Unable to provide enough fuel, the Colombo government this week announced desperate measures to shut down many public and economic activities, sparking deeper anger among workers, the poor and the youth. The government has virtually no foreign currency to import basic necessities, including fuel, food and medicine.
On Monday, the government of President Gotabhaya Rajapakse and Prime Minister Ranil Wickremesinghe began a new round of talks with the International Monetary Fund (IMF) over tough new austerity measures they must impose to secure a bailout loan.
Measures already implemented from this week include a two-week ‘work from home’ rule for all public sector employees from Monday. But no proper facilities such as internet access and computers are available to work from home. Public institutions have started calling workers back to work two days a week.
Two weeks ago the government introduced a holiday Friday for all government employees, citing the food and energy crisis. These workers have been callously urged to cultivate their home gardens due to severe food shortages.
State employees previously worked overtime in an effort to earn enough income to meet the rising cost of living, but paid overtime was eliminated. The wages of casual employees have also been reduced as the number of working days has been reduced.
Although the “work from home” scheme was scheduled for two weeks, several employees told the WSWS that it was uncertain whether it would end. They noted that the fuel crisis is not easing in Sri Lanka and other countries.
On Sunday, Energy Minister Kanchana Wijesekera urged private companies to also introduce “working from home”, as some of them have done during previous periods of the COVID-19 pandemic. Due to insufficient fuel supplies and lack of international orders, some companies have already reduced employment to two or three days a week. Workers have expressed fears for their jobs as businesses could close.
The Ministry of Education has ordered all public and private schools in major cities to close from Monday for a week and provide education online. However, these stops can also last longer. School principals told students not to attend schools until they were informed.
Across the country, a major disruption to education is occurring as teachers and students are unable to attend schools due to drastic cuts in transportation services.
The country’s largest university, the University of Peradeniya, was closed from Monday until further notice. Authorities said they took the step because of “current difficulties”.
The public hospital system is also collapsing due to lack of medicines, the food crisis and fuel shortages. The DailyMirror reported that cardiac surgeons and cardiac anesthesiologists at national hospitals have written to authorities saying they have decided to suspend several operations from Monday due to drug shortages and the fuel crisis.
The director of Colombo South Teaching Hospital, Dr Sagari Kiriwandeniya, told the media that doctors were having problems getting to work due to difficulty in getting fuel. She said Morning“Doctors coming to work stop their vehicles at fuel queues and come to the hospital on three-wheelers or on foot. They finish their shift and return to the queue.
Over the past two weeks, mile-long queues have emerged near about 600 distribution stations across the country. Hundreds of thousands of motorists waited up to three days for fuel.
Service stations are like battlefields, with police and armed soldiers deployed. Without fuel, clashes erupted near many petrol sheds. Angry people chanted slogans and cursed the government for its lack of interest in the masses. In some places soldiers fired into the air to “control” the unrest and in other places police attacked and arrested people.
The fuel crisis has disrupted internal supply chains, further intensifying shortages of basic necessities and driving up prices. Many trucks line up for days to get fuel. Even products from one region cannot be transported to other regions in time. This disruption particularly affected vegetables and fish, increasing prices by up to 300%.
This extreme economic crisis was produced by the COVID-19 pandemic and the proxy war between the United States and NATO against Russia in Ukraine, which drove up the prices of raw materials and fuel. The country’s foreign exchange reserves have dried up with falling exports, collapsing tourism revenues and plummeting remittances from people working abroad. The situation has been aggravated by the massive repayments demanded on foreign loans.
Sri Lanka has just $1.9 billion in foreign exchange reserves, according to the latest figures cited in Bloomberg. Of this amount, $1.5 billion is a swap loan from China.
An IMF team had ten days of talks with Prime Minister Wickremesinghe and officials from the Central Bank and Treasury. His statement read: “We reaffirm our commitment to support Sri Lanka at this difficult time, in line with IMF policies.”
This means that the government must carry out “debt restructuring” with its creditors and reduce public spending to satisfy the IMF. International creditors, who still demand pounds of flesh, will provide the least “debt relief”.
The government will step up its austerity program by cutting public spending, including cutting public sector payrolls, privatizing state-owned enterprises, and cutting social programs such as education and health. The government has already started cutting around 800,000 public sector jobs and raising taxes, including VAT (value added tax).
The World Bank estimated last week that Sri Lanka would face an economic contraction of 7.8% this year and 3.7% in 2023. This is the result of the combined impact of IMF austerity policies and the global economic crisis.
In its Global Prospects Report, the World Bank warned the government not to delay in implementing the IMF measures, saying: “The contraction may be greater in the event of prolonged delays in the authorities’ actions to restore stability. macroeconomic stability and debt restructuring”.
The working class will not tolerate this horrible situation that is developing and the austerity measures of the government.
Since early April, workers, the poor and youth have launched massive protests, demonstrations and strikes against the government. Millions of workers joined one-day general strikes on April 8 and May 6.
They demanded the resignation of President Rajapakse and his government and an end to austerity policies, soaring prices and long hours of power cuts. These struggles have shaken the entire political establishment.
Unions have reluctantly called strikes to divert massive worker opposition to demands for interim rule and general elections. These were the demands that the opposition Samagi Jana Balawegaya (SJB) and Janatha Vimukthi Peramuna (JVP) made to divert the anger of the masses into parliamentary channels.
After the unions betrayed these struggles, the SJB and JVP rallied in support of new Prime Minister Wickremesinghe, who promised to step up IMF policies to “resolve the economic crisis”.
However, sensing growing anger among workers and the poor, these opposition parties began to play a new tune. Yesterday the leaders of the SJB and the JVP accused the new government of not solving the people’s problems. They declared a week-long boycott of parliament from yesterday.
The SJB calls for a multi-party government and the resignation of President Rajapakse. The JVP demanded an eight-month multi-party interim regime for “political stability” as a supposed first step to solving the economic crisis.
These are sinister maneuvers to once again derail the growing mass opposition. The SJB and the JVP may have small tactical differences but they offer no other alternative than the implementation of the IMF program. Both parties voted for Wickremesinghe’s tax hike bill earlier this month.
The unions, associated with these opposition parties, will join their bandwagon. Not a single union opposed the austerity measures announced by the government, thus demonstrating their support for the policies of the IMF.
The Socialist Equality Party (SEP) urges workers and young people to learn the lessons of the past two months. They cannot leave their struggle in the hands of the unions, which act as the industrial police of the ruling class and serve its interests. Workers should create action committees, independent of the unions, in every major workplace, estate and economic center as their own organizations of struggle and rally all the oppressed and the young.
There is no solution in the capitalist system. Only by fighting for a workers’ and peasants’ government and socialist policies can the working class defend its rights in the struggle for international socialism.
We urge workers and young people to participate in the online meeting organized by the SEP on July 3 at 4 p.m. where these policies will be discussed.
Please register for the meeting here: https://chords-org-lk.zoom.us/meeting/register/tJcqcO-sqDopGNIOeLXWE4d1hK76OP8KYGHf
