Peace Council